FORTUNA METALS LTD — AGM Information 2009

Oct 25, 2009

FRONTIER RESOURCES LIMITED

ACN 095 684 389

NOTICE OF ANNUAL GENERAL MEETING

TIME : 2:00pm (WST) DATE : 25 November 2009 PLACE : Barringtons House Level 1 283 Rokeby Road SUBIACO WA 6008

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting.

Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on (08) 6468 0388.

CONTENTS PAGE

Notice of Annual General Meeting (setting out the proposed resolutions) 3 Explanatory Statement (explaining the proposed resolutions) 6 Proxy Form 18

TIME AND PLACE OF MEETING AND HOW TO VOTE

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The Annual General Meeting of the Shareholders of Frontier Resources Limited to which this Notice of Meeting relates will be held at 2:00pm (WST) on 25 November 2009 at:

Barringtons House, Level 1, 283 Rokeby Road, SUBIACO WA 6008

YOUR VOTE IS IMPORTANT

The business of the Annual General Meeting affects your shareholding and your vote is important.

VOTING IN PERSON

To vote in person, attend the Annual General Meeting on the date and at the place set out above.

VOTING BY PROXY

To vote by proxy, please complete and sign the proxy form enclosed and send the proxy form:

(a) by post to Frontier Resources Limited, Unit 6, 34 York Street, North Perth, Western Australia; or

(b) by facsimile to the Company on facsimile number (08) 9228 0704,

so that it is received not later than 2:00pm (WST) on 23 November 2009.

Proxy forms received later than this time will be invalid.

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N OTICE OF ANN UA L GENERA L MEETIN G

Notice is given that the Annual General Meeting of Shareholders of Frontier Resources Limited will be held at 2:00pm (WST) on 25 November 2009 at Barringtons House, Level 1, 283 Rokeby Road, SUBIACO WA 6008.

The Explanatory Statement to this Notice of Meeting provides additional information on matters to be considered at the Annual General Meeting. The Explanatory Statement and the proxy form are part of this Notice of Meeting.

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the General Meeting are those who are registered Shareholders of the Company at the close of business on 23 November 2009.

Terms and abbreviations used in this Notice of Meeting and Explanatory Statement are defined in the Glossary.

AGENDA

ORDINARY BUSINESS

Reports and Accounts

To receive and consider the financial statements of the Company for the year ended 30 June 2009 together with the declaration of the directors, the directors’ report, the remuneration report and auditor’s report.

1. RESOLUTION 1 – ADOPTION OF THE REMUNERATION REPORT

To consider and, if thought fit, to pass, with or without amendment, the following resolution as a non-binding resolution :

“That, for the purposes of Section 250R(2) of the Corporations Act and for all other purposes, approval is given to the adoption of the Remuneration Report as contained in the Company’s annual financial report for the year ended 30 June 2009.”

Short Explanation : The vote on this resolution is advisory only and does not bind the Directors or the Company.

2. RESOLUTION 2 – RE-ELECTION OF DIRECTOR – MR ROBERT MCNEIL

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for all purposes, Mr Robert McNeil, a director of the Company who retires by rotation in accordance with clause 16.1 of the Constitution and, being eligible, is re-elected as a Director of the Company.”

3. RESOLUTION 3 – RE-ELECTION OF DIRECTOR – MR WARREN STAUDE

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for all purposes, Mr Warren Staude, a director of the Company who retires by rotation in accordance with clause 16.1 of the Constitution and, being eligible, is re-elected as a Director of the Company.”

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4. RESOLUTION 4 – GRANT OF OPTIONS TO MR ROBERT MCNEIL

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for the purposes of Listing Rule 10.11 of the ASX Listing Rules and Section 208 of the Corporations Act and for all other purposes, the Company approves and authorises the Directors to grant to Mr Robert McNeil (or his nominee) 1,500,000 options to be issued on the terms and conditions set out in Annexure A to this Notice of Meeting.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by Mr McNeil and any of his associates.

5. RESOLUTION 5 – GRANT OF OPTIONS TO MR PETER MCNEIL

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for the purposes of Listing Rule 10.11 of the ASX Listing Rules and Section 208 of the Corporations Act and for all other purposes, the Company approves and authorises the Directors to grant to Mr Peter McNeil (or his nominee) 2,000,000 options to be issued on the terms and conditions set out in Annexure A to this Notice of Meeting.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by Mr McNeil and any of his associates.

