Matsa Resources : Quarterly Activities Report 31st March 2021

Matsa Resources Limited

1. ASX Announcement 20th January 2021 - High Grade Olympic Results Enhances Devon Gold Mine Lake Carey Gold Project
2. ASX Announcement 9th March2021 - Magnetic (SAM) Survey Highlights New Targets at Devon - Lake Carey Gold Project
3. ASX Announcement 8th April 2021 - Initial High Grade Resource at Devon 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

Matsa Resources Limited

Red October Gold Mine

• There were no lost time injuries during the quarter
• Winding down of mining operations continued during the quarter in preparation to commence exploration during the 2nd quarter.
• Total mine production of 20,666 tonnes @ 2.99 g/t Au for 1,689 recovered ounces gold- equivalent
• C1 cash costs were A$1,222/oz and AISC was A$2,150/oz

Scoping study for a proposed Matsa owned and operated processing plant4

• Matsa appointed CPC Project Design (CPC) to undertake an Engineering Concept Study ("Study") on a 600,000 tonnes per annum gold-ore treatment plant.
• The Study demonstrates a Matsa owned and operated treatment plant located centrally to the existing Fortitude gold mine to significantly and positively impact the financial results of Matsa's mining opportunities and unlock other opportunities.
• A review of the Fortitude Stage 2 mine study shows a projected positive cash flow from mining operations substantially increases to A$55.4M compared to A$21.8M (at A$2,500/oz Au) under the current ore purchase agreement.
• A Scoping Study on the Devon Pit subsequent to the end of the quarter illustrated a projected positive cash flow from mining operations of A$40.75M over 12 months (at A$2,250/oz Au)
• Concept Study highlights a dramatic positive impact on the economics & operating costs of the Red October underground gold mine

Matsa Transformational Exploration Strategy5

• Strategic review of Matsa portfolio with the aim of becoming a significant gold producer
• Exploration driven resource growth is key to realising the significant value potential in the highly prospective Lake Carey Gold project
• Focus will be on increasing the current gold resources of 596koz to underpin a 600,000tpa gold- ore treatment plant

Scoping study into Devon pit6

• A recently completed scoping study confirms near term open pit production potential at the Devon Pit located on a granted mining lease, currently under Care and Maintenance
• Scoping Study (based on Matsa owned processing plant) delivers highly positive results which indicates immediate commencement of Devon Pit feasibility study is warranted.
• • Total operating cash surplus A$40.75M over 12 months
  • Production of ~37,000 oz gold at 4.64g/t from 264,000t with a 93% recovery
  • Operating cash cost of A$1,144/oz gold
  • Assumed average gold sale price of A$2,250/oz
  • Production of ore commences from surface
• Historical metallurgical test work indicates that Devon Pit ore is amenable for treatment at any of the nearby standard CIP/CIL processing facilities.

Symons Hill Fraser Range Project (IGO Farm-in)

• Re-interpretationof aeromagnetic data with conceptual diamond drill target on Nova Haul Road

1. ASX Announcement dated 22nd Jan 2021 - Positive Concept Study 600,000tpa Gold-Ore Treatment Plant Lake Carey Project
2. ASX Announcement dated 28th Jan 2021 - Matsa Transformational Exploration Strategy Lake Carey Gold Project
3. ASX Announcement dated 14th Apr 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

Matsa Resources Limited

Lake Rebecca Gold Project

• Matsa and Bulletin Resources Limited, through their 20/80 joint venture, sold a 400m wide strip (1.35km2) of the Lake Rebecca gold project for a total consideration of approximately A$5.6M to Apollo Consolidated Ltd7
• First aircore drilling results at Lake Rebecca produce at least 3 new gold mineralised zones with one zone identified at over 2.4km in length8
• A 2,000m RC drill program was commenced in March to follow up recent lake-aircore drilling intercepts eg 2m at 2.72 g/t Au including 1m at 4.86g/t Au and target areas directly along strike of Apollo's Rebecca gold project

Corporate

• Appointment of Pascal Blampain as an Executive Director9
• Launched a 1 for 10 renounceable rights issue to raise up to $2.17M before costs10

1. ASX Announcement dated 23rd Apr 2022 - Partial Sale of Lake Rebecca Gold Project Receipt of AOP Shares
2. ASX Announcement dated 11th Feb 2021 - Highly Successful Drilling Identifies New 2.4 km Gold Zone Lake Rebecca Gold Project
3. ASX Announcement 17 FEB 2021 - Appointment of Executive Director
4. ASX Announcement 22 MAR 2021 Renounceable Rights Issue to Raise up to $2.17M

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

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 31st March 2021.

