FORTUNA METALS LTD — Capital/Financing Update 2009

Aug 13, 2009

ADDRESS PHONE EMAIL PO Box 35 +61 (8) 9295 0388 info@frontierresources.com.au North Perth FAX WEBSITE WA 6906 Australia +61 (8) 9295 3480 www.frontierresources.com.au

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ABN 96 095 684 389 ASX : FNT

ASX Limited

Company Announcements Office

Announcement

14th August 2009

NON-RENOUNCEABLE RIGHTS ISSUE

Frontier Resources Ltd ( Frontier) is pleased to announce that it will lodge a prospectus with ASIC and the ASX today for a non-renounceable rights issue ( Rights Issue) on the basis of 1 New Share for every 1 Existing Share held on the Record Date at a price of 3.5 cents, with 1 free-attaching New Option for every 1 New Share subscribed for (with an exercise price of 4.5 cents, exercisable on or before 3 December 2010).

The maximum number of New Shares which may be issued under the Rights Issue is 148,866,279 to raise up to A$5,210,320 (before the costs of the Rights Issue).

Frontier’s ongoing strategy has five prongs, with funds raised under the Offer to be used to:

• Advance the Narrawa and Stormont Deposits in Tasmania toward development; o Initiate obtaining a Mining Lease(s) from Mineral Resources Tasmania;

• Continue feasibility studies on the Deposits including resource expansion and infill drilling to allow upgrading of the resources and estimation of a reserve;

• Evaluate development scenarios for the deposits including Frontier mining and treating the mineralisation, toll milling and other options;

• Assess the proximal high-grade tungsten mineralisation potential at Narrawa by drilling, to determine if it can contribute to the Narrawa gold-lead-zinc-silver mining operation;

• Assess alternate metallurgical treatment options that could be more effective and/or capable of also extracting the associated bismuth at Stormont and tungsten at Narrawa.

• Drill test and define resources at the Esis porphyry copper Deposit on the island of New Britain in PNG. The targets are a World Class primary copper deposit and/or a more easily developed, near surface and higher average grade, secondary (supergene) copper deposit;

• Initiate surface exploration and undertake extensive hand trenching on the multiple very high-grade gold targets at Bulago in PNG to define the mineralised horizons and future drilling targets;

• Advance the remaining tenements held by Frontier in PNG and Tasmania with cost effective exploration and/or by looking to enter into and fund joint ventures to advance these tenements (* Frontier has agreed to sell EL 1596 for A$300,000 cash) ;

• Complete the construction of 3 new diamond drilling rigs for Frontier’s use or sale.

• To provide working capital

The Rights Issue is not underwritten.

Page 1 of 2

Timetable

The current proposed timetable for the Rights Issue is documented below. The dates are indicative only and Frontier reserves the right to vary the dates (subject to the Corporations Act and the ASX Listing Rules).

Activity	Date
Announcement of Offer	14 August 2009
Lodge Appendix 3B and Prospectus with ASIC and ASX	14 August 2009
Dispatch of notices to Shareholders informing them of the Rights Issue	17 August 2009
Shares trade on an “ex” Entitlement basis	18 August 2009
Record Date for Entitlement to participate in the Rights Issue	24 August 2009
Prospectus and Entitlement and Acceptance Form dispatched to	26 August 2009
Shareholders
Closing Date for Receipt of Entitlement and Acceptance Form	15 September 2009
Securities quoted on deferred settlement basis	16 September 2009
ASX notified of under subscriptions	18 September 2009
Holding statements for New Shares and New Options are dispatched to	23 September 2009
Shareholders
Normal ASX trading for New Shares and New Options commences	24 September 2009

*The “ex” date for entitlements is 18 August 2009, therefore shares purchased on or after 18 August 2009 will not provide the buyer with an entitlement to participate in the Rights Issue. Where fractions arise in the calculation of entitlements, they will be rounded up to the nearest whole number.

The attached initial advice to shareholders contains further details and will be mailed to each shareholder on 17 August 2009.

An Appendix 3B in respect on the issue is attached.

For more information please contact: Paige McNeil, Joint Company Secretary, Frontier Resources Ltd on +61 8 9295 0388.

