MATSA RESOURCES LIMITED — Interim / Quarterly Report 2022

Oct 26, 2021

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Matsa Resources Limited
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ASX Announcement

27[th] October 2021

Quarterly Activities Report 30[th] September 2021

Highlights

• Fortitude Mineral Resource Estimate has grown by 43% to 489,000oz @ 1.9 g/t Au

CORPORATE SUMMARY

Executive Chairman

Paul Poli

• The Lake Carey Mineral Resource Estimate now stands at 867,000oz @ 2.4g/t Au

• A new mine optimisation at Fortitude Gold Mine delivered a significant increase in the estimated gold mined to ~ 132,000oz Au @ 1.6g/t (up from 58koz)

• A$95M cash surplus forecast from Fortitude and A$41M from Devon pit projected, based on a proposed Matsa mill

• Final 1 metre assays confirm positive early results from reverse circulation (RC) drilling program completed at Devon Hub during the June quarter. Significant intercepts include:

HE1 8m @2.66 g/t Au from 63m 3m @ 14.2 g/t Au from 123m 3m @ 6.64 g/t Au from 84m

Directors

Frank Sibbel

Pascal Blampain

Director & Company Secretary

Andrew Chapman

Shares on Issue

358.15 million

Listed Options

49.22 million @ $0.17

Unlisted Options

65.38 million @ $0.17 - $0.35

Top 20 shareholders

LIN5 1m @ 29.2 g/t Au from 17m

Hold 53.29%

Share Price on 27[th] Oct 2021

Devon Pit 4m @ 3.23 g/t Au from 99m 3m @ 2.52 g/t Au from 99m

• New Years Gift soil sampling defines new 600m x 300m gold anomaly approximately 1km north of Devon Pit

6.0 cents

Market Capitalisation

A$21.49 million

• Ground magnetic survey at Fortitude North highlights key structures for drill targeting

• During the quarter the Company raised A$3.38M (before costs) via a placement with funds to be utilised for further exploration expenditure on the Company’s projects

Matsa Resources Limited | www.matsa.com.au | ABN 48 106 732 487

Head office: 11/139 Newcastle Street, Perth Western Australia 6000 | T 08 9230 3555 | reception@matsa.com.au

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INTRODUCTION

Matsa Resources Limited (“Matsa” or “the Company” ASX: MAT) is pleased to report on its exploration and corporate activities for the quarter ended 30[th] September 2021.

COMPANY ACTIVITIES DURING THE QUARTER

Activities during the quarter have been principally focused on the Company’s Lake Carey Gold project (Figure 1) and comprised the following:

• Upgraded Mineral Resource Estimate completed at Fortitude

• Mining optimisation study completed at Fortitude

• Upgraded Mineral Resource Estimate completed at Lionfish (Red October Hub)

• Fortitude North Exploration Target progress update

• Feasibility Study at Devon Pit commenced

• Devon Hub soil sampling results defined new gold target at New Years Gift

• Assay results for 1 metre split samples have been returned for RC drill holes completed in the Devon Hub during the previous quarter

• Ground magnetic survey completed at Fortitude North with interpretation of data underway

• Red October underground wind down complete

TOTAL MINERAL RESOURCES

Resource upgrades during the quarter at Fortitude and Lionfish has substantially increased the global Mineral Resource Estimate for Lake Carey to 867,000oz @ 2.4g/t Au (adjusted for depletion for 20202021 mining). This represents a 25% increase on the total of 694,000 oz reported June 2021.

	Cutoff g/t Au	('000t) g/t Au Measured	('000t) g/t Au Indicated	('000t) g/t Au Inferred	('000t) g/t Au ('000 oz) Total Resource
Red October Red October UG	2.0	105 8	483 5.7	411 6.3	999 6.2 199
Red October Subtotal		105 8.4	483 5.7	411 6.3	999 6.2 199
Devon Devon Pit (OP) Olympic (OP) Hill East (OP)	1.0 1.0 1.0	- - - - - -	341 4.8 - - - -	102 3.6 171 2.8 633 1.7	443 4.6 65 171 2.8 15 633 1.7 35
Devon Subtotal		- -	341 4.8	906 2.1	1247 2.9 115
Fortitude Fortitude Gallant (OP) Bindah (OP)	1.0 1.0 1.0	127 2.2 - - - -	2,979 1.9 - - 43 3.3	4,943 1.9 341 2.1 483 2.3	8,048 1.9 489 341 2.1 23 526 2.4 40
Fortitude Subtotal		127 2.2	3021 2.0	5,767 1.9	8,915 1.9 553
Total		232 5.0	3,845 2.7	7,084 2.2	11,161 2.4 867

Refer to ASX announcement dated 2[nd] September 2021 for more details of the Mineral Resource Estimate.

Matsa confirms that it is not aware of any new information or data that materially affects the information included in the ASX announcement dated 2[nd] September 2021 entitled “Gold Resource Nears 1 Million Ounce Milestone Lake Carey Gold Project”. All material assumptions and technical parameters underpinning the Mineral Resource estimate continue to apply and have not materially changed. Red October numbers have been depleted for 2020-2021 mining

Matsa Resources Limited | www.matsa.com.au | ABN 48 106 732 487

Head office: 11/139 Newcastle Street, Perth Western Australia 6000 | T 08 9230 3555 | reception@matsa.com.au

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Figure 1: Lake Carey Gold Project

LAKE CAREY PROJECT ACTIVITIES

In January 2021, Matsa announced the results of a concept study into a proposed new 600,000tpa processing plant to service Lake Carey[1] . The Study demonstrated a Matsa owned and operated treatment plant would significantly and positively impact the financial results of Matsa’s mining opportunities.

1 ASX Announcement 22 January 2021 - Concept Study 600,000tpa Treatment Plant Lake Carey Project

Matsa Resources Limited | www.matsa.com.au | ABN 48 106 732 487 Head office: 11/139 Newcastle Street, Perth Western Australia 6000 | T 08 9230 3555 | reception@matsa.com.au

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During the quarter a preferred site was selected and relevant work activities are progressing for a new gold processing plant to be constructed at the Fortitude gold mine. The proposed mill location at the Fortitude mine is well positioned to service Matsa’s other projects that are by and large within 20km of the proposed site location (Figure 2).

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Figure 2: Proposed site for Matsa processing plant showing key projects within 10km and 20km radius

Matsa Resources Limited | www.matsa.com.au | ABN 48 106 732 487 Head office: 11/139 Newcastle Street, Perth Western Australia 6000 | T 08 9230 3555 | reception@matsa.com.au

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Devon Hub

The Devon Hub was the most actively explored area during the September quarter. Activities include:

• Feasibility study commenced at Devon Pit, with fauna and flora studies completed

• Final assays for 1m samples were received for the 42 hole RC program completed during the previous quarter

• Assays were received from soil sampling north of Devon Pit defining a new 600m x 300m gold target, which extends to the SW from historic high grade gold workings at New Years Gift towards Devon Pit

• 245 soil samples were collected to the west of Olympic, results are awaited

• Systematic XRF readings have commenced on 2,500 sample residues for multi element data, such as arsenic, following laboratory assays for gold-only assays

Devon Study

The April scoping study[2] showed that a mining operation at the Devon Pit will produce attractive project economics with a potential cash surplus of A$40.75M through production of 265kt @ 4.64 g/t Au over an estimated mining period of 12 months . A sensitivity review indicates that the project is robust with potential for improvement to the financial model as new optimisations come to hand and exploration progresses to potentially add additional ounces to the resource.

