Matsa Resources Limited ('Matsa' or 'the Company' ASX: MAT) is pleased to report highly positive results from its recently completed Scoping Study for the Devon Pit mining operation at the Company's Devon project within the 100% owned Lake Carey Gold Project in the Eastern Goldfields of Western Australia.
The study shows that a mining operation at the Devon Pit will produce attractive project economics with a potential cash surplus of A$40.75M 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.
While the current scoping study of the Devon Pit is based on processing at Matsa's proposed treatment facility, metallurgical test work indicates that Devon Pit ore is amenable for treatment at any of the nearby standard CIP/CIL processing facilities, having been previously mined by GME Resources in 2015 - 2016 and treated at Carosue Dam. Future mining is expected to deliver very goodto-excellent gold recoveries with no deleterious elements.
Matsa Executive Chairman Mr Paul Poli commented: 'Based on the positive outcomes of the Scoping Study, we will now immediately move ahead with plans to complete the necessary studies and works to obtain mining approvals. The results of this scoping work make a fantastic addition to Matsa's existing Fortitude and Red October mines. Recently, we released a conceptual processing study that demonstrated a positive cash flow of upwards of A$50M at Fortitude and combined, the Devon and Fortitude open pits alone could provide collective positive cash flows of A$80-90M at an assumed A$2,250 gold price.
This study was completed using a conservative gold price of A$2,000/oz for the optimisation, and at the current gold price, makes a fantastic return. The mine sits on an existing Mining Lease under care and maintenance, which allows the Company the option to rapidly bring the Devon Pit back into operation. The opportunity to generate early cash flow from this high grade deposit presents a compelling case. The Devon Pit appears well placed to deliver significant cash flows for the Company and great value for our shareholders.
The exploration potential at Devon is significant and we're about to embark on another 3,500m exploration drilling program that will seek to deliver new discoveries and, in time, add additional ounces to the resource. Devon is an integral cog in our strategy to build and operate our own mill at the Lake Carey project.'
Study Scope
An optimisation study has been completed for the Devon Pit MRE using a conventional open pit operation, with ore hauled and processed at a conceptual Matsa processing plant2.
Three shells were assessed and compared that reflect step changes in a potential mining operation
The study does not account for setup costs and other capital requirements.
Cut-Off grade
The Devon Pit MRE3 has been reported at a cut-off grade of 1 g/t. This is reasonable considering the style of the deposit, the proximity to process facilities and to the selection of open cut mining equipment and methods used. It is quite possible that during operation a lower cut-off grade for mining will be economic.
Metallurgy and processing
The Devon Pit has been mined during 2015 and 2016 by GME Resources Ltd ('GME'). Metallurgical testwork completed in 2016 by ALS Metallurgy laboratories indicate excellent recoveries ranging 91% to 96%. The results of a 2015 test also returned similar results up to 96% recovery. No reports of metallurgical issues were reported in either of GME's annual reports at the time of mining. GME reported a Plant recovery of 93.8% for the operation in their 2015 Annual Report4.
Infrastructure
Haulage roads are already established at Devon with the Devon Pit having been previously mined in 2015 and 2016 and the Red October accommodation village is readily accessible being only 25km by dirt road. Matsa has an operating landing strip for small aircraft at Linden which is currently in use to transport Red October mine staff to site.
Power will need to be established via portable generators. Water availability is not expected to be an issue due to proximity to Lake Carey and it is likely that dewatering of the operation will be an ongoing requirement with dewatering generating surplus water volumes that will need to be discharged.
Environment and community
Devon has a long history of mining activities dating back to the late 19th century. As such the area is heavily disturbed and is 115km from the nearest residential community being the town of Laverton to the north.
Contact:
Paul Poli
Tel: 08 9230 3555
Email: reception@matsa.com.au
MATSA RESOURCES LIMITED 
