MATSA RESOURCES LIMITED — Interim / Quarterly Report 2017

Jul 30, 2017

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Matsa Resources Limited
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LIMITED ABN 48 106 732 487

ASX Announcement

31[st] July 2017

Quarterly Activities Report – 30[th] June 2017

HIGHLIGHTS

Fortitude Trial Mining Study

• Mobilisation of the mining contractor, Quadrio Earthmoving Pty Ltd, was completed

• Construction of office blocks, workshops and sediment ponds was completed

• Clearing of the north and central pits and waste dump was completed

CORPORATE SUMMARY

Executive Chairman

Paul Poli

Director

Frank Sibbel

Director & Company Secretary

Andrew Chapman

• Mining commenced in July 2017

Shares on Issue

Lake Carey Exploration

144.7 million

• Visible gold mineralisation was observed in a laminated quartz vein in the first of 5 diamond drill holes at BE 1 and coincides with an assay of 0.14m @ 8.91 g/t Au

• Gold values >0.5 g/t Au in diamond drilling at BE 1 confirm the presence of gold mineralised quartz veins associated with strong sericite pyrite alteration of host intrusion

• Aircore assays of up to 3m @ 3.62 g/t Au at BE 3 have defined a 1.5km long NNW trending gold target in weathered basement rocks which remains open to the south

• BE 3 is only 1.7 km along strike from the I ntrepid gold prospect where past aircore drilling included 4m @ 2.91 g/t Au

Unlisted Options

17.02 million @ $0.25 - $0.30

Top 20 shareholders

Hold 54.25%

Share Price on 31[st] July 2017

18.5 cents

Market Capitalisation

$26.77 million

• Step out drilling 2km north of BE 1 intersected anomalous gold values up to 3m @ 2.62 g/t Au at new gold target BE 4

Paisali Base Metal Project Thailand

• Thailand government clears the path for exploration activities to proceed on ALRO areas

Corporate

• Cash and liquid investments as at 30 June approximately $5.67 million

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INTRODUCTION

Matsa Resources Limited (“Matsa” or “the Company” ASX: MAT) is pleased to report on its development, exploration and corporate activities for the quarter ended 30[th] June 2017.

COMPANY ACTIVITIES

LAKE CAREY GOLD PROJECT

Matsa is pleased to report significant progress at Lake Carey with work carried out during the quarter focused on the following key activities:

• Establishment of the Fortitude trial gold mine

• Receipt of assays for infill aircore drilling carried out a BE 1 during previous quarter

• Diamond drilling at BE 1 gold exploration target

• Infill aircore drilling at gold exploration targets BE 2 and BE 3

• Step out aircore drilling north of gold exploration target BE 1

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Figure 1. Fortitude Mine and Lake Carey Gold Project – oblique view

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Fortitude Trial Mining

During the quarter, the following mining activities were carried out:

• mining contractor mobilization to site

• construction of topsoil dumps and sediment ponds

• bore-field was commissioned and mine dewatering commenced

• topsoil removed and stockpiled from the North Pit, waste dump, admin offices and workshop areas

• construction of offices and workshop was completed and communications established

• RC grade control drilling was completed with all assays received over the three trial pit areas in preparation for the first ore mining

• Results of grade control drilling are currently being incorporated into the resource model

Ore will be trucked and processed at the nearby Sunrise Dam treatment facility only 32km north of Fortitude.

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Figure 2: Part of Mining Fleet at Fortitude Gold Mine

LAKE CAREY EXPLORATION

Drilling has continued over the Bindah Extended target a ~6km section of the Bindah Fault zone commencing 8km NW of Matsa’s Fortitude gold mine. Drilling has focused on gold targets BE 1, BE 2 and BE 3 which were defined by aircore drilling in the previous quarter. The Bindah Fault zone is a structural and stratigraphic corridor which contains gold mineralisation at the Bindah, Intrepid and Gallant deposits to the south and passes within 5km of the Red October gold mine and within 15km of the Sunrise Dam gold mine to the west and north respectively (Figure 1).

During the quarter, the following exploration activities were carried out:

• Assays were received for stage 1 aircore drilling (112 assays) from BE 1

• Stage 2 aircore drilling was completed for a total of 136 holes and 10,376m, over the Bindah Extended target zone, focused on infill drilling at BE 2, BE 3 and step out drilling north of BE 1

• Diamond drilling was carried out at BE 1 for a total of 5 drill holes for 1,336m

Stage 1 Aircore Assays BE 1

A total of 112 assays were received from infill aircore drilling carried out during the previous quarter to define insitu gold mineralisation in weathered basement rocks at BE 1. (MAT announcement to ASX 12[th] April 2017)

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Significant new gold assays at BE 1 include:

• 17LCAC245 : 2m @ 25.3 g/t Au from 93m including 1m @ 39.8 g/t Au .

• 17LCAC239: 3m @ 1.94 g/t Au from 50m including 1m @ 3.43g/t Au.