Sincerely

FRONTIER RESOURCES LTD

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Peter McNeil, M.Sc. Managing Director

Page 2 of 2

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ADDRESS PHONE PO Box 35 +61(08) 9295 0388 North Perth FAX WA 6906 Australia +61 (08) 9295 3480 EMAIL 5 August 2009 ABN 96 095 684 389 info@frontierresources.com.au WEBSITE www.frontierresources.com.au

Dear Shareholder,

NON-RENOUNCEABLE ENTITLEMENT ISSUE

Rights Issue

Frontier Resources Ltd ( Frontier ) has announced a non-renounceable entitlements issue of up to 148,866,279 Shares on the basis of 1 New Share for every 1 Existing Share at a price of 3.5 cents per New Share to raise up to AUD$5,210,320 (before the costs of the issue) ( Rights Issue ).

For every 1 New Share issued, subscribers will also receive 1 free-attaching New Option to subscribe for 1 Share at an exercise price of 4.5 cents and exercisable by 3 December 2010.

You will be eligible to participate in the Rights Issue if you hold Shares at 5pm (AEST) on the Record Date.

Shareholders can apply for unsubscribed shares over and above their allocation. The Board will reserve the right to place any shortfall of the issue with third-parties.

Frontier’s ongoing strategy has five prongs, with funds raised under the Offer to be used to:

• Advance the Narrawa and Stormont Deposits in Tasmania toward development; o Initiate obtaining a Mining Lease(s) from Mineral Resources Tasmania;

• Continue feasibility studies on the deposits including resource expansion and infill drilling to allow upgrading of the resources and estimation of a reserve;

• Evaluate development scenarios for the deposits including Frontier mining and treating the mineralisation, toll milling and other options;

• Assess the proximal high-grade tungsten mineralisation potential at Narrawa by drilling, to determine if it can contribute to the Narrawa gold-lead-zinc-silver mining operation;

• Assess alternate metallurgical treatment options that could be more effective and/or capable of also extracting the associated bismuth at Stormont and tungsten at Narrawa.

• Drill test and define resources at the Esis porphyry copper deposit on the island of New Britain in PNG. The targets are a World Class primary copper deposit and/or a more easily developed, near surface and higher average grade, secondary (supergene) copper deposit;

• Initiate surface exploration and undertake extensive hand trenching on the multiple very high-grade gold targets at Bulago in PNG to define the mineralised horizons and future drilling targets;

• Advance the remaining tenements held by Frontier in PNG and Tasmania with cost effective exploration and/or by looking to enter into and fund joint ventures to advance these tenements (* Frontier has agreed to sell EL 1596 for A$300,000 cash) ;

• 2 -

• Complete the construction of 3 new diamond drilling rigs for Frontier’s use or sale.

• To provide working capital

A Prospectus with personalised Entitlement and Acceptance Forms, detailing the Rights Issue will be dispatched to Shareholders eligible to participate on 26 August 2009.

Timetable

The current proposed timetable for the Rights Issue is set out below. The dates are indicative only and Frontier reserves the right to vary the dates (subject to the Corporations Act and the ASX Listing Rules).

Activity	Date
Announcement of Offer	14 August 2009
Lodge Appendix 3B and Prospectus with ASIC and ASX	14 August 2009
Dispatch of notices to Shareholders informing them of the	17 August 2009
Rights Issue
Shares trade on an “ex” Entitlement basis	18 August 2009
Record Date for Entitlement to participate in the Rights Issue	24 August 2009
Prospectus and Entitlement and Acceptance Form dispatched	26 August 2009
to Shareholders
Closing Date for Receipt of Entitlement and Acceptance Form	15 September 2009
Securities quoted on deferred settlement basis	16 September 2009
ASX notified of under subscriptions	18 September 2009
Holding statements for New Shares and New Options are	23 September 2009
dispatched to Shareholders
Normal ASX trading for New Shares and New Options	24 September 2009
commences

*The “ex” date for entitlements is 18 August 2009; therefore shares purchased on or after 18 August 2009 will not provide the buyer with an entitlement to participate in the Rights Issue. Where fractions arise in the calculation of entitlements, they will be rounded up to the nearest whole number.

Information required to be given to you in accordance with the Listing Rules

1. Up to a maximum of 148,866,279 New Shares will be issued pursuant to the Rights Issue and a maximum of 148,866,279 New Options (assuming no existing options are exercised prior to the Record Date).