Flora and Fauna studies have been completed and initial discussions with regulatory authorities have been held regarding potential recommencement of mining at Devon Pit.

RC Drilling Program – Final 1m Assays Received

Final assay results were received for 1m split samples from the 42 hole RC drilling program completed during the June quarter[3] . Key mineralised intercepts >0.5 g/t Au are highlighted in Figure 3 and Table 1. All assays >0.1 g/t Au are listed in Appendix 1.

Final 1m Assays – Discussion

HE1 and HE2: 8 RC drill holes were designed to test HE1 and HE2 which form part of the Devon Hill East Resource. The drilling targeted depth extensions at HE1 as well as an interpreted ESE trending structural link between HE1 and HE2. This interpretation targets a strong magnetometric resistivity (MMR) response from Matsa’s 2020 SAM survey.

The 1m assays from the 8 RC drill holes include excellent results such as 8m @ 2.66 g/t Au from 63m (21HERC045), 3m @ 14.2 g/t Au from 123m (21HERC042) and 3m @ 6.64 g/t Au from 84m (21HERC046). These results closely confirm first pass composite assays and the two deeper intercepts can be seen to highlight potential for discovery of additional mineralisation through further drilling at depth and along strike (Figure 4).

HE5: 9 RC drill holes were completed to test potential structural extensions to gold mineralisation in the HE5 resource associated with a south east trending MMR response (Figure 3). The 1m assay data returned significantly mineralised intercepts in 4 drill holes, including high grade intercepts at shallow

2 ASX Announcement 14 April 2021 - Devon Pit Scoping Study Delivers Excellent Results

3 ASX Announcement 13th July 2021 - New High Grade Gold Results Boosts Devon Hub Lake Carey Gold Project

Matsa Resources Limited | www.matsa.com.au | ABN 48 106 732 487

Head office: 11/139 Newcastle Street, Perth Western Australia 6000 | T 08 9230 3555 | reception@matsa.com.au

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depth in two holes namely 1m @ 6.77 g/t from 10m (21HERC035) and 1m @ 5.03 g/t Au from 22m (21HERC039). Further drilling is proposed.

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Figure 3: RC Drilling Devon Hub, summary of 1m assay intervals >0.5 g/t Au over contoured soil gold values and SAM targets

LIN5: This target comprises a small number of shallow workings within a strong NE trending soil gold anomaly and was tested by two RC drill holes. Potentially significant intersections at very shallow depth in both drill holes were confirmed and supported by the 1m assays which returned intercepts of 1m @ 29.2 g/t Au from 17m (21HERC61) and 5m @ 1.51 g/t Au from 18m (21HERC062). These encouraging results will be followed up with further drilling at depth and along strike.

Matsa Resources Limited | www.matsa.com.au | ABN 48 106 732 487 Head office: 11/139 Newcastle Street, Perth Western Australia 6000 | T 08 9230 3555 | reception@matsa.com.au

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Figure 4: Devon Hub, HE 1 drilling highlighting new high grade 1m assays on existing resource wireframe.

Devon South: 7 RC drill holes were designed to follow up historic costean and drilling intercepts by previous explorers Haoma Mining NL and Exterra Resources Limited. Drilling was also designed to test structural targets as defined in the 2020 SAM survey and to follow up reported gold intercepts from historic drilling (Figure 3). All drill holes intersected anomalous gold values >0.1 g/t Au in an area of colluvial cover and minor porphyry and basalt float. The 1m assays have identified two narrow intercepts >1g/t Au including 1m @ 5.95 g/t Au from 83m (21DVRC063) which supports sporadic high grade intercepts in historic drilling and costeans. Infill soil or auger geochemistry is planned to define a potentially more robust drill target in this structurally complex area.

LIN1: 6 RC drill holes targeted a >1km long x 100 - 200m wide soil gold anomaly with >0.1g.t Au gold in soil with coincident arsenic and tellurium anomalism. The target was partly covered by the SAM survey where it coincided with a highly anomalous late time conductivity target. First pass composite assays confirmed the presence of widespread low tenor gold mineralisation at shallow depth (to 50m) in a veined, brecciated and sheared metasedimentary chert up to 15m wide at surface. The 1m assays have returned narrow intercepts of >1 g/t Au as shown in Table 1. The results however, do not explain the strong SAM geophysical response and this target remains unresolved. A ground EM survey is planned as a guide to further drilling.

LIN2: 3 RC drill holes were completed to test a gold in soil anomaly overlying the northern extension of LIN1, a sheared and brecciated quartz veined metasedimentary chert unit similar to LIN1, but geochemically less distinctive and with less brecciation and quartz veining. The 1m assays confirm the presence of discrete low tenor gold mineralisation at shallow depth. Metasedimentary chert units in the Devon area are distinctive in aeromagnetic data and have been mapped extensively. Further exploration will await results of proposed EM follow up and further drilling at LIN1.

LIN6: 2 RC drill holes on one EW section were completed on this target. The target is a linear MMR target from the 2020 SAM survey with coincident soil gold anomalism along a N-NE trending fault controlled drainage channel.

Matsa Resources Limited | www.matsa.com.au | ABN 48 106 732 487 Head office: 11/139 Newcastle Street, Perth Western Australia 6000 | T 08 9230 3555 | reception@matsa.com.au

