Matsa Resources strikes $101m deal with AngloGold Ashanti, retains key Lake Carey assets

Matsa Resources (ASX: MAT) has signed a deal giving global mining company AngloGold Ashanti Australia the option to acquire the majority of its Lake Carey gold project in Western Australia.

An assumed gold price of $4,500 puts the value of the deal at $101 million.

The Devon Pit gold mine, the Fortitude North project and the Red October village and associated tenements (all within Lake Carey) are excluded from the transaction and will be retained by Matsa.

Option fee

Consideration for the acquisition includes an option fee of $8m and 1.875% of the gold price multiplied by an agreed resource of 936,000 ounces within 18 months of the agreement, currently valued at $86.81/oz or approximately $73m.

A deferred consideration of up to $20m will be based on resources discovered by AngloGold after completion of the acquisition, calculated as 1% of the prevailing gold price.

AngloGold will also reimburse Matsa for all tenement-related expenses such as fees, rents, rates and other levies incurred since June 2024 and until completion of the transaction.

Strategic focus

The two companies began discussions regarding Lake Carey in July 2023, at which time Matsa granted AngloGold an exclusive three-month period to conduct due diligence and negotiate a potential transaction.

Matsa executive chair Paul Poli said the deal would allow Matsa to maintain a strategic focus on the start of mining at Devon and exploration activities at Fortitude North.

“This transaction has been a long time in the making and I would like to thank AngloGold Ashanti for the way in which the negotiations were conducted,” he said.

“To have a party of the ilk of AngloGold speaks to the true potential value of our assets and has attributed a ‘see-through’ value in excess of $85 per resource ounce based on the current market gold price.”

Long-standing relationship

Matsa and AngloGold have a long-standing relationship that has included the execution of a purchase agreement in 2017 for ore from Matsa’s Fortitude, Red October and Red Dog mines to be processed at AngloGold’s Sunrise Dam facility on the eastern margin of Lake Carey.

The companies executed a co-operative memorandum of understanding the following year, enabling them to share technical assistance and support.

“It is heartening that AngloGold considers it worthwhile to run a due diligence and discussion process over assets in a region that has seen significant interest and consolidation,” Mr Poli said at the time.

This included the merger of Kingwest Resources and Brightstar Resources (ASX: BTR) in May 2023, the $370m sale of St Barbara’s (ASX: SBM) Leonora assets to Genesis Minerals (ASX: GMD) in June 2023 and Genesis’ off-market takeover of Dacian Gold in November 2023.