FORTUNA METALS LTD — Interim / Quarterly Report 2014

Jan 30, 2014

ADDRESS PHONE EMAIL PO Box +61 (08) 9295 0388 info@frontierresources.com.au West Perth FAX WEBSITE 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

ASX : FNT

31[st] January 2014

QUARTERLY ACTIVITY REPORT

TECHNICAL REPORT – QUARTER ENDED 31[ST] DECEMBER 2013

Frontier Resources Ltd is focussed on mineral exploration in Papua New Guinea (Figure 1) with a 100% interest in 9 Exploration Licences (ELs) that are highly prospective for the discovery and delineation of porphyry copper+/- gold +/-molybdenum, porphyry gold and epithermal gold deposits. No field work was conducted during the Quarter.

The Company also has a 50%-50% contributing Joint Venture with Quintessential Resources Ltd on 3 Exploration Licences on the island of New Britain, PNG. No field work was conducted during the Quarter.

The geological and assay database for the 5 projects returned from former Joint Venture partner Ok Tedi Mining Ltd is being evaluated.

Frontier has a 5% Nett profits Interest in the Stormont Gold Deposit in Tasmania, Australia, where mining of ore and stripping of waste rock commenced in December 2013. A substantial stockpile of ore was built up and is being processed through BCD Resources Ltd's Beaconsfield Mill. Frontier also has a 10% Free Carried Interest to completion of 'Bankable" Feasibility Study in Torque's adjacent Moina Project and will be repaid long term debt from Torque when Stormont mining/processing is completed.

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The following had been achieved by early January 2014:

• Approximately 6,200t of ore mined

• Approximately 3,700t of ore trucked to Beaconsfield for processing

• Approximately 2,500t of ore is on the Run of Mine pad at Stormont awaiting trucking to Beaconsfield.

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Mining and drilling at the Stormont open cut gold Mine
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Frontier Resources Ltd Exploration Licence Information
Area Latitudinal
Licence No. Date From Date To Ownership
(SQ KM) Sub Blocks
Bulago River EL 1595 7/07/2012 6/7/2014 100% Frontier Copper PNG Ltd 140 42
Mt Andewa EL 1345 13/08/2012 12/8/2014 100% Frontier Copper PNG Ltd 100 30
Mt Likuruanga EL 1351 13/08/2012 12/8/2014 100% Frontier Copper PNG Ltd 123 37
East New Britain EL 1592 21/03/2013 20/3/2015 100% Frontier Copper PNG Ltd 493 148
Central New Britain EL 1598 21/03/2013 20/3/2015 100% Frontier Copper PNG Ltd 347 104
Leonard Schultz EL 1597 13/02/2013 12/2/2015 100% Frontier Copper PNG Ltd 590 177
Mt Schrader EL 1951 13/03/2012 12/3/2014 100% Frontier Copper PNG Ltd 127 38
Sudest Island EL 1594 13/03/2012 12/3/2014 100% Frontier Copper PNG Ltd 133 40
Aria River EL 2045 28/09/2012 27/09/2014 50% Frontier -Quintessential Resources Ltd contributing JV 553 166
Whiteman Range EL 2047 28/09/2012 27/09/2014 50% Frontier -Quintessential Resources Ltd contributing JV 83 25
Gasmata EL 2057 28/09/2012 27/09/2014 50% Frontier -Quintessential Resources Ltd contributing JV 107 32
Cethana EL 29/2009 13/09/2010 12/09/2015 10% Free Carried to BFS Frontier -Torque Mining Ltd JV 109 NA
River Lea EL 42/2010 3/04/2011 2/04/2016 10% Free Carried to BFS Frontier -Torque Mining Ltd JV 9 NA
Narrawa Creek RL 3/2005 12/05/2006 12/05/2014 10% Free Carried to BFS Frontier -Torque Mining Ltd JV 2.8 NA
Stormont Mine ML 1/2013 3/11/2013 13/08/2018 5% Nett Profits Interest Frontier -Torque / BCD Mining Ltd JV 0.13 NA
Total Area 2,918 Sq Km
NB: 1. The Papua New Guinea Mining Act of 1992 stipluates that ELs are granted for renewable 2 year Terms (subject to Work and Financial Commitments)
2. The PNG Government maintains the right to purchase up to 30% project equity at "Sunk Cost" if/when a Mining Lease is granted.
3. BFS = Completion of a positive and hence "Bankable" Feasibility Study into the viability of any proposed mining operation
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For additional information relating to Frontier Resources and/ or its projects, please refer to previous quarterly reports, ASX releases and visit the Company's website at www.frontierresources.com.au.

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 is based on information compiled by, or compiled under the supervision of Peter A. McNeil - B.Sc., M.Sc. and Member of the Aust. Inst. of Geoscientists. Peter McNeil is the Managing Director of Frontier Resources and consults to the Frontier Resources Ltd. 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 2012 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.

Appendix 5B Mining exploration entity quarterly report

Rule 5.3

Appendix 5B

Mining exploration entity quarterly report

Introduced 1/7/96. Origin: Appendix 8. Amended 1/7/