• 17LCAC240; 1m @ 2.47 g/t Au from 45m.

These results are highlighted in yellow and lie within the previously defined 700m long NNE trending linear zone (outlined in red on Figure 3) of highly anomalous gold values in weathered basement. Diamond drill hole locations at BE 1 are also shown in Figure 3.

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Figure 3: BE 1 Summary and Diamond Drill Hole Locations

Stage 2 Aircore Drilling

The Stage 2 aircore drilling programme was completed over the Bindah Extended Target area at Lake Carey. This programme of 136 aircore drill holes (17LCAC275-410) for 10,376m of drilling comprised infill and step out drilling at the BE1, BE2 and BE3 gold targets. (MAT announcement to ASX 26[th] July 2017)

A total of 2,690 composite samples 1-3m in length, 200 “split” 1m samples from gold anomalous composite intervals and 136 end-of-hole samples, were collected. All samples were submitted for gold analysis by fire assay.

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A compilation of all assay results received to date is presented in Figure 4, in the form of maximum gold values for each drill hole.

Intercepts containing >0.5g/t Au are summarised in Table 1. All assays >0.1 g/t Au are listed in Appendix 3.

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Figure 4: Stage 2 Aircore Drilling Summary

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Target	Hole_ID	Hole Depth	Intercept	Comment
BE3	17LCAC280	63	3m@1.12g/t Au from 27m	Anomalous values over quartz sericite leucoxene altered dolerite
	17LCAC283	86	1m@0.63g/t Au from 85m(EOH)
	17LCAC284	72	3m@0.7 g/t Au from 45m inc. 1m@1.14g/t Au
	17LCAC400	69	3m@3.62g/t Au from 42m
	17LCAC404	99	5m @ 0.61g/t Au from 93m
BE2	17LCAC313	101	1m@1.46g/t Au from 71m	Anomalous intercept over altered dolerite (quartz sericite leucoxene)
	17LCAC315	82	1m @ 0.71g/t Au from 64m	Saprolite developed over strongly laminated BIF and quartz sericite altered dolerite
BE1	17LCAC340	114	1m @ 0.68g/t Au from 39m	Lake sediments over coarse weakly pyritic feldsparporphyry
BE4	17LCAC381	72	3m @ 2.62g/t Au from 45m	Saprolite over laminated sericite altered intermediate volcaniclastic

Table 1: Stage 2 aircore intercepts >0.5 g/t Au

Results have highlighted the following:

• Assays have continued to better define gold target BE 3 as an irregular 1.5km long NW trending zone of highly anomalous gold values in variably weathered dolerite and andesitic volcanics including 3m @ 3.62 g/t Au from 42m (17LCAC400).

• Step out drilling returned a number of gold anomalous intercepts located ~2km north of BE 1 with a best result of 3m @ 2.62 g/t Au (17LCAC381) from 45m in deeply weathered intermediate volcanics. This new target BE 4, remains open to the north and further aircore drilling is required.

• Infill drilling at BE 2 returned further gold anomalous intercepts with a best result of 1m @ 1.46 g/t Au from 71m (17LCAC313) in deeply weathered dolerite.

• Infill and step out drilling at BE 1 returned a number of gold anomalous intercepts with a best result of 1m @ 0.68 g/t Au (17LCAC340). Drilling appears to have closed off BE 1 to the north, but this target remains open to the east.

• Anomalous gold values at BE 2 and BE 3 are located within an area of strong hydrothermal alteration of basement rocks characterised by sericite, quartz and leucoxene. This style of alteration is commonly associated with gold mineralisation in major dolerite hosted gold deposits including the Golden Mile at Kalgoorlie.

Diamond Drilling

Diamond drilling is underway at BE 1, to determine the basement source of in-situ gold mineralisation identified by aircore drilling in clay and deeply weathered feldspar porphyry intrusion (Figure 1).

Anomalous gold values being targeted by diamond drilling are associated with quartz veins in the feldspar porphyry intrusion interpreted to be formed in response to brittle fracture of the intrusion by movement along the Bindah fault. This is the style of gold mineralisation described at the world class ~7 million oz. Granny Smith gold deposit 47km to the north which occurs in and along the margins of a granodiorite intrusion.

The objectives of diamond drilling were to:

• determine the nature and grade of potentially economic gold mineralisation in basement rocks below the depth of aircore refusal (typically 60m-90m below surface);

• determine the orientation(s) of mineralised structures through the use of oriented diamond core; and

• provide a platform for seismic detectors to be deployed as part of an experimental survey which could define acoustic surfaces corresponding with gold mineralised structures. There are potential applications of this technique, if successful, in exploration for structurally controlled gold mineralisation in salt lakes.