COMPANY ACTIVITIES

Activities during the quarter have been principally focused on the Company's 503km2 Lake Carey Gold project (Figure 1):

Lake Carey Gold Project

• Final results for RC drilling on the Devon Pit and Olympic prospects
• Geological and model updates for the Devon Pit and Olympic prospects
• Interpretation of SAM ground geophysical survey Devon
• Infill Soil sampling on the LIN1 and LIN2 targets at Devon
• Rock chip sampling, prospecting and mapping Devon project
• Sampling of historic drill holes
• Development and production from Red October underground gold mine
• Planning of exploration drilling for Red October
• Scoping study for construction of Matsa owned and operated 600,000tpa gold-ore treatment plant

Figure 1: Regional setting of Lake Carey gold project, depicted in colour by hubs

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

MATSA TRANSFORMATIONAL EXPLORATION STRATEGY & ORE TREATMENT PLANT

The Matsa Board believes that the strategy of becoming a significant producer through exploration and construction of Matsa's own gold-ore treatment plant will create significant shareholder value and appeal by dramatically increasing project economics across our multiple Lake Carey Project deposits. As a result, the Board is committed to making the necessary changes to achieve this strategy.

To deliver the strategy, Matsa will focus on:

• Growing the Company's resources and reserves to enable the construction and successful operation of a proposed 600,000tpa treatment plant
• Commencing background works such as site location, environmental and permitting activities to expedite the Company's mining and processing objectives
• Securing the funding to explore and unlock value from the Company's Lake Carey Gold project
• Re-optimisationand mine designs at Fortitude and Devon and develop a robust long term mine plan at Red October through exploration, grade control drilling and mine designs
• Key board and management appointments to be made to deliver the strategy

Plant Description and Design Criteria11

CPC undertook the Study on the basis of requirements and information supplied by Matsa. The full study document is included as an attachment.

Battery limits to estimating the Capital Cost were defined as ore feed into the primary crusher feed bin and discharge of tailings to an approved tailings storage facility. Additionally, other non-process infrastructure such as offices, workshop, store buildings, power station, construction of the TSF, water supply etc were excluded from the CPC scope.

The 600,000t per annum processing plant will consist of a primary and secondary crushing circuit, stockpile reclaim ahead of a single stage ball mill which will grind to a target size of P80 125µm. The ball mill will be arranged in a standard configuration with a cyclone cluster and associated pumps. A single stage closed circuit ball mill has been selected for the grinding process. The ball mill has a diameter of 4.2 meters (m), and effective grinding length of 5.4m fitted with a 1,300kW motor. The availability is expected to be 91.3%. Process water will be added to the mill to maintain the mill discharge slurry density at 70-75% solids. It is anticipated that the design criteria will cater for a range of feed types from oxide to fresh rock. Targeted metallurgical recovery was anticipated between 90 and 95% based on an average feed grade of 2 to 2.5g/t.

Power would be provided by a power supply contractor under a power purchase agreement. The contractor would build, own and operate a power station of the appropriate size (with diesel generators considered as the base case) and sell the power to Matsa. This is a typical contractual arrangement found throughout the Goldfields and other remote areas in WA.

Limited metallurgical data was available to CPC, so it is acknowledged that the cost estimates have been prepared at a Concept Study accuracy level of ± 40%. Whilst the overall estimate is based on all available test work and information collected so far, a number of additional assumptions have been made based on industry norms and CPC's experience. Risks to CAPEX are limited as the design is fairly robust, considered a stock standard CIL (carbon in leach) plant design throughout the industry, and indicative parameters are in most cases adequate to make informed equipment selections.

11 ASX Announcement dated 22nd Jan 2021 - Positive Concept Study 600,000tpa Gold-Ore 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