FORTUNA METALS LTD - Capital/Financing Update 2011

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ADDRESS PHONE EMAIL PO Box 35 +61 (8) 9295 0388 [email protected] 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 2nd June 2011

Andewa Project Update

Frontier Resources Ltd is pleased to announce an update on exploration activities at its Andewa gold – copper project (EL 1345) in West New Britain Province of Papua New Guinea (Figure 1).

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Exploration activities re-commenced at Andewa in early February, 2011, with the establishment of a camp to support the programs (Figure 2).
A grid controlled soil sampling program in 2010 was very successful and delineated extensive gold (Figure 3) and polymetallic anomalies. Results from the concurrent 3D induced polarisation (IP) survey showed several very large areas of coincident deep seated and near surface chargeability, resistivity and conductivity anomalies (Figure 4).
The geochemical and geophysical data sets were used to design the next phase of exploration including targeting hand trenching (Figures 4, 6a/b and 8), infill soil sampling (Figure 5) and more geological / structural mapping and creek sampling.
932m of hand trenching and more than 18 linear kilometres of soil sampling have been completed in 2011 and the programs are continuing.
The 10,000m drilling program is now scheduled to commence mid June, subject to barge mobilisation (Figures 7 and 9). The program has been delayed due to customs clearance of required drill rods and consumables.

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Frontier owns and operates its own drilling and earthmoving equipment to minimise costs and maximise exploration output.

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An excellent value new and used capital equipment purchasing program has been completed to ultimately allow the drilling program to proceed as planned and ultimately with ground support.

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Four additional diamond drilling rigs are under construction and are expected to be completed and delivered to PNG by early September.

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Frontier will have the capability to drill to a maximum of about 1,700m depth, (if warranted) with the track mounted CS1800 (Figure 10), to 1,100m with the track mounted but also heliflyable CS1300 and to 400m with our other small rigs.

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Earth moving and support equipment capacity has been significantly enhanced to cater to the logistics of the program.

DETAILS

The hand trenches were designed to test interpreted coincident sub surface conductivity and chargeability anomalies demonstrated by the 3D-IP, plus outcropping gold and other base metal mineralisation defined by the soil sampling program. Six trenches have been cleared to a minimum depth of 1.5m and 409 continuous chip channel samples were collected for 932m total. The nominal sampling interval is 3m reducing to 1m in more intensely mineralised sections of the trench.

Six infill soil lines were completed (714 samples) between existing anomalous gold and polymetallic soil geochemistry on a 25 m downline interval, for 18,175 line metres.

Structural mapping and rock chip sampling has continued on some of the creeks not covered in last year’s program. This program involved selective sampling of structures and mineralised horizons to determine possible structural controls on the mineralisation at Andewa.

Recent excavations of a contour trail around the small hill containing a gold-copper -molybdenum soil anomaly on line 12400E show areas of abundant quartz –limonite –sulphide (dominantly pyrite with trace chalcopyrite) stockworking within argillised intrusives (Figure 6a,b). The veins are either steeply dipping or flat lying.

Soil line 9800E runs through a hill consisting of strongly silicified and oxidised reddish brown, approximately east -west trending hematitic hydrothermal breccia. Silicified and argillised angular rock fragments are found within a clast-supported matrix with open spaces and cavities. It is located at the far eastern end of the Komsen Prospect.

A drill pad has been prepared (Figure 9 - the hole will be drilling to left) to test the geological, gold in soil, chargeability and conductivity anomalies on this line (refer to Figure 7).

Figure 1. SRTM (Shuttle Radar Topography Mission) topographic image showing the location of the Andewa Exploration Licence and the surrounding Mt Schrader Exploration Licence Application in West New Britain Province.
Figure 2. The Andewa Camp at the junction of the Komsen and the Tarkau Rivers (looking ESE).
Figure 3. Individual gold in soil assays at the Andewa Project plotted on a 1:100,000 topographic plan with 40m contours intervals and 1,000m x 1,000m squares. The economically significant areas however are greater than 0.05 g/t gold (50 ppb) and particularly greater than 0.10 g/t gold (100ppb). There is locally good correlation between higher tenor soil assays and specific geomorphic situations.
Figure 4. Location of completed and proposed trenches relative to conductivity anomalies (blue) and intense chargeability anomalies (green). Yellow dots represent soil sample assays 100ppb.
Figure 5. Image showing infill soil sampling lines (blue) that have been cut and sampled. Yellow dots show the identified prospect areas within the crater .
Figure 6a,b Quartz-limonite-sulphide stockworking exposed in Ehgini contour trail within the soil anomaly, (perspective and close -up views).

Figure 1

Figure 7. Line 9800E with trench #08 and proposed drill hole.
Figure 8. Hydrothermal breccia with haematite from Trench #08 in soil sample anomaly and to be targeted by drill hole 1.
Figure 9. Proposed drill pad one from the air and looking to the south.

Figure 2

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Figure 3
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Figure 4
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Figure 5
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Figure 6a
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Figure 6b
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Figure 7
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Figure 8
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Figure 9
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Figure 10
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For additional information relating to Frontier Resources please visit our website at www.frontierresources.com.au or feel free contact me.

FRONTIER RESOURCES LTD

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P.A.McNeil, M.Sc. CHAIRMAN / 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 the information in the form and context in which it appears.

ABOUT FRONTIER RESOURCES LTD

FRONTIER IS FOCUSED ON EXPLORING FOR AND DEVELOPING MINERAL DEPOSITS IN THE HIGHLY MINERALISED PACIFIC ‘RIM OF FIRE’ IN PAPUA NEW GUINEA AND THE HIGHLY PROSPECTIVE DOLCOATH GRANITE AND MT READ VOLCANICS OF TASMANIA, AUSTRALIA