FORTUNA METALS LTD — Capital/Financing Update 2018

Jan 7, 2018

ADDRESS PHONE EMAIL Unit 5, Ground Floor +61 (8) 9486 4036 pmcneil@frontierresources.com.au 1 Centro Ave, Subiaco ABN WEBSITE WA, 6005 Australia 96 095 684 389 www.frontierresources.com.au

==> picture [115 x 80] intentionally omitted <==

ASX: FNT

Market Announcements Platform

8th January 2018

Planned Muller Exploration

Frontier Resources Limited ( Frontier ) is pleased to announce an Exploration update.

• Aimex Geophysics (Director Swiridiuk) has commenced an Aster satellite imagery study to better define the main geochemically anomalous zones of the 3 main project areas, plus to attempt to locate additional high alteration prospectivity zones proximal to them and regionally within the EL.

The Muller (EL 2356) renewal application was lodged and the Warden’s Court Hearing is scheduled for January 15[th] , 2018. The Muller porphyry copper- gold moly exploration program will be initiated subsequent to the Hearing.

• The Bulago (EL 1595) exploration program will commence subsequent to Muller, with evaluation of skarn targets at the limestone/ intrusive contact and several ‘higher elevation’ Bulago Valley gold + base-metal silt + stream geochemical anomalies.

• The Lake Lavu (ELA2477) Warden’s Court Hearing was successfully completed, but the landowners expressed negative sentiments at the Sewatupwa Hearing. Lake Lavu is easily the ‘better’ application of the two in Milne Bay. This should go before the PNG MRA Mining Advisory Council (MAC) in the first quarter of 2018, for a recommendation to the Minister.

The Tolukuma Region EL Application is also going through the normal application process.

Frontier’s Chairman Peter McNeil said:

“The Muller EL is highly prospective for porphyry style copper-gold mineralisation and our exploration program will target the Tingi Prospect, to better define drilling targets and include relocating areas of interest defined from soil geochemistry /rock outcrop /float sampling, evaluation of creek geology and hand trenching on possible strike extensions to previously defined mineralisation. This work should facilitate site visits by major companies interested in a possible Joint Venture. Gold, copper, zinc and molybdenum plans are attached showing thematic contouring of elements with geology or alteration.

Exploration targets at Tingi are:

• Porphyry style copper-gold mineralisation (in Angali and Andiria Creeks).

• Skarn gold —base metal on the intrusive margins with the limestone.

• Epithermal higher-grade gold + silver mineralisation.

• Breccia hosted base metal stockwork veining (at Hogo Creek).

• NE-SW fault controlled massive epidote-

==> picture [270 x 186] intentionally omitted <==

==> picture [270 x 183] intentionally omitted <==

pyrite, massive pyrite and massive magnetite-pyrite mineralisation (at Angali Creek, Hogo Creek and Magnetite Creek).

Exploration results at Tingi by previous explorers (released to ASX 3[rd] May 2016) include:

• Strong gold in soil anomalies (including 90m of 2.14 g/t gold, to a high of 6.09 g/t gold), plus strong lead-zinc ridge soil anomalies (including 390m of 0.17% lead + 0.33% zinc) on the northern half of the main target, reflecting stratabound base metal skarn mineralisation along the base of the Darai Limestone. The tropical setting may have leached copper from the surficial soils and rocks and provided low copper assay results.

• A 250m x 200m soil–rock chip anomaly (>300 ppm copper and >0.1 g/t gold) was delineated coincident with phyllic-altered diorite.

• Gold assays from float rock include 30 g/t gold, 12 g/t gold and 4.9 g/t gold.

• Outcrop rock grab samples include 1.1g/t gold + 0.26% copper + 0.29% lead + 8.8% zinc and 3.72g/t gold + 1.55% zinc + 0.53 g/t lead.

• Pyrite altered quartzite outcrops had assays to 0.97 g/t gold + 58 g/t silver + 0.24% copper, that probably represents low sulphidation epithermal quartz-sulphide gold + copper mineralisation that formed marginal to the porphyry copper-gold intrusions.

==> picture [256 x 178] intentionally omitted <==

==> picture [256 x 178] intentionally omitted <==

• Channel sampling along strike of Jerry’s skarn (6m thick x 30m long + an additional 50m in gossan outcrop to the southwest) returned an average for 20 non-continuous outcrop channel samples of 1.18g/t gold. A total of 15 x 2m channel samples were taken with best results of 2m continuous chip sampling showing 28m of 0.78 g/t gold including 2m of 4.36g/t gold and 2m of 2.58g/t gold.

• 10m of polymetallic massive sulphide assayed 3.3 g/t gold + 0.12% copper + 0.8% lead+ 1.9% zinc, within potassically and phyllicly altered diorite, representing a feeder for the base metal skarn mineralisation.

