Matsa Resources : 30 June 2021 Financial Report

MATSA RESOURCES LIMITED

ABN 48 106 732 487

ANNUAL REPORT

For the Year Ended

30 June 2021

	MATSA RESOURCES LIMITED
	CORPORATE DIRECTORY
Directors
Paul Poli	Executive Chairman
Franciscus (Frank) Sibbel	Director
Andrew Chapman	Director
Pascal Blampain	Director (appointed 17 February 2021)
Company Secretary
Andrew Chapman

Registered Office

Suite 11,

139 Newcastle Street PERTH WA 6000 Tel: [phone] Fax: [phone]

Email: [e-mail]

Postal Address

PO BOX 376

Northbridge W.A. 6865

Website

www.matsa.com.au

Share Registry

Advanced Share Registry Services

110 Stirling Highway

Nedlands WA 6009

Tel: [phone]

Fax: [phone]

Home Stock Exchange

Australian Securities Exchange Ltd

Level 40, Central Park

152-158 St George's Terrace

Perth WA 6000

ASX Code: MAT

Auditors

Nexia Perth Audit Services Pty Ltd

Level 3

88 William Street

PERTH WA 6000

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MATSA RESOURCES LIMITED
CONTENTS
Page
CORPORATE DIRECTORY	1
CHAIRMAN'S REPORT	3
OPERATIONS REVIEW	4
DIRECTORS' REPORT	44
AUDITOR'S INDEPENDENCE DECLARATION	59
FINANCIAL STATEMENTS
- Consolidated Statement of Profit or Loss and Other Comprehensive Income	60
- Consolidated Statement of Financial Position	61
- Consolidated Statement of Changes in Equity	62
- Consolidated Statement of Cash Flows	63
- Notes to and Forming Part of the Consolidated Financial Statements	64
DIRECTORS' DECLARATION	108
INDEPENDENT AUDIT REPORT	109
ADDITIONAL ASX INFORMATION	112
SCHEDULE OF MINING TENEMENTS	118

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MATSA RESOURCES LIMITED

CHAIRMAN'S REPORT

Dear Shareholder,

The year saw us focused on developing a strategy that would serve the Company's future and create value for all shareholders. We substantially increased our gold resource, and produced several feasibility studies which demonstrates that the Company can develop excellent returns for shareholders by producing gold at the Lake Carey Gold Project through a Matsa owned and operated gold treatment plant. The pathway forward is by continuing to increase our gold resources through exploration and building our own treatment plant.

However, to achieve this strategy, we needed to take a step backwards during this year and temporarily suspend our operations at the Red October underground gold mine. We were not able to attain forecasted results at Red October and accordingly, it would be naive of us to not expect that this would bring disappointment to some shareholders. All indications at the onset were positive and we maintained good initial progress. It was not to last and whilst we could have, and some may say should have, ceased operations earlier, we took the decision to continue as the operations kept delivering important geological and mining information which proved invaluable for our future planning and drill preparations. Red October, in my opinion, will in the future be an excellent asset and combined with the open pits that are ready for development at Fortitude and Devon, we do have an excellent ore source for our own treatment plant. Future new discoveries will make it even better.

The Company will shape up, we are on the precipice of having a great Company, only patience and hard work is what will deliver the results that we are chasing and I am absolutely positive the team at Matsa are up for that challenge and will in the near term steer this Company to the success that we anticipate.

As I have mentioned in previous years, I am in awe with the pool of talent that has come together at Matsa and I thank them for their dedication and comradeship throughout the year. I thank my fellow board members, senior management and the whole great team within our exploration, mining and Thailand office who are always ready to put a dedicated and unwavering effort in the advancement of Matsa. We remain committed to achieving our goals in a safe, environmentally friendly and compassionate community minded manner.

The board appreciates the support offered by the many shareholders who communicated with us during the year.

PAUL POLI

EXECUTIVE CHAIRMAN

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MATSA RESOURCES LIMITED

OPERATIONS REVIEW

SUMMARY - REPOSITIONING TO DELIVER THE STRATEGY

During the year, Matsa Resources Limited ('Matsa' or 'the Company') has repositioned itself to leverage off a growing resource base at Lake Carey (refer Figure 1) and has set about focussing activities with a clear purpose and pathway to establishing a sustainable long term gold inventory, mining and processing business, centred on Lake Carey.

With the strategy now driving business activities, Matsa has focussed its energy into building sufficient resources and reserves that will support construction of a Matsa owned and operated processing plant and deliver improved operating costs and higher margins to the Company. Ultimately, this repositioning of the business is expected to unlock the full potential of the Lake Carey asset.

As a result, a number of important and positive outcomes have been achieved over the past 12 months whose highlights include:

• • An 99% increase in Mineral Resource at Lake Carey from 439,000oz @ 2.3 g/t Au to 874,000*oz @ 2.4 g/t Au
  • A scoping study into a Matsa owned and operated processing plant at Lake Carey returned a favourable outcome improving the bottom line at the Fortitude mine by A$33M
  • Positive cash flow of A$96M from the Fortitude and Devon pits utilising a proposed Matsa processing plant
  • Adopted a clear strategic pathway to realising vision of transitioning from an explorer with periodic small scale mining to a long term sustainable miner with processing capacity
  • Suspension* of production at the Red October underground mine to enable a full drill out, mine design and rescheduling of the operation
  • Established resource and mine development hubs to provide future operational and scheduling efficiencies
  • Disciplined and diligent execution of a robust exploration and development project pipeline clearly aimed at delivering on the strategy
• Note these changes are current as of 1st September 2021 but took effect after the June 30 reporting period

Figure 1: Lake Carey Mineral Resource growth since 2020 Annual Report (excluding mining depletion) to 1st September 2021. Refer Resources and Reserves table for actual 30 June statement.

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