FORTUNA METALS LTD — Capital/Financing Update 2008

Apr 3, 2008

` 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

4 April 2008

ASX ANNOUNCEMENT

SHARE PURCHASE PLAN

The Directors are pleased to announce that the Company has adopted a Share Purchase Plan (Plan) and that an offer will be made under the Plan to all of the Company’s shareholders registered at 5pm WST on 14 April 2008 (Record Date) with a registered address in Australia or New Zealand (Eligible Shareholders).

Eligible Shareholders will each be entitled to apply for up to $5,000 of new fully paid ordinary shares in the Company (Shares). The subscription price for each Share will $0.085 per Share, which is approximately a 19.5% discount to the volume-weighted average trading price of the Company’s shares on ASX during the 5 days immediately prior to the date of this announcement on which trades occurred in the Shares.

The attached offer document containing all relevant information will be mailed to Eligible Shareholders on 15 April 2008.

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

4 April 2008

Dear Shareholder

RE: INVITATION TO PARTICIPATE IN SHAREHOLDER SHARE PURCHASE PLAN

The Board of Directors of Frontier Resources Limited (Frontier or Company) has approved the introduction of a Shareholder Share Purchase Plan (Plan).

Shareholders Eligible to Participate in the Plan

The right to participate in the Offer under the Plan is available exclusively to shareholders who are registered as holders of fully paid ordinary shares in the capital of Frontier (Shares) at 5pm (WST) on the Record Date of 14 April 2008 and whose registered address is in Australia or New Zealand (Eligible Shareholders).

Share Purchase Plan

The Board is pleased to offer to all Eligible Shareholders an opportunity to participate in the Plan. Details of the Offer are set out in this letter and the enclosed Terms and Conditions together with an Entitlement and Acceptance Form.

The Plan entitles Eligible Shareholders in the Company, irrespective of the size of their shareholding, to purchase up to $5,000 worth of Shares at $0.085/share a price equal to a 19.5% discount to the volume weighted average trading price of $0.1055 of the Company’s shares on ASX during the 5 trading days immediately prior to the announcement date of this offer, free of brokerage and commission (Offer).

Current Projects

Details of the Company’s current activities are set out in the announcements made by Frontier to the ASX and are available from the ASX or Frontier’s website at www.frontierresources.com.au.

The funds raised under the Plan will be used by the Company to increase working capital and to fund the Company’s current activities.

Intended Use of Proceeds

Operational capital is being raised by this Share Purchase Plan for a variety of purposes noted below, as Frontier works to maximise value from its highly prospective portfolio of properties in Papua New Guinea and Tasmania. If the full subscription is not raised, it is likely that some of the programs noted below will have to be reduced or modified.

♦ Papua New Guinea Kodu - EL1348

The resource tonnage at Kodu has been increased 225% by Frontier to date and the scope for further increases with additional drilling is good. The deposit has been shown (through the Conceptual Mining Study) to be potentially economic at benchmark (long term) metal prices and the Company intends to undertake a Feasibility Study as soon as possible.

Frontier remains committed to the future development of the Kodu copper -gold - molybdenum Deposit and will continue to campaign for the renewal of the Exploration License

The PNG Minister for Mining has yet to renew the EL, even though all statutory requirements have been massively exceeded. Management are of the opinion that renewal of the EL is still likely (a decision for non-renewal would have to be based on ‘National Interest’) after evaluation by the ‘Taskforce’ recently established by the PNG Government to review the ‘situation’ and create an overall ‘Plan’ for the region.

The Company has made several highly significant compromises to attempt to move the EL renewal situation forward, such as granting 7% total equity to landowners and local stakeholders, (including the Kokoda Track regulator) and as such, has 100% landowner support for any mine development.

Frontier has also recently proposed to the Minister that we will relinquish all but 250 linear metres of the original WWII Kokoda Track (retained for possible mine access road crossing) from the EL upon its renewal. The original EL held about 40km of Track and this proposal would take it from about 15km to effectively zero.

Additional metallurgical test work and cutting edge process routes and tailings disposal techniques are being evaluated to maximise extraction, minimise chemicals and possible tailings issues, to ultimately minimise the environmental footprint of the possible development.

The Company has commissioned an Independent Environmental Impact Assessment to evaluate any possible impact the Kodu ‘mine’ would have on the future Port Moresby water and power supplies (to address hypothetical arguments from the Minister).

Andewa - EL1345

Drilling will commence forthwith at the widest section of the Komsen structure at the Andewa Gold Deposit, where it assayed 21.65m of 4.4 g/t gold in trench, with 2 occurrences of visible gold.

