Red October – Gold Mine

Red October – Gold Mine

Red October – Gold Mine Overview

The Red October gold mine and project area covers 44kmand consists of six granted Mining Leases (ML’s), an extensive well-maintained underground mine, a 68-person camp, offices, workshops and exploration base, wet and dry messes, underground mine equipment and a JORC 2012 compliant Mineral Resource of ~99,000 oz of gold, which importantly includes 85,000 oz @ 13.6g/t Au (Table 1).

The Red October mine is a structurally controlled gold deposit located in the Laverton Greenstone Belt (LGB) which hosts a number of world class and emerging gold mines with resources >25M oz of gold which include Sunrise Dam, Mt Morgans, Butcher Well, Granny Smith and Wallaby.

The Red October gold mine has produced a total of 1.7Mt at 6.1g/t Au for 342,000 oz gold. The open pit operation contributed 113,000 oz gold at 6.5g/t Au between 1999 and 2002 and the underground operation has produced 1.2Mt at 5.9g/t Au for 229,000 oz gold to a depth of 550m vertical metres between 2012 and 2017.


Table 1:  30 June 2017 Red October Resource Estimate (ref SAR report to ASX 02/08/2017) *

*The Company confirms that it is not aware of any new information or data that materially affects the information included in the above resource estimate and that all material assumptions and technical parameters underpinning the above resource estimate continue to apply and have not materially changed.


Mining Studies

Since purchasing the mine in March 2018, the Matsa team have undertaken a high-level economic analysis of the Red October underground gold mine (Stage 1). Stage 1 has been completed, with quality resource definition targets and potential mining targets identified throughout the mine.

Stage 1 was an initial high level mine design and financial model, which identified 15 areas within the existing 85,000 oz @ 13.6 g/t Au underground resource with potential for near-term mining (Figure 1).  Twelve additional targets outside of the existing resource were also identified as having near mine potential and have been flagged for further exploration and evaluation.

Figure 1:  Stage 1 potential mining areas identified at Red October


Commencement of Mining

Mining activities commenced in February 2019 and included the refurbishment of facilities, mine equipment and the decline. Grade control drilling was completed, analysed and incorporated into the mine block model, with an updated mine design produced.

Matsa has executed a 5 year ore purchase agreement with AngloGold Ashanti Australia Limited for ore delivery to the Sunrise Dam processing plant.

Grade Control Drilling and Discovery

Grade control drilling, whilst also being undertaken to de-risk the preliminary mine plan, returned multiple intersections of very high-grade gold and led to the discovery of a new high-grade, moderately north-plunging shoot, within the Red October Shear Zone (ROSZ). This high grade shoot remains open down-plunge and indicates the strong potential for more shoots to be discovered by further drilling.

The ROSZ is made up of a sheared mafic package with a quartz breccia, pervasive pyrite and narrow intercalated sedimentary units.  Typical alteration minerals seen include biotite, carbonate, silica and sericite.  Visible gold is observed in drill core at Red October.

Outstanding gold intercepts in the Red October Shear Zone North include:

1.60m @ 36.90g/t Au
4.32m @ 16.30g/t Au
2.84m @ 15.95g/t Au
6.30m @ 4.54g/t Au
Outstanding results were also returned from the Red October Shear Zone South including:

1.60m @ 36.90g/t Au from 15.20m
Inc. 0.85m @ 67.60g/t Au from 15.7m

2.75m @ 3.25g/t Au from 38.50m
Additional impressive high-grade gold intercepts include:

0.81m @ 181.50g/t Au in HW 362 lode
1.33m @ 40.51g/t Au in HW 362 lode
0.80m @ 248.00g/t Au in a new lode

There are a number of other untested structural junctions along the ROSZ which form dilational fluid traps, potentially causing ideal pressure/temperature ranges conducive to the deposition of gold mineralisation. Grade control drilling also identified new opportunities for immediate mining. These opportunities can significantly enhance the existing mine plan and further evaluation is being undertaken.  Matsa will continue targeting such structural junctions to identify other potential future mining areas along the ROSZ to the north of the current mine workings.

Results have provided a compelling platform for the current mining phase, can positively affect mining outcomes and strongly endorse Matsa’s belief that new high-grade gold mineralisation remains to be discovered.

Drilling to continue during 2019 on new mining targets within and outside of the existing resource.


Underground Exploration – A key strategic pillar for Matsa’s future

The geomechanical modelling in conjunction with geology knowledge gained from small scale mining, structural geology, geochemistry, geophysics, historical drilling and mapping, will enable Matsa to construct a quality pipeline of underground drilling targets ranging from resource extension to brownfields drill targeting. The Red October deposit is under-explored, with some known mineralised lodes remaining poorly drilled, and the orebody extents remaining open in all directions (Figure 2).

Figure 2: View looking West; Greater than 1 Ounce drilling intercepts versus existing mine workings

The Red October underground mine workings are relatively shallow at 552m below the surface (Figure 3) at its deepest point (South Decline).  Gold mines throughout the Yilgarn Craton are commonly mined to depths of 1km through ongoing extension of resources via exploration and diligent mine planning including geotechnical analysis.

Figure 3:  View looking West; Mine workings, drilling intercepts and Resource wireframes

Given the relatively undeveloped nature of the ore system, Matsa holds a positive, long-term view to the exploration potential and future mining at Red October.

The Red October Environmental Management Plan is available upon request. Please contact the Head Office for more information.