FORTUNA METALS LTD — Capital/Financing Update 2007

Oct 29, 2007

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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

30[th] October 2007

ASX Limited

Company Announcements Office

Dear Sir,

NOTIFICATION RE 30 NOVEMBER 2007 OPTION FNTO EXPIRY

The attached formal notification will be mailed to holders of FNTO options on 31[st] October 2007.

Yours faithfully,

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Garry M. Edwards Company Secretary

Encl.

kc/ge/111.07

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Dear Fellow Optionholder

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

30[th] October 2007

Update and Form for Option Conversion

If not exercised, the FNTO class of options will cease trading on the ASX at 5.00pm on 23[rd] November and expire on 30[th] November 2007(as required by the ASX listing rules). The form required to request conversion of options to shares is attached.

As noted on 17[th] October 2007, Frontier is focused on exploring for and developing mineral deposits in the highly mineralised Pacific ‘Rim of Fire’ in Papua New Guinea, plus the Mount Read Volcanics in Tasmania. The Company is advancing the World Class Kodu copper–gold–molybdenum Deposit (PNG) through to feasibility and this is proceeding very well, rapidly and cost effectively.

A highly successful site visit was conducted yesterday with the Vice–Minister for Mining for PNG the Hon. Ano Palo, the Governor of Central Province the Hon. Alphonse Moroi, the First Secretary to the Minister for Mining Mr Veri Maha, landowner clan leaders and journalists from both PNG’s leading newspapers plus the PNG Resources Magazine. Watch the newspapers!

Frontier announced 23[rd] October 2007 that it had increased the Total Resources at Kodu to 1,241,000 tonnes of contained copper equivalent* as follows:

• An Indicated Resource containing 507,000 tonnes of copper equivalent* grading 0.48%, within 105 million tonnes grading 0.30% copper + 0.35g/t gold + 68ppm molybdenum + 2.0g/t silver; and

• An Inferred Resource containing 171 million tonnes, containing 734,000 tonnes of copper equivalent* grading 0.43%, consisting of 0.26% copper + 0.27g/t gold + 82ppm molybdenum + 1.6g/t silver.

Kodu is a World Class Deposit and the strong long term commodity price projections give the project a very good chance of being economically viable at the long term base case scenario being documented by the Conceptual Mining Study.

The Company has also made concerted and successful efforts to evaluate and advance several other prospects, such as the release to the ASX 25[th] October 2007 noting high grade gold + silver and base metals ( 4.4m grading 19.95g/t gold + 47g/t silver + 3.2% lead ) in bulldozer trenches from the Sirimu Prospect and the release today noting high grade gold and zinc in drill hole at the Komsen Prospect.

Announcements to the ASX that are likely to have a significant impact on the share price in the immediate future include:

• The continuing release of Andewa drill core assay results, as received, but mostly

• The Conceptual Mining Study (CMS) which is due to be reported early to mid-November.

I am increasingly confident in Frontier’s future and suggest you monitor the Company’s announcements and share price in the immediate future, with the view to seriously considering exercising the options prior to their expiry date, should you so wish to do so. If you would like to discuss this further, please feel free to contact me.

Sincerely,

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P.A. McNeil, M.Sc. Managing Director

The information in this report that relates to Exploration Results and Mineral Resources is based on information compiled by, or compiled under the supervision of Peter A. McNeil - Member of the Aust. Inst. of Geoscientists. Peter McNeil is the Managing Director of Frontier Resources, who consults to the Company. Peter McNeil has sufficient experience which is relevant to the type of mineralisation and type of deposit under consideration to qualify as Competent Person as defined in the 2004 Edition of the Australasian Code of Reporting Exploration Results, Mineral Resources and Ore Resources. Peter McNeil consents to the inclusion in the report of the matters based on their information in the form and context in which it appears.

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About Frontier Resources

• Frontier operates with a general policy of ‘DRILLING’ our quality projects using our purpose built and self manufactured, cost effective, environmentally friendly, man-portable diamond core rigs. We ‘own’ and operate all the major required means of exploration including a long term and very competent human resources team, drilling, earth moving and transport equipment, magnetic surveys, to maximise exploration success, while minimising costs in a very competitive environment.

• Frontier’s Directors and management team have more than 200 years combined experience in PNG and Australia to serve the interests of the Company and its shareholders.

• Kodu copper- gold –molybdenum Deposit Resources:

  • The Total Resource (Indicated + Inferred) contains 1,241,000 tonnes of copper equivalent* grading 0.45%, within 276 million tonnes grading 0.27% copper + 0.30g/t gold + 77ppm molybdenum + 1.7g/t silver. This equals 754,000 tonnes of copper, 83.4 tonnes of gold, 21,200 tonnes of molybdenum and 475 tonnes of silver (or 1.66 billion pounds of copper, 2.68 million ounces of gold, 46.7 million pounds molybdenum and 15.3 million ounces of silver).