Subsequently, drilling will then focus on delineating the higher gold grade zone in the western section of Komsen. When sufficient drill hole density with higher grade assays exists in the deposit, a resource estimation will be undertaken. The Company will recommence the access dozer track to site which has stalled due to landowner negotiations and dozer mechanical issues.

Likuruanga - EL1351

Frontier plan to initiate access track cutting in May/June 2008, to the 5km long Bukuam Porphyry /Skarn Prospect, at Likuruanga for trenching of the copper – molybdenum - gold zone and assessing the zinc –silver -gold skarns. This program will be followed by drill evaluation of defined prospective targets.

Frontier will continue the bulldozer access on to the Esis Deposit (located to the SW) and will initiate drilling in later 2008, to follow up historic results such as 152.6m of 0.39% copper (in 1 of only 4 holes drilled into the large porphyry copper system). Esis has good potential to define a deposit/resource with similar tonnage and grade to the Kodu Deposit. The dozer, diamond drill rig and exploration equipment from EL 1348 will be shipped to the port Kimbe in about 3 weeks to organise for the program.

♦ Tasmania

SMRV Project

Exploratory or ‘scout’ drilling (that commenced late-January this year) will continue at Wart Hill, targeting the faulted off depth extension to the south of the deposit. In mid April 2008, drilling will then target other previously undrilled SMRV semi-regional polymetallic prospects (such as NE Osmund), for Rosebery type deposits.

The Company plans to undertake Resource definition drilling at the Wart Hill zinc-lead-silvergold Deposit in late 2008/2009, to attempt to double the current tonnage of known mineralisation. Frontier will also continue regional generative exploration.

Gowrie Park – RL 3/2005

A resource estimation and metallurgical characterisation of the Narrawa Deposit will be completed, then the Conceptual Mining Study will be finalised. Frontier believes that this project has the potential to generate ‘early’ cash flow and is seriously evaluating this possibility. The Stormont Deposit in nearby RL 4/2005 will also be evaluated.

♦ General

Frontier has benefited from the manufacture and operation of its own drill rigs and plans to finalise construction of 3 additional diamond drilling rigs in 2008. The bases/frames have been completed and they will be fitted out and have drill strings and consumables purchased as appropriate. These rigs will be utilised in the Company’s planned drilling programs, privately leased out or sold as appropriate, depending on corporate financial constraints.

Subscription and Application Procedure

If you would like to participate in the Offer, please return your completed Entitlement and Acceptance Form (enclosed), together with your cheque or direct deposit for the subscription monies for the Shares you wish to acquire to Registries Limited, on or before the Closing Date of 5pm (WST) on 14 May 2008. No late applications will be accepted.

The number of Shares to which you are entitled will be calculated by dividing the subscription amount you have elected by the purchase price per Share.

Please note the maximum investment per shareholder is $5,000 and the minimum investment is $2,000.

The maximum investment any shareholder may apply for will remain $5,000 even if a shareholder receives more than one Offer (whether in respect of a joint holding or because the shareholder has more than one holding under a separate account).

Additional Information and Important Dates

The Offer cannot be transferred and the Directors of the Company reserve the right to reject any application over $5,000. Shares allotted under the Plan will be issued no later than 5 business days after the Closing Date of the Offer. Application for quotation on ASX of the new Shares will be made immediately following the issue of those Shares.

The maximum number of Shares that may be issued pursuant to this Offer is 40,074,565. In the event of an oversubscription by the Closing Date the Directors may, in their absolute discretion, scaleback all applications on a pro-rata basis.

If the Company rejects or scales-back an application or purported application, the Company will promptly return to the shareholder the relevant application monies, without interest.

On the trading day immediately prior to the announcement date of the Offer, the closing price of the Shares traded on ASX was $0.12 cents. The market price of the Shares in the Company may rise and fall between the date of the Offer and the date that any Shares are allotted to you as a result of your acceptance of this Offer. This means that the subscription price you pay for the Shares may exceed the market price of the Shares at the date of allotment of Shares under this Offer. The Board recommends that you obtain your own financial advice in relation to the Offer and consider price movements of Shares in the Company prior to accepting this Offer.

Shortfall Placement

In the event that less than 40,074,565 Shares are applied for pursuant to this Offer, the shortfall may be placed at the discretion of the directors.

Indicative Timetable

IndicativeTimetable
Announcement Date of Plan	4 April 2008
RecordDate (5.00pm WST)	14 April 2008
Dispatch Plan to Shareholders	15 April 2008
Opening Date of Offer	16 April 2008
ClosingDate ofOffer	14 May2008
Issue ofShares under thePlan	28May2008
Dispatch date for holding statements	2 June 2008
Quotation of Shares on ASX	2 June 2008

These dates are indicative only. The Company may vary the dates and times of the Offer without notice. Accordingly, shareholders are encouraged to submit their Entitlement and Acceptance Forms as early as possible.

