Matsa Resources has reported significant drilling results at Fortitude North and enhanced gold recoveries at its Devon Pit Gold Mine, underpinning ongoing development at the Lake Carey Gold Project.
- 3,865m diamond drilling completed at Fortitude North with notable gold grades
- Devon Pit processing achieves 89.6% gold recovery, up from previous 86.16%
- AngloGold Ashanti extends drilling with 12 holes on Matsa tenement, assays pending
- Board strengthened with three new non-executive directors and key management hires
- Cash and ROM stocks total $11.89M; $5M drawn from $17.5M debt facility
Fortitude North Drilling Delivers Encouraging Gold Intercepts
Matsa Resources Limited (ASX:MAT) has made solid progress in its maiden 10,000-metre diamond drilling campaign at Fortitude North, part of its flagship Lake Carey Gold Project in Western Australia. The company completed 15 holes totaling 3,865 metres during the June quarter, returning significant gold assays including 12.8 metres at 2.43 g/t Au and 15.2 metres at 2.93 g/t Au among others. These results reinforce Fortitude North as a key exploration target within the 1.7-kilometre Fortitude Shear Gold Corridor, a structurally prospective zone that remains underexplored beneath lake cover.
While a JORC-compliant resource estimate is premature due to limited drilling density, Matsa has developed a mineralising model supported by structural and geophysical data to guide future drill targeting. The company plans to continue drilling with approximately 4,000 metres scheduled for the coming quarter, aiming to expand resources at Fortitude North and other deposits like Red October and Gallant.
Devon Pit Gold Mine Shows Operational Improvements
Mining and processing at the Devon Pit Gold Mine remain central to Matsa’s development strategy. During May and June, the company processed 40,751 tonnes of ore from the Campaign 3/4 program, with gold recoveries improving to 89.6%, up from 86.16% in the previous campaign. This uplift contributed to gold sales of $7.86 million for the quarter, with additional sales post-quarter at an average price of $5,861 per ounce.
However, mining dilution from historical underground voids has impacted grade, with an estimated 40% unplanned dilution reducing mined grade. Despite this, total gold sales from the project to date have reached $52 million, reflecting steady production and processing throughput.
AngloGold Ashanti Continues Drilling on Option Tenements
Under the existing tenement option agreement, AngloGold Ashanti has completed a further 12 diamond drill holes for 4,419 metres on Matsa’s M39/599 tenement. This follows earlier drilling that identified a 2-kilometre gold mineralised trend with high-grade intercepts exceeding 12 g/t Au. AngloGold has now drilled 44 holes totaling over 12,000 metres, with assay results pending for the latest holes. The option agreement has generated $9.5 million in payments to Matsa, including a $1.65 million instalment received this quarter.
Corporate Restructuring and Financial Position
Matsa has bolstered its governance and technical expertise with the addition of three new non-executive directors; Graham Ascough, Robert Ryan, and Leonard Lau; alongside key management appointments such as Consultant Exploration Manager Karen De Luca. Executive Pascal Blampain stepped down from the board but remains involved in geological management.
Financially, the company drew down $5 million from its $17.5 million debt facility with Deutsche Balaton Aktiengesellschaft to support mining and working capital needs. At quarter-end, Matsa held $6.24 million in cash and $5.65 million in run-of-mine ore stocks, totaling $11.89 million. Despite a net operating cash outflow of $13.2 million for the quarter, the company anticipates improved cash flow from upcoming gold sales and is exploring additional financing options to sustain operations.
Resource Base and Upcoming Work Programs
The global Mineral Resource Estimate for Lake Carey remains steady at 949,000 ounces at 2.5 g/t Au, spread across multiple deposits including Fortitude, Red October, Devon, Gallant, and Bindah. Matsa plans to advance resource definition drilling across these deposits, alongside further R&D seismic surveys and gravity studies along the Fortitude Shear Gold Corridor to refine exploration targets.
With the drilling campaign underway and operational improvements at Devon, Matsa is positioning itself to unlock additional value from Lake Carey. However, the company’s funding runway currently covers less than a quarter, underscoring the importance of timely gold sales and successful capital raising efforts.
Bottom Line?
Matsa’s drilling success and operational gains at Lake Carey provide a platform for resource growth, but sustaining momentum hinges on securing additional funding and converting exploration upside into defined resources.
Questions in the middle?
- Will pending assay results from AngloGold’s latest drilling extend the 2km gold trend further?
- How effectively can Matsa manage mining dilution at Devon to protect grade and margins?
- What financing strategies will Matsa pursue to extend its funding runway beyond under one quarter?