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Diamond drilling commenced on the 17[th] May 2017 at BE 1. (Refer MAT announcement to the ASX 17[th] May 2017) A total of 5 drill holes (17BEDD01 – 17BEDD05) were completed for a total of 1,336m of drilling (Figure 2, Table 1). Difficult ground conditions meant that two drill holes (17BEDD03A and 17BEDD05A) were abandoned in unconsolidated lake sediments. In addition, drill hole 17BEDD02 was terminated in weathered basement at a depth 133.6m, above its designed depth of 350m because of difficult ground conditions. A description of logging, sampling and assay procedures is included in Appendix 1. Drill collars are listed in Table 2 and summarised in Figure 3.

Hole ID	East	North	RL	Depth	**Dip **	Azimuth
17BEDD01	448405	6765585	400	268.3	-60	320
17BEDD02	448340	6766010	400	133.6	-60	140
17BEDD03	448319	6766028	400	252.6	-60	140
17BEDD04	448237	6765874	400	350.8	-60	140
17BEDD05	448239	6765639	400	330.3	-60	126

Table 2: BE 1 Diamond Drill Holes Summary of Collar Information

Assay Results

Core logging and sampling continued beyond 30[th] June 2017, procedures are described in Appendix 1. Best gold values received by 30[th] June 2017 are listed in Table 3 and assays >0.1 g/t Au are listed in Appendix 2. Summary cross sections of the 5 diamond drill holes are presented in Appendix 3.

Hole ID	Sample	m From	m To	Auppm
17BEDD01	139845	79.12	79.26	8.91
17BEDD01	139869	112	113	0.5
17BEDD01	139891	164.35	164.6	0.64
17BEDD01	139897	175.96	176.15	0.86
17BEDD01	139910	206	206.3	0.81
17BEDD02	139976	130.25	131	0.8
17BEDD02	139977	131	132	0.85
17BEDD02	139978	132	133	0.7
17BEDD03	139980	120.2	120.3	1.76
17BEDD03	149534	184	186	0.67
17BEDD03	149558	212	213	0.52
17BEDD03	149566	220	221	0.65
17BEDD04	149663	225.9	227.4	0.52
17BEDD04	149679	242.6	243	1.37
17BEDD04	149680	243	244	1.5
17BEDD05	149847	288	288.4	1.64

Table 3: BE 1 Diamond Drill Holes Assays >0.5 g/t Au

Visible Gold Observed

Diamond drill hole 17BEDD01 was designed to explore the extent of gold mineralisation intersected in aircore drill hole 17LCAC130, namely, 21m @ 1.82 g/t Au from 87m as shown in Figure 5.

The best diamond drill assay of 0.14m @ 8.91 g/t Au , coincides with a 14cm wide laminated quartz vein containing visible gold at a drilled depth of 79m in 17BEDD01 which was the first of 5 diamond drill holes at BE 1 (MAT announcement to ASX 23[rd] May 2017).

The quartz vein containing visible gold in 17BEDD01, occurs in unconsolidated clays produced by deep lateritic weathering of basement rocks. Core recoveries were very poor through this zone. Only 16 metres of the 25 metre interval (75m-100m) containing the visible gold intercept, was recovered thus the actual mineralised interval may have been significantly reduced by this core loss (Figure 5).

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Figure 5: BE 1 Schematic Cross Section 17BEDD01

Results from this preliminary diamond drill programme have not explained the highly anomalous gold intercepts by aircore drilling in the weathered zone. BE 1 remains highly prospective for significant gold mineralisation and as such, further drilling is required.

Geology and Mineralisation

All drill holes encountered massive lake clays to a depth of ~90m, underlain by saprolite clays and deeply weathered basement rocks to a downhole depth of ~140m before encountering fresh basement rocks. Basement rocks are dominated by a massive to weakly laminated feldspar porphyry with a fine-grained quartz/feldspar matrix. The mafic component of this rock is made up of large irregular clots of chlorite. The generally massive and consistent texture of this rock confirms the earlier interpretation that it is a high level felsic/intermediate intrusive body emplaced in a dilational position along the Bindah Fault. All elevated gold values >0.1 g/t Au received to date were returned from intersections containing quartz veins and variably altered feldspar porphyry.

As noted above, intersections with >0.5 g/t Au coincide with quartz veins typically 0.01m – 0.2m thick. Quartz veins (including the visible gold bearing quartz vein described above) pass outward into hydrothermally altered and bleached feldspar porphyry with the alteration dominated by development of sericite and pyrite.

Research and Development Project

Diamond drill results including structural observations on orientations of potentially mineralised structures, are currently being compiled and interpreted to progress the geological understanding of gold mineralisation at BE 1, and to design the next stage of exploration.

As noted above, one significant objective of the diamond drilling programme has been to use drill holes as platforms for acoustic sensors as part of a Research and Development project into application of Seismic Surveys to define potentially mineralised structures.

The seismic survey is expected to commence in the next quarter.