Should you wish to discuss any information contained in this letter further, do not hesitate to contact the Jay Stephenson, Company Secretary on (08) 6468 0388.

Sincerely,

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P.A. McNeil, M.Sc. MANAGING DIRECTOR

FRONTIER RESOURCES LIMITED ABN 96 095 684 389

Shareholder Share Purchase Plan - Terms and Conditions

Purpose

The purpose of the Shareholder Share Purchase Plan (the Plan) is to offer shareholders of Frontier Resources Limited ((Frontier) or Company) the opportunity to acquire additional fully paid ordinary shares in the Company (Frontier Shares) up to a maximum of A$5,000 in any 12 month period at a discount to the market price of Frontier Shares on the financial market operated by Australian Stock Exchange Limited (ASX) without the need to pay brokerage costs and without the need for Frontier to issue a Prospectus, upon such terms and conditions as the board of directors of Frontier, in its absolute discretion, sees fit.

Shareholders eligible to participate

Eligible shareholders of Frontier Shares that are registered with an Australian address at the relevant record date may participate in the Plan. Due to foreign securities laws, it is not practical for shareholders resident in other countries to be offered the opportunity to participate in the Plan.

Participation in the Plan is optional and is subject to these terms and conditions. Offers made under the Plan are non-renounceable (i.e. eligible shareholders may not transfer their rights to any Frontier Shares offered under the Plan).

An offer may, at the discretion of the directors of Frontier, be made under the Plan once a year. The maximum amount, which any shareholder may subscribe for in any consecutive 12 month period, is A$5,000. The directors of Frontier may also determine in their discretion the minimum amount for participation, the multiple of Frontier Shares to be offered under the Plan and the period the offer is available to eligible shareholders.

Price of Frontier Shares

The price of Frontier Shares to be issued under the Plan will be determined by calculating a discount to the volume weighted average market price of Frontier Shares quoted on ASX during the period 5 trading days immediately prior to the date of the Offer or the date Shares are issued pursuant to the Offer.

Applications and Notices

At the discretion of the directors of the Company, Frontier will send eligible shareholders a letter of offer and acceptance procedures, inviting them to subscribe for Frontier Shares under the Plan, and accompanied by the terms and conditions of the Plan and an entitlement & acceptance form. Applications will not be accepted after the closing date of an offer. Over subscriptions to an offer may be refunded without interest.

Notices and statements made by Frontier to participants may be given in any manner prescribed by its Constitution.

Underwriting

An Offer may be underwritten and the underwriters and/or sub-underwriters may be issued with Shares pursuant to the Plan where one or more of the eligible shareholders fail to subscribe for the maximum number of shares available to them under the Offer. The Directors may pay a broker’s fee to Underwriters.

Issue of Frontier Shares

Frontier Shares to be issued under the Plan will be issued as soon as reasonably practicable after the closing date specified by the Directors of Frontier in the relevant offer.

Frontier Shares issued under the Plan will rank equally in all respects with all other fully paid ordinary shares in Frontier from the date of issue.

Shareholding statements or CHESS notification will be issued in respect of all Frontier Shares issued under the Plan. The Company will, promptly after the issue of Frontier Shares under the Plan, make application for those Frontier Shares to be listed for quotation on the official list of ASX.

Modification and Termination of the Plan

Frontier may modify or terminate the Plan at any time.

Frontier will notify ASX of any modification to, or termination of, the Plan. The omission to give notice of any modification to, or termination of, the Plan or the failure of ASX to receive such notice will not invalidate the modification or termination.

Without limiting the above, Frontier may issue to any person fewer Frontier Shares than the person applied for under the Plan if the issue of the Frontier Shares applied for would contravene any applicable law or the Listing Rules of ASX.

Dispute Resolution

Frontier may, in any manner it thinks fit, settle any difficulties, anomalies or disputes which may arise in connection with or by reason of the operation of the Plan, whether generally or in relation to any participant, application or Frontier Shares. The decision of Frontier in this respect will be conclusive and binding on all shareholders and other persons to whom that determination relates.

Frontier reserves the right to waive strict compliance with any provision of these terms and conditions. The powers of Frontier under these conditions may be exercised by the directors of Frontier or any delegate of the directors of Frontier

Questions and Contact Details

If you have any questions regarding the Plan or how to deal with this Offer, please contact your stockbroker or professional adviser or the Company Secretary, Frontier on (08) 6468 0388.