Matsa's scoping study for the deposit at the southern end of its Norseman gold project predicted cash operating costs of $A570-610 per ounce ($US386-413/oz), depending on treatment options.

Released before an overnight increase of 2.77% to the spot gold price, to $US941.50, the scoping study assumed production of 90,000-120,000 tonnes within open pit optimisations at average grades of 6.8-7.3 grams per tonne gold.

Matsa executive chairman Paul Poli said: "We are very impressed with how financially robust the North Scotia deposit is following this study."

"We can confidently invest our funds towards an early mining commencement date, irrespective of transport distances to regional mills, or fluctuations in the gold price."

Paul Poli is an accountant and brother of Aquila Resources founder Tony Poli.

The North Scotia deposit lies at the southern end of one of two locations that make up the Norseman gold project, which has a mineral resource of 26.3 million tonnes at 1.7gpt gold in 1.44 million ounces.

Poli said the results delivered on the company's earlier statements that it had "strong potential for early cash flow opportunities".

Matsa had 659,347 in cash and cash equivalents at the end of December, and made a 4.95 million loss for the half year ended December 31, 2008.

The company traded as Kalgoorlie-Boulder Resources until January this year, and changed its name following a reverse takeover of private company, Matsa, completed last December.

"Our discussions with various mill owners have been very encouraging and we can now look more closely at the economic viability of several other shallow high-grade resources within the Mt Henry deposit," Poli said.

The Western Australian company is preparing a number of scoping studies, including one for the Mt Henry resource, and expects to release results in the near future.

Shares in Matsa gained 1c to 13c this morning.