FORTUNA METALS LTD — AGM Information 2007

Nov 19, 2007

==> picture [183 x 127] intentionally omitted <==

ASX Announcement

ABN 96 095 684 389 ADDRESS PHONE EMAIL PO Box 7996 +61 (07) 5592 2274 info@frontierresources.com.au Gold Coast Mail Centre FAX WEBSITE Qld 9726 Australia +61 (07) 5592 2275 www.frontierresources.com.au

20 November 2007

Chairman’s Address Frontier Resources

Welcome to Frontier Resources Annual General Meeting.

Frontier has had a very successful year in terms of exploration achievements which I will briefly note for you. Firstly, however, I particularly want to compliment Peter McNeil, Frontier’s Managing Director who has worked tirelessly to move Frontier forward over the past year and who deserves full credit for Frontier’s achievements.

Exploration at Frontier’s Kodu Project has shown, as outlined in the ASX Release yesterday, that this project is very attractive for development and at present metal prices would yield very substantial cash flows to shareholders.

Resources have more than doubled in the past year. As a result of the recently completed and announced Conceptual Mining Study, a 64 page study by independent expert David Swain, Frontier will move forward to a Feasibility Study with the aim of bringing this project to development as soon as possible. The results of the Conceptual Mining Study are described at length in the ASX release and I will not attempt to describe the study results in detail, however, I would like to note several of the author’s conclusions.

“The Kodu Project contains copper and molybdenum and a smaller quantity of gold and silver.

At Benchmark commodity prices and a power cost of US$0.22/kWhr, and a production rate of 20Mtpa, the base case completes payback within four years and commences positive cash flow in year five. However at current commodity prices say copper US$3.5/lb, and molybdenum US$35/lb, payback and positive cash flow commence in year one.

At benchmark commodity prices and a power cost of US$0.06/kWhr and a production rate of 20Mtpa, the base case completes payback within two years and commences positive cash flow in year three”.

The benchmark commodity prices are what are considered to be long term likely minimum prices – US$1.50/lb for copper, US$15/lb for molybdenum and US$750/oz for gold. These are much lower prices than present copper prices of approximately US$3.20/lb and molybdenum, US$35 to $40/lb. Project capital cost is estimated to be approximately US$600 million plus a further US$150 million in mobile equipment financing.

If power can be generated by cheaper methods than diesel/oil generation such as hydro, geothermal, etc the project becomes even more attractive as indicated above in the second benchmark analysis.

The final conclusion in this Conceptual Mining Study is:

“We conclude that the Kodu Project has potential to be a satisfactory and robust project at long term projected (benchmark) metal prices”.

In the past year Frontier in addition to the exploration at Kodu, has defined attractive gold results in drill hole and trench at projects near Kodu and at Mt Andewa on the island of New Britain. These will be followed up in 2008.

• 2 -

In Tasmania we are mobilising this week an exploration team to the south west areas to further explore and drill test the high grade zinc/lead/silver mineralisation encountered in earlier company exploration.

At this meeting it would be remiss of me if I did not comment on the current controversy in relation to mining near the Kokoda Track.

At a recent meeting convened by the MRA in Port Moresby, and described in a further ASX release yesterday, all participants except Australia Government representatives were supportive of the development of Kodu.

Development of Kodu would affect a relatively small part of the 94km long Kokoda Track – perhaps two to three kilometres. The financial consequences of development, as suggested by the Conceptual Mining Study are massive for shareholders, the Papua New Guinea Government and the PNG citizens who live in or near the project area.

I would note that this part of the Kokoda track is not a particularly significant section and a number of other sections have already been relocated – so why all the fuss!

I am at a complete loss to understand the rationale of those people that completely oppose all development along or near (whatever that means) the Kokoda track. This attitude seems arrogant and hypocritical to me as it completely ignores both the wishes and well being of the people that actually own the track and the fact that PNG is a sovereign country. It is no wonder that Papua New Guineans and the PNG Government have a negative attitude towards Australia, when Australian politicians and many media commentators, arrogantly try to impose solutions that originate in Australian political considerations. I cannot believe that Australian “diggers” who fought along the Kokoda track, assisted by local Papua New Guineans, would want to relegate these people to a “cultural zoo” to help attract trekkers. These people assisted our troops – and what have we ever done for them – nothing! I believe the original diggers would want these people to have a better life – access to transport, communications, health services, education – all benefits we take for granted, and which they would receive from the development of Kodu.

The management of Frontier have many relatives who fought in WW2, some that did not return, and some that fought in Papua New Guinea. We are as aware as anyone of the significance of memorials to WW2, such as the Kokoda track, but we also firmly believe that the well being of the people takes precedence over memorials.

Finally all parties should be aware that the people that own the Kokoda Track are very likely to prevent all trekking if development is seriously threatened – is this what opponents want – confrontation with the landowners?

I firmly believe that there is too much at stake in PNG for development not to proceed – from a legal standpoint, economic considerations, sovereign risk, and PNG sovereign issues. I also believe that in the current resources “boom” development will in fact proceed quite quickly.

Before closing, I would like to acknowledge the efforts of all Directors and Management. As you are aware, there is in progress a major resources boom affecting the companies’ ability to employ skilled and loyal staff, and this in turn has placed much greater stress on our existing employees.

In closing I wish all shareholders a prosperous 2008 and thank you for your support in 2007.

Yours faithfully

==> picture [138 x 47] intentionally omitted <==

R.D. McNeil CHAIRMAN