Matsa Resources - Quick update from AGC (Oct 26)

I had a chance to chat with Matsa at the Australian Gold Conference in Oct 26.

Full disclosure..... I am a shareholder and trying to figure out what to do with the stock... This is not financial advice. Personal opinion. Do your own research.

Quick points:

1. Matsa acknowledges they need to resolve the dispute with the mining contractor and come out of the trading halt.

2. Re Devon.... Campaign 3/4 was disappointing due to: i) voids, and ii) one week interruption (due to weather ?). Importantly, Matsa mentioned it "encountered" most of the voids already. Its view remains the later campaigns will always be more profitable than these earlier campaigns now that it is moving well into the productive part of the mine. Thinking through this point, I am leaning to thinking Matsa is right on this point. Why else would Blue Cap be fighting for Devon if it is NEVER going to be profitable (as some may believe) ?

3. Once the dispute is settled, it plans to move forward with more drilling at Fortitude North. The goal is to turn Fortitude North into a JORC resource. It plans to update the resource sometime in 2027.

4. Matsa is really keen to build its own mill and start mining at Fortitude + Fortitude North. CapX for the mill is OK (say $180-200M to be safe).

5. While some may be disappointed that Matsa did not get the full payment (over $100M) from Anglo, Matsa got paid $64-65M from Anglo in total. Close enough if you ask me when I thought the drilling results from Anglo was OK (but certainly not stellar).

So far, this is very much in line with what I was thinking before the chat.... What was new for me after the chat ?

1. My gut says Matsa feels optimistic on Fortitude North (i.e. we can rule out the bottom end of the range of 600K oz at F North). I will stick to my base case that Fortitude North will deliver over 1M oz (middle of the range it disclosed in a slide). Hoping for more of course :)

2. There may also be upside in Fortitude as Matsa drills more to better understand the deposit.

3. Matsa has been cash strapped for some time..... Frankly, it hasn't drilled in many of its prospects... Yet, thinking how Anglo paid over $60M for an area that Matsa itself chose not to investigate further until Anglo came along. Makes me wonder if Matsa has more surprises. Have a look at Pic 1. Note the two green lines.... Matsa thinks it has potentially 2 "zones" of gold, forming a V (for Victory :)).. So far, it has been focusing on the zone along the line of Fortitude and F North.... From what I understand, there are other anomalies to explore along another this other zone (Bindah + BE1-4 etc etc).....

4. Matsa may not need to spend much to see if there is more gold in the other zone......

5. Now playing with the numbers => Is it possible that Matsa may have between 2.5-3M oz in time ? Heck... Matsa sits next to Sunrise Dam (12M oz)..... Maybe >3M oz is not outlandish at all.

6. There are two other deposits nearby (but not owned by Matsa)... Brightstar (?) has 500K oz nearby. Apparently, Matsa has been talking to another deposit (300k oz) nearby as well. One day when Matsa has its mill in the area, it can potentially act as consolidator in the area.

Other thoughts:

1. Management at Matsa feels old school. Watch carefully how it spends money. During the chat, didn't feel promotional at all. When it promises something, it will work hard to deliver (but things can go wrong obviously.. see Devon but not for want of trying).... Our interests are aligned.... Senior management own enough shares to make a difference if Matsa does well.

2. I asked about how is Matsa different under the new board ? The new members added significant expertise (e.g. financial market, geophysic work) to the board. Afterwards, I went and looked up their profile. Now this was a surprise for me..... I didn’t realize 2 of the 3 new directors are affiliated with Patronus... And then I looked up Patronus. Patronus tried to take over Matsa for $33M in 2025, even lower than current MV. In addition, Deutsche Balaton + another German entity owns 46% of Patronus. I sincerely hope the board will represent ALL shareholders.

3. What to make of this I haven't decided but I will be watching closely the board's actions. There are questions unanswered about managements plans going forward compared with plans under the previous board, what's happening with Devon? How much exploration do they want to commit to? What are the milestones? How long will it all take? Importantly is it United?

In summary.... Being a Matsa shareholder is certainly character building....I am in the red on Matsa.... But thanks to the trading halt, it outperformed many of my other small miners in recent weeks ha..... Again... Running the numbers....and comparing with many other co at the gold conference, at MV of $45M with 900k oz of gold + upside in resource (of at least 2M oz would be my estimate/base case but >3M is a possibility) + potential to roll up other assets in the area + there are still profits to be made at Devon (which most folks don't believe anymore), it compares well with plenty of upside in the stock.....

If all goes well, Matsa will emerge from settling the dispute with a clean/net cash balance sheet.... It will then get to better define Fortitude North and maybe other prospects.... With some (or a lot of) luck, it will retain Devon and run it profitably in future campaigns.....

One more point => In a perfect world, the board will act in the best interest of all shareholders..... Worthwhile to follow the board decisions closely and get in touch if/when major decisions are upon Matsa. I sure hope my shares in Matsa will be worth a lot more in coming years and EVERYONE gets to participate in the upside.