FORTUNA METALS LTD — Capital/Financing Update 2008

Feb 28, 2008

PHONE EMAIL +61 (08) 9295 0388 info@frontierresources.com.au FAX WEBSITE +61 (08) 9295 3480 www.frontierresources.com.au

ADDRESS P.O. Box 79 Rokeby Tas 7019 Australia

ABN 96 095 684 389 ASX Code : FNT

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29[th] February 2008

ASX Limited Company Announcements Office

Announcement

BENEFITS FROM POSSIBLE KODU MINE WIDENED TO ENCOMPASS MORE PNG STAKEHOLDERS, ENLISTING THEIR SUPPORT FOR THE RENEWAL OF EL 1348 AND POSSIBLE MINE DEVELOPMENT

• Frontier Resources’ Board of Directors is pleased to announce that a seven % equity interest in total is now offered to PNG stakeholders, including the ‘Kokoda Track Authority’, if the Kodu Deposit is mined (probably in the Mining Lease holding Company).

• Kodu Deposit landowners (who would be impacted directly by mine development) have stated they will give 1% of their previously promised 5% equity to all other Kokoda Track/ nearby landowners, proving the wealth would be equitably distributed in the region.

• Frontier Resources wish to recognise this generous gift of 1% by the Kodu Deposit landowners with an allocation of a further 2% equity interest in the Kodu Deposit to be administered by the ‘Kokoda Track Authority’ –KTA (or successor) &/or Koiari LLG, half for funding to preserve, operate and improve the Kokoda Trail and half for the creation of an educational fund for all ‘Trail’ and nearby landowners.

• This 3% equity could amount to tens of million of dollars over the 10 year life of the mine, depending on costs, commodity prices and taxes. The fund will be subject to specific transparency, governance and Board of Directors representation provisions by Frontier.

• The KTA and Koiari Local Level Government (KLLG) continues to express support for the renewal of the Exploration License that contains Kodu and the responsible development of the Deposit for the benefit of all stakeholders. The KTA /KLLG are very pleased with the possibility noted above, as funding is a major and continuing issue for them.

• ‘Moral absolution’ for the renewal of the Exploration License and responsible development recently came via support noted by RSL President Maj. Gen. Bill Crews (Rtd) to “The West Australian”, after discussions with Barney Jack (Landowner Spokesman) and myself.

• The proposed equity distribution will rightly provide most fiscal benefits to the affected landowners, significant economic and educational benefits to ALL Kokoda Trail and nearby landowners and also highly significant funds to preserve the historical significance of the Kokoda Track and improve facilities along it for tourists/ trekkers.

• See the presentations by Barney and myself to the Explorers Conference via the link on our website at www.frontierresources.com.au or contact me for additional information.

• The Kokoda Track remains closed, with landowners advocating that Mining and Tourism must co-exist in the Kodu/ Kokoda Track /Koiari District for the benefit of all stakeholders.

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.

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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, develop and mine the Kodu Deposit rapidly and cost effectively.

• The Company has a 95% effective interest in 3 Exploration Licences (Kodu, Likuruanga and Andewa) covering approx. 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.

• Frontier is currently drilling on the zinc-lead-silver-gold SMRV Project in SW Tasmania and also at the Andewa Gold Project in PNG.

• Kodu copper- gold –molybdenum Deposit Resources:

  • The Total Resource (Indicated + Inferred) at the 0.2 % copper equivalent cutoff 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 at the 0.2 % copper equivalent cutoff 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), at the 0.2 % copper equivalent cutoff and it contains 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.

  • The Total Resource (Indicated + Inferred) at the 0.3% copper equivalent cutoff contains 1,080,000 tonnes of copper equivalent* grading 0.51%, within 213.6 million tonnes grading 0.31% copper + 0.35g/t gold + 78ppm molybdenum + 1.8g/t silver.

• Frontier’s Directors and management team have more than 300 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).

• Zinc* or Gold* Equivalents are the same, except metals are converted tho the equivalent amount of zinc or gold, respectively.

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

• It is the Company’s opinion that each of the elements included in the copper metal equivalents calculation has good potential to be recovered if the project proceeds to mining, as per extraction rates documented in the Conceptual Mining Study (ASX release dated 19/11/2007).

• The ASX requires a metallurgical recovery be specified for each metal, however, no testwork has ever been undertaken at Wart Hill and recoveries can only be assumed to be typical for VHMS deposits.

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

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