• 24m zone of andesite porphyry 0.085% copper with up to 10% pyrite + minor chalcocite.

• A 3m channel sample of brecciated massive sulphide magnetite skarn at the andesite porphyry / Darai Limestone contact assayed 1.17 g/t gold + 33 g/t silver + 0.16% copper + 1.80% lead + 3.50% zinc.

For additional information relating Frontier and our projects, please visit the website at www.frontierresources.com.au.

FRONTIER RESOURCES LTD P.A. McNeil, M.Sc., MAIG Chairman and Managing Director	Frontier Resources Ltd Exploration Licence Information	Frontier Resources Ltd Exploration Licence Information	Frontier Resources Ltd Exploration Licence Information	Frontier Resources Ltd Exploration Licence Information	Frontier Resources Ltd Exploration Licence Information	Frontier Resources Ltd Exploration Licence Information	Frontier Resources Ltd Exploration Licence Information
	Licence Name	**Number **	Date From	Date To	Ownership	Area (SQ KM)	Lat. Sub Blocks
	Bulago	EL 1595	7/07/2016	6/7/2018	100% Frontier Gold PNG Ltd	73	22
	Muller	EL 2356	31/12/2015	30/12/2017	100% Frontier Copper PNG Ltd	187	56
	Granted Els = 260 SQ KM
	Sewatupwa	ELA 2476	Application		100% *Frontier Copper PNG Ltd	436	131
	Lavu	ELA 2477	Application		100% *Frontier Copper PNG Ltd	839	252
	Gazelle	ELA 2529	Application SECOND		100% *Frontier Copper PNG Ltd	703	211
	Tolukuma	ELA 2531	Application		100% *Frontier Copper PNG Ltd	433	130
	2,411 SQ KM EL Applications =
	NB: The PNG Mining Act- 1992 stipulates that ELs are granted for renewable 2 year Terms (subject to Work and Financial Commitments) and the PNG Government maintains the right to purchase up to 30% project equity at "Sunk Cost"if/when a Mining Lease is granted.

The following information is provided to comply with the JORC Code (2012) requirements for the reporting of exploration trenching results for Exploration Licence 2356 Papua New Guinea.

		JORC CODE 2012	JORC CODE 2012	JORC CODE 2012	JORC CODE 2012	JORC CODE 2012	JORC CODE 2012
		Section 1 -- Sampling Techniques and Data
Criteria		Explanation	Commentary
Sampling techniques	o	Nature and quality of sampling (e.g. cut channels, random chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down whole gamma sondes, or handheld XRF instruments, etc). These examples should not be taken as limiting the broad meaning of sampling.	Historic exploration results are quoted. Previous explorers are known and standard industry practice sampling procedures were followed.
	o	Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.				Unknown
	o	Aspects of the determination of mineralisation that are Material to the Public Report. In cases where 'industry standard' work has been done this would be relatively simple (e.g. 'reverse circulation drilling was used to obtain 11m samples from which 3 kg was pulverised to produce a 30g charge for fire assay’) In other cases more explanation may be required, such as where there is coarse gold that has inherent sampling problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information.
Drilling techniques	o	Drill type (e.g. core, reverse circulation, open-hole hammer, rotary air blast, auger, Bangka, sonic, etc) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, face-sampling bit or other type, whether core is oriented and if so, by what method, etc).				No drilling undertaken.
Drill sample recovery	o	Method of recording and assessing core and chip sample recoveries and results assessed				No drilling undertaken.
	o	Measures taken to maximise sample recovery and ensure representative nature of the samples.				No drilling undertaken.
	o	Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.				No drilling undertaken.
Logging	o	Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.				No drilling undertaken.
	o	Whether logging is qualitative or quantitative in nature. Core (or costean, channel, etc) photography.				No drilling undertaken.
	o	The total length and percentage of the relevant intersections logged				No drilling undertaken.
Sub-sampling techniques and sample preparation	o	If core, whether cut or sawn and whether quarter, half or all core taken.				No drilling undertaken.
	o	If non-core, whether riffled, tube sampled, rotary split, etc and whether sampled wet or dry.				No drilling undertaken.
	o	For all sample types, the nature, quality and appropriateness of the sample preparation technique.				No drilling undertaken.
	o	Quality control procedures adopted for all sub-sampling stages to maximise representivity of samples.				No drilling undertaken.
	o	Measures taken to ensure that the sampling is representative of the in-situ material collected, including for instance results for field duplicate /second-half sampling.				No drilling undertaken.
	o	Whether sample sizes are appropriate to the grain size of the material being sampled.				No drilling undertaken.
Quality of assay data and laboratory tests	o o	The nature, quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total. Nature of quality control procedures adopted (e.g. standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established.		Historic exploration results are quoted. Previous explorers are known and standard industry practice sampling procedures were followed.
	o	For geophysical tools, spectrometers, handheld XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc.			Not applicable
Verification of sampling and assaying	o	The verification of significant intersections by either independent or alternative company personnel.			Not verified.
	o	The use of twinned holes.			No drilling reported
	o	Documentation of primary data, data entry procedures, data verification, data storage(physical and electronic) protocols.	Primary data was collected manually then loaded into the database.
	o	Discuss anyadjustments to assaydata.	Unknown
Location of data points	o	Accuracy + quality of surveys used to locate drill holes (collar + down- hole surveys), trenches, mine workings and other locations used in Mineral Resource estimation.	Not applicable
	o o	Specification of the grid system used. Qualityand adequacyof topographic control.	Map datum is AGD 066. 40m contours - 1:100,000plans,20m -SRTM contours.
Data spacing and distribution	o	Data spacing for reporting of Exploration Results.	Refer to the attached plans for details relating to the data spacingof exploration results.
	o	Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classifications applied					Not applicable

