FORTUNA METALS LTD — Capital/Financing Update 2007

Oct 24, 2007

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

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ABN 96 095 684 389

25th October 2007

ASX Limited

Company Announcements Office

Announcement

HIGH GRADE AND ALSO WIDE GOLD ASSAY RESULTS IN MULTIPLE LOCATIONS FROM THE FIRST BULLDOZER TRENCHING AT THE SIRIMU PROSPECT, PNG PLUS A POSSIBLE SSW EXTENSION TO THE KODU DEPOSIT DEFINED

Frontier Resources is very pleased to announce excellent gold and locally silver + lead assay results, covering an 800m apparent strike length, from the first round of bulldozer trenching at the Sirimu /SW Kodu Epithermal Prospect, in Papua New Guinea.

In addition, a possible >300m extension to the Kodu Deposit has been defined from >600ppm copper anomalism in trenches at the eastern end of this zone. These are exciting advances in the exploration of EL 1348.

• Higher grade bulldozer trench assay results include:

• 4.4m grading 19.95g/t gold + 47g/t silver + 3.2% lead

• 10m grading 11.40g/t gold + 40g/t silver + 0.4% lead

• 10m grading 4.82g/t gold + 0.75% lead

• 10m grading 5.10g/t gold

• 10m grading 2.19g/t gold

• 10m grading 1.06g/t gold

• 5m grading 1.18g/t gold

• Entire gold anomalous bulldozer trench intervals (including the above results) are:

• 34.8m grading 8.64g/t gold + 36g/t silver + 1.01% lead

• 107.7m grading 2.23g/t gold + 11g/t silver

• 201.4m grading 0.54g/t gold (true widths of these intervals are unknown)

• The first stage bulldozer trenching and access program consisted of a total of 2,575m cut and sampled in 8 trenches, in the gold anomalous ridge/spur soil zones.

• Frontier rock chip sampling of float in the vicinity that was reported to the ASX 27/6/2007, returned high grades of epithermal style of mineralisation, with assays to 5.73g/t gold + 8.49% lead + 19 g/t silver, 3.3 g/t gold + 6.81% lead + 491 g/t silver and 0.13% molybdenum.

• The trenching has confirmed epithermal mineralisation occurs over a large area, centred about 1km WSW of Kodu. The only historic drill hole in this area returned 2m of 15.5g/t gold + 8 lower grade gold zones to 10m of 0.5 g/t gold.

• This exciting prospect strongly warrants concerted exploration, including infill and extension bulldozer trenching followed by drilling. Additional trenching, mapping and more detailed sampling is now underway.

• The Sirimu/SW Kodu high-grade epithermal precious and base-metal mineralisation provides a first class exploration and possible development target near Kodu. If such a deposit were discovered, it could be easier and faster to bring into production, than the World Class copper-gold-molybdenum deposit itself.

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Track
Kokoda
Kodu Deposit
Possible Kodu
Deposit Extension
Sirimu Prospect
SW Kodu Prospect
Figure 1. Prospect Locations
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History

BHP sampled quartz bearing float during their historical reconnaissance that showed gold to 20.8g/t and silver to 463g/t in multiple samples. Limited ridge and spur soil sampling was then undertaken, a significant gold in soil anomaly was defined and 4 hand trenches were dug in the Sirimu anomaly about 1,100m WSW of the Kodu Deposit.

Low grade epithermal gold mineralisation was noted in trench and rock chip samples, including 35m grading 1.09g/t gold, 30m grading 1.10g/t gold and 60m grading 0.79g/t gold, with selective grab rock chip samples up to 20.3g/t gold + 5.5% copper. No trenching or evaluation was undertaken at the SW Kodu area, located about 1,300m WSW of Kodu.

Frontier’s former Joint Venture partner drilled one scout hole (KD005) on the gold in soil (max. 0.62g/t gold) and trench anomaly at Sirimu in late 2005, with 25% of the 300m hole grading >0.1 g/t gold, within about 8 anomalous zones. These results established the existence of highly significant gold occurrences that are not part of the Kodu porphyry copper-gold-moly Deposit.

The peak gold result from hole KD005 was 2m of 15.5 g/t gold ( from 222 to 224m downhole), in an epithermal vein/structural zone, associated with strong pyritic argillic alteration along late (post porphyry) structures adjacent to a lithological contact between carbonaceous shales and the Sirimu Dyke (diorite porphyry similar to Kodu). In addition, there was also 10m grading 0.53g/t gold and 6m of 0.49 g/t gold.

Frontier’s reconnaissance mapping and sampling in May 2007, then confirmed the presence of a significant gold, silver and lead bearing epithermal target at SW Kodu. High-grade assays were returned from gossanous epithermal rock samples forming a distinct float rock train between 1.2 and 1.7 km downstream of the south-west end of the Kodu copper–gold–molybdenum Deposit.