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THAILAND EXPLORATION

Exploration has been delayed over the last three quarters due to confusion as to whether the Agricultural Land Reform Office (ALRO) had the ability to permit exploration and mining activities to be undertaken on ground under their control. This confusion halted drilling and affected a large proportion of Matsa’s tenements, in particular, Chang 1, Siam 1 and Siam 2. The Thai government has invoked a ruling under Section 44 of the Thailand Constitution 2014, which now removes this confusion relating to ALRO ground. Accordingly, Matsa has now been informed that full ALRO consent over tenements covering ALRO ground should be forthcoming within 90 days of declaration.

Activities during the quarter were restricted to soil sampling and ground magnetics.

Activities undertaken included:

• 792 auger soil samples at Siam 2

• 37.3 line kilometres of ground magnetics

Auger Soil Sampling

A total of 792 soil auger samples at 100m spacing were taken at Siam 2W and Siam 2S. Soil auger sampling and assay with Matsa’s Innovex portable XRF (PXRF) analyser were carried out. Assays are summarised in Table 4. Auger sampling and PXRF assay procedures have been described in earlier announcements (MAT announcement to the ASX 25/4/2016) . Infill sampling has delineated several NW trending zones of anomalous Cu in soil values (Figure 6). These NW trends reflect structures noted in regional magnetics and it is interpreted that NW faults have provided fluid pathways and potential trap sites for copper mineralisation. Exploration is ongoing and upon receipt of the ALRO providing consent as discussed above, drilling will commence as soon as practicable.

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Figure 6: Siam 2 prospect Auger soil copper values Siam. Red shading >200ppm Cu

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Project	Sample ID	No of Samples	Min Cu ppm	Max Cu ppm	Average Cu ppm	95th Percentile
Siam	PBDC0999 – PBDS2098	792	8	509	104	195

Table 4: Soil Auger Assay Summary Statistics

Ground Magnetics

A total of 37.3 line kilometres of ground magnetics was completed at Siam 2 as part of a program to provide better resolution to the widely spaced regional aerial magnetic data available over Matsa’s areas of interest. The program is continuing.

Chang 1

The Chang 1 copper target is a large (1.8km x 1.2km) soil anomaly. Drilling of the highest soil copper grades is anticipated to commence in accordance with ALRO consents as discussed above, as soon as practicable. Diamond assay results to date show Chang 1 to be a large low-grade copper mineralised intrusion with intervals of higher grade Cu associated with increased hydrothermal activity along faults.

SYMONS HILL PROJECT (NICKEL)

E69/3070 of 96km[2] is located within the Fraser Range Tectonic zone, 6kms SSW of Independence Group Ltd’s (ASX:IGO) Nova nickel mine. There is currently significant M&A activity in the locality and accordingly the Symons Hill project is recognised as a valuable area for any accumulator of tenements in this highly prospective locality.

Collaborative Research Project with CSIRO

Stage 1 of a collaborative research project concerned with regolith processes and geochemical dispersion of key metals including Ni in the weathered profile, was completed during the quarter.

Whole-rock geochemical datasets for 89 selected samples were received and are undergoing interpretation.

CORPORATE

Cash and liquid assets total approximately $6 million as at 30[th] June 2017.

For further Information please contact:

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

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Competent Person Statement

Exploration results

The information in this report that relates to Exploration results is based on information compiled by David Fielding, who is a Fellow of the Australasian Institute of Mining and Metallurgy. David Fielding is a full time employee of Matsa Resources Limited. David Fielding has sufficient experience which is relevant to the style of mineralisation and the type of ore deposit under consideration and the activity which he is undertaking to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. David Fielding consents to the inclusion in the report of the matters based on his information in the form and context in which it appears .

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Appendix 1 - Matsa Resources Limited

JORC Code, 2012 Edition – Table 1 report

Section 1 Sampling Techniques and Data

(Criteria in this section apply to all succeeding sections.)

Criteria	JORC Code explanation	Commentary
Sampling	• Nature and quality of sampling (eg cut channels, random chips, or	•Diamond Drill Core Lake Carey.
techniques	specific specialised industry standard measurement tools appropriate
	to the minerals under investigation, such as down hole gamma
	sondes, or handheld XRF instruments, etc). These examples should
	not be taken as limiting the broad meaning of sampling.
	• Include reference to measures taken to ensure sample representivity
	and the appropriate calibration of any measurement tools or systems	•Core is cut with diamond saw and sampled based on geological
	used.	boundaries with intervals in the range 0.1-2m.
	• Aspects of the determination of mineralisation that are Material to the
	Public Report.
	• In cases where ‘industry standard’ work has been done this would be	•Mineralisation comprises quartz veins formed in brittle fracture of host
	relatively simple (eg ‘reverse circulation drilling was used to obtain 1	dacite porphyry caused by movement along the Bindah Fault
	m samples from which 3 kg was pulverised to produce a 30 g charge
	for fire assay’). In other cases more explanation may be required,
	such as where there is coarse gold that has inherent sampling
	problems. Unusual commodities or mineralisation types (eg
	submarine nodules) may warrant disclosure of detailed information.
Drilling	• Drill type (eg core, reverse circulation, open-hole hammer, rotary air	•Diamond drilling at Lake Carey. Drilling employed HQ and BQ core
techniques	blast, auger, Bangka, sonic, etc) and details (eg core diameter, triple	drilling
	or standard tube, depth of diamond tails, face-sampling bit or other
	_type, whether core is oriented and ifso, by what method, etc). _
Drill sample	• Method of recording and assessing core and chip sample recoveries	•Diamond drilling, core is measured and recorded as a percentage of
recovery	and results assessed.	drilled metres with visual check of lost core intervals.
	• Measures taken to maximise sample recovery and ensure
	representative nature of the samples.
	• Whether a relationship exists between sample recovery and grade
	and whether sample bias may have occurred due to preferential
	loss/gainof fine/coarse material.
Logging	• Whether core and chip samples have been geologically and	•Diamond core logging comprised geology, orientation, structure,
	geotechnically logged to a level of detailto support appropriate	photography.