6. RESOLUTION 6 – GRANT OF OPTIONS TO MR WARREN STAUDE

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for the purposes of Listing Rule 10.11 of the ASX Listing Rules and Section 208 of the Corporations Act and for all other purposes, the Company approves and authorises the Directors to grant to Mr Warren Staude (or his nominee) 1,000,000 options to be issued on the terms and conditions set out in Annexure A to this Notice of Meeting.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by Mr Staude and any of his associates.

7. RESOLUTION 7 – GRANT OF OPTIONS TO MR GRAHAM FISH

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for the purposes of Listing Rule 10.11 of the ASX Listing Rules and Section 208 of the Corporations Act and for all other purposes, the Company approves and authorises the Directors to grant to Mr Graham Fish (or his nominee) 1,000,000 options to be issued on the terms and conditions set out in Annexure A to this Notice of Meeting.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by Mr Fish and any of his associates.

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8. RESOLUTION 8 – GRANT OF OPTIONS TO MR HUGH DAVID SWAIN

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for the purposes of Listing Rule 10.11 of the ASX Listing Rules and Section 208 of the Corporations Act and for all other purposes, the Company approves and authorises the Directors to grant to Mr Hugh David Swain (or his nominee) 1,000,000 options to be issued on the terms and conditions set out in Annexure A to this Notice of Meeting.”

Voting Exclusion : The Company will disregard any votes cast on this Resolution by Mr Swain and any of his associates.

9. RESOLUTION 9 – ISSUE OF SECURITIES TO MR ROBERT MCNEIL – SHORTFALL ISSUE

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution :

“That, for the purposes of Section 208 of the Corporations Act, ASX Listing Rule 10.11 and for all other purposes, approval is given for the Directors to allot and issue 1,000,000 Shares and 1,000,000 Options to Robert McNeil and/or his nominee/s and otherwise on the terms of the Explanatory Statement.”

Voting Exclusion: The Company will disregard any votes cast on this Resolution by Robert McNeil, his nominee(s) or any of his associates. However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote in accordance with the directions on the Proxy Form or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

DATED: 20 October 2009

BY ORDER OF THE BOARD

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FRONTIER RESOURCES LIMITED JAY STEPHENSON COMPANY SECRETARY

Short Explanation : Resolutions 4 to 9 - The ASX Listing Rules require the Company to seek Shareholder approval prior to the issue of securities to a related party. Under the Corporations Act, the provision of any financial benefit (which includes the grant of options) requires shareholder approval pursuant to the related party provisions (Part 2E). Messrs Robert McNeil, Peter McNeil, Warren Staude, Graham Fish and David Swain are a related party of the Company by virtue of the fact that they are directors.

Voting Exclusion Note:

Where a voting exclusion applies, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote in accordance with the directions on the proxy form or it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

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EXPLANATORY STATEMENT

This Explanatory Statement has been prepared for the information of the Shareholders of the Company in connection with the business to be conducted at the Annual General Meeting to be held at Barringtons House, Level 1, 283 Rokeby Road, Subiaco WA 6008 at 2:00pm (WST) on 25 November 2009.

This purpose of this Explanatory Statement is to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions in the Notice of Meeting.

1. FINANCIAL STATEMENTS AND DIRECTORS’ REPORTS

In accordance with the Company’s Constitution, the business of the meeting will include receipt and consideration of the Company’s Financial Report and reports of directors and auditors for the year ended 30 June 2009.

2. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT

The Remuneration Report is set out in the Directors’ Report in the Company’s 2009 Annual Report. The Remuneration Report sets out the Company’s remuneration arrangements for the Directors and senior management of the Company.

A reasonable opportunity will be provided for discussion of the Remuneration Report at the Meeting.

The Corporations Act requires that at a listed company’s annual general meeting, a resolution that the remuneration report be adopted must be put to the shareholders.

However, Shareholders should note that the vote on this resolution is advisory only and does not bind the Directors or the Company.

3. RESOLUTION 2 & 3 – RE-ELECTION OF MR ROBERT MCNEIL & MR WARREN STAUDE

Clause 16.1 of the Constitution requires that one-third of all Directors (other than the Managing Director) must retire by rotation at an annual general meeting.

A Director who retires under clause 16.1 of the Constitution is eligible for re-election.

Mr Robert McNeil and Mr Warren Staude retire in accordance with clause 16.1 of the Constitution and, being eligible, seek re-election.