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Prospect	Hole Id	From	To	Sample ID	Au_ppm	Intercepts
LIN1	21HERC050	8	9	183009	1.13	1m@1.13g/t Au from 8m
	21HERC050	15	16	183016	1.05	1m@1.05g/t Au from 15m
	21HERC052	10	11	183222	1.15	1m@1.15g/t Au from 10m
	21HERC052	25	26	183237	1.14	1m@1.14g/t Au from 25m
	21HERC052	29	30	183242	1.5	2m @ 1.26 g/t Au from 29m
		30	31	183243	1.02
	21HERC053	22	23	183505	1.08	1m@1.08g/t Au from 22m
Devon South	21DVRC061	54	55	183950	1.14	1m@1.44g/t Au from 54m
	21DVRC063	83	84	184063	5.95	1m@5.95g/t Au from 83m
HE1	21HERC043	73	74	184292	1.39	1m@1.39g/t Au from 73m
	21HERC042	23	24	184347	1.97	2m @ 1.81 g/t Au from 23m
	21HERC042	24	25	184348	1.65
	21HERC042	123	124	184452	2.81	3m @ 14.2 g/t Au from 123m, incl 2m @ 19.9 g/t Au from 124m
		124	125	184453	18.6
		125	126	184454	21.2
	21HERC046	84	85	184563	2.8	3m @ 6.64 g/t Au from 83m, incl 2m @ 8.56 g/t Au from 85m
		85	86	184564	7.12
		86	87	184565	9.99
	21HERC045	63	64	184654	1.32	8m @ 2.66 g/t Au from 63m, incl 1m @ 7.06 g/t Au from 65m
		64	65	184655	0.6
		65	66	184656	7.06
		66	67	184657	2.19
		67	68	184658	1.45
		68	69	184659	3.1
		69	70	184661	2.87
		70	71	184662	2.67
HE2	21HERC048	61	62	184759	5.5	1m@5.5g/t Au from 61m
HE5	21HERC039	22	23	185198	5.03	1m@5.03g/t Au from 22m
	21HERC034	4	5	185337	1.47	1m@1.47g/t Au from 4m
	21HERC035	10	11	185527	6.77	1m@6.77g/t Au from 10m
	21HERC038	56	57	185666	2.03	1m@2.03g/t Au from 56m
LIN5	21HERC062	18	19	185976	1.91	5m @ 1.51g/t Au from 18m
		19	20	185977	0.09
		20	21	185978	3.27
		21	22	185979	0.55
		22	23	185981	1.72
	21HERC061	17	18	186053	29.2	1m@29.2g/t Au from 17m
Devon Pit	21DVRC054	69	70	186455	5.63	4m @ 3.23 g/t Au from 69m, incl 1m @5.63 g/t from 69m
		70	71	186456	1.57
		71	72	186457	0.6
		72	73	186458	5.12
	21DVRC052	23	24	186696	2.03	1m@2.03g/t Au from 23m
	21DVRC052	94	95	186771	1.89	1m@1.89g/t Au from 9.m
	21DVRC052	102	103	186779	1.66	1m@1.66g/t Au from 102m
	21DVRC053	61	62	186874	6.33	1m@6.33g/t Au from 61m
	21DVRC053	99	100	186914	1.19	3m @ 2.52 g/t Au from 99m, incl 1m @5.02 g/t from 100m
		100	101	186915	5.02
		101	102	186916	1.34

Table 1: RC Drilling Devon Hub, key 1m assay intercepts

Matsa Resources Limited | www.matsa.com.au | ABN 48 106 732 487

Head office: 11/139 Newcastle Street, Perth Western Australia 6000 | T 08 9230 3555 | reception@matsa.com.au

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The 1m assay data returned 1m @ 0.53 g/t Au from 59m (21HERC060) supporting earlier composite assays and indicates the presence of potentially significant gold mineralisation in the NNE trending structure. Additional geochemistry and further drilling is proposed.

Devon Pit: Matsa previously announced a Resource of 65,000oz[4] for the Devon Pit and a scoping study showed A$40M positive cash flow could be achieved[5] . 5 RC drill holes were completed to better define the NW and SE extents of the narrow but high grade Hanging-wall Lode which is part of the Devon Pit Resource. The 1m assays have confirmed the earlier results with best results of 4m @ 3.23 g/t Au from 99m (21DVRC054) and 3m @ 2.52 g/t Au from 99m (21DVRC053). These results appear to define the northern and southern extremities of the Hanging Wall lode system.

Overall, final 1m assay results have refined 3m composite assay intercepts. Results demonstrate that anomalous surface gold extends below surface to depths of at least 120m, which is the maximum depth of recent drilling. Whilst results returned a limited number of drill intercepts of significant “economic” type grades, it is equally encouraging that a large number of thick lower grade “smoke” intercepts were recorded across the entire program. It is postulated that such a widespread distribution of both surface and below surface gold anomalism, could be associated with more substantial mineralisation at depth that is yet to be explored.

Soil Sampling Program

During the quarter, soil sampling activities included:

• A soil sampling program comprising 245 soil samples was commenced to the west of Olympic with results pending (Figure 5)

• Soil results returned for 124 soil samples collected north of Devon Pit define a strong geochemical anomaly extending 600m south of the New Years Gift workings (Figure 6)

Results are summarised in Figures 5 and 6.

New Years Gift Soil Sampling

This program comprised 124 soil samples collected on a staggered grid with 80m spaced soil samples located along EW lines spaced 160m apart. Sampling was completed in a dominantly residual regolith regime with deeper windblown sand to the north of a small lake in an area with no previous geochemical sampling recorded. Sampling on the lake floor exposed deeply weathered basaltic rocks under a thin (~10cm) veneer of transported clays and sands. Results have defined a new 600m x 300m gold anomaly wholly contained within a small ephemeral lake, with anomalous maximum soil values up to 0.14 g/t Au.

The soil anomaly defined by the soil sampling extends well beyond the historic New Years Gift workings which are located at the northern extremity of the soil gold anomaly (Figure 5).

4 ASX Announcement 8th April 2021 - Initial High Grade Resource at Devon Lake Carey Gold Project

5 ASX Announcement 14th April 2021 - Devon Pit Scoping Study Delivers Excellent Results

Matsa Resources Limited | www.matsa.com.au | ABN 48 106 732 487

Head office: 11/139 Newcastle Street, Perth Western Australia 6000 | T 08 9230 3555 | reception@matsa.com.au

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Figure 5: Devon soil sampling progress on magnetics (1VD aeromagnetics), summary gold results and location of recent soil samples awaiting assays. Devon Resource outlines are in black

Matsa Resources Limited | www.matsa.com.au | ABN 48 106 732 487

Head office: 11/139 Newcastle Street, Perth Western Australia 6000 | T 08 9230 3555 | reception@matsa.com.au

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Previous drilling achieved several narrow very high grade gold hits at New Years Gift as follows:

• 3m @ 13.96 g/t Au from 25m NYGRC002, 1m @ 23.6 g/t Au from 23m NYGRC004, 2m @3.52 g/t Au from 12m NYGRC003[6]

• 1m @ 19.4 g/t Au from 44m 20NYGRC006, 1m @ 10.45 g/t Au from 35m 20NYGRC007[7]

An initial program of costeans is planned to test the new soil anomaly which potentially reflects a significant extension to gold mineralisation at New Years Gift (Figure 6).

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Figure 6: New Years Gift, summary of soil sample results and previous drilling on satellite image

• 6 ASX Announcement by GME Resources Ltd 11th April2015 - Encouraging Results from Initial RC drilling at New Years Gift Gold Prospect - Linden

• 7 ASX Announcement 31 July 2020 - Quarterly Report to June 30th 2020.

Matsa Resources Limited | www.matsa.com.au | ABN 48 106 732 487

Head office: 11/139 Newcastle Street, Perth Western Australia 6000 | T 08 9230 3555 | reception@matsa.com.au

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Vanta pXRF Analyser

A total of 2,967 samples have been analysed to date using Matsa’s Olympus Vanta pXRF analyser. pXRF analyses have been conducted on 2,493 sample residues from drilling and 474 residues from soil sampling.

Potential gold pathfinder assays eg As, Bi, Sb can enable program decisions to be made during drilling or underground development without waiting for final gold assay results. Multi-element soil sample assays are also a valuable early stage exploration tool to improve survey design and to guide follow up soil sample surveys.

A review of results is currently underway to examine the relationship between the basic pXRF assay suite and laboratory gold assays in drilling and soil samples.