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Criteria	JORC Code explanation	Commentary
	Mineral Resource estimation, mining studies and metallurgical	•Logging is carried out over 100% of drill hole. With the focus on
	studies.	Lithology structure alteration and mineralisation
	• Whether logging is qualitative or quantitative in nature. Core (or
	costean, channel, etc) photography.
	• _The total length and percentage of the relevant intersections logged. _
Sub-	• If core, whether cut or sawn and whether quarter, half or all core	•Diamond Core Lake Carey core is split in half with half marked up and
sampling	taken.	left in tray and ½ submitted for assay.
techniques	• If non-core, whether riffled, tube sampled, rotary split, etc and
and sample	whether sampled wet or dry.	•Sample preparation techniques for diamond drilling comprises a
preparation	• For all sample types, the nature, quality and appropriateness of the	coarse crush ~6mm, riffle split with around 300-500 gram pulverised to
	sample preparation technique.	<75 microns.
	• Quality control procedures adopted for all sub-sampling stages to
	maximise representivity of samples.
	• Measures taken to ensure that the sampling is representative of the in
	situ material collected, including for instance results for field
	duplicate/second-half sampling.
	• Whether sample sizes are appropriate to the grain size of the material
	_being sampled. _
Quality of	• The nature, quality and appropriateness of the assaying and	•All gold determinations on Lake Carey diamond core were by fire assay
assay data	laboratory procedures used and whether the technique is considered	AA finish. Limited QA QC samples provided
and	partial or total.
laboratory	• For geophysical tools, spectrometers, handheld XRF instruments, etc,
tests	the parameters used in determining the analysis including instrument
	make and model, reading times, calibrations factors applied and their
	derivation, etc.
	• Nature of quality control procedures adopted (eg standards, blanks,
	duplicates, external laboratory checks) and whether acceptable levels
	_of accuracy (ie lack of bias) and precision have been established. _
Verification	• The verification of significant intersections by either independent or	•Data is maintained in Datashed which is a database system which is
of sampling	alternative company personnel.	maintained in-house. Assays reviewed by Matsa Exploration Manager
and	• The use of twinned holes.	Dave Fielding
assaying	• Documentation of primary data, data entry procedures, data	•Logging data is entered in the field to minimize transcription errors,
	verification, data storage (physical and electronic) protocols.	assay data are loaded electronically.
	• _Discuss any adjustment to assay data. _
Location of	• Accuracy and quality of surveys used to locate drill holes (collar and	•All drill holes are set up by handheld GPS to 3m accuracy. Diamond
data points	down-hole surveys), trenches, mine workings and other locations	Drill holes are resurveyed on completion using a hired DGPS system.
	used in Mineral Resource estimation.	•Drilling under the Lake Carey project is all located using the MGA
	• Specification of the grid system used.	GDA94 UTM location Zone 51.
	• Quality and adequacy of topographic control.	•Drilling and soil sampling in Thailand is located using the Indian
		Thailand1975 datum zone47.

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Criteria	JORC Code explanation	Commentary
Data spacing	• Data spacing for reporting of Exploration Results.	•Data spacing has been taken into account at Fortitude, in particular to
and	• Whether the data spacing and distribution is sufficient to establish the	increase the amount of diamond drilling in the upper part of the
distribution	degree of geological and grade continuity appropriate for the Mineral	resource in order to improve the mineralisation model.
	Resource and Ore Reserve estimation procedure(s) and	•Sample compositing has been applied all non-core holes drilled during
	classifications applied.	the quarter to reduce assay costs.
	• _Whether sample compositing has been applied. _
Orientation	• Whether the orientation of sampling achieves unbiased sampling of	•Diamond drilling at Lake Carey is oriented as far as possible at right
of data in	possible structures and the extent to which this is known, considering	angles to the direction of the interpreted structure.
relation to	the deposit type.
geological	• If the relationship between the drilling orientation and the orientation
structure	of key mineralised structures is considered to have introduced a
	sampling bias, this should be assessed and reported if material.
Sample	• The measures taken to ensure sample security.	•Samples are managed and transported by Matsa personnel who
security		maintain chain of custody until delivery to laboratory
Audits or	• The results of any audits or reviews of sampling techniques and data.	•The previously announced JORC 2012 resource at Fortitude was
reviews		revised during the quarter. Revision based on new diamond drilling
		carried outin December 2016.

