FORTUNA METALS LTD — Capital/Financing Update 2010

Apr 22, 2010

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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 ABN 96 095 684 389 ASX:FNT

ASX Limited Company Announcements Office Announcement

23rd April 2010

Letter to Optionholders Regarding Exercise of Options and Corporate Update

Please find attached a Company Update letter for Frontier Resources Ltd (ASX:FNT) and an Exercise of Options form which was distributed to holders of FNTO options today.

FRONTIER RESOURCES LTD

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

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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

ABN 96 095 684 389 ASX:FNT

name address address

23rd April 2010

Letter to Optionholders Regarding Exercise of Options and Corporate Update

Frontier Resources Ltd is writing to you as a registered holder of the Company’s options exercisable at 4.5 cents on or before 3 December 2010. Whist there is no obligation to exercise your options, the Company requests that you consider converting them to shares to provide additional short term working capital for conducting enhanced exploration programs.

Frontier presently has $700,000 in cash which will fund exploration until later 2010, based on our proposed work programs. Additional capital will be required to enable more extensive exploration programs to be undertaken on the Company’s highly prospective tenements in Papua New Guinea and Tasmania. The Company proposes to use funds from the exercise of options to achieve this goal.

Requests have been recently received to exercise individual small parcels of options. Due to substantial administration costs which are incurred for the processing of each parcel, it is more cost effective to request holders to exercise options and then to issue the shares in batches. The first batch will be exercised on May 31st 2010.

Options may be exercised in whole or in part by the payment of 4.5 cents for each option (to convert it to a fully paid ordinary share that can be held or sold) at any time prior to the option expiry date. Whilst there is no obligation to exercise the options now, the opportunity to exercise options ceases on the date of expiry.

If you wish to exercise your options, please complete the attached form and forward it with the required payment to Registries Ltd, Level 7, 207 Kent Street, Sydney, NSW, 2000. Cheques should be made payable to "Frontier Resources Ltd" and should be crossed "Not Negotiable". A BPAY facility is also available.

Joint Venture negotiations between Frontier and a World Class copper producer regarding an alliance on 3 Exploration Licenses (Bulago, Leonard Schultz and Likuruanga) and 2 Exploration License applications (Central and East New Britain) continue without delay. Frontier is very pleased with the proposed structure of the alliance and all the major terms have been resolved to the satisfaction of both parties. A placement of US $1million is proposed to Frontier upon execution of the Joint Venture agreements. Drafting of the Agreements governing the JVs will commence without delay and it is anticipated that they will be executed in late May subject to each of the proposed partners completing final due diligence.

Frontier has received excellent results from its 2009/2010 Highlands exploration programs in PNG. Exploration will continue at the Suguma high grade gold Prospect at Bulago and commence at the Andewa Gold Project in New Britain. The Andewa program will consist of grid based soil sampling and 3D-IP over a 10km[2] area. Additional working capital that is raised via the exercise of options will assist the Company to enhance and consolidate the Company’s prospective tenement portfolio.

For additional information regarding the exercise of options please contact Registries Ltd: registries@registries.com.au or 1300 737 760.

FRONTIER RESOURCES LTD

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P.A.McNeil, M.Sc.

MANAGING DIRECTOR

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Name Address Line 1 Name Address Line 2 Name Address Line 3 Name Address Line 4 Name Address Line 5 Name Address Line 6

Reference Number

Payment may only be made by BPAY or cheque. Cash will not be accepted via the mail or at the Frontier Resources Ltd Share Registry. Payments cannot be made at any bank. Please tick the relevant box below to confirm your method of payment.

Payment Option 1 - BPAY

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Biller Code: X X X X Ref: «BPayCRN»

Telephone & Internet Banking - BPAY®

Contact your bank, credit union or building society to make this payment from your cheque or savings account. More info: www.bpay.com.au

® Registered to BPAY Ltd ABN 69 079 137 518

• To pay via BPAY please contact your participating financial institution

• If paying by BPAY you must still return this exercise notice with your signature(s) below

• If paying by BPAY the amount of your payment received in the account divided by the exercise price will be deemed to be the total number of options you are exercising

Payment Option 2 – Cheque (Record cheque details below)

DRAWER	CHEQUE NO.	BSB NO.	ACCOUNT NO.	AMOUNT $AUD
				$

• Only cheques or bank drafts in Australian dollars and drawn on a bank or financial institution in Australia will be accepted.

• Your cheque or bank draft must be made payable to “Frontier Resources Ltd ” and crossed Not Negotiable.

• Please ensure that you submit the correct amount. Incorrect payments may result in your application being rejected.

Payment Made By (Please tick one)

Cheque 

BPAY 

NOTICE OF EXERCISE OF OPTION

To: Frontier Resources Limited, C/- Registries Limited, GPO Box 3993, Sydney NSW 2001

I / We…………………………………………………………………………………………………………………………………….… Name of Option holder/s (Please use block letters)

………………………………………………………………………………………………………………………………………….........

Registered address of Option holder/s (Please use block letters)

hereby exercise my options to apply for ………………………………………………………………………………….……………………… [(number in words)][ (in figures)]

fully paid ordinary shares in the capital of Frontier Resources Ltd. I/we have made payment of $.........................................., being $0.045 per option subscription. I/we request that you allot me/us on the share register the number of shares to which I am/we are entitled and I/we agree to accept such shares subject to the Company’s Constitution.

PLEASE SIGN HERE:

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Shareholder 1 (Individual) Joint Shareholder 2 (Individual) Joint Shareholder 3 (Individual)
Sole Director & Sole Company Secretary Director Director / Company Secretary
Business Telephone No. ( ) Date
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