FORTUNA METALS LTD — Capital/Financing Update 2008

Oct 29, 2008

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ABN 96 095 684 389

ADDRESS PHONE EMAIL PO Box 35 +61 (08) 6468 0388 info@frontierresources.com.au NORTH PERTH WA 6906 FAX WEBSITE Australia +61 (08) 9228 0704 www.frontierresources.com.au

30 October 2008

ASX Announcement

CORRECTION TO INITIAL ADVICE OF NON-RENOUNCEABLE RIGHTS ISSUE

The initial advice to shareholders in relation to the non-renounceable rights issue contained some errors in the dates. The main error was the expiry of the options is 3 December 2010 not 3 December 2008.

Attached is the revised initial advice to shareholders.

Jay Stephenson Company Secretary

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ABN 96 095 684 389

ADDRESS PO Box 35 NORTH PERTH WA 6906 Australia

PHONE EMAIL +61 (08) 6468 0388 info@frontierresources.com.au FAX WEBSITE +61 (08) 9228 0704 www.frontierresources.com.au

29 October 2008

Dear Shareholder

INITIAL ADVICE OF NON-RENOUNCEABLE RIGHTS ISSUE

Frontier Resources Ltd (Frontier) is pleased to inform you of its non-renounceable Entitlements Issue (Issue) to raise up to a maximum of approximately $1.7 million.

The purpose of the Issue is to provide sufficient funds to:

• initiate feasibility studies on the Narrawa and Stormont Deposits, that are located in northern Tasmania;

• continue exploration activities in PNG and Tasmania;

• continue legal action in the PNG courts, regarding the refusal to renew the Exploration Licence for the Kodu Deposit despite commitments being exceeded; and

• complete construction of 3 new diamond drilling rigs (frame construction has already commenced) for Frontier’s own use, hire or sale.

The Entitlements Issue

Frontier is making a non-renounceable Entitlements Issue of up to 48,586,431 fully paid ordinary shares at 3.5 cents per New Share. Every New Share will be accompanied by a free New Option exercisable at 4.5 cents on or before 3 December 2010. If fully subscribed, the Issue will raise up to a maximum of approximately $1.7 million. The offer does not require shareholder approval.

Shareholders registered or entitled to be registered at 5pm WST on 6 November 2008 are offered 1 New Share for every 3 Shares then held, at an issue price of 3.5 cents per New Share. The “ex” date for entitlements is 30 October 2008. Therefore shares purchased after 29 October 2008 will not provide the buyer with entitlements in the Issue. Where fractions arise in the calculation of entitlements, they will be rounded up to the next whole number of New Shares. Entitlements will be shown on the personalised Entitlement and Acceptance Form which will accompany the Prospectus when it is mailed to shareholders. Shareholders may apply for New Shares and New Options in excess of their entitlements.

The New Shares will rank equally in all respects from the date of issue with existing ordinary shares.

A Prospectus detailing the non-renounceable Entitlements Issue was lodged by Frontier with the Australian Securities & Investments Commission on 28 October 2008. A copy is available on the Frontier website www.frontierresources.com.au. The Prospectus, with personalised Entitlement and Acceptance Form, is expected to be mailed on 10 November 2008.

Before making a decision whether to take up any of these entitlements to New Shares, please read carefully the Prospectus. The offer closes at 5pm WST on 3 December 2008.

Eligible shareholders wishing to participate in this offer should either pay by BPay (if you have an account with an Australian financial institution) or complete the Entitlement and Acceptance Form in accordance with the instructions set out on the form and forward it together with an Australian dollar cheque or bank draft to Frontier’s share registry, Registries Limited.

Shareholders not wishing to take up their entitlements may not dispose of those entitlements.

SUMMARY OF PRINCIPAL DATES

Announcement of Entitlements Issue, lodgement of prospectus and	28 October 2008
publication on Frontier’s internet site www.frontierresources.com.au
Initial advice of Offer to Shareholders	29 October 2008
Shares trade ex-entitlements	30 October2008
Record date	6 November 2008
Prospectus and Entitlement and Acceptance form despatched to	10 November 2008
Shareholders
Entitlements Issue closes - last date for acceptances and payment of	3 December 2008
application money
Last day for allotment of New Shares and New Options	9 December 2008
Despatch of holding statements for New Shares and New Options	9 December 2008
Normal trading commences for New Shares and New Options on ASX	10 December 2008

If you have any questions regarding your entitlement or the mailing of the Prospectus and the accompanying Entitlement and Acceptance Form, please contact Frontier’s share registry on (02) 9290 9600 or +61 2 9290 9600 for overseas callers.

Yours faithfully

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Jay Stephenson Company Secretary

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