Section 2 Reporting of Exploration Results

(Criteria listed in the preceding section also apply to this section.)

Criteria	JORC Code explanation	Commentary
Mineral	• Type, reference name/number, location and ownership including	•Tenement status is as per attached Schedule of Tenements.
tenement	agreements or material issues with third parties such as joint	•Diamond drilling at BE 1 is located on E39/1889 which is the subject of
and land	ventures, partnerships, overriding royalties, native title interests,	a JV agreement, 90% Matsa Resources, 10% Raven Resources
tenure status	historical sites, wilderness or national park and environmental	•Tenements covered by Aircore drilling at Fortitude announced 26thJuly
	settings.	2017
	• The security of the tenure held at the time of reporting along with any
	_known impediments to obtaining a licence to operate inthe area. _
Exploration	• Acknowledgment and appraisal of exploration by other parties.	•Exploration by other parties at Fortitude/Lake Carey, has been
done by		previously announced.
other parties
Geology	• Deposit type, geological setting and style of mineralisation.	•At Lake Carey the principal target is orogenic gold associated
		stratigraphic contacts associated with major faults.
		•In Thailand the target is base metal mineralisation associated with
		major boundary between the Indian and Chinese plates which was
		activeinpermoTriassic times.

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Criteria	JORC Code explanation	Commentary
Drill hole	• A summary of all information material to the understanding of the	•Diamond Drill hole information is included in the body of the report.
Information	exploration results including a tabulation of the following information	•Aircore drill collars information as previously announced.
	for all Material drill holes:	•The expected accuracy is +/- 5 metres for easting and northings and
	o easting and northing of the drill hole collar	10 metres for elevation coordinates. Elevation values were in AHD. The
	o elevation or RL (Reduced Level – elevation above sea level in	grid system used is Map Grid of Australia (MGA) GDA94 Zone 51.
	metres) of the drill hole collar
	o dip and azimuth of the hole
	o down hole length and interception depth
	o hole length.
	• If the exclusion of this information is justified on the basis that the
	information is not Material and this exclusion does not detract from
	the understanding of the report, the Competent Person should clearly
	_explain why this is the case. _
Data	• In reporting Exploration Results, weighting averaging techniques,	•Intercepts at Chang 1 are quoted on the basis of simple weighted
aggregation	maximum and/or minimum grade truncations (eg cutting of high	averages.
methods	grades) and cut-off grades are usually Material and should be stated.
	• Where aggregate intercepts incorporate short lengths of high grade
	results and longer lengths of low grade results, the procedure used
	for such aggregation should be stated and some typical examples of
	such aggregations should be shown in detail.
	• The assumptions used for any reporting of metal equivalent values
	_should be clearly stated. _
Relationship	• These relationships are particularly important in the reporting of	•All intercepts quoted are explicitly downhole depths and not true
between	Exploration Results.	widths.
mineralisatio	• If the geometry of the mineralisation with respect to the drill hole
n widths and	angle is known, its nature should be reported.
intercept lengths	• If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg ‘down hole length, true
	_width not known’). _
Diagrams	• Appropriate maps and sections (with scales) and tabulations of	•Appropriate diagrams are included in the body of the report.
	intercepts should be included for any significant discovery being
	reported These should include, but not be limited to a plan view of
	_drill hole collar locations and appropriate sectional views. _
Balanced	• Where comprehensive reporting of all Exploration Results is not	•Intercepts are presented in a balanced way, with better intercepts
reporting	practicable, representative reporting of both low and high grades	illustrating why Matsa is maintaining an interest in a particular project.
	and/or widths should be practiced to avoid misleading reporting of
	_Exploration Results. _
Other	• Other exploration data, if meaningful and material, should be reported	•Significant use is made of geophysical datasets, particularly
substantive	including (but not limited to): geological observations; geophysical	aeromagnetics.
	survey results; geochemical survey results; bulk samples – size and	• Geophysicalsurveys carried out are presented undersamplingin

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Matsa Resources Limited
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Criteria	JORC Code explanation	Commentary
exploration	method of treatment; metallurgical test results; bulk density,	Section 1.
data	groundwater, geotechnical and rock characteristics; potential
	_deleterious or contaminating substances. _
Further work	• The nature and scale of planned further work (eg tests for lateral	•Comments on likely outcomes for future exploration is fully accounted
	extensions or depth extensions or large-scale step-out drilling).	for.
	• Diagrams clearly highlighting the areas of possible extensions,
	including the main geological interpretations and future drilling areas,
	_provided this information is not commercially sensitive. _

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Appendix 2 - Matsa Resources Limited

