MATSA RESOURCES LIMITED — Capital/Financing Update 2020

Aug 24, 2020

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Matsa Resources Limited
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LIMITED ABN 48 106 732 487

ASX Announcement

25[th] August 2020

Commencement of Diamond Drilling

Red October

Highlights

• An initial 2,900m diamond drilling program at Red October is due to commence 26[th] August

• Successful drilling results are expected to lead to additional ounces which could increase the current mine life and ounces produced per month

• The focus of this initial drilling program is to define further high grade shoots and resource infill to de-risk and provide additional ounces to the current mine plan proximal to the current workings

• It is Matsa’s intention to continue to increase the level of production at Red October and that this and subsequent drilling programs will assist in achieving that outcome

CORPORATE SUMMARY

Executive Chairman

Paul Poli

Director

Frank Sibbel

Director & Company Secretary

Andrew Chapman

Shares on Issue

227.07 million

Unlisted Options

25.6 million @ $0.17 - $0.35

Top 20 shareholders

Hold 57.99%

Share Price on 24[st] August 2020

16 cents

Market Capitalisation

$36.33 million

Head Office: Suite 11, 139 Newcastle Street, Perth Western Australia 6000 Tel : +61 8 9230 3555 Fax: +61 8 9227 0370 Bangkok Office: Unit 1801, Pacific Place 2, 142 Sukhumvit Road, Klongtoey, Bangkok 10110 Tel : +66 0 2653 0258 Fax : +66 0 2653 0258 reception@matsa.com.au www.matsa.com.au

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Matsa Resources Limited
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Matsa Resources Limited (“Matsa” or “the Company” ASX: MAT) is pleased to advise that an underground drilling program is due to commence at Red October aimed at providing grade control around the current production area and provide infill to existing resources to define and de-risk potential future mining areas.

Successful drilling results are expected to lead to additional gold ounces to the current mine plan with a view to increasing the production profile at Red October. It is expected that further drilling programs will occur upon receipt of successful results from this initial program.

It is the aim at Red October to increase the production profile in the medium term and build on the steady increase in production achieved in the June 2020 quarter (MAT announcement to ASX 30/7/2020) . Ongoing drilling and development is the key to expanding production.

The drilling program targets 5 lodes, including Lionfish, Dory, Splay 533, Red October Shear Zone (ROSZ) and Marlin 410 as highlighted in green in Figure 1.

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Figure 1: Long Section Looking West - Planned Target Areas

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Marlin 410

The Marlin 410 lode is sub-parallel to the ROSZ, and consists of stockwork veining and brecciated textures along the boundary of tholeiitic basalt units. The Marlin 410 (along with the ROSZ lode) was mined extensively by Saracen, and provided a significant proportion of Red October’s historic underground production.

The Marlin 410 lode presents an opportunity for mining two levels below the current Saracen-mined workings at the 842mRL, which have previously never been mined. Further definition of the existing resource is required to improve confidence in the down-plunge continuity of the grade shoots.

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Figure 2: Marlin 410 Long-section Looking West, SAR June 2016 Resource model shown with blocks Au >10g/t

Lionfish

Lionfish consists of narrow, anastomosing lodes within an ultramafic lithology sequence, situated in the hangingwall of the Red October Shear Zone.

The program consists of an initial five holes to test for down-plunge continuity of high-grade shoots Saracen mined on the N-1255 Level.

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Figure 3: Lionfish Long-section Looking West, SAR June 2016 Resource model shown with blocks Au >10g/t

A successful first phase of drilling at Lionfish would trigger a more substantial second phase in order to adequately define two new mining levels below the N-1255 and also test for another mineable grade shoot.

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Figure 4: Lionfish Second Phase Drilling Long-section Looking West, SAR June 2016 Resource model shown with blocks Au >10g/t

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It is expected that the results of this drilling campaign will enable better planning for mine design and, open additional areas for mining as part of the longer-term aim to extend the mine life of the Red October Gold mine.

This ASX report is authorised for release by the Board of Matsa Resources Limited.

For further information please contact:

Paul Poli Executive Chairman Phone +61 8 9230 3555 Fax +61 8 9227 0370 Email reception@matsa.com.au Web www.matsa.com.au

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