4. RESOLUTIONS 4 TO 8 – GRANT OF OPTIONS TO MESSRS ROBERT MCNEIL, PETER MCNEIL, WARREN STAUDE, GRAHAM FISH AND DAVID SWAIN

The Company seeks approval for the grant of options Messrs Robert McNeil, Peter McNeil, Warren Staude, Graham Fish and Hugh David Swain on the terms and conditions set out in Annexure A to this Explanatory Statement ( Director Options ).

For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company, the public company or entity must:

• a) obtain the approval of the public company’s members in the manner set out in Sections 217 to 227 of the Corporations Act; and

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b) give the benefit within 15 months following such approval,

unless the giving of the financial benefit falls within an exception set out in Sections 210 to 216 of the Corporations Act.

In addition, ASX Listing Rule 10.11 also requires shareholder approval to be obtained where an entity issues, or agrees to issue, securities to a related party (or a person whose relationship with the entity or a related party is, in ASX’s opinion, such that approval should be obtained) unless an exception in ASX Listing Rule 10.12 applies.

The issue of the Director Options to the Related Parties requires the Company to obtain Shareholder approval because the grant of Director Options constitutes giving a financial benefit and as Directors, each of Messrs McNeil, McNeil, Fish, Staude, and Swain are related parties of the Company.

It is the view of the Directors that the exceptions set out in Sections 210 to 216 of the Corporations Act and ASX Listing Rule 10.12 do not apply in the current circumstances. Accordingly, Shareholder approval is sought for the grant of the Director Options to each Related Party.

4.1 Shareholder Approval (Chapter 2E of the Corporations Act and Listing Rule 10.11)

Pursuant to and in accordance with the requirements of Sections 217 to 227 of the Corporations Act and ASX Listing Rule 10.13, the following information is provided in relation to the proposed issue of Shares:

• a) the related parties are Mr Robert McNeil, Mr Peter McNeil, Mr Graham Fish, Mr Warren Staude, and Mr David Swain and they are related parties by virtue of being Directors;

• b) the maximum number of Director Options (being the nature of the financial benefit being provided) to be granted to the Related Parties is:

• i. 1,500,000 Director Options to Mr Robert McNeil;

• ii. 2,000,000 Director Options to Mr Peter McNeil;

• iii. 1,000,000 Director Options to Mr Graham Fish

• iv. 1,000,000 Director Options to Mr Warren Staude; and

• v. 1,000,000 Director Options to Mr David Swain.

• c) the Director Options will be granted to the Related Parties no later than 1 month after the date of the General Meeting (or such later date as permitted by any ASX waiver or modification of the ASX Listing Rules) and it is anticipated the Director Options will be issued on one date;

• d) the Director Options will be granted for nil cash consideration, accordingly no funds will be raised. Any funds raised on the exercise of the Director Options will be used for working capital purposes;

• e) the terms and conditions of the Director Options are set out in Annexure A;

• f) a valuation of the Director Options, and the pricing methodology used for that valuation, is set out in Annexure B. This Black & Scholes valuation was undertaken by an independent consultant to the Company who was considered to have an appropriate level of skill and experience to perform such a valuation;

• g) the existing relevant interests of each of the Related Parties in securities of the Company are set out below;

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Related Party	Shares	Options
Mr Robert McNeil	6,237,893	2,325,514
Mr Peter McNeil	9,002,025	1,426,988
Mr Graham Fish	391,457	1,142,856
Mr Warren Staude	61,112	800,000
Mr David Swain	Nil	Nil
Total	15,692,487	5,695,358

Shareholders should note that these interests may increase as a result of Resolutions 4,5,6,7 and 8.

• h) the remuneration and emoluments from the Company to the Related Parties are set out below:

Related Party	Current Financial Year **Remuneration **	Previous Financial Year **Remuneration **
Mr Robert McNeil	32,700	41,650
Mr Peter McNeil	127,430	242,060
Mr Graham Fish	29,031	57,444
Mr Warren Staude	21,800	25,308
Mr David Swain	21,800	10,900
Total	232,761	377,362

• i) At present there are 188,034,250 Shares and 42,216,467 options on issue. If all of the Director Options granted to the Related Parties are exercised, a total of 6,500,000 additional Shares would be allotted and issued.

