FORTUNA METALS LTD — AGM Information 2011

Oct 23, 2011

FRONTIER RESOURCES LIMITED

ACN 095 684 389

NOTICE OF ANNUAL GENERAL MEETING

TIME : 11:00am (WST) DATE : 21 November 2011 PLACE : The Celtic Club 48 Ord Street WEST PERTH WA 6005

An electronic copy of the Frontier Resources Limited 2011 Annual Report can be found at www.frontierresources.com.au.

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) 6141 3500.

C O N TE N T S P A GE

Notice of Annual General Meeting (setting out the proposed resolutions)	3
Explanatory Statement (explaining the proposed resolutions)	7
Glossary	14
Annexure A	15
Annexure B	17
Proxy Form	18

T I M E A N D P L AC E OF M E ET I N G A N D HO W T O V OT E

VENUE

The Annual General Meeting of the Shareholders of Frontier Resources Limited to which this Notice of Meeting relates will be held at 11:00am (WST) on 21 November 2011 at:

The Celtic Club 48 Ord Street WEST PERTH WA 6005

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, PO Box 52, West Perth, Western Australia 6872; or

(b) by facsimile to the Company on facsimile number +61 9 6141 3599,

so that it is received not later than 11:00am (WST) on 19 November 2011.

Proxy forms received later than this time will be invalid.

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N O T IC E OF A N N U A L G E N E R AL ME E T I NG

Notice is given that the Annual General Meeting of Shareholders of Frontier Resources Limited will be held at 11:00am (WST) on 21 November 2011 at The Celtic Club, 48 Ord Street, West Perth WA 6005.

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 19 November 2011.

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 2011 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 purpose of Section 250R(2) of the Corporations Act and for all other purposes, approval is given for the adoption of the Remuneration Report as contained in the Company’s annual financial report for the financial year ended 30 June 2011.”

Note: the vote on this Resolution is advisory only and does not bind the Directors or the Company.

Voting Prohibition Statement:

A vote on this Resolution must not be cast (in any capacity) by or on behalf of any of the following persons:

• (a) a member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report; or

• (b) a Closely Related Party of such a member.

However, a person described above may vote on this Resolution if:

• (c) the person does so as a proxy appointed by writing that specifies how the proxy is to vote on the Resolution; and

• (d) the vote is not cast on behalf of a person described in sub-paragraphs (a) or (b) above.

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2. RESOLUTION 2 – RE-ELECTION OF DIRECTOR – 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 all purposes, Mr Hugh David Swain, 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 – GRANT OF OPTIONS TO MR PETER MCNEIL

To consider and, if thought fit, to pass, 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, Shareholders approve and authorise the Directors to grant to Mr Peter McNeil (or his nominee) 3,000,000 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 or his nominee and any of their 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.

Voting Prohibition Statement

A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

• ( a) the proxy is either:

• (i) a member of the Key Management Personnel; or

• (ii) a Closely Related Party of such a member; and

(b) the appointment does not specify the way the proxy is to vote on this Resolution. However, the above prohibition does not apply if:

• (c) the proxy is the Chair of the Meeting; and

• (d) the appointment expressly authorises the Chair to exercise the proxy even if the Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

4. RESOLUTION 4 – GRANT OF OPTIONS TO MR WARREN STAUDE

To consider and, if thought fit, to pass, 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, Shareholders approve and authorise 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.”

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

Voting Prohibition Statement

A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

• (a) the proxy is either:

• (i) a member of the Key Management Personnel; or

• (ii) a Closely Related Party of such a member; and

• (b) the appointment does not specify the way the proxy is to vote on this Resolution.

However, the above prohibition does not apply if:

• (c) the proxy is the Chair of the Meeting; and

• (d) the appointment expressly authorises the Chair to exercise the proxy even if the Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

5. RESOLUTION 5 – GRANT OF OPTIONS TO MR GRAHAM FISH

To consider and, if thought fit, to pass, 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, Shareholders approve and authorise 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 or his nominee and any of their 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.

Voting Prohibition Statement

A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

(a) the proxy is either:

• (i) a member of the Key Management Personnel; or

• (ii) a Closely Related Party of such a member; and

(b) the appointment does not specify the way the proxy is to vote on this Resolution.

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However, the above prohibition does not apply if:

• (c) the proxy is the Chair of the Meeting; and

• (d) the appointment expressly authorises the Chair to exercise the proxy even if the Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

6. RESOLUTION 6 – GRANT OF OPTIONS TO MR HUGH DAVID SWAIN

To consider and, if thought fit, to pass, 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, Shareholders approve and authorise 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 or his nominee and any of their 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.

