FORTUNA METALS LTD — Capital/Financing Update 2012

Jan 26, 2012

CONTACTS PHONE EMAIL PO Box 52 +61 (08) 9295 0388 info@frontierresources.com.au West Perth FAX W EBSITE WA 6872 Australia +61 (08) 9295 3480 www.frontierresources.com.au

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ABN 96 095 684 389

ASX Limited Company Announcements Office

27th January 2012

Ok Tedi Mining Ltd Joint Venture Update

Frontier Resources Ltd is pleased to announce that the Ok Tedi Mining Ltd Joint Ventures on 5 of Frontier’s Exploration Licences are moving ahead systematically, with 2 rigs drilling at EL 1351 –Likuruanga and 2 rigs drilling at EL 1595 – Bulago. Aeromagnetic and radiometric acquisition programs are underway on the island of New Britain covering EL 1598 - Central New Britain. In addition, soil sampling is being undertaken at EL 1597 - Leonard Schultz. Senior personnel have been recruited to start work on EL 1592 - East New Britain and the communities have already been briefed on OTML presence.

Bulago

The first rig commenced drilling hole BUL001 in mid-November and was terminated at 440.3m, with copper mineralisation observed to about 300m. The rig was rotated 80 degrees after the Christmas break and BUL003 is now underway. The second rig was mobilised to site in mid-December and hole BUL002 is now at 331m deep. Minor copper mineralisation is observed after 270m.

South of Suguma, rock chip samples, grab and float samples were taken to follow up on result of 37g/t Au previously achieved by OTML. Ok Tedi have an obligation to drill 5 holes at Suguma prior to late May 2012. Soil sampling is also continuing to infill previous campaigns.

Likuruanga

Four holes have been completed at the Esis Prospect with two in progress for more than 2,750m in total: Hole NBE001 End of Hole= 697.6m - Assays are pending and will be released forthwith.

Hole NBE002 End of Hole=716.9m – Samples are prepared in Tabubil and analysed in Australia.

Hole NBE003 End of Hole = 615.8m – Sampling is in progress

Hole NBE004 End of Hole = 719.90m – Geological logging in progress

Holes NBE005/006 are in progress, access to the Pele Prospect (located along strike to the north of and proximal to Esis) was established and field work started. Both drilling rigs are in full production averaging about 30 meters per day.

Multiple intercepts of mineralised quartz feldspar porphyry dykes, with occurrences of chalcopyrite, were noted in all holes. Preliminary 3D modelling of the mineralisation suggest a preferred orientation at ~55 degrees and hole NBE004 was designed to targeting the mineralisation’s depth potential in this orientation.

Step out drilling has commenced to the south with NBE006 spudding off close to historical BHP diamond drill hole MD22.

In addition to step out drilling alongstrike,holedepthsarebeingextended to test for the source forthe mineralised dykes drilled to date(i.e. main porphyry stock).	MD 022- Magnetite breccia to 135m + qtz. diorite	MD 022- Magnetite breccia to 135m + qtz. diorite	MD 022- Magnetite breccia to 135m + qtz. diorite	MD 022- Magnetite breccia to 135m + qtz. diorite	MD 022- Magnetite breccia to 135m + qtz. diorite	MD 022- Magnetite breccia to 135m + qtz. diorite	MD 022- Magnetite breccia to 135m + qtz. diorite
	0	152.4 (EOH)	152.4m		0.28% Cu + 12ppm Mo
	incl 16.8	37.5	20.7m		0.52% Cu
	incl 87.9	120.0	32.1m		0.34% Cu
					Highest = 1.40% Cu, 92ppm Mo

Leonard Schultz

The main camp was completed and infill soil sampling on the east of the Tomafe creek baseline was completed with 174 samples taken along 2.6km. Sampling will now move to the west in January to extend some of the lines. 24 grab samples and 12 rock chip samples were also collected while sampling and during creek mapping.

Central New Britain and East New Britain

The geophysical contractor mobilised to Hoskins airport at the end of December and commenced the aeromagnetic and radiometric survey of the large Central New Britain EL in January. 60% of the 4085 line-km have been flown so far and the survey is expected to be completed in the second week of February.

Data from East New Britain is being reviewed to decide whether a 3D induced polarisation ground survey would be more appropriate.

For additional information relating to Frontier Resources and/ or its projects, please visit the Company's website at www.frontierresources.com.au or feel free to 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.

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