This will increase the number of Shares on issue from 188,034,250 to 194,534,250 (assuming that no other Options are exercised and no other Shares issued) with the effect that the shareholding of existing Shareholders would be diluted as follows:

Related Party	Issued Shares as at the date of this Notice of Meeting	Director Options to be issued	Total Issued Shares upon exercise of all Director Options	Dilutionary effect upon exercise of Director Options
Mr RobertMcNeil	188,034,250	1,500,000	194,534,250	0.77%
Mr Peter McNeil	188,034,250	2,000,000	194,534,250	1.03%
MrGraham Fish	188,034,250	1,000,000	194,534,250	0.51%
Mr WarrenStaude	188,034,250	1,000,000	194,534,250	0.51%
Mr David Swain	188,034,250	1,000,000	194,534,250	0.51%
**Total **	188,034,250	6,500,000	194,534,250	3.34%

The market price for Shares during the term of the Director Options would normally determine whether or not the Director Options are exercised. If, at any time any of the Director Options are exercised and the Shares are trading on ASX

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at a price that is higher than the exercise price of the Director Options, there may be a perceived cost to the Company.

The Board resolved to issue the Director Options to Messrs McNeil, McNeil, Fish, Staude, and Swain, subject to Shareholder approval, on the terms and conditions set out in Annexure A. As at the date of this Notice of Meeting, the share price is trading on ASX below the exercise price of the Director Options. The grant of the Director Options to Messrs McNeil, McNeil, Fish, Staude, and Swain is intended to align their interests with the Company and its Shareholders;

• j) the trading history of the Shares on the ASX in the 12 months before the date of this Notice of General Meeting is set out below:

	Price	Date
Lowest	1.0 cents	12 Mar09
Highest	4.6 cents	18 Sept 09
Last	3.4cents	15 Oct 09

• k) the primary purpose of the grant of Director Options to Mr Robert McNeil is to provide a market linked incentive package in his capacity as a Director and for future performance by him in his role. The Board (other than Mr Robert McNeil) considered the extensive experience and reputation of Mr Robert McNeil within the industry when considering the grant of the Director Options to Mr Robert McNeil. The Board considers the issue of the Director Options to Mr Robert McNeil to be reasonable, given the necessity to attract the highest calibre of professionals to the Company whilst maintaining the Company’s cash reserves. Other than as set out in this Explanatory Statement, the Board does not consider that there are any significant opportunity costs to the Company, taxation consequences, or benefits foregone by the Company in issuing the Director Options upon the terms proposed;

• l) the primary purpose of the grant of Director Options to Mr Peter McNeil is to provide a market linked incentive package in his capacity as a Director and for future performance by him in his role. The Board (other than Mr Peter McNeil) considered the extensive experience and reputation of Mr Peter McNeil within the industry when considering the grant of the Director Options to Mr Peter McNeil. The Board considers the issue of the Director Options to Mr Peter McNeil to be reasonable, given the necessity to attract the highest calibre of professionals to the Company whilst maintaining the Company’s cash reserves. Other than as set out in this Explanatory Statement, the Board does not consider that there are any significant opportunity costs to the Company, taxation consequences, or benefits foregone by the Company in issuing the Director Options upon the terms proposed;

• m) the primary purpose of the grant of Director Options to Mr Fish is to provide a market linked incentive package in his capacity as a Director and for future performance by him in his role. The Board (other than Mr Fish) considered the extensive experience and reputation of Mr Fish within the industry when considering the grant of the Director Options to Mr Fish. The Board considers the issue of the Director Options to Mr Fish to be reasonable, given the necessity to attract the highest calibre of professionals to the Company whilst maintaining the Company’s cash reserves. Other than as set out in this Explanatory Statement, the Board does not consider that there are any significant opportunity costs to the Company, taxation consequences, or benefits foregone by the Company in issuing the Director Options upon the terms proposed;

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• n) the primary purpose of the grant of Director Options to Mr Staude is to provide a market linked incentive package in his capacity as a Director and for future performance by him in his role. The Board (other than Mr Staude) considered the extensive experience and reputation of Mr Staude within the industry when considering the grant of the Director Options to Mr Staude. The Board considers the issue of the Director Options to Mr Staude to be reasonable, given the necessity to attract the highest calibre of professionals to the Company whilst maintaining the Company’s cash reserves. Other than as set out in this Explanatory Statement, the Board does not consider that there are any significant opportunity costs to the Company, taxation consequences, or benefits foregone by the Company in issuing the Director Options upon the terms proposed;

• o) the primary purpose of the grant of Director Options to Mr Swain is to provide a market linked incentive package in his capacity as a Director and for future performance by him in his role. The Board (other than Mr Swain) considered the extensive experience and reputation of Mr Swain within the industry when considering the grant of the Director Options to Mr Swain. The Board considers the issue of the Director Options to Mr Swain to be reasonable, given the necessity to attract the highest calibre of professionals to the Company whilst maintaining the Company’s cash reserves. Other than as set out in this Explanatory Statement, the Board does not consider that there are any significant opportunity costs to the Company, taxation consequences, or benefits foregone by the Company in issuing the Director Options upon the terms proposed;

