Devon Pit Feasibility Study Shows $60M Surplus; AngloGold Eyes $101M Lake Carey Deal
Matsa Resources has commenced mining at its Devon Pit Gold Mine, backed by a robust feasibility study and a maiden reserve of 46,000 ounces. The company also sealed a $101 million option deal with AngloGold Ashanti for part of its Lake Carey project, while successfully fending off an unsolicited takeover bid.
- Devon Pit Gold Mine mining operations commenced with key agreements executed
- Feasibility study projects $60 million operating surplus at $4,250/oz gold price
- Maiden open pit ore reserve declared at 46,000 ounces
- AngloGold Ashanti executed $101 million option agreement for Lake Carey assets
- Unsolicited takeover bid by Patronus Resources was unsuccessful
Devon Pit Gold Mine Moves Into Production
Matsa Resources Limited has marked a significant milestone with the commencement of mining operations at its Devon Pit Gold Mine, located within the Lake Carey Gold Project in Western Australia. This development follows the execution of a mining agreement with Blue Cap Mining Pty Ltd and a processing agreement with FMR Investments Pty Ltd, setting the stage for the first ore to be processed by September-October 2025.
The company has initiated pit dewatering as the first phase of mining, with first ore expected in June 2025. The Devon Pit project is underpinned by a recently completed feasibility study that forecasts a potential pre-tax operating surplus of approximately $60 million, assuming a gold price of AUD 4,250 per ounce. This study supports an 18-month mine life with a maiden open pit ore reserve of 46,000 ounces at an average grade of 4.6 grams per tonne.
Exploration Progress and Resource Expansion Potential
Exploration activities continue to advance, with two diamond drill holes completed at Fortitude North totaling 886 meters, and additional drilling underway north of Devon. Assay results are pending, but previous drilling has confirmed significant gold mineralisation, including a notable 22-meter intercept at 9.2 grams per tonne. These results are expected to refine geological models and potentially expand the resource base.
Complementing these efforts, Matsa is progressing research and development projects focused on seismic survey methodologies in hyper-saline environments, which could enhance future exploration targeting.
Strategic Corporate Developments
On the corporate front, Matsa executed an option agreement with AngloGold Ashanti Australia Limited, granting AngloGold the right to acquire the majority of the Lake Carey Gold Project for a potential consideration of A$101 million, based on a gold price of A$4,500 per ounce. This agreement excludes near-term production assets such as the Devon Pit and Fortitude North projects, which Matsa will retain. The option period extends for 18 months, with conditions precedent expected to be met in the June quarter.
Meanwhile, Matsa successfully repelled an unsolicited on-market takeover bid from Patronus Resources Limited, which offered $0.045 per share. The bid received no acceptances and was formally rejected by Matsa, with shareholders advised to take no action.
To support the accelerated development of Devon Pit, Matsa completed a $3.13 million share placement at $0.038 per share, attracting new sophisticated investors including The Flagship Fund, alongside participation from existing major shareholders Deutsche Balaton and Bulletin Resources.
Financial Position and Outlook
At quarter-end, Matsa held cash and receivables of approximately $3.71 million. The company reported a negative operating cash flow of $316,000 for the quarter, with exploration expenditure totaling $682,000. The financials reflect ongoing investment in project development and exploration, balanced by capital raising activities.
Operational leadership has been strengthened with the appointment of Jon Pluckhahn as General Manager Operations for the Devon Pit Gold Mine, tasked with overseeing the mine’s development and production ramp-up.
Looking ahead, Matsa plans to complete the diamond drilling program at Devon North, continue assay analysis at Fortitude North, and advance seismic survey work to refine exploration targeting. The company’s strategic focus remains on unlocking value from its Lake Carey assets while managing corporate opportunities and challenges.
Bottom Line?
As Devon Pit transitions to production and AngloGold’s option looms, Matsa stands at a pivotal juncture that could redefine its market trajectory.
Questions in the middle?
- What will the pending assay results from Fortitude North and Devon North reveal about resource expansion?
- How will the completion of conditions precedent impact the timing and certainty of the AngloGold option exercise?
- Can Matsa sustain its development momentum and cash flow as Devon Pit moves into full production?