	o	Whether sample compositinghas been applied.	Whether sample compositinghas been applied.	Whether sample compositinghas been applied.	Whether sample compositinghas been applied.	Whether sample compositinghas been applied.	Whether sample compositinghas been applied.	Unknown
Orientation of data in relation to geological structure	o	Whether the orientation of sampling achieves unbiased sampling of possible structures to the extent this is known, considering the deposit type.						Unknown
	o	If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a samplingbias, this should be assessed and reported.						No drilling undertaken.
Sample security	o	The measures taken to ensure sample security			Unknown
audits or reviews	o	The results of any audits or reviews of sampling techniques and data.			No specific audits or reviews of sampling techniques and data have been undertaken
		Section 2 -- Reporting of Exploration Results
Criteria		Explanation		Commentary
Mineral tenement and land tenure status	o	Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.	Exploration Licence 2356 - Muller Range is located in Papua New Guinea's Western and Southern Highlands Provinces. ELs are regulated under the Mining Act of 1992. There no agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and/or environmental issues associated with the EL. The PNG National government under the Mining Act of 1992 currently has the right to acquire up to 30% of any project at the time of granting of a mining lease for the 'sunk cost'.
	o	The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.		The tenement was granted 31/12/15 for a standard period of 2 years
Exploration done by other parties	o	Acknowledgment and appraisal of exploration by other parties.		Exploration in the region was initiated in the late 1960s as part of a PNG porphyry copper deposit search. It was explored for gold initiallyin the mid 1980's
Geology	o	Deposit type, geological setting and style of mineralisation.		Porphyry copper-gold – molybdenum, higher grade gold - silver-zinc-lead skarns, gold intrusive -epithermal related targets,
Drill hole information	o	A summary of all information material to the understanding of the exploration results including a tabulation of the followinginformation for all Material drill holes:					No drilling undertaken.
		Eastingand northingof the drill hole collar					No drillingundertaken.
		Elevation or RL (Reduced Level- elevation above sea level in metres) of the drill hole collar					No drilling undertaken.
		Dipand azimuth of the hole					No drillingundertaken.
		Down hole length and interception depth					No drillingundertaken.
		Hole length					No drillingundertaken.
	o	If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearlyexplain whythis is the case.					No drilling undertaken.
Data aggregation methods	o	In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (e.g. cutting of high grades) and cut-off grades are usually Material and should be stated.		Tables of results included show data aggregation if applied in trench/channel samples etc. No top cuts have been applied. They are continuous channel samples and so are stated as continuous weighted assay results (length x grade summed for each sample/sum of total length).
		Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail				If this is occurring, it is stated in the text.
	o	The assumptions used for any reporting of metal equivalent values should be clearlystated.				No metal equivalent values are reported.
Relationship between mineralisation widths & intercept lengths	o	These relationships are particularly important in the reporting of Exploration Results.				Not well understood
	o o	If the geometry of the mineralisation with respect to drill hole angle is known, its nature should be reported. If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect(e.g. 'down hole length,true width not known').
Diagrams	o	Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.				Appropriate maps and tabulations of intercepts are included.
Balanced reporting	o	Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.				Comprehensive reporting of Exploration Results is included herein.
Other substantive exploration data	o	Other exploration data, if meaningful and material should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples - size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances				All meaningful exploration data relating to Tingi has been included in this release.
Further work	o o	The nature and scale of planned further work (e.g. tests for lateral extensions or depth extensions or large-scale step-out drilling). Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.				Future work is dependent on a additional funding. Appropriate plans will be included, as possible in a later release documenting approved future workprograms.