• p) Mr Robert McNeil declines to make a recommendation to Shareholders in relation to Resolution 4 due to his material interest in the outcome of Resolution 4. The other Directors, who do not have a material interest in the outcome of Resolution 4, recommend that Shareholders vote in favour of Resolution 4. The Board is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass Resolution 4;

• q) Mr Peter McNeil declines to make a recommendation to Shareholders in relation to Resolution 5 due to his material interest in the outcome of Resolution 5. The other Directors, who do not have a material interest in the outcome of Resolution 5, recommend that Shareholders vote in favour of Resolution 5. The Board is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass Resolution 5;

• r) Mr Warren Staude declines to make a recommendation to Shareholders in relation to Resolution 6 due to his material interest in the outcome of Resolution 6. The other Directors, who do not have a material interest in the outcome of Resolution 6, recommend that Shareholders vote in favour of Resolution 6. The Board is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass Resolution 6.

• s) Mr Graham Fish declines to make a recommendation to Shareholders in relation to Resolution 7 due to his material interest in the outcome of Resolution 7. The other Directors, who do not have a material interest in the outcome of Resolution 7, recommend that Shareholders vote in favour of Resolution 7. The Board is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass Resolution 7.

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• t) Mr Hugh David Swain declines to make a recommendation to Shareholders in relation to Resolution 8 due to his material interest in the outcome of Resolution 8. The other Directors, who do not have a material interest in the outcome of Resolution 8, recommend that Shareholders vote in favour of Resolution 8. The Board is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass Resolution 8.

Approval pursuant to ASX Listing Rule 7.1 is not required in order to issue the Director Options to the Related Parties as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the issue of Director Options to the Related Parties (and any issue of Shares on exercise of those Director Options) will not be included in the 15% calculation of the Company’s annual placement capacity pursuant to ASX Listing Rule 7.1.

5. RESOLUTIONS 9 – ISSUE OF SHARES TO MR ROBERT MCNEIL

5.1 General

On 22 September 2009, the Company announced that it had completed its Entitlements Issue after receiving applications for 19,463,096 shares and 19,463,096 options. The Company reserved the right to allocate shortfall from the issue.

The Company has agreed, subject to obtaining Shareholder approval, to allot and issue 1,000,000 Shortfall Shares and 1,000,000 Shortfall Options at an exercise price of 4.5 cents and a 3 December 2010 expiry date to Mr Robert McNeil ( Related Party ) pursuant to the Entitlement Prospectus dated 14 August 2009and on the terms and conditions set out below.

For a public company, or an entity that the public company controls, to give a financial benefit to a related party of the public company, the public company or entity must:

• (a) obtain the approval of the public company’s members in the manner set out in Sections 217 to 227 of the Corporations Act; and

• (b) give the benefit within 15 months following such approval,

unless the giving of the financial benefit falls within an exception set out in Sections 210 to 216 of the Corporations Act.

In addition, ASX Listing Rule 10.11 also requires shareholder approval to be obtained where an entity issues, or agrees to issue, securities to a related party, or a person whose relationship with the entity or a related party is, in ASX’s opinion, such that approval should be obtained unless an exception in ASX Listing Rule 10.12 applies.

The grant of the Shares to the Related Parties requires the Company to obtain Shareholder approval because the grant of Shares constitutes giving a financial benefit and as Directors, Mr Robert McNeil is a related party of the Company.

It is the view of the Directors that the exceptions set out in Sections 210 to 216 of the Corporations Act and ASX Listing Rule 10.12 do not apply in the current circumstances. Accordingly, Shareholder approval is sought for the grant of Shares to the Related Parties.

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5.2 Shareholder Approval (Chapter 2E of the Corporations Act and Listing Rule 10.11)

Pursuant to and in accordance with the requirements of Sections 217 to 227 of the Corporations Act and ASX Listing Rule 10.13, the following information is provided in relation to the proposed grant of Shares and Options:

• (a) the related parties Mr Robert McNeil and he is a related party by virtue of being Directors;

• (b) the maximum number of Shares and Options (being the nature of the financial benefit being provided) to be granted to the Related Party is:

• (i) 1,000,000 Shares; and

• (ii) 1,000,000 Options;

• (c) the Shares will be granted to the Related Party no later than 1 month after the date of the General Meeting (or such later date as permitted by any ASX waiver or modification of the ASX Listing Rules) and it is anticipated the Shares will be issued on one date;

