Matsa Resources has kicked off a major diamond drilling campaign at Fortitude North targeting up to 1.85 million ounces of gold while reporting robust $28.7 million gold sales and $6.1 million EBITDA from the Devon Pit Gold Mine.
- 10,000m diamond drilling program commenced at Fortitude North
- Devon Pit Campaign 2 gold sales total $28.7 million with 86.16% recovery
- Operating EBITDA of $6.1 million recorded for Campaign 2
- AngloGold Ashanti completes initial drilling on M39/599 tenement
- Secured $17.5 million working capital facility with Deutsche Balaton
Fortitude North Drilling Targets Up to 1.85 Million Ounces
Matsa Resources (ASX:MAT) has commenced a 10,000-metre diamond drilling program at its Fortitude North project, aiming to delineate a substantial gold exploration target estimated between 685,000 and 1.85 million ounces. The target is based on a geological model of multiple northerly plunging stacked lode structures spanning approximately 1.7 kilometres, each capable of hosting several million tonnes of mineralisation. Initial drilling focuses on shallow upper sections of these shoots, including areas with previous high-grade intercepts such as 22 metres at 9.2 g/t gold and 8 metres at 9.0 g/t gold.
This drilling initiative is a key part of Matsa’s strategy to grow its Lake Carey Gold Project resource base, which currently stands at 949,000 ounces at an average grade of 2.5 g/t gold. The company anticipates that a successful initial campaign will be followed by a further 10,000 metres of infill drilling to support a maiden JORC-compliant resource estimate. The program involves both land and lake drilling rigs, with land-based operations underway and lake drilling planned for the coming months.
Strong Operational Performance at Devon Pit Gold Mine
Meanwhile, the Devon Pit Gold Mine delivered a solid financial performance during Campaign 2 processing, with gold sales of $28.7 million and an improved recovery rate of 86.16%, exceeding both budget and prior campaign results. The mine processed 51,449 tonnes of ore, slightly higher than the previous campaign, resulting in an operating EBITDA of $6.1 million (unaudited). Mining for Campaign 3 progressed steadily during the quarter, with ore stockpiled and processing scheduled to start on 28 May 2026.
Matsa has taken proactive measures to mitigate operational risks by increasing fuel storage capacity at the mine site, ensuring uninterrupted mining and haulage activities. The company continues to work closely with its contractor Blue Cap Mining to maintain mining rates and meet processing schedules. This operational momentum follows the company’s earlier achievement of doubling gold output in Campaign 2, as detailed in a recent report highlighting the mine’s improved grade and recovery metrics Campaign 2 gold sales reach.
AngloGold Ashanti Advances Drilling on M39/599 Tenement
Adding to exploration activity in the region, AngloGold Ashanti has completed initial reverse circulation and diamond drilling on Matsa’s M39/599 tenement under an option agreement. The program included 29 RC holes totaling 3,944 metres and 12 diamond holes for 1,443 metres, with assays pending. AngloGold Ashanti plans to continue drilling throughout the June quarter and will conduct geophysical surveys and additional flora assessments to refine targeting.
This collaboration underscores AngloGold Ashanti’s commitment to exploring the Lake Carey district and complements Matsa’s own drilling programs. The ongoing AngloGold Ashanti activity builds on the initial drilling launch earlier this year, reinforcing the region’s exploration potential AngloGold Ashanti starts RC.
Financial Flexibility Secured Through $17.5 Million Debt Facility
To support its mining and exploration programs, Matsa secured a $17.5 million three-tranche working capital facility from major shareholder Deutsche Balaton. The company drew down $5 million during the quarter, providing additional balance sheet flexibility. The facility carries a 25% interest rate and includes options for repayment in cash or gold bullion, with repayment due by 31 December 2026 unless extended.
Alongside this, Matsa raised $1.46 million through the exercise of 25.3 million unlisted options, further bolstering its cash position. At quarter-end, the company reported combined cash and run-of-mine ore stocks valued at $22.92 million, underpinning its capacity to fund ongoing operations and exploration.
Exploration and Resource Growth Plans for Lake Carey
Looking ahead, Matsa plans to continue drilling at Fortitude North with initial assay results expected this quarter. The company also aims to execute an approved drilling program at BE1 and advance resource definition drilling at Fortitude, Red October, Gallant, and Bindah deposits. A notable focus remains on integrating seismic R&D surveys to refine geological models, leveraging new downhole acoustic sensing technology.
These efforts align with Matsa’s broader ambition to expand its Lake Carey resource beyond the current 949,000 ounces and enhance its production profile. The company has expanded its geological and operational teams to support these initiatives, reflecting a concerted push to convert exploration potential into mined ounces.
Bottom Line?
Matsa’s aggressive drilling and operational execution at Lake Carey set the stage for potential resource upgrades, but the high-cost debt facility and pending assay results add layers of uncertainty to watch closely.
Questions in the middle?
- Will assay results confirm the high-grade potential at Fortitude North to justify resource upgrades?
- How will the 25% interest rate on Deutsche Balaton’s debt facility impact Matsa’s cash flow and profitability?
- What strategic role will AngloGold Ashanti’s ongoing drilling play in shaping Matsa’s exploration priorities?