Voting Prohibition Statement

A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

• (a) the proxy is either:

• (ii) a member of the Key Management Personnel; or

• (iii) a Closely Related Party of such a member; and

• (b) the appointment does not specify the way the proxy is to vote on this Resolution.

However, the above prohibition does not apply if:

• (c) the proxy is the Chair of the Meeting; and

• (d) the appointment expressly authorises the Chair to exercise the proxy even if the Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

DATED: 14 October 2011 BY ORDER OF THE BOARD

JULIA BECKETT

COMPANY SECRETARY

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E X P L A N A T O R Y S T A TE M E N T

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 The Celtic Club, 48 Ord Street, West Perth WA 6005, at 11:00am (WST) on 21 November 2011.

The 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 2011.

The Company will not provide a hard copy of the Company’s annual financial report to Shareholders unless specifically requested to do so. The Company’s annual financial report is available on its website at www.frontierresources.com.au.

2. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT

2.1 General

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, such a resolution is advisory only and does not bind the Directors or the Company.

Under recent changes to the Corporations Act which came into effect on 1 July 2011, if at least 25% of the votes cast on Resolution 1 are voted against adoption of the Remuneration Report at the Annual General Meeting, and then again at the Company's 2012 annual general meeting, the Company will be required to put to Shareholders a resolution proposing the calling of an [extraordinary] general meeting to consider the appointment of directors of the Company ( Spill Resolution ).

If more than 50% of Shareholders vote in favour of the Spill Resolution, the Company must convene the [extraordinary] general meeting ( Spill Meeting ) within 90 days of the Company's 2012 annual general meeting. All of the Directors who were in office when the Company's 2012 Directors' report was approved, other than the managing director of the Company, will cease to hold office immediately before the end of the Spill Meeting but may stand for re-election at the Spill Meeting. Following the Spill Meeting those persons whose election or re-election as Directors is approved will be the Directors of the Company.

The remuneration report sets out the Company’s remuneration arrangements for the Directors and senior management of the Company. The remuneration report is part of the Directors’ report contained in the annual financial report of the Company for the financial year ending 30 June 2011.

A reasonable opportunity will be provided for discussion of the remuneration report at the Annual General Meeting.

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2.2 Proxy Restrictions

Pursuant to the Corporations Act, if you elect to appoint the Chair, or another member of Key Management Personnel or any Closely Related Party as your proxy to vote on this Resolution 1, you must direct the proxy how they are to vote. Where you do not direct the Chair, or another member of Key Management Personnel or Closely Related Party on how to vote on this Resolution 1, the proxy is prevented by the Corporations Act from exercising your vote and your vote will not be counted in relation to this Resolution 1.

2.3 Definitions

Key Management Personnel has the same meaning as in the accounting standards and broadly includes those persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly, including any director (whether executive or otherwise) of the Company.

Closely Related Party of a member of the Key Management Personnel means:

• (a) a spouse or child of the member;

• (b) a child of the member’s spouse;

• (c) a dependent of the member or the member’s spouse;

• (d) anyone else who is one of the member’s family and may be expected to influence the member, or be influenced by the member, in the member’s dealing with the entity;

• (e) a company the member controls; or

• (f) a person prescribed by the Corporations Regulations 2001 (Cth ).

Remuneration Report means the remuneration report set out in the Director’s report section of the Company’s annual financial report for the year ended 30 June 2011.

3. RESOLUTION 2 – RE-ELECTION OF MR HUGH DAVID SWAIN

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.

The Directors to retire at an annual general meeting are those who have been longest in office since their last election, but, as between persons who because Directors on the same day, those to retire shall (unless they otherwise agree among themselves) be determined by drawing lots.

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

Mr Hugh David Swain retires in accordance with clause 16.1 of the Constitution and, being eligible, seeks re-election.

4. RESOLUTIONS 3 TO 6 – GRANT OF OPTIONS TO MESSRS PETER MCNEIL, WARREN STAUDE, GRAHAM FISH AND DAVID SWAIN

The Company seeks approval for the grant of Options to Messrs Peter McNeil, Warren Staude, Graham Fish and Hugh David Swain ( Related Parties ) on the terms

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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

• (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, 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 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:

• (iii) 3,000,000 Director Options to Mr Peter McNeil;

• (iv) 1,000,000 Director Options to Mr Graham Fish;

• (v) 1,000,000 Director Options to Mr Warren Staude; and

• (vi) 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 Annual 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;

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• (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;

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

Related Party	Shares	Options
Mr Peter McNeil	9,737,223	2,000,000
Mr Warren Staude	952,879	2,000,000
Mr Graham Fish	741,457	1,500,000
Mr David Swain	1,078,570	1,000,000
Total	12,516,129	6,500,000

Shareholders should note that these interests may increase as a result of Resolutions 3,4, 5, and 6;

(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 Peter McNeil	$275,000	$327,219
Mr Warren Staude	$30,000	$30,000
Mr Graham Fish	$30,000	$31,750
Mr David Swain	$32,750	$32,700
Total	$367,750	$421,669

(i) At present there are 294,455,036 Shares and 21,240,800 Options on issue. If all of the Director Options granted to the Related Parties are exercised, a total of 6,000,000 additional Shares would be allotted and issued.

