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Matsa Resources to begin short-term mining at Red Dog Gold Project

An ore purchase agreement for all production is in place with AngloGold Ashanti.
aerial plan of mine site
The Red Dog site layout plan

Matsa Resources Ltd (ASX:MAT) will begin mining at its Red Dog Gold Project in Western Australia in early August with reserves of 13,400 ounces to be recovered.

The company’s decision to begin mining is based on a mining study that shows it will produce a cash surplus of $5.4 million over a 3-month period.

This includes all mining and haulage of gold ore to the Sunrise Dam Gold Mine treatment facilities owned by AngloGold Ashanti Australia Ltd (ASX:AGG).

The capital and operational requirements of the mine will be funded by Matsa’s existing cash reserves.

READ: Matsa Resources discovers gold in bedrock over 1 kilometre at project in WA’s Eastern Goldfields

Matsa plans to mine 182,000 tonnes of ore grading at 2.5 g/t gold to produce 13,400 ounces over two months, with an additional two months scheduled to include haulage and rehabilitation.

The all-in sustainable cash cost will be $1,294 per ounce based on a gold price of $1,700 an ounce.

Mining will be carried out by a contractor with technical and management direction from Matsa.

Drill and blast, load and haul

The mine’s single pit, which is less than 20 metres deep, will have ore extracted through drilling and blasting.

Gold mineralisation appears to be flat lying, 2-3 metres thick and typically 6-7 metres below surface.

Test work recoveries using AngloGold’s methodology, including gravity, flotation, regrind and cyanidation techniques, provided a 92%-95% gold recovery.

The weighted average of 92.5% was used in the financial model.

Red Dog was discovered by Whim Creek Consolidated in 1984 and sits within the Archaean greenstone belt, consisting of predominantly intermediate to mafic volcanic sequence with interbedded sediments and banded iron formations.

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Matsa Resources Ltd Timeline

September 25 2017

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