Fortitude Hub

Fortitude Resource Upgrade

The Fortitude Mineral Resource Estimate has grown to 489koz @ 1.9 g/t Au (1g/t cut-off) which represents a 43% increase against previous estimates of 343koz @ 2.0 g/t Au. As a result, the overall Lake Carey Mineral Resource grows to 874,000oz @ 2.4g/t Au.

Matsa previously reported a global Fortitude resource of 5,449,000t @ 2.0 g/t Au for 342,600 oz and an in-pit mining reserve of 1,029,000t @ 1.8 g/t Au for 58,100 oz[8] producing a positive operating cash flow of A$55M[9] .

Information from Fortitude was used to update the model which includes grade control drilling, pit geology mapping and more density data from mined ore. Importantly, production reconciliation identified that the grade of fresh ore had been underestimated in the resource compared to the grade control drilling.

Fortitude Updated Optimisation Study

Strong results from updated optimisation study enhances Fortitude’s value by effectively doubling mine life, production output and cash flow for the Fortitude Gold Mine.

Key outcomes from the study include:

• Total operating cash surplus grows to A$95M over 4 years (+72% increase)

• Mine production of ~ 132,000 oz Au @ 1.6g/t (up from 58koz)

• 95% of the ounces are in the Measured and Indicated resource category

• 2.7Mt of ore (up from 1.1Mt)

• Strip ratio of 8:1 (down from 14:1)

• Operating cash costs of A$1,570/oz (previously A$1,483/oz)

• Potential for additional production via an underground operation is currently being investigated

Gold recovery of 93% is in line with past trial production through AngloGold Ashanti’s Sunrise Dam treatment plant.

8 ASX Announcement 21 August 2019 - Mining Study Results Fortitude Gold Project Stage 2

9 ASX Announcement 22 January 2021 - Concept Study 600,000tpa Treatment Plant Lake Carey Project

Matsa Resources Limited | www.matsa.com.au | ABN 48 106 732 487

Head office: 11/139 Newcastle Street, Perth Western Australia 6000 | T 08 9230 3555 | reception@matsa.com.au

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The optimisation study update was driven by the significant increase in Fortitude’s Mineral Resource Estimate to 489koz @ 1.9 g/t Au (1g/t cut-off) recently announced.[10]

This upgraded optimisation highlights a highly attractive commercialisation opportunity for just a portion of the wider 867Koz resource.

Fortitude North Update

In August 2020, Matsa identified an exploration target[11] of between 310,000oz and 600,000oz for the Fortitude North prospect. New geological modelling* strongly supports the exploration target with only the northern 2/3[rd] of the known 1.5km anomaly having been drill tested to date.

Exploration and modelling* completed so far has achieved a potential 378,990oz @ 2.53 g/t Au to 600,000oz @ 3.8 g/t Au in the target. Bearing in mind that the prospect has undergone very limited drilling, further drilling is planned both to drill test the remaining 1/3[rd] of the anomaly and to better define the resource potential within the exploration target.

The new model** comprises 33 mineralised intercepts and has dimensions of 1,300m length by 350m depth and approximately 4m thickness. The prospect has been modelled as steeply dipping stacked lodes with minor components of poddy flat supergene.

The following previously reported intersections highlight the extensive gold mineralisation at Fortitude North and further drilling is a priority for the Company:

• 47m @ 2.55 g/t Au from 42m (18FNAC71)

• 26m @ 1.95 g/t Au from 58m (18FNAC36)

• 8.0m @ 3.02 g/t Au from 106m (19FNDD001)

• 4.0m @ 13.63 g/t Au from 79m (20FNDD002)

• 17.2m @ 3.4 g/t Au from 73m (20FNDD003)

Planned drilling will aim to improve definition (infill drilling) and extend mineralisation. This next step will enable us to work towards a maiden resource at Fortitude North and add to the wider Lake Carey Mineral Resource Estimate.

• The Fortitude North exploration and mineralising target (model) is not a resource, conceptual in its present form, and is based on wide spaced drill lines up to 300m apart. Whilst geological continuity is thought to be present, further drilling is required. The model has been prepared to guide exploration and prioritise future drillhole planning.

** Modelling was completed using eight AC holes, six RC holes and seven diamond core drill holes.

Fortitude North Ground Magnetic Survey

A 66 line km ground magnetic survey was completed at Fortitude North. Magnetic readings were collected at 2 second intervals along ENE lines spaced 40m apart. Preliminary data is presented in Figure 7. A structural interpretation of the data is currently underway as the basis for improving the geological interpretation and as a guide for future drilling.

10 ASX Announcement 2 September 2021 - Lake Carey Gold Resource Nears 1 Million Oz Milestone 11 ASX Announcement 18 August 2020 - Significant Gold Potential at Lake Carey Gold Project

Matsa Resources Limited | www.matsa.com.au | ABN 48 106 732 487

Head office: 11/139 Newcastle Street, Perth Western Australia 6000 | T 08 9230 3555 | reception@matsa.com.au

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Figure 7: Fortitude North: 1VD ground magnetic image showing drilling (diamond drill holes labelled) and outline of gold mineralisation in weathered basement

Matsa Resources Limited | www.matsa.com.au | ABN 48 106 732 487

Head office: 11/139 Newcastle Street, Perth Western Australia 6000 | T 08 9230 3555 | reception@matsa.com.au

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Red October Hub

An upgraded Lionfish Mineral Resource Estimate was reported during the quarter producing a result of 54koz @ 7.4g/t Au (2g/t cut-off) which represents a 159% increase against the previous estimate of 21koz @ 5.6g/t Au.

The Red October Mineral Resource now stands at 199koz @ 6.1g/t Au (net of 2020-2021 mining depletion) , which compares favourably against the previous estimate of 173koz @ 5.8g/t Au.

Encouragingly, the 32% increase in grade at Lionfish from 5.6g/t to 7.4g/t demonstrates the high grade nature of the prospect and value gained from additional drilling.

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Figure 7: Oblique view looking grid north of Red October showing Lionfish Resource and high

priority exploration target areas for Lionfish

The Lionfish mineral resource now covers an area of 400m (strike) by 400m (dip) and remains open along strike and at depth and comprises multiple lodes.

Modelling suggests strong exploration potential exists where the Lionfish structure is interpreted to intersect the new Western target interpreted from seismic and SAM data as announced in December 2020[12] (Figure 7).

Further exploration drilling at Red October is planned for Lionfish as well as testing the new Western and Eastern targets and potential extensions at Nemo.

12 ASX Announcement 14 December 2020 - High Grade Results and Resource Review Red October

Matsa Resources Limited | www.matsa.com.au | ABN 48 106 732 487

Head office: 11/139 Newcastle Street, Perth Western Australia 6000 | T 08 9230 3555 | reception@matsa.com.au

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Matsa Resources Limited
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Fraser Range

Two new tenements have been added to Matsa’s Fraser range portfolio being E39/2162 and E39/2159, located in the NE extent of the Fraser Range belt and approximately 80km south of the Tropicana Mine (refer Figure 8).