This will increase the number of Shares on issue from 294,455,036 to 300,455,036 (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:

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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 Peter McNeil	294,455,036	3,000,000	297,455,036	1.02%
Mr Warren Staude	294,455,036	1,000,000	295,455,036	0.34%
Mr Graham Fish	294,455,036	1,000,000	295,455,036	0.34%
Mr David Swain	294,455,036	1,000,000	295,455,036	0.34%
Total	294,455,036	6,000,000	300,455,036	2.04%

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 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, Staude, Fish, 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, 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	$0.062	22 November 2010
Highest	$0.42	22 February 2011
Last	$0.155	13 October 2011

(k) 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;

(l) 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

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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;

(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;

(n) 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;

• (o) Mr Peter McNeil declines to make a recommendation to Shareholders in relation to Resolution 3 due to his material interest in the outcome of Resolution 3. The other Directors, who do not have a material interest in the outcome of Resolution 3, recommend that Shareholders vote in favour of Resolution 3. 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 3;

• (p) Mr Warren Staude 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 Graham Fish 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

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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; and

• (r) Mr Hugh David Swain 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.

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. 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.

4. ENQUIRIES

Shareholders are requested to contact Julia Beckett on (+61 8) 6141 3500 if they have any queries in respect of the matters set out in these documents.

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5. GLOSSARY

$ means Australian dollars.

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

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 Day means Monday to Friday inclusive, except New Year’s Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any other day that ASX declares is not a business day.

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 to acquire a Share on the terms set out in Annexure A.

Directors means the current directors of the Company.

Explanatory Statement means the explanatory statement accompanying the Notice.

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

Proxy Form means the proxy form accompanying the Notice.

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.

Shareholder means a holder of a Share.

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

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ANNEXURE 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 October 2014 ( 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 the Director Options will be at an exercise price equal to 145% of the ASX 5 day volume weighted average price per Frontier Share prior to the date of issue.

• (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:

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

• (viii) 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.

• (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.

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• (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 exercisable 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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ANNEXURE B – ESTIMATED VALUATION OF DIRECTOR OPTIONS

The Director Options to be issued to the Related Parties pursuant to Resolutions 3, 4, 5 and 6, have been valued using the Black & Scholes option model.

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:
Valuation date	11 October 2011
Market price of Shares	13.5 cents
Exercise price*	145% of ASX 5 day VWAP
Expiry date		31 October 2014
Risk free interest rate		3.76%
Discount for non-transferability		20%
Volatility	80%	92%	100%
Indicative value per Director Option	4.77 cents	5.53 cents	6.00 cents
Total Value of Director Options
-Peter McNeil	$143,100	$165,900	$180,000
-Warren Staude	$47,700	$55,300	$60,000
-Graham Fish	$47,700	$55,300	$60,000
-David Swain	$47,700	$55,300	$60,000

• The actual price of the Options will be determined on the Meeting date when it will be based on 145% of the ASX 5 day volume weighted average price per Frontier Share prior to the date of issue.

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

of

==> picture [377 x 64] intentionally omitted <==

being a Member of Frontier Resources Limited entitled to attend and vote at the Annual General Meeting, hereby

Appoint OR The Chair of the Annual General Meeting as your proxy Name of proxy

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chairman of the Meeting, as my/our proxy to act generally at the meeting on my/our behalf and 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 of Frontier Resources Limited to be held at The Celtic Club, 48 Ord Street, West Perth, Western Australia on 21 November 2011 at 11:00am (WST) and at any adjournment of that meeting. The Chairman of the Meeting intends to vote undirected proxies in favour of each item of business other than in respect of Item 1 , where the company has determined that the Chairman is unable to do so.

If the Chair of the Annual General Meeting is appointed as your proxy, or may be appointed by default, and you do not wish to direct your proxy how to vote as your proxy in respect of Resolutions 2 to 6 please place a mark in this box.

By marking this box, you acknowledge that the Chair of the Annual General Meeting may exercise your proxy even if he has an interest in the outcome of Resolutions 2 to 6 and that votes cast by the Chair of the Annual General Meeting for Resolutions 2 to 6 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 Chair will not cast your votes on Resolutions 2 to 6 and your votes will not be counted in calculating the required majority if a poll is called on Resolutions 2 to 6.

