Matsa Resources : Ground EM Survey Commences Mt Day Nickel Project

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Matsa Resources Limited

LIMITED

ABN 48 106 732 487

ASX Announcement 3rd May 2016 Ground EM Survey Commences Mt Day Nickel Project Highlights

• The Mt Day nickel project, located 25km north of Maggie Hayes near Forrestania, is the latest addition to Matsa's pipeline of quality projects

• Previous shallow drilling at Mt Day achieved nickel intercepts up to 1.51% Ni with strong supporting copper values up to 0.17% Cu in weathered ultramafics

• Review of past exploration data at Mt Day has identified significant untested potential for Ni sulphides

• A Moving Loop EM (MLTEM) survey is planned utilizing a high power transmitter to test prospective komatiites which remain untested by earlier surveys

CORPORATE SUMMARY Executive Chairman

Paul Poli Director Frank Sibbel

Director & Company Secretary

Andrew Chapman

Shares on Issue

144.15 million

Unlisted Options

8.44 million @ $0.25 - $0.40

Top 20 shareholders

Hold 52.15%

Share Price on 2nd May 2016

18 cents

Market Capitalisation

$25.95 million

Head Office: Suite 11, 139 Newcastle Street, Perth Western Australia 6000 Tel: +61 8 9230 3555 Fax: +61 8 9227 0370

Bangkok Office: Unit 1808, Pacific Place 2, 142 Sukhumvit Road, Klongtoey, Bangkok 10110 Tel: +66 0 2653 0258 Fax: +66 0 2653 0258 reception@matsa.com.au www.matsa.com.au

Matsa is pleased to announce commencement of a ground EM survey at its 100% owned Mt Day nickel project located 25km NW of Poseidon's Emily Anne and Maggie Hayes nickel mines near Forrestania (Figure 1).

A detailed review of past exploration data over the Mt Day project has identified significant untested nickel potential in this highly prospective greenstone belt, including a number of shallow drill intersections in weathered ultramafic rocks containing significant nickel values up to 1.51% Ni with supporting copper values up to 0.17%Cu.

Figure 1: Location and regional geology of Mt Day Project

Planned EM

The target area is located in the southernmost of the two blocks, making up Matsa's E63/1710. The planned EM survey is intended to cover the southern end of an 8km long belt of komatiite lavas in interpreted early stage fold closures which Matsa believes to be a structurally favourable location for nickel mineralisation in the Maggie Hays area.

The prospective belt of komatiite lavas coincides with a high amplitude NS trending magnetic anomaly which can be seen in aeromagnetic data. Only the northern part of this komatiite unit has been previously explored by ground EM surveys and the presence of komatiite lavas was confirmed by mostly shallow aircore drill holes (Figure 2). Support for the potential of significant nickel occurrences in this deeply weathered ultramafic belt is provided in significant results from aircore drilling by previous explorers as listed below:

 JSA066 3m @ 1.02% Ni from 69m

 JSA170 3m @ 1.03% Ni and 0.08% Cu from 36m

 JSA179 3m@ 1.03% Ni and 0.05% Cu from 51m

 JSA180 3m @ 1.51% Ni and 0.17% Cu from 21m

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These highly anomalous and encouraging intercepts have all been made in deeply weathered ultramafic rocks and no nickel sulphides were observed. The presence of supporting copper values in three of the anomalous nickel intercepts above suggests that the intersections were made at least partly in weathered sulphides or "gossan" rather than simply reflecting lateritic enrichment of nickel in the weathering profile, which typically is not accompanied by elevated copper values.

Based on trends visible in the aeromagnetic image in Figure 2, the prospective komatiite continues around a fold closure towards the east to where additional interpreted fold closures can be seen as distinctive magnetic anomalies.

Past exploration including EM surveys and drilling was focused on the northern portion of the 8km long western komatiite belt. The southern fold closure and the interpreted eastern extension of the komatiite remain virtually untested.

Matsa has commenced the first of 5 planned lines for a planned ~12.5 line-kilometre moving loop EM (MLEM) survey over two areas which have received minimal exploration to date. A total of 4 lines are planned over the interpreted fold closure at the southern end of the western komatiite trend where a potential conductor target identified in previous surveys appears to become stronger. The conductor target is highlighted in Figure 2. One additional line is planned to cover a strong discrete magnetic feature thought to reflect a second fold closure to the NE.

Follow up EM surveys may be carried out to better define any targets which are identified by this survey. Diamond drilling is planned to test any sulphide type conductors detected as soon as possible after completion of surveying.

Figure 2: Mt Day, Planned MLEM survey areas, past EM and drilling over aeromagnetic image

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For further Information please contact:

Paul Poli

Executive Chairman Phone +61 8 9230 3555 Fax +61 8 9227 0370

Email reception@matsa.com.au

Web www.matsa.com.au

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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