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Figure 8: Fraser Range magnetics, distribution of nickel occurrences and Matsa tenements

Matsa Resources Limited | www.matsa.com.au | ABN 48 106 732 487 Head office: 11/139 Newcastle Street, Perth Western Australia 6000 | T 08 9230 3555 | reception@matsa.com.au

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Symons Hill

The Symons Hill project is located approximately 6km south of IGO’s NOVA Ni-Cu-Co Operation and is being explored by IGO under a $7M earn in agreement. Exploration completed by IGO during the September 2021 quarter is summarised as follows:

Work Completed during the quarter

As reported in June 2021, a single 843m long diamond drill (21AFDD105) hole to test for nickel sulphides returned a 410m long interval (215m-625m) of blebby and semi massive sulphides.

During the quarter assay results were received for drill hole with peak Ni results summarised as follows:

HOLEID	FROM	TO	LENGTH (m)	Ni ppm(1)	Lith1	Co ppm	Cu ppm
21AFDD105	66	67	1	617	MGNG	77	524
21AFDD105	106	107	1	544	MGNG	79	518
21AFDD105	446.1	446.55	0.45	507	UWB	193	1400
21AFDD105	456.3	456.9	0.6	510	MGNG	170	456
21AFDD105	577.8	578.1	0.3	645	MGNG	216	745

Table 2: Significant Ni intercepts with major associated sulphide metals

Matsa considers that the length of anomalous material intersected suggests the area can be considered fertile for nickel accumulations and warrants further exploration.

IGO are reviewing the assay data in context of the geological and geophysical models to determine the next exploration steps with further exploration drilling yet to be determined.

OPERATIONS

Red October Hub

As previously forecast, production at Red October underground mine ceased during the quarter.

Following the MRE update of Lionfish, other parts of the Red October mine are being reviewed as part of the exploration planning process.

CORPORATE

Matsa sold its shareholding in Bulletin Resources Limited generating A$2.23M in cash before costs. Overall, this represents a return of approximately A$7.4M from an original cost of A$1.4M, and is an excellent outcome. Matsa retains its 20% free carried interest in the Lake Rebecca Gold Project

The Company completed a A$3.38M placement[13] via the issue of approximately 42.2 million shares at A$0.08 per share (incl. a free 1 for 2 listed option exercisable at A$0.17 each expiring 30 April 2023).

Financial Commentary

An overview of the Company’s financial activities for the quarter ending 30 September 2021 (Appendix 5B) notes that:

13 ASX Announcement dated 15 July 2021 - $3.38M Placement to Fund Aggressive Drilling Campaign

Matsa Resources Limited | www.matsa.com.au | ABN 48 106 732 487

Head office: 11/139 Newcastle Street, Perth Western Australia 6000 | T 08 9230 3555 | reception@matsa.com.au

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Matsa Resources Limited
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• In line with the winding down of production at Red October there were no receipts from customers from the sale of gold ore. Correspondingly, cash outflows for the quarter also reduced and amounted to A$2.56M

• There was a negative operating cashflow for the quarter of A$0.99M taking into account corporate and other overhead expenditure

• Exploration expenditure for the quarter at the Lake Carey gold project was A$0.75M. The total amount paid to directors of the entity and their associates in the period (Item 6.1 of the Appendix 5B) was A$223,000 and includes salary, director’s fees, consulting fees and superannuation

• Cash on hand was approximately A$1.77M as at 30 September 2021

• A loan facility of A$5M drawn down to A$4M is available to the Company

Conferences and Marketing

During the quarter, the Company presented at the Noosa Mining & Exploration Investor Conference (via zoom due to COVID travel restrictions). The Company’s presentations were well received by current and prospective shareholders and are available on the Company’s website.

DECEMBER 2021 PLANNED ACTIVITIES

During the December quarter, the Company intends to undertake the following activities:

• Continue and extend soil sampling coverage across Lake Carey

• Advance environmental and other related studies for regulatory mining approvals process for Devon Pit

• Continue studies for regulatory approvals process for Matsa’s proposed ore treatment plant

• Finalise resource model updates at Devon Pit and Hill East following receipt of final RC drilling assays of the May 2021 RC program

• Continue the mining and feasibility studies at Bindah

• Plan and conduct further drilling at Devon, Red October and Fortitude Hubs

• Design and plan regional exploration programs to advance the Company’s exploration pipeline

• Review results of the Fortitude North ground magnetic survey for potential drill targeting

2021 SEPTEMBER QUARTER - ASX ANNOUNCEMENTS

This Quarterly Activities Report contains information extracted from ASX market announcements reported in accordance with the 2012 edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves” (“2012 JORC Code”). Further details (including 2012 JORC Code reporting tables where applicable) of exploration results referred to in this Quarterly Activities Report can be found in the following announcements lodged on the ASX:

Date	Announcement
2 July2021	A$2.23M Sale of Bulletin Investment
12 July2021	410m Blebbyto Semi Massive Ni-Cu Sulphides Symons Hill
13 July2021	High Grade Gold Results Boosts Devon - Lake CareyProject
14 July2021	Noosa Mining& Exploration Investor Conference Presentation
15 July2021	A$3.38M Placement to Fund Aggressive DrillingCampaign

Matsa Resources Limited | www.matsa.com.au | ABN 48 106 732 487

Head office: 11/139 Newcastle Street, Perth Western Australia 6000 | T 08 9230 3555 | reception@matsa.com.au

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Matsa Resources Limited
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29 July 2021 30 June 2021 Quarterly Report 2 August 2021 Lake Carey Gold Project Resource Grows to 727,000 oz 18 August 2021 Nickel-Copper Assays Symons Hill Fraser Range 2 September 2021 Lake Carey Gold Resource Nears 1 Million Oz Milestone 14 September 2021 Fortitude Preferred Site for Proposed Gold Plant Lake Carey 16 September 2021 Fortitude North Shaping as a Significant Mineralised System

These announcements are available for viewing on the Company’s website under the Investors centre tab under ASX Announcements. The Company confirms that it is not aware of any new information or data that materially affects the information included in any original ASX announcement.

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

For further information please contact:

Paul Poli

Executive Chairman T 08 9230 3555 E reception@matsa.com.au

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 .