BE 1 Diamond Drill Core, Gold Assays >0.1 g/t Au

Hole_ID	Sample ID	M From	M To	Auppm
17BEDD01	139845	79.12	79.26	8.91
17BEDD01	139863	106	107	0.29
17BEDD01	139864	107	108	0.16
17BEDD01	139869	112	113	0.5
17BEDD01	139871	113	114	0.13
17BEDD01	139884	144.77	145.06	0.12
17BEDD01	139891	164.35	164.6	0.64
17BEDD01	139897	175.96	176.15	0.86
17BEDD01	139910	206	206.3	0.81
17BEDD01	139926	211.25	212.2	0.11
17BEDD01	139932	216.5	216.8	0.28
17BEDD01	139933	216.8	218	0.12
17BEDD01	139939	228	230	0.13
17BEDD01	139949	246	248	0.12
17BEDD02	139913	70.4	70.7	0.11
17BEDD02	139917	78.5	79	0.25
17BEDD02	139925	100	101	0.39
17BEDD02	139971	128	128.6	0.2
17BEDD02	139973	129.1	129.4	0.35
17BEDD02	139975	129.4	130.25	0.13
17BEDD02	139976	130.25	131	0.8
17BEDD02	139977	131	132	0.85
17BEDD02	139978	132	133	0.7
17BEDD02	139979	133	133.6	0.18
17BEDD03	139980	120.2	120.3	1.76
17BEDD03	139990	136	137	0.29
17BEDD03	139995	139	140	0.1
17BEDD03	149503	145	146	0.12
17BEDD03	149505	147	148	0.12
17BEDD03	149534	184	186	0.67
17BEDD03	149549	204	205	0.39
17BEDD03	149554	208	209	0.15
17BEDD03	149558	212	213	0.52
17BEDD03	149560	214	215	0.17
17BEDD03	149565	219	220	0.44
17BEDD03	149566	220	221	0.65
17BEDD03	149567	221	222	0.28
17BEDD03	149568	222	223	0.3
17BEDD04	149593	125	126	0.11

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Matsa Resources Limited
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Hole_ID Sample ID M From M To Au ppm

Hole_ID	Sample ID	M From	M To	Auppm
17BEDD04	149597	129	130	0.21
17BEDD04	149608	139	140	0.23
17BEDD04	149620	157	159	0.11
17BEDD04	149657	218	220	0.1
17BEDD04	149663	225.9	227.4	0.52
17BEDD04	149677	241	242	0.15
17BEDD04	149678	242	242.6	0.2
17BEDD04	149679	242.6	243	1.37
17BEDD04	149680	243	244	1.5
17BEDD04	149681	244	245	0.11
17BEDD04	149682	245	246	0.23
17BEDD04	149684	247.2	248.2	0.16
17BEDD04	149689	255.85	256.2	0.1
17BEDD04	149691	258	260	0.34
17BEDD05	149789	172	174	0.11
17BEDD05	149779	228.4	229.25	0.23
17BEDD05	149785	232	232.35	0.19
17BEDD05	149839	273	275	0.29
17BEDD05	149841	277	279	0.15
17BEDD05	149842	279	281	0.25
17BEDD05	149846	287	288	0.19
17BEDD05	149847	288	288.4	1.64
17BEDD05	149848	288.4	290	0.15

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Appendix 3 - Matsa Resources Limited

BE 1 Diamond Drill Holes Summary Cross Sections

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17BEDD01 cross section looking NE

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17BEDD02 and 17BDD03 cross section looking NE

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17BEDD04 cross section looking NE

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17BEDD05 cross section looking NE

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Plan view of BE1 diamond drilling

Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

+Rule 5.5

Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Introduced 01/07/96 Origin Appendix 8 Amended 01/07/97, 01/07/98, 30/09/01, 01/06/10, 17/12/10, 01/05/13, 01/09/16

Name of entity

MATSA RESOURCES LIMITED

ABN

Quarter ended (“current quarter”)

48 106 732 487 30 June 2017

Consolidated statement of cash flows	Current quarter $A’000	Year to date (12 months) $A’000
1. Cash flows from operating activities 1.1 Receipts from customers 1.2 Payments for (a) exploration & evaluation (b) development (c) production (d) staff costs (e) administration and corporate costs 1.3 Dividends received (see note 3) 1.4 Interest received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Research and development refunds 1.8 Other (provide details if material) 1.9 Net cash from / (used in) operating activities	- (543) - - (249) (198) - 7 - - - 38	- (5,960) - - (1,096) (914) - 27 (1) - 853 115
	(945)	(6,976)
2. Cash flows from investing activities 2.1 Payments to acquire: (a) property, plant and equipment (b) tenements (see item 10) (c) investments (d) other non-current assets	(175) - - -	(243) (1,961) (21) -