2. The New Shares will be fully paid ordinary shares and will rank equally in all respects from the date of allotment with the existing class of quoted Shares. The New Options will have an exercise price of 4.5 cents each and are exercisable on or before 3 December 2010. Shares issued pursuant to the exercise of any New Option will be fully paid ordinary shares and will rank equally in all respects from the date of allotment with the existing class of quoted Shares.

3. 3 -

4. The issue price of the New Shares is $0.035 each. The New Options will be issued for nil consideration.

5. Frontier will apply to ASX for admission of the New Shares and New Options to official quotation within 7 days of the date of the Offer Document.

6. The funds raised by the Rights Issue will be used to provide working capital for further development and exploration programs (as further described above), expenses of the Rights Issue, and administration.

7. It is expected that New Shares and New Options will be entered into uncertificated holdings and holding statements dispatched on 23 September 2009.

8. The total number and class of all securities that will be quoted on ASX (including the maximum number of New Shares and New Options to be issued under the Rights Issue on an undiluted basis) is as follows:

Number	Class
297,732,558	Fully paid ordinary shares
151,914,775	Quoted options exercisable at 4.5 cents on
	or before 3 December 2010

1. Following the Rights Issue, the total number and class of all securities that will not be quoted on ASX is as follows:

Number	Class
180,000	Non-transferable employee options 14 cents, 20/10/2011
270,000	Non-transferable employee options 16 cents, 19/10/2010
3,200,000	Non-transferable director options 20 cents, 30/11/2010
100,000	Non-transferable employee options
	15 cents, 11/12/2010

1. Frontier currently has no dividend policy.

2. No shareholder approval for the Rights Issue is required.

3. The Rights Issue is non-renounceable. This means that shareholders who do not wish to take up their entitlements will not be able to trade or sell their entitlements. Their entitlements will simply lapse if not taken up.

4. The New Shares will be offered on the basis of 1 New Share for every 1 Existing Share held at 5.00pm AEST on 24 August 2009 (Record Date). The New Options will be issued free on the basis of 1 New Option for every 1 New Share subscribed for.

5. In determining entitlements, any fractional entitlements will be rounded up to the nearest whole number.

6. Neither the Rights Issue nor the Prospectus constitutes an offer to acquire shares, to any Shareholders who are not resident in Australia or New Zealand as at the Record Date. However, the return of a completed Entitlement and Acceptance Form from a Non-Eligible Foreign Shareholder will be taken by the Company to constitute a representation and warranty by the Applicant that all relevant approvals have been obtained by the Applicant and that the Company may legally issue the Shares to the Applicant.

7. The Closing Date for the offer is 5.00pm AEST on 15 September 2009.

8. 4 -

9. The Rights Issue is not underwritten.

10. There is no broker to the Rights Issue.

11. The Prospectus for the Rights Issue and accompanying Entitlement and Acceptance Form will be sent to Shareholders on 26 August 2009.

12. Existing option holders may participate in the Rights Issue upon exercise of their options prior to the Record Date.

13. The above information was provided to the ASX on 14 August 2009.

For further information on your entitlement, please contact your stockbroker or Frontier’s share registry – Registries Limited

Phone: 1300 737 760 within Australia, +61 2 9290 9600 from overseas Fax: 1300 653 459 within Australia, +61 2 9279 0664 from overseas Email: registries@registries.com.au

Yours Sincerely, FRONTIER RESOURCES LIMITED

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Peter McNeil, M.Sc. Managing Director

Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003.

Name of entity

FRONTIER RESOURCES LIMITED

ABN

96 095 684 389

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of +securities issued or to be 1. ORDINARY SHARES issued 2. LISTED OPTIONS 2 Number of[+] securities issued or to 1. 148,866,279 ORDINARY SHARES be issued (if known) or maximum 2. 148,866,279 LISTED OPTIONS number which may be issued (ASSUMING NO EXISTING OPTIONS ARE EXERCISED ON OR BEFORE THE RECORD DATE) 3 Principal terms of the[+] securities 1. ORDINARY SHARES (eg, if options, exercise price and 2. LISTED OPTIONS, 4.5 CENTS expiry date; if partly paid EXPIRY 3 DECEMBER 2010 +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)

• See chapter 19 for defined terms.