Matsa Resources Limited | www.matsa.com.au | ABN 48 106 732 487 Head office: 11/139 Newcastle Street, Perth Western Australia 6000 | T 08 9230 3555 | reception@matsa.com.au

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Matsa Resources Limited
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Appendix 1

Devon Hub RC Drilling Program May-June 2021 final 1m assays >0.1g/t Au

Hole_ID	Sample ID	Depth_From	Depth_To	Au_ppm
21DVRC052	186672	0	1	0.44
21DVRC052	186673	1	2	0.1
21DVRC052	186696	23	24	2.03
21DVRC052	186697	24	25	0.22
21DVRC052	186770	93	94	0.89
21DVRC052	186771	94	95	1.89
21DVRC052	186779	102	103	1.66
21DVRC053	186827	16	17	0.23
21DVRC053	186842	30	31	0.62
21DVRC053	186874	61	62	6.33
21DVRC053	186881	67	68	0.17
21DVRC053	186882	68	69	0.14
21DVRC053	186914	99	100	1.19
21DVRC053	186915	100	101	5.02
21DVRC053	186916	101	102	1.34
21DVRC053	186917	102	103	0.6
21DVRC053	186918	103	104	0.22
21DVRC054	186447	61	62	0.18
21DVRC054	186455	69	70	5.63
21DVRC054	186456	70	71	1.57
21DVRC054	186457	71	72	0.6
21DVRC054	186458	72	73	5.12
21DVRC054	186459	73	74	0.72
21DVRC054	186461	74	75	0.43
21DVRC057	186634	54	55	0.3
21DVRC059	183617	48	49	0.49
21DVRC061	183916	22	23	0.42
21DVRC061	183917	23	24	0.38
21DVRC061	183918	24	25	0.23
21DVRC061	183919	25	26	0.69
21DVRC061	183921	26	27	0.85
21DVRC061	183922	27	28	0.65
21DVRC061	183923	28	29	0.38
21DVRC061	183924	29	30	0.14
21DVRC061	183925	30	31	0.23
21DVRC061	183926	31	32	0.28
21DVRC061	183937	42	43	0.47
21DVRC061	183942	46	47	0.39
21DVRC061	183943	47	48	0.36
21DVRC061	183950	54	55	1.14
21DVRC061	183951	55	56	0.94

Matsa Resources Limited | www.matsa.com.au | ABN 48 106 732 487

Head office: 11/139 Newcastle Street, Perth Western Australia 6000 | T 08 9230 3555 | reception@matsa.com.au

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Matsa Resources Limited
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21DVRC061	183952	56	57	0.14
21DVRC061	183959	63	64	0.96
21DVRC063	183984	8	9	0.25
21DVRC063	183993	17	18	0.18
21DVRC063	184062	82	83	0.87
21DVRC063	184063	83	84	5.95
21DVRC063	184064	84	85	0.27
21DVRC064	183748	6	7	0.3
21DVRC064	183749	7	8	0.25
21DVRC064	183750	8	9	0.12
21DVRC064	183786	42	43	0.16
21HERC033	185703	11	12	0.2
21HERC033	185721	28	29	0.19
21HERC033	185722	29	30	0.16
21HERC034	185334	1	2	0.14
21HERC034	185336	3	4	0.36
21HERC034	185337	4	5	1.47
21HERC034	185338	5	6	0.37
21HERC034	185339	6	7	0.51
21HERC034	185410	73	74	0.88
21HERC034	185411	74	75	0.82
21HERC035	185526	9	10	0.25
21HERC035	185527	10	11	6.77
21HERC035	185528	11	12	0.17
21HERC035	185536	19	20	0.1
21HERC035	185537	20	21	0.7
21HERC035	185538	21	22	0.25
21HERC035	185539	22	23	0.13
21HERC035	185540	23	24	0.19
21HERC036	185261	1	2	0.84
21HERC036	185262	2	3	0.25
21HERC036	185273	13	14	0.82
21HERC036	185276	16	17	0.4
21HERC036	185277	17	18	0.54
21HERC037	185508	66	67	0.28
21HERC037	185509	67	68	0.32
21HERC038	185630	22	23	0.19
21HERC038	185645	36	37	0.16
21HERC038	185665	55	56	0.46
21HERC038	185666	56	57	2.03
21HERC038	185667	57	58	0.4
21HERC038	185668	58	59	0.15
21HERC038	185669	59	60	0.15
21HERC039	185189	13	14	0.23

Matsa Resources Limited | www.matsa.com.au | ABN 48 106 732 487

Head office: 11/139 Newcastle Street, Perth Western Australia 6000 | T 08 9230 3555 | reception@matsa.com.au

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Matsa Resources Limited
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21HERC039	185190	14	15	0.21
21HERC039	185191	15	16	0.15
21HERC039	185192	16	17	0.16
21HERC039	185196	20	21	0.14
21HERC039	185197	21	22	0.4
21HERC039	185198	22	23	5.03
21HERC039	185199	23	24	0.11
21HERC039	185238	60	61	0.77
21HERC039	185251	72	73	0.22
21HERC039	185258	79	80	0.35
21HERC042	184347	23	24	1.97
21HERC042	184348	24	25	1.65
21HERC042	184349	25	26	0.35
21HERC042	184350	26	27	0.11
21HERC042	184448	119	120	0.44
21HERC042	184451	122	123	0.26
21HERC042	184452	123	124	2.81
21HERC042	184453	124	125	18.6
21HERC042	184454	125	126	21.2
21HERC042	184455	126	127	0.51
21HERC042	184456	127	128	0.29
21HERC042	184457	128	129	0.16
21HERC042	184459	130	131	0.1
21HERC042	184464	134	135	0.21
21HERC043	184286	67	68	0.16
21HERC043	184290	71	72	0.12
21HERC043	184291	72	73	0.51
21HERC043	184292	73	74	1.39
21HERC043	184293	74	75	0.2
21HERC043	184301	81	82	0.28
21HERC043	184302	82	83	0.53
21HERC043	184310	90	91	0.23
21HERC044	184171	18	19	0.61
21HERC044	184172	19	20	0.19
21HERC044	184173	20	21	0.29
21HERC044	184174	21	22	0.31
21HERC044	184175	22	23	0.2
21HERC044	184212	57	58	0.69
21HERC045	184601	12	13	0.15
21HERC045	184605	16	17	0.33
21HERC045	184606	17	18	0.32
21HERC045	184654	63	64	1.32
21HERC045	184655	64	65	0.6
21HERC045	184656	65	66	7.06

Matsa Resources Limited | www.matsa.com.au | ABN 48 106 732 487

Head office: 11/139 Newcastle Street, Perth Western Australia 6000 | T 08 9230 3555 | reception@matsa.com.au

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Matsa Resources Limited
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21HERC045	184657	66	67	2.19
21HERC045	184658	67	68	1.45
21HERC045	184659	68	69	3.1
21HERC045	184661	69	70	2.87
21HERC045	184662	70	71	2.67
21HERC045	184663	71	72	0.86
21HERC045	184664	72	73	0.32
21HERC045	184665	73	74	0.45
21HERC045	184666	74	75	0.36
21HERC045	184667	75	76	0.12
21HERC045	184668	76	77	0.25
21HERC046	184536	59	60	0.65
21HERC046	184538	61	62	0.56
21HERC046	184562	83	84	0.53
21HERC046	184563	84	85	2.8
21HERC046	184564	85	86	7.12
21HERC046	184565	86	87	9.99
21HERC046	184566	87	88	0.7
21HERC046	184567	88	89	0.18
21HERC047	184822	30	31	0.43
21HERC047	184848	55	56	0.2
21HERC047	184849	56	57	0.12
21HERC047	184890	95	96	0.23
21HERC047	184891	96	97	0.14
21HERC048	184734	37	38	0.14
21HERC048	184759	61	62	5.5
21HERC048	184761	62	63	0.21
21HERC048	184772	73	74	0.16
21HERC049	184946	4	5	0.18
21HERC049	184948	6	7	0.14
21HERC049	184950	8	9	0.1
21HERC049	185008	63	64	0.27
21HERC049	185009	64	65	0.21
21HERC049	185012	67	68	0.13
21HERC049	185013	68	69	0.11
21HERC050	183008	7	8	0.12
21HERC050	183009	8	9	1.13
21HERC050	183010	9	10	0.19
21HERC050	183011	10	11	0.12
21HERC050	183016	15	16	1.05
21HERC050	183017	16	17	0.55
21HERC050	183474	73	74	0.17
21HERC051	183203	112	113	0.11
21HERC052	183219	8	9	0.16