• (d) the Shares will be issued for $0.035 each under the terms of the Entitlement Issue Prospectus dated 14 August 2009 and the Company intends to use the funds for working capital purposes;

• (e) the Options will be issued for no consideration under the terms of the Entitlement Issue Prospectus dated 14 August 2009

• (a) the Shares issued will be fully paid ordinary shares in the capital of the Company issued on the same terms and conditions as the Company’s existing Shares;

• (b) the Options will be exercisable at 4.5 cents per Option on or before 3 December 2010 under the terms of the Entitlement Issue Prospectus dated 14 August 2009

• (f) the relevant interests of the Related Party in securities of the Company are set out in 4.1 (g) of this Explanatory Statement;

• (g) the remuneration and emoluments from the Company to the Related Party are set out in 4.1 (h) of this Explanatory Statement;

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• (h) if the Shares and Options are granted to the Related Party after approved and assuming the Options in Resolutions 4 to 8 are approved, a total of 7,500,000 Shares would be allotted and issued. This will increase the number of Shares on issue from 188,034,250 to 195,534,250 (assuming that no other Shares are issued and no Options are exercised) with the effect that the shareholding of existing Shareholders would be diluted as follows:

Related Party	Issued Shares as at the date of this Notice of Meeting	Shortfall Shares and Options and Director Options to be issued	Total Issued Shares upon exercise of all Director Options and Issue of Shortfall Shares and Exercise of Shortfall Options	Dilutionary effect upon issue of Shortfall Shares and exercise of Director Options and Shortfall Options
Mr RobertMcNeil	188,034,250	3,500,000	195,534,250	1.79%

• (i) the trading history of the Shares on ASX in the 12 months before the date of this Notice of Annual General Meeting is set out in 4.1 (j) of this Explanatory Statement;

• (j) Mr Robert McNeil declines to make a recommendation to Shareholders in relation to Resolution 9 due to his material interest in the outcome of Resolution 9. The other Directors, who do not have a material interest in the outcome of Resolution 9, recommend that Shareholders vote in favour of Resolution 9. The Board is not aware of any other information that would be reasonably required by Shareholders to allow them to make a decision whether it is in the best interests of the Company to pass Resolution 9;

Approval pursuant to ASX Listing Rule 7.1 is not required in order to issue the Shares to the Related Parties as approval is being obtained under ASX Listing Rule 10.11. Accordingly, the issue of Shares to the Related Parties will not be included in the 15% calculation of the Company’s annual placement capacity pursuant to ASX Listing Rule 7.1.

6. RECOMMENDATION

The Board believes that the resolutions to be proposed at the Company’s Annual General Meeting are in the best interests of the Company and (except where otherwise stated) unanimously recommend that shareholders vote in favour of each resolution.

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GLOSSARY

$ means Australian dollars.

Annual General Meeting means the meeting convened by the Notice of Meeting.

ASIC means the Australian Securities and Investments Commission.

ASX means ASX Limited.

ASX Listing Rules means the Listing Rules of ASX.

Board means the current board of directors of the Company.

Business Days means any day other than a Saturday, Sunday or public holiday in the State of Western Australia.

Company means Frontier Resources Limited (ACN 095 684 389).

Constitution means the Company’s constitution.

Corporations Act means the Corporations Act 2001 (Cth).

Director Option means an Option granted pursuant to Resolutions 4 to 8 with the terms and conditions set out in Annexure A.

Directors means the current directors of the Company.

Explanatory Statement means the explanatory statement accompanying the Notice of Meeting.

Notice of Meeting or Notice of Annual General Meeting means this notice of annual general meeting including the Explanatory Statement.

Optionholder means a holder of an Option or Director Option as the context requires.

Resolutions means the resolutions set out in the Notice of Meeting, or any one of them, as the context requires.

Share means a fully paid ordinary share in the capital of the Company.

Shortfall Share means a Share granted pursuant to Resolution 9 with the terms and conditions pursuant to the Entitlement Issue Prospectus dated 14 August 2009.

Shortfall Option means a Share granted pursuant to Resolution 9 with the terms and conditions pursuant to the Entitlement Issue Prospectus dated 14 August 2009.

Shareholder means a holder of a Share.

WST means Western Standard Time as observed in Perth, Western Australia.

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ANNEXUR E A – TERMS AND CONDITIONS OF DIRECTOR OPTIONS

The Director Options entitle the holder to subscribe for Shares on the following terms and conditions:

• (a) Each Director Option gives the Optionholder the right to subscribe for one Share. To obtain the right given by each Director Option, the Optionholder must exercise the Director Options in accordance with the terms and conditions of the Director Options.

