Matsa sells flagship Lake Carey gold project for $101M

Shares in Matsa Resources Ltd (ASX:MAT) have jumped by more than 32% on news it has inked a $101 million deal with AngloGold Ashanti which would open the door to the latter acquiring the majority of Matsa’s flagship Lake Carey gold project in Western Australia.

In a statement to the market, the company said the divestment would allow it to focus attention on production activity at the Devon Pit gold mine, and exploration at the Fortitude North project – both of which would be retained by Matsa, together with the Red October village and associated tenements.

The cash consideration agreement with AngloGold Ashanti includes an $8M option fee; 1.875% of the gold price multiplied by the agreed resource (936,000 ounces at the time of exercise), less A$6M already paid, within 18 months; and a deferred consideration of up to $20M on the basis of JORC resources discovered by AngloGold Ashanti after the acquisition (based on 1% of the gold price at the time).

The gold price used for this calculation is $4,500.

Matsa executive chairman Paul Poli said the deal had been a long time in the making.

“This transaction is the culmination of negotiations over the past 12 months with AngloGold Ashanti and I am thrilled with this outcome,” he said.

“To attribute a value of approximately A$101M to the Lake Carey gold project speaks volumes for the exploration potential of this project.

“Not only that, Matsa retains the highly valuable, near-term production Devon project, Red October Accommodation Village and what I consider to be a very exciting exploration project in Fortitude North where recent drilling highlighted its potential.”

At 12:24 AEDT, Matsa shares were trading at 7 cents – a rise of 32.08% since the market opened.

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