  • An Indicated Resource has now been estimated for the first time and it contains 507,000 tonnes of copper equivalent* grading 0.48%, within 105 million tonnes grading 0.30% copper + 0.35g/t gold + 68ppm molybdenum + 2.0g/t silver.

  • The revised Inferred Resource contains 171 million tonnes (in addition to the Indicated Resource), containing 734,000 tonnes of copper equivalent* grading 0.43%, consisting of 0.26% copper + 0.27g/t gold + 82ppm molybdenum + 1.6g/t silver.

• *Copper Equivalent is the contained copper, gold, silver and molybdenum that are converted to an equal amount of pure copper and summed (based on assays of mineralised rock and actual metal prices). It is used to allow interpretation of the possible theoretical ‘value’ of mineralised rock, without consideration of the ultimate extractability any of the metals.

• Copper Equivalent* herein is based upon metal prices of US$3.69/lb Cu, US$749/oz Au, US$32/lb Mo (57% MoO3 conc.) & US$13.67/oz Ag (11[th] October 2007). The formula used is Cu Equivalent* % = Cu(%) + (Au(g/t) x 0.2958) + (Mo(ppm) x 0.00101) + (Ag(g/t) x 0.00540).

• Island Arc related porphyry copper– gold– molybdenum deposits such as Kodu typically recover contained Cu, Au, Mo and Ag (subject to metallurgical characteristics and prevailing metal prices).

• The ASX requires a metallurgical recovery be specified for each metal, however, no testwork has ever been undertaken at Kodu and recoveries can only be assumed to be typical for Island Arc porphyry copper – gold – molybdenum – silver deposits. The Conceptual Mining Study expected to be announced in early to mid November will clarify this.

• It is the Company’s opinion that each of the elements included in the metal equivalents calculation has good potential to be recovered if the project proceeds to mining.

FRONTIER RESOURCES LTD ABN 96 095 684 389

NOTICE OF EXERCISE OF OPTIONS

Shareholder Reference Number/ Holder Identification Number: xxxxxx Last date of Quotation on ASX: 23 November 2007 FNTO Options Expiry Date: 30 November 2007 Number of FNTO Options held at 7.00pm (E.S.T.) on 29 October 2007: xxxxxx Total cost to Exercise all Options: A$xxxxxx

Frontier Resources Ltd (FNT) Options trading on the Australian Securities Exchange under the code FNTO expire at 5.00pm on 30 November 2007. If the Notice of Exercise of Options and required payment are not received by this time, the Options will automatically lapse in accordance with the Terms of Options and will no longer be available for exercise. The Options exercises are not underwritten.

Exercise Price A$0.20 Conversion Ratio 1 for 1 Ordinary Share ASX Quotation Prices: Closing price on 29 October 2007 A$0.1650 3-month High to 29 October 2007 A$0.2200 3-month Low to 29 October 2007 A$0.0850

PLEASE COMPLETE BELOW (using block letters).

I/We apply to exercise the following number of options and attach a cheque in Australian currency for the amount payable. Please allot me/us Ordinary Shares calculated on the basis of one (1) Ordinary Share in Frontier Resources Ltd for every one (1) Option which I/we exercise.

NUMBER OF OPTIONS TO BE EXERCISED:

TOTAL PAYMENT REQUIRED (at A$0.20 per Option Exercised)

A$

CHEQUE DETAILS

Cheques must be made payable to “Frontier Resources Ltd” and crossed “Not Negotiable”.

Cheque Number BSB Account Number -

YOUR CONTACT DETAILS

Please provide a daytime telephone number where we can contact you if we have any questions about this application.

Contact name	Daytime telephone number()	Daytime telephone number()	Daytime telephone number()	Daytime telephone number()
	(			)

NO SIGNATURES ARE REQUIRED ON THIS FORM

HOW TO LODGE YOUR NOTICE OF EXERCISE OF OPTIONS

Return this form with your cheque to the postal address set out below on or before the 5.00pm (E.S.T.) on 30 November 2007. This will constitute acceptance of your exercise of options and will constitute your agreement to be bound by the Constitution of Frontier Resources Ltd. Applications received after this time will be rejected and exercise monies (without interest) returned to the Applicant.

Postal Address in Australia

Frontier Resources Ltd C/- Registries Ltd PO Box R67 Royal Exchange SYDNEY NSW 1223

If you require further information on how to complete this Application Form please contact the Registries Ltd on +61 2 9290 9600.