Appendix 3B Page 1

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Appendix 3B New issue announcement

4 Do the[+] securities rank equally in all 1. ORDINARY SHARES – YES (FNT) respects from the date of allotment 2. OPTIONS - YES (FNTO) with an existing[+] class of quoted +securities? If the additional securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration $0.035 PER SHARE INCLUDING ONE FREE OPTION WITH EVERY ONE SHARE SUBSCRIBED FOR 6 Purpose of the issue TO CONTINUE THE COMPANY’S (If issued as consideration for the EXPLORATION ACTIVITIES AND FOR acquisition of assets, clearly identify WORKING CAPITAL those assets) 7 Dates of entering[+] securities into 23 SEPTEMBER 2009 uncertificated holdings or despatch of certificates Number +Class 8 Number and +class of all 297,732,558 ORDINARY +securities quoted on ASX SHARES ( including the securities in clause 2 if applicable) 151,914,775 OPTIONS EXERCISABLE at 4.5 CENTS EACH ON OR BEORE 3 DECEMBER 2010 (to be issued)

• See chapter 19 for defined terms.

Appendix 3B Page 2

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Appendix 3B New issue announcement

9 Number and +class of all +securities not quoted on ASX (_including_the securities in clause 2 if applicable) 10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)	Number	+Class
	180,000 270,000 3,200,000 100,000	NON-TRANSFERABLE EMPLOYEE OPTIONS 14 CENTS, 20/10/2011 NON-TRANSFERABLE EMPLOYEE OPTIONS 16 CENTS, 19/10/2010 NON-TRANSFERABLE DIRECTOR OPTIONS 20 CENTS, 30/11/2010 NON-TRANSFERABLE EMPLOYEE OPTIONS 15 CENTS,11/12/2010
	NO DIVIDEND DISTRIBUTION IS ENVISAGED IN THE NEAR FUTURE

Part 2 - Bonus issue or pro rata issue

11 Is security holder approval required? 12 Is the issue renounceable or non- renounceable? 13 Ratio in which the+securities will be offered 14 +Class of+securities to which the offer relates 15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions	NO
	NON-RENOUNCEABLE
	1 ORDINARY SHARE (PLUS ONE FREE OPTION WITH EVERY 1 SHARE SUBSCRIBED FOR)
	ORDINARY SHARES
	24 AUGUST 2009
	N/A
	ROUNDING UP

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

18 Names of countries in which the GERMANY entity has[+] security holders who will not be sent new issue documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of 15 SEPTEMBER 2009 acceptances or renunciations

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of+security holders 25 If the issue is contingent on +security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and prospectus or Product Disclosure Statement will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do+security holders sell their entitlements_in full_through a broker? 31 How do+security holders sell_part_ of their entitlements through a broker and accept for the balance?	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	26 AUGUST 2009
	17 AUGUST 2009
	N/A
	N/A
	N/A
	N/A

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

32 How do+security holders dispose of their entitlements (except by sale through a broker)? 33 +Despatch date	N/A
	23 SEPTEMBER 2009

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

34 Type of securities ( tick one ) (a) X Securities described in Part 1

• (b)[All other securities ]

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35[If the ][+][securities are ][+][equity securities, the names of the 20 largest holders of the ] additional[+] securities, and the number and percentage of additional[+] securities held by those holders 36[If the ] +securities setting out the number of holders in the categories[+][securities are ][+][equity securities, a distribution schedule of the additional ] 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over 37[A copy of any trust deed for the additional ][+][securities ]

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Entities that have ticked box 34(b)

38 Number of securities for which +quotation is sought 39 Class of +securities for which quotation is sought 40 Do the[+] securities rank equally in all respects from the date of allotment with an existing[+] class of quoted +securities? If the additional securities do not rank equally, please state: • the date from which they do • the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment • the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment

41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another security, clearly identify that other security)

Number +Class

42 Number and[+] class of all[+] securities quoted on ASX ( including the securities in clause 38)

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those[+] securities should not be granted[+] quotation.

• An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• We warrant that if confirmation is required under section 1017F of the Corporations Act in relation to the[+] securities to be quoted, it has been provided at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before[+] quotation of the[+] securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

JAY STEPHENSON COMPANY SECRETARY

• See chapter 19 for defined terms.

Appendix 3B Page 9

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