Limited grid based soil sampling at SW Kodu on a radiometric anomaly located slightly upstream of the above rocks discovered a coherent and coincident zone of gold–silver-lead across the ridge. Peak gold in soil samples was 0.14g/t, with coincident lead grading 0.24%. The soil anomaly showed the same geochemical signature as the epithermal vein rock chip samples collected from Ofi Creek and was open to the north, south and east, providing for possible significant strike extensions. This area is where the highest grade trench results are located. Page 2 of 6

Details

Approximately 2,575m of trenching has been sampled in the reported 8 trenches (which includes the access track) to date. About 3,700m of trenching is planned depending upon priorities and the availability of the bulldozer.

Table 1 is a complete list of all anomalous trench assay results from Sirimu, including trench sampling intervals. The trench assays have been bulked (weighted averages) over their entire mineralised intervals (>0.05, but generally >0.1 g/t gold).

Table 1. Entire Gold Anomalous Trench Assay Results and Intervals	Table 1. Entire Gold Anomalous Trench Assay Results and Intervals	Table 1. Entire Gold Anomalous Trench Assay Results and Intervals	Table 1. Entire Gold Anomalous Trench Assay Results and Intervals	Table 1. Entire Gold Anomalous Trench Assay Results and Intervals	Table 1. Entire Gold Anomalous Trench Assay Results and Intervals	Table 1. Entire Gold Anomalous Trench Assay Results and Intervals	Table 1. Entire Gold Anomalous Trench Assay Results and Intervals	Table 1. Entire Gold Anomalous Trench Assay Results and Intervals	Table 1. Entire Gold Anomalous Trench Assay Results and Intervals	Table 1. Entire Gold Anomalous Trench Assay Results and Intervals
Trench Number	Anomalous Length	Assay Results							Anomalous Interval
		Gold (g/t)	Silver (g/t)	Lead (ppm)	Copper (ppm)	Moly (ppm)	Arsenic (ppm)	Antimony (ppm)	From (m)	To (m)
Trench 7	107.7m	2.23	11.4	814	221	2	300	NA	80.0	187.7
Trench 6	34.4m	8.64	35.7	1.01%	641	-	0.31%	873	340.0	374.4
Trench 4	201.4m	0.54	-	599	132	3	200	59	109.1	310.5
Trench 3	90m	0.37	-	362	51	-	155	10	50.0	140.0
Trench 2	116m	0.30	2.2	403	735	32	83	81	280.1	396.1

NB: NA = not analysed

Table 2 is a list of the highest grade assay results in each trench from Sirimu / SW Kodu.

The continuous channel

chip trench rock Table 2. Highest Gold Assay Trench Results sampling was Assay Results undertaken on 10m Trench Anomalous Gold Silver Lead Number Length long reconnaissance (g/t) (g/t) (%) style intervals, but Trench 7 10m 11.40 40.0 0.38 narrowed to 5m or less plus 10m 5.10 - - in obvious Trench 6 4.4m 19.95 47.0 3.23 mineralisation. Higher grade sections are now Trench 4 10m 4.82 - 0.75 being re-sampled at Trench 3 10m 2.19 - - smaller intervals. Trench 2 5m 1.18 - -

Table 2. Highest Gold Assay Trench Results	Table 2. Highest Gold Assay Trench Results	Table 2. Highest Gold Assay Trench Results	Table 2. Highest Gold Assay Trench Results	Table 2. Highest Gold Assay Trench Results	Table 2. Highest Gold Assay Trench Results	Table 2. Highest Gold Assay Trench Results	Table 2. Highest Gold Assay Trench Results
Trench Number	Anomalous Length	Assay Results				Anomalous Interval
		Gold (g/t)	Silver (g/t)	Lead (%)	Copper (%)	From (m)	To (m)
Trench 7	10m	11.40	40.0	0.38	0.04	130.0	140.0
plus	10m	5.10	-	-	0.01	177.7	187.7
Trench 6	4.4m	19.95	47.0	3.23	0.12	340.0	344.4
Trench 4	10m	4.82	-	0.75	0.05	159.5	169.5
Trench 3	10m	2.19	-	-	-	-	306.0
Trench 2	5m	1.18	-	-	0.18	-	8.0
plus	10m	1.06	-	0.12	0.09	15.0	208.5

The higher grade gold

mineralisation appears to occur on the margins of the Sirimu dyke, the same as the 15.5 g/t gold intercept in drill hole, or as veins/structures within the dyke itself. There appear to be 2 dominant mineralisation trends, as shown schematically by the arrows.

