FORTUNA METALS LTD — Capital/Financing Update 2008

May 4, 2008

ADDRESS PHONE PO Box 35 North Perth FAX WA 6906 Australia

PHONE EMAIL +61 (8) 9295 0388 info@frontierresources.com.au FAX WEBSITE +61 (8) 9295 3480 www.frontierresources.com.au

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ABN 96 095 684 389

ASX : FNT

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Dear Shareholder

RE: Frontier’s Share Purchase Plan (SPP) Closes on May 14, 2008

The Company has noted that the closing date for Frontier’s Share Purchase Plan on the back of the subscription form supplied by the share registry is not correct. It should be 14/5/2008

The Share Purchase Plan capital raising is required for your Company to continue to drill and define the gold resource at Andewa, progress the Kodu Deposit Exploration Licence renewal and explore the Company’s other prospective tenements in Papua New Guinea and Tasmania.

Frontier has successfully drilled gold mineralisation on all of the six fences completed to date on the Komsen structure at the Mt Andewa property, with high-grade gold documented in many holes. Results to ASX have included 7.9m of 10.01g/t gold and 0.9m of 10.55 g/t gold (announced on 28/11/07), 3.0m of 10.97g/t gold (announced on 31/3/08) and 1m of 19g/t gold +119g/t silver+10% zinc (announced on 29/10/07). Historic trenches have included moderate intervals of high grade and wider intervals of lower grade gold.

A 23m wide downhole zone of megascopic mineralisation and alteration was noted in recent hole AFD018 (assays awaited) and was further targeted by holes 019 and 020 (underway) at the far eastern end of the area drilled to date, where visible gold was also noted in 2 trenches.

Frontier Resources has not received any verbal or written communications from the PNG government regarding the Kodu renewal this year but the Company considers that under the PNG Mining Act 1992 the Minister For Mines has no grounds to refuse the renewal. A very encouraging independent Draft Initial Environmental Assessment that has evaluated normal environmental issues relating to Kodu and Port Moresby’s future water supply issues was received. Peter Allan Lowing Lawyers of Port Moresby have been appointed legal counsel to defend Frontier’s rights in the PNG (and Australian) courts if required.

The Managing Director and Chairman’s corporate (and family) interests will be contributing their maximum allowances to the SPP, which given the timeframe /circumstances is progressing well.

Frontier continues to work diligently to define a gold resource at Komsen, is seeking short term commercial drilling opportunities to assist cash flow and will continue to fight for the renewal of the Kodu EL and if rejected, adequate fiscal compensation for sunk costs and lost potential profit.

For additional information relating to Frontier and its projects please visit our website at www.frontierresources.com.au or 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.