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Consolidated statement of cash flows	Current quarter $A’000	Year to date (12 months) $A’000
2.2 Proceeds from the disposal of: (a) property, plant and equipment (b) tenements (see item 10) (c) investments (d) other non-current assets 2.3 Cash flows from loans to other entities 2.4 Dividends received (see note 3) 2.5 Other (provide details if material) 2.6 Net cash from / (used in) investing activities	- - 1,109 - - - (4)	- - 9,586 - - - (19)
	930	7,342
3. Cash flows from financing activities 3.1 Proceeds from issues of shares 3.2 Proceeds from issue of convertible notes 3.3 Proceeds from exercise of share options 3.4 Transaction costs related to issues of shares, convertible notes or options 3.5 Proceeds from borrowings 3.6 Repayment of borrowings 3.7 Transaction costs related to loans and borrowings 3.8 Dividends paid 3.9 Other (provide details if material) 3.10 Net cash from / (used in) financing activities	- - - - - (2) - - -	- - 151 - - (13) - - -
	(2)	138
4. Net increase / (decrease) in cash and cash equivalents for the period 4.1 Cash and cash equivalents at beginning of period 4.2 Net cash from / (used in) operating activities (item 1.9 above) 4.3 Net cash from / (used in) investing activities (item 2.6 above) 4.4 Net cash from / (used in) financing activities (item 3.10 above) 4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period	2,084 (945) 930 (2) -	1,563 (6,976) 7,342 138 -
	2,067	2,067

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

5. Reconciliation of cash and cash equivalents at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts	Current quarter $A’000	Current quarter $A’000	Previous quarter $A’000
5.1 Bank balances 5.2 Call deposits 5.3 Bank overdrafts 5.4 Other (provide details) 5.5 Cash and cash equivalents at end of quarter (should equal item 4.6 above) Shares held in listed investments Total cash and liquid investments at end of quarter*	2017 50 - -		2,034 50 - -
	2,067 3,603 5,670		2,084 5,116 7,200
* Market value at 30 June 2017 (Previous quarter 31 March 2017) 6. Payments to directors of the entity and their associates Current quarter $A'000 6.1 Aggregate amount of payments to these parties included in item 1.2 135 6.2 Aggregate amount of cash flow from loans to these parties included in item 2.3 - 6.3 Include below any explanation necessary to understand the transactions included in items 6.1 and 6.2
		Current quarter $A'000
		135
		-

7.	Payments to related entities of the entity and their	Current quarter
	associates	$A'000
7.1	Aggregate amount of payments to these parties included in item 1.2		-
7.2	Aggregate amount of cash flow from loans to these parties included
	in item 2.3		-
7.3	Include below any explanation necessary to understand the transactions included in
	items 7.1 and 7.2

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B Mining exploration entity and oil and gas exploration entity quarterly report

8. Financing facilities available Add notes as necessary for an understanding of the position 8.1 Loan facilities 8.2 Credit standby arrangements 8.3 Other (please specify)	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
	-	-
	-	-
	-	-

• 8.4 Include below a description of each facility above, including the lender, interest rate and whether it is secured or unsecured. If any additional facilities have been entered into or are proposed to be entered into after quarter end, include details of those facilities as well.

9. Estimated cash outflows for next quarter $A’000 9.1 Exploration and evaluation 572 9.2 Development 879 9.3 Production 849 9.4 Staff costs 281 9.5 Administration and corporate costs 345 9.6 Other (provide details if material) - 9.7 Total estimated cash outflows 2,926

10. Changes in tenements (items 2.1(b) and 2.2(b) above)		Tenement reference and location	Nature of interest	Interest at beginning of quarter	Interest at end of quarter
10.1 Interests in mining tenements and petroleum tenements lapsed, relinquished or reduced		Buldania Rocks (WA) P63/1503 Killaloe (WA) P63/1672	Direct Direct	100% 100%	0% 0%
10.2 Interests in mining tenements and petroleum tenements acquired or increased

Compliance statement

• 1 This statement has been prepared in accordance with accounting standards and policies which comply with Listing Rule 19.11A.

• 2 This statement gives a true and fair view of the matters disclosed.

Sign here: ............................................................ Date: 31 July 2017 (Director/Company secretary)

Print name: Andrew Chapman

• See chapter 19 for defined terms 1 September 2016

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Appendix 5B

Mining exploration entity and oil and gas exploration entity quarterly report

Notes

1. The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity that wishes to disclose additional information is encouraged to do so, in a note or notes included in or attached to this report.

2. If this quarterly report has been prepared in accordance with Australian Accounting Standards, the definitions in, and provisions of, AASB 6: Exploration for and Evaluation of Mineral Resources and AASB 107: Statement of Cash Flows apply to this report. If this quarterly report has been prepared in accordance with other accounting standards agreed by ASX pursuant to Listing Rule 19.11A, the corresponding equivalent standards apply to this report.

3. Dividends received may be classified either as cash flows from operating activities or cash flows from investing activities, depending on the accounting policy of the entity.

4. See chapter 19 for defined terms 1 September 2016

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