Matsa Resources Limited | www.matsa.com.au | ABN 48 106 732 487

Head office: 11/139 Newcastle Street, Perth Western Australia 6000 | T 08 9230 3555 | reception@matsa.com.au

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Matsa Resources Limited
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21HERC052	183221	9	10	0.18
21HERC052	183222	10	11	1.15
21HERC052	183233	21	22	0.11
21HERC052	183234	22	23	0.92
21HERC052	183235	23	24	0.29
21HERC052	183236	24	25	0.36
21HERC052	183237	25	26	1.14
21HERC052	183238	26	27	0.25
21HERC052	183239	27	28	0.21
21HERC052	183241	28	29	0.33
21HERC052	183242	29	30	1.5
21HERC052	183243	30	31	1.02
21HERC052	183246	33	34	0.1
21HERC052	183248	35	36	0.36
21HERC052	183249	36	37	0.15
21HERC052	183276	62	63	0.2
21HERC052	183279	65	66	0.11
21HERC052	183283	68	69	0.17
21HERC052	183284	69	70	0.14
21HERC052	183285	70	71	0.26
21HERC052	183286	71	72	0.11
21HERC052	183290	75	76	0.12
21HERC053	183497	15	16	0.48
21HERC053	183503	20	21	0.1
21HERC053	183504	21	22	0.19
21HERC053	183505	22	23	1.08
21HERC053	183507	24	25	0.52
21HERC053	183523	39	40	0.66
21HERC053	183524	40	41	0.36
21HERC054	183295	3	4	0.38
21HERC054	183376	80	81	0.13
21HERC054	183377	81	82	0.14
21HERC054	183378	82	83	0.32
21HERC055	183429	30	31	0.18
21HERC055	183432	33	34	0.28
21HERC055	183436	37	38	0.69
21HERC055	183437	38	39	0.18
21HERC055	183438	39	40	0.15
21HERC056	186141	25	26	0.53
21HERC057	186299	21	22	0.1
21HERC057	186301	22	23	0.24
21HERC057	186303	24	25	0.16
21HERC057	186304	25	26	0.1
21HERC057	186305	26	27	0.58

Matsa Resources Limited | www.matsa.com.au | ABN 48 106 732 487

Head office: 11/139 Newcastle Street, Perth Western Australia 6000 | T 08 9230 3555 | reception@matsa.com.au

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Matsa Resources Limited
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21HERC057	186306	27	28	0.66
21HERC057	186307	28	29	0.24
21HERC057	186315	36	37	0.14
21HERC057	186316	37	38	0.61
21HERC057	186317	38	39	0.65
21HERC057	186318	39	40	0.37
21HERC057	186319	40	41	0.11
21HERC057	186344	63	64	0.16
21HERC057	186349	68	69	0.11
21HERC057	186356	75	76	0.23
21HERC057	186358	77	78	0.15
21HERC058	186235	35	36	0.51
21HERC059	184097	20	21	0.15
21HERC059	184122	43	44	0.22
21HERC060	185837	59	60	0.53
21HERC061	186048	12	13	0.81
21HERC061	186049	13	14	0.38
21HERC061	186053	17	18	29.2
21HERC061	186054	18	19	0.36
21HERC061	186055	19	20	0.12
21HERC061	186056	20	21	0.17
21HERC062	185976	18	19	1.91
21HERC062	185978	20	21	3.27
21HERC062	185979	21	22	0.55
21HERC062	185981	22	23	1.72
21HERC062	185982	23	24	0.35
21HERC062	185983	24	25	0.33

Matsa Resources Limited | www.matsa.com.au | ABN 48 106 732 487 Head office: 11/139 Newcastle Street, Perth Western Australia 6000 | T 08 9230 3555 | reception@matsa.com.au

MATSA RESOURCES LIMITED

SCHEDULE OF TENEMENTS HELD AT 30 SEPTEMBER 2021

Tenement	Project	Interest at Beginning ofQuarter	Interest at End of Quarter	Change During Quarter
E 69/3070	Symons Hill	100%	100%
E 28/2916		100%	100%
E 39/2159	Fraser Range	100%	100%
E39/2162		0%	100%	Granted during the quarter
E 52/3339	Glenburg	100%	100%
E 28/2600	Lake Rebecca3	20%	20%
E 28/2635		20%	20%
E38/2945	Lake Carey	100%	100%
E 39/1837		100%	100%
E 39/1863		100%	100%
E 39/1864		100%	100%
E 39/1957		100%	100%
E 39/1958		100%	100%
E 39/1980		100%	100%
E 39/1981		100%	100%
P 39/5652		100%	100%
E 39/1796		90%2	90%2
E 39/1752		100%	100%
E 39/1770		100%	100%
E 39/1803		100%	100%
E 39/1812		100%	100%
E 39/1819		100%	100%
E 39/1834		100%	100%
E 39/1840		100%	100%
E 39/1889		90%1	90%1
E 39/2015		100%	100%
L 39/247		100%	100%
L 39/260		100%	100%
L 39/267		100%	100%
L 39/268		100%	100%
L 39/291		100%	100%
M 39/1		100%	100%
M39/1099		100%	100%
M39/1100		100%	100%
M39/38		100%	100%
M 39/1065		100%	100%
M 39/1089		100%	100%
M 39/286		100%	100%

MATSA RESOURCES LIMITED

SCHEDULE OF TENEMENTS HELD AT 30 SEPTEMBER 2021

Tenement	Project	Interest at Beginning ofQuarter	Interest at End of Quarter	Change During Quarter
M 39/709		100%	100%
M 39/710		100%	100%
P 39/5293		100%	0%	Relinquished during the quarter
P 39/5669		100%	100%
P 39/5670		100%	100%
P 39/5694		100%	100%
P 39/5841		100%	100%
E 47/3518	Paraburdoo	100%	100%
E 39/1760	Devon	100%	100%
E 39/1232		100%	100%
L39/222		100%	100%
L 39/235		100%	100%
L 39/237		100%	100%
M 39/386		100%	100%
M 39/387		100%	100%
M 39/500		100%	100%
M 39/629		100%	100%
M 39/1077		100%	100%
M 39/1078		100%	100%
P 39/6116		100%	100%
P 39/6117		100%	100%
L 39/217	Red October	100%	100%
L 39/273		100%	100%
M 39/411		100%	100%
M 39/412		100%	100%
M 39/413		100%	100%
M 39/599		100%	100%
M 39/600		100%	100%
M 39/609		100%	100%
M 39/610		100%	100%
M 39/611		100%	100%
M 39/721		100%	100%

All tenements are located in Western Australia.

