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Matsa Resources Ltd. (ASX:MAT) is a listed explorer of minerals and has now become a major gold producer with the acquisition and the subsequent development of fortitude gold mine Devon Gold Mine.
The company via a recent release stated that it had acquired the Devon gold mine and surrounding project area from GME Resources Ltd via entering into a âSale purchase agreementâ (SPA). This has provided the company with access to the known gold mineralized areas within the proximity and purview of the Devon mine which is at present is on care and maintenance.
This new agreement would be in line with and thus complement the earlier agreement with the greater Devon projects which were acquired from the Anova Metals Ltd.
This fortitude mine lies in the Lake Carey gold project. Extensive exploration programme is still undergoing in the region with the potential of discoveries.
It is a noteworthy fact that the company has lately acquired the Red October Gold Mine & thus boosting the mining potential within the region. Matsa remains a financially strong organisation with cash and liquid assets. The Company has an aim of sustainable development and thus has a goal of increasing shareholder wealth via development of minerals in an environmentally responsible way, utilizing world best practices.
Notably, this area is pretty connected to the Red October gold mine and Capella tenements, the acquisition of which is expected to be finalized soon. With these developments the company now holds a ground position of approximately 620-kilometer square at Lake Carey region.
The agreement for sale provides for the transfer of Devon Gold Mine and all associated tenements to the company for a consideration of $100,000 and a 1% Net Smelter Royalty on all future production from the Devon tenements. The consideration would be paid by way of cash to the tune of $50,000 and the remaining by way of either issuance of ordinary shares in Matsa at a price which would be based on the VWAP of Matsa securities over the five trading days prior to settlement or in cash. This decision would be based on Matsaâs discretion & election.
The above-stated agreement would come into effect subject to receipt of the Minister for Mines approval to transfer the title. This would also require a 10-business day due diligence period which had already commenced on the 12 December 2018. Hence, the transaction is anticipated to get settled at or around the 28 December 2018.
Matsaâs shares are trading at $0.135, down by 3.57% (AEST 03:10 PM) as compared to previous close of $0.140. The stock has performed poorly this year with 6 months return of -10% and a YTD return of -33%. The company has a market capitalization of around $24.77 Million and Earnings per share of -0.032 AUD.
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