Highlights

• Kambalda style Ni sulphide mineralisation confirmed at Killaloe by further assays from Phase 3 diamond drillhole programme at HWG.

• The presence of elevated copper values, high Ni/Cu ratio and high MgO/Cr ratio all provide strong support that drilling is narrowing down to a mineralised lava channel pathway.

• A wide zone of classic ‘harrisite’ textures between 329.2m – 338.7m provides further confirmation of prospective channel pathway rocks.

• New assays from the recent extension to KLDH02 returned further elevated Ni values in conjunction with Ni sulphides as follows:

• 0.25m @ 0.49% Ni, 0.09% Cu, 0.02% Co from 230.75m – 231m

• 0.30m @ 0.54% Ni, 0.36% Cu, 0.04% Co from 232.9m – 233.2m

• Phase 4 diamond drillhole 14KLDH06 commenced to test the basal contact of a mineralised lava channel as interpreted from 14KLDH02.

Killaloe Project (Matsa Resources 80%, Cullen Resources 20%)

Recent diamond drilling at the HWG prospect at Killaloe continues to strongly support the target concept for Kambalda style nickel sulphide mineralisation. Nickel sulphide mineralisation has been confirmed in 3 of the 5 diamond drillholes completed to date.

This report provides an update on Matsa’s exploration programme to discover komatiite hosted nickel sulphide mineralisation at Killaloe and includes:

• New assay results for the drilled extension to drillhole 14KLDH02;

• New assay results for 14KLDH05; and

• Recommencement of diamond drilling on 22nd November 2014.

New Assays

Assays for a 33 element suite for the two Phase 3 diamond drillholes (14KLDH02 extension and 14KLD05) were received. Sampling and assay procedures for the two diamond holes are detailed in Appendix 1, drill collar locations in Appendix 2 and results for Co, Cu, Cr, Mg and Ni are presented in Appendix 3.

14KLDH02 extension (230m – 396m) Assays

Drillhole 14KLDH02 was extended from 230m to 396m and intersected a suite of ultramafic rocks which includes komatiites interpreted on chemical and textural grounds to occupy nickel mineralised lava channel pathways at HWG. Two narrow zones of disseminated nickel sulphide mineralisation were intersected as follows:

• 0.25m @ 0.49% Ni, 0.09% Cu, 0.02% Co from 230.75m – 231m

• 0.30m @ 0.54% Ni, 0.36% Cu, 0.04% Co from 232.9m – 233.2m

The presence in these intersections of elevated copper values, a high Ni/Cu ratio and high MgO/Cr ratio all provide strong support that they are located within a mineralised lava channel pathway. The sequence has been complicated by the presence of a number of faults, but textural evidence indicative of the facing or "way up" direction of komatiites in 14KLDH02 indicate the intersections are towards the base of the channel pathway (potentially an ore-bearing and ore focusing structure), which is most prospective for Kambalda style nickel mineralisation. The drillhole intersected a fault immediately beneath the sulphide zone which prevented testing of the prospective basal contact.

A wide zone was intersected exhibiting classic ‘harrisite’ textures between 329.2m – 338.7m. Harrisite textured komatiite is a recognised indicator of channel pathway rocks in a mineralised environment as shown schematically.