• (b) The Director Options will expire at 5:00 pm (WST) on 31 December 2012 ( Expiry Date ). Any Director Option not exercised before the Expiry Date will automatically lapse on the Expiry Date.

• (c)

• The amount payable upon exercise of:

  • a. 50% of the Director Options will be at an exercise price equal to 130% of the ASX 5 day volume weighted average price per Frontier Share prior to the Meeting Date; and

  • b. 50% of the Director Options will be at an exercise price equal to 160% of the ASX 5 day volume weighted average price per Frontier Share prior to the Meeting Date; ( Exercise Price )

• (d) The Director Options held by each Optionholder may be exercised in whole or in part, and if exercised in part, multiples of 1,000 must be exercised on each occasion.

• (e) An Optionholder may exercise their Director Options by lodging with the Company, before the Expiry Date:

• (i) a written notice of exercise of Director Options specifying the number of Director Options being exercised; and

• (ii) a cheque or electronic funds transfer for the Exercise Price for the number of Director Options being exercised;

( Exercise Notice ).

• (f) An Exercise Notice is only effective when the Company has received the full amount of the Exercise Price in cleared funds.

• (g) Within 10 Business Days of receipt of the Exercise Notice accompanied by the Exercise Price, the Company will allot the number of Shares required under these terms and conditions in respect of the number of Director Options specified in the Exercise Notice.

• (h) The Director Options will vest 12 months after the issue date.

• (i) The Director Options are not transferable.

• (j) All Shares allotted upon the exercise of Director Options will upon allotment rank pari passu in all respects with other Shares.

• (k) The Company will not apply for quotation of the Director Options on ASX. However, The Company will apply for quotation of all Shares allotted pursuant to the exercise of Director Options on ASX within 10 Business Days after the date of allotment of those Shares.

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• (l) If at any time the issued capital of the Company is reconstructed, all rights of an Optionholder are to be changed in a manner consistent with the Corporations Act and the ASX Listing Rules at the time of the reconstruction.

• (m) There are no participating rights or entitlements inherent in the Director Options and Optionholders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Director Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 7 Business Days after the issue is announced. This will give Optionholders the opportunity to exercise their Director Options prior to the date for determining entitlements to participate in any such issue.

• (n) In the event the Company proceeds with a pro rata issue (except a bonus issue) of securities to Shareholders after the date of issue of the Director Options, the exercise price of the Director Options will be reduced in accordance with the formula set out in ASX Listing Rule 6.22.2.

• (o) In the event the Company proceeds with a bonus issue of securities to Shareholders after the date of issues of the Director Options, the number of securities over which a Director Option is exerciseable may be increased by the number of securities which the Optionholder would have received if the Director Option had been exercised before the record date for the bonus issue.

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ANNEXUR E B – ESTIMATED VALUATION OF DIRECTOR OPTIONS

The Director Options to be issued to the Related Parties pursuant to Resolutions 4,5,6,7 and 8, have been valued by Stantons International Pty Ltd.

Using the theoretical Black & Scholes option model and based on the assumptions set out below, the Director Options were ascribed a value range, as follows:

**Assumptions: **
Valuationdate	15 October 2009
Market price ofShares	3.4cents
Exercise price*	130% of ASX 5 day VWAP	160% of ASX 5 day VWAP
Expiry date	31 Dec2012	31 Dec2012
Risk free interest rate	5%	5%
Volatility	172.92%	172.92%
**Indicative value per Director Option **	2.89 cents	2.94cents
Total Value of Director Options	$93,925	$95,550
- RobertMcNeil	$21,675	$22,050
- Peter McNeil	$28,900	$29,400
-Graham Fish	$14,450	$14,700
- WarrenStaude	$14,450	$14,700
- David Swain	$14,450	$14,700

• The actual price of the options will be determined on the Meeting date when it will be based on 130% and 160% of the ASX 5 day volume weighted average price per Frontier Share prior to the Meeting Date.

Note: The valuation ranges noted above are not necessarily the market prices that the Director Options could be traded at and they are not automatically the market prices for taxation purposes.