• 1 = Joint venture with Raven Resources Pty Ltd

• 2 = Joint venture with Bruce Legendre 3 = Joint venture with Bulletin Resources Limited

Rule 5.5

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Name of entity

Name of entity	Name of entity	Name of entity
MATSA RESOURCES LIMITED
ABN 48 106 732 487	Quarter ended (“current quarter”)
	30 September 2021
Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 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 (f) care and maintenance 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 Government grants and tax incentives 1.8 Other (provide details if material) 1.9 Net cash from / (used in) operating activities	- - - (2,561) (391) (284) (184) - - (132) - - 51	- - - (2,561) (391) (284) (184) - - (132) - - 51
	(3,501)	(3,501)
2. Cash flows from investing activities 2.1 Payments to acquire or for: (a) entities (b) tenements (c) property, plant and equipment (d) exploration & evaluation (e) investments (f) other non-current assets	- - (31) (752) - -	- - (31) (752) - -

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

Page 1

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 months) $A’000
2.2 Proceeds from the disposal of: (a) entities (b) tenements (c) property, plant and equipment (d) investments (e) 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	- - - - - - - -	- - - - - - - -
	(783)	(783)
3. Cash flows from financing activities 3.1 Proceeds from issues of equity securities (excluding convertible debt securities) 3.2 Proceeds from issue of convertible debt securities 3.3 Proceeds from exercise of options 3.4 Transaction costs related to issues of equity securities or convertible debt securities 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	3,380 - - (218) - (124) - - -	3,380 - - (218) - (124) - - -
	3,027	3,027
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)	3,032 (3,501) (783) 3,027	3,032 (3,501) (783) 3,027

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

Page 2

Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

Consolidated statement of cash flows	Current quarter $A’000	Year to date (3 months) $A’000
4.5 Effect of movement in exchange rates on cash held 4.6 Cash and cash equivalents at end of period	-	-
	1,775	1,775
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	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)	1,725 50 - -	2,982 50 - -
	1,775	3,032
6. Payments to related parties of the entity and their associates		Current quarter $A'000
6.1 Aggregate amount of payments to related parties and their associates included in item 1 223 6.2 Aggregate amount of payments to related parties and their associates included in item 2 Note: if any amounts are shown in items 6.1 or 6.2, your quarterly activity report must include a description of, and an explanation for, such payments. Payments to directors and related parties are included in Item 1		223

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

Page 3

Appendix 5B Mining exploration entity or oil and gas exploration entity quarterly cash flow report

7. 7.1 7.2 7.3 7.4 7.5 7.6	Financing facilities Note: the term “facility’ includes all forms of financing arrangements available to the entity. Add notes as necessary for an understanding of the sources of finance available to the entity. Total facility amount at quarter end $A’000 Amount drawn at quarter end $A’000 Loan facilities 5,000 4,000 Credit standby arrangements - - Other (please specify) - - Total financing facilities 5,000 4,000 Unused financing facilities available at quarter end 1,000 Include in the box below a description of each facility above, including the lender, interest rate, maturity date and whether it is secured or unsecured. If any additional financing facilities have been entered into or are proposed to be entered into after quarter end, include a note providing details of those facilities as well.	Total facility amount at quarter end $A’000	Amount drawn at quarter end $A’000
		5,000	4,000
		-	-
		-	-
		5,000	4,000
	On 8 August 2017 Matsa entered into a secured $4M loan facility split equally between two separate parties. The loan attracts a 12% per annum interest rate and is repayable by 31 July 2022. On 6 May 2019 a variation to the loan increased the facility to $5M. At 30 June 2020 the Company had drawn down $4M of the facility.

8.	Estimated cash available for future operating activities	$A’000
8.1 8.2 8.3 8.4 8.5 8.6 8.7 8.8	Net cash from / (used in) operating activities (item 1.9) (3,501) (Payments for exploration & evaluation classified as investing activities) (item 2.1(d)) (752) Total relevant outgoings (item 8.1 + item 8.2) (4,253) Cash and cash equivalents at quarter end (item 4.6) 1,775 Unused finance facilities available at quarter end (item 7.5) 1,000 Total available funding (item 8.4 + item 8.5) 2,775 Estimated quarters of funding available (item 8.6 divided by item 8.3) 0.65 Note: if the entity has reported positive relevant outgoings (ie a net cash inflow) in item 8.3, answer item 8.7 as “N/A”. Otherwise, a figure for the estimated quarters of funding available must be included in item 8.7. If item 8.7 is less than 2 quarters, please provide answers to the following questions: 8.8.1 Does the entity expect that it will continue to have the current level of net operating cash flows for the time being and, if not, why not?	(3,501) (752) (4,253) 1,775 1,000
		2,775
	Answer: As previously advised net operating cash flows are expected to decrease significantly as production at Red October ceased during July 2021. Therefore, production costs will be significantly reduced with the mine now on care and maintenance. Further staff and administration expenditure has also been reduced significantly. Exploration expenditure remained similar to the last quarter.

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

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Appendix 5B

Mining exploration entity or oil and gas exploration entity quarterly cash flow report

• 8.8.2 Has the entity taken any steps, or does it propose to take any steps, to raise further cash to fund its operations and, if so, what are those steps and how likely does it believe that they will be successful?

• Answer: The Company has reduced its overall expenditure significantly however it is evaluating its ongoing future capital requirements including the need to raise additional cash to fund its operations.

• 8.8.3 Does the entity expect to be able to continue its operations and to meet its business objectives and, if so, on what basis?

Answer: Yes. Please refer to above responses.

Note: where item 8.7 is less than 2 quarters, all of questions 8.8.1, 8.8.2 and 8.8.3 above must be answered.

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.

Date: 27 October 2021

Authorised by: .......... By the Board...............................................................

(Name of body or officer authorising release – see note 4)

Notes

1. This quarterly cash flow report and the accompanying activity report provide a basis for informing the market about the entity’s activities for the past quarter, how they have been financed and the effect this has had on its cash position. An entity that wishes to disclose additional information over and above the minimum required under the Listing Rules is encouraged to do so.

2. If this quarterly cash flow 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 cash flow 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. If this report has been authorised for release to the market by your board of directors, you can insert here: “By the board”. If it has been authorised for release to the market by a committee of your board of directors, you can insert here: “By the [ name of board committee – eg Audit and Risk Committee ]”. If it has been authorised for release to the market by a disclosure committee, you can insert here: “By the Disclosure Committee”.

5. If this report has been authorised for release to the market by your board of directors and you wish to hold yourself out as complying with recommendation 4.2 of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations , the board should have received a declaration from its CEO and CFO that, in their opinion, the financial records of the entity have been properly maintained, that this report complies with the appropriate accounting standards and gives a true and fair view of the cash flows of the entity, and that their opinion has been formed on the basis of a sound system of risk management and internal control which is operating effectively.

ASX Listing Rules Appendix 5B (17/07/20) + See chapter 19 of the ASX Listing Rules for defined terms.

Page 5