The gold anomalous assays in trenches 2, 4 and 7 appear to trend generally east-northeast and appear to correlate well with the Sirimu dyke. Measurements of mineralised structures are generally (more similar to Kodu itself), especially in Trenches 4, 6 and 7, but the local trends could be influenced by topography and limited slumping. The zone is also modelled as having a west-north west trending splay on the centre. Remapping and sampling in these mineralised intervals should establish the lithological and structural controls on the mineralisation.

The Sirimu dyke is more strongly gold, silver and lead anomalous in the west and trends to being more copper anomalous in the east, where it approaches the Kodu Deposit (towards hole KFD005 that returned 450m grading about 0.5% copper equivalent*). This anomalous copper >600ppm in trench is likely to represent the strike extension of the Kodu Deposit. This interpretation is also supported by a magnetic signal anomaly from ground magnetic interpretation and normal metals trends and haloes in porphyry deposits.

Figure 2 (below) shows gold in trench assay results plotted as red / orange coloured shapes at various cutoff levels, drainages in blue and 200m squares for scale on an airphoto base. The south-southwest end of the Kodu Deposit is located near Ofi Creek, toward the upper right hand corner of the image at 564200mE / 8972300mN (also see Figure 5).

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Trench 2
Trench 6
Trench 4
Trench 7
Trench 3
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Figure 3 (right) shows brecciated and oxidised sediments on the margin of the Sirimu dyke grading 5.1g/t gold (trench 7).

Figure 4 (below right) shows a mineralised structure in trench 2, with 10m grading 1.06 g/t gold.

Figure 5 (below) shows a thematic plan on a digital elevation model, with copper in trench assay results Trench 6 plotted as coloured shapes at various cutoff levels and drainages in blue.

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The southwest end of the Kodu Deposit is shown. The possible strike extension is represented by the larger green squares in Trench 2 and its also contains low grade gold (including 10m of 1.06g/t gold (noted above) and 5m of 1.18g/t gold.

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SSW end
of Kodu
Probable Strike
Extension to
Kodu Deposit
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For additional information relating to the Company and its projects please visit our website at www.frontierresources.com.au or feel free call me.

FRONTIER RESOURCES LTD

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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.

About Frontier Resources

• Frontier is focused on exploring the highly mineralised Pacific ‘Rim of Fire’, Papua New Guinea and the major Kodu copper – gold – molybdenum Deposit. The Company is also successfully exploring the Andewa gold Project, Elo and Bukuam copper +/- gold/moly porphyries, plus the SMRV zinc-lead–silver-gold Project in the highly prospective Mt Read volcanics of Tasmania.

• Frontier’s objective is to advance the Kodu Deposit rapidly and cost effectively. A Conceptual Mining Study (CMS) is being undertaken to evaluate various parameters associated with possible development paths forward for the deposit and its further exploration. It is due to be reported early to mid November.

• The Company has a 100% interest in 3 Exploration Licences (Kodu, Likuruanga and Andewa) covering ~804 km[2] of quality copper and gold properties in PNG and 5 Exploration Licences + 2 Retention Licences covering 211 km[2] in Tasmania.

• The portfolio offers excellent mineral deposit potential, with primary Targets being World Class copper/gold/molybdenum porphyry, gold/silver epithermal and polymetallic VMS (zinc/lead/silver/gold) deposits.

• The projects all have high-grade exploration results in rock, trenches and/or drill hole and are in the same or similar geological terranes as existing World Class and/or major mines.

• Kodu copper- gold –molybdenum Deposit Resources: Trench 6

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• The Total Resource (Indicated + Inferred) at the 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 at Kodu 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.

• Recent assays from drilling at the Komsen Prospect in PNG have confirmed previous trench assays and shown that that multiple gold mineralised structures exist to at least 50m vertical depth. There are also locally associated high grade zinc and moderate grade lead and silver veins in drill hole. Results from the next sequence of holes at depths to 130m below surface will be announced forthwith.

• 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 .

• 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.

• The Company is an ASX listed junior mineral explorer whose shares also trade on the Frankfurt, Berlin and Munich Stock Exchanges.

Notes:

• *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 (11/10/2007). 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.

• Trench samples at Sirimu were generally on a 10m reconnaissance basis, with some intervals being sampled on smaller intervals when mineralisation was readily apparent. Sampling was by continuous channel chip near the cleaned base of the bulldozer trench. Quality control was assessed via submission of known standards approximately every 10 samples. Laboratory quality control reported very good repeatability for in-house standards. Assaying was carried out at SGS Laboratories in Townsville using 25 gram fire assays for gold and the ICP technique generally for silver, molybdenum, copper, lead, zinc, arsenic and antimony.

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