OR

Voting on Business of the Annual General Meeting

FOR AGAINST ABSTAIN

Resolution 1 – Adoption of the Remuneration Report Resolution 2 – Re-election of Mr Hugh David Swain Resolution 3 – Grant of Options to Mr Peter McNeil Resolution 4 – Grant of Options to Mr Warren Staude Resolution 5 – Grant of Options to Mr Graham Fish Resolution 6 – Grant of Options to Mr Hugh David Swain

Please note : If you mark the abstain box for a particular Resolution, you are directing your proxy not to vote on that Resolution on a show of hands or on a poll and your votes will 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

Signature of Member(s): Individual or Member 1 Sole Director/Company Secretary

Date: ____ Member 2 Member 3 Director Director/Company Secretary

Contact Name: _____ Contact Ph (daytime): _________

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FRONTIER RESOURCES LIMITED ACN 095 684 389

Instructions for Completing ‘Appointment of Proxy’ Form

New sections 250BB and 250BC of the Corporations Act came into effect on 1 August 2011 and apply to voting by proxy on or after that date. Shareholders and their proxies should be aware of these changes to the Corporations Act, as they will apply to this Annual General Meeting. Broadly, the changes mean that:

• if proxy holders vote, they must cast all directed proxies as directed; and

• any directed proxies which are not voted will automatically default to the Chair, who must vote the proxies as directed.

Further details on these changes is set out below.

Proxy vote if appointment specifies way to vote

Section 250BB(1) of the Corporations Act provides that an appointment of a proxy may specify the way the proxy is to vote on a particular resolution and, if it does :

• the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way (i.e. as directed); and

• if the proxy has 2 or more appointments that specify different ways to vote on the resolution – the proxy must not vote on a show of hands; and

• if the proxy is the chair of the meeting at which the resolution is voted on – the proxy must vote on a poll, and must vote that way (i.e. as directed); and

• if the proxy is not the chair – the proxy need not vote on the poll, but if the proxy does so, the proxy must vote that way (i.e. as directed).

Transfer of non-chair proxy to chair in certain circumstances

Section 250BC of the Corporations Act provides that, if:

• an appointment of a proxy specifies the way the proxy is to vote on a particular resolution at a meeting of the Company's members; and

• the appointed proxy is not the chair of the meeting; and

• at the meeting, a poll is duly demanded on the resolution; and

• either of the following applies:

• the proxy is not recorded as attending the meeting;

• the proxy does not vote on the resolution,

the chair of the meeting is taken, before voting on the resolution closes, to have been appointed as the proxy for the purposes of voting on the resolution at the meeting.

1. ( Appointing a Proxy ): A member entitled to attend and vote at an Annual General Meeting is entitled to appoint not more than two proxies to attend and vote on a poll on their behalf. The appointment of a second proxy must be done on a separate copy of the Proxy Form. Where more than one proxy is appointed, such proxy must be

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allocated a proportion of the member’s voting rights. If a member appoints two proxies and the appointment does not specify this proportion, each proxy may exercise half the votes. A duly appointed proxy need not be a member of the Company.

2.

( Direction to Vote ): A member may direct a proxy how to vote by marking one of the boxes opposite each item of business. Where a box is not marked the proxy may vote as they choose. Where more than one box is marked on an item the vote will be invalid on that item.

3. ( Signing Instructions ):

• ( Individual ): Where the holding is in one name, the member must sign.

• ( Joint Holding ): Where the holding is in more than one name, all of the members should sign.

• ( Power of Attorney ): If you have not already provided the Power of Attorney with the registry, please attach a certified photocopy of the Power of Attorney to this form when you return it.

• ( Companies ): Where the company has a sole director who is also the sole company secretary, that person must sign. Where the company (pursuant to Section 204A of the Corporations Act) does not have a company secretary, a sole director can also sign alone. Otherwise, a director jointly with either another director or a company secretary must sign. Please sign in the appropriate place to indicate the office held.

• ( Attending the Meeting ): Completion of a Proxy Form will not prevent individual members from attending the Annual General Meeting in person if they wish. Where a member completes and lodges a valid Proxy Form and attends the Annual General Meeting in person, then the proxy’s authority to speak and vote for that member is suspended while the member is present at the Annual General Meeting.

• ( Return of Proxy Form ): To vote by proxy, please complete and sign the enclosed Proxy Form and return by:

• (b) post to Frontier Resources Limited, PO Box 52, West Perth WA 6872; or

• (c) facsimile to the Company on facsimile number +61 8 6141 3599;

so that it is received not later than 11:00am (WST) on 19 November 2011.

Proxy forms received later than this time will be invalid.

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