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PROXY FORM

APPOINTMENT OF PROXY FRONTIER RESOURCES LIMITED ACN 095 684 389

ANNUAL GENERAL MEETING

I/We Appoint

being a Member of Frontier Resources Limited entitled to attend and vote at the Meeting, hereby Name of proxy OR

Mark this box if you wish to appoint the Chairman of the Meeting as your proxy

or failing the person so named or, if no person is named, the Chairman of the Meeting or the Chairman’s nominee, to vote in accordance with the following directions or, if no directions have been given, as the proxy sees fit at the Annual General Meeting to be held at 1:00 pm (WST), on 25 November 2009 at Barringtons, Level 1, 283 Rokeby Road, Subiaco WA 6008 and at any adjournment thereof. If no directions are given, the Chairman will vote in favour of all the resolutions.

Voting on Business of the Annual General Meeting

FOR AGAINST ABSTAIN Resolution 1 – Adoption of the Remuneration Report Resolution 2 – Re-election of Director, Mr Robert McNeil Resolution 3 – Re-election of Director, Mr Warren Staude Resolution 4 – Grant of Options to Mr Robert McNeil Resolution 5 – Grant of Options to Mr Peter McNeil Resolution 6 – Grant of Options to Mr Warren Staude Resolution 7 – Grant of Options to Mr Graham Fish Resolution 8 – Grant of Options to Mr Hugh David Swain Resolution 9 – Issue of Securities to Mr Robert McNeil

OR

In relation to these Resolutions, if the Chairman is to be your proxy and you do not wish to direct your proxy how to vote on these Resolutions, please place a mark in this box

By marking this box, you acknowledge that the Chairman of the meeting may exercise your proxy even if he has an interest in the outcome of the resolution and votes cast by him other than as proxy holder will be disregarded because of that interest. If you do not mark this box, and you have not directed your proxy how to vote, the Chairman of the meeting will not cast your votes on these Resolutions and your votes will not be counted in computing the required majority if a poll is called on these Resolutions. The Chairman intends to vote in favour of these Resolutions.

IF THE CHAIRMAN IS TO BE YOUR PROXY IN RELATION TO RESOLUTIONS 1 TO 8 YOU MUST EITHER MARK THE BOXES DIRECTING YOUR PROXY HOW TO VOTE OR MARK THE BOX INDICATING THAT YOU DO NOT WISH TO DIRECT YOUR PROXY HOW TO VOTE, OTHERWISE THIS APPOINTMENT OF PROXY IN RELATION TO RESOLUTIONS 1 TO 8 WILL BE DISREGARDED.

If you mark the abstain box for a particular item, you are directing your proxy not to vote on that item on a show of hands or on a poll and that your shares are not to be counted in computing the required majority on a poll.

If two proxies are being appointed, the proportion of voting rights this proxy represents is

Signed this day of 2009

%

By:

By:	By:	By:
Individuals and joint holders Companies (affix common seal if appropriate)
Signature		Director
Signature		Director/Company Secretary
Signature		Sole Director and Sole Company Secretary

FRONTIER RESOURCES LIMITED ACN 095 684 389

Instructions for Completing ‘Appointment of Proxy’ Form

1. A member entitled to attend and vote at a Meeting is entitled to appoint not more than two proxies to attend and vote on their behalf. Where more than one proxy is appointed, such proxy must be allocated a proportion of the member’s voting rights. If the shareholder appoints two proxies and the appointment does not specify this proportion, each proxy may exercise half the votes.

2. A duly appointed proxy need not be a member of the Company. In the case of joint holders, all must sign.

3. Corporate shareholders should comply with the execution requirements set out on the Proxy Form or otherwise with the provisions of Section 127 of the Corporations Act. Section 127 of the Corporations Act provides that a company may execute a document without using its common seal if the document is signed by:

4. 2 directors of the company;

5. a director and a company secretary of the company; or

6. for a proprietary company that has a sole director who is also the sole company secretary – that director.

For the Company to rely on the assumptions set out in Section 129(5) and (6) of the Corporations Act, a document must appear to have been executed in accordance with Section 127(1) or (2). This effectively means that the status of the persons signing the document or witnessing the affixing of the seal must be set out and conform to the requirements of Section 127(1) or (2) as applicable. In particular, a person who witnesses the affixing of a common seal and who is the sole director and sole company secretary of the company must state that next to his or her signature.

1. Completion of a Proxy Form will not prevent individual shareholders from attending the Meeting in person if they wish. Where a shareholder completes and lodges a valid proxy form and attends the Meeting in person, then the proxy’s authority to speak and vote for that shareholder is suspended while the shareholder is present at the Meeting.

2. Where a Proxy Form or form of appointment of corporate representative is lodged and is executed under power of attorney, the power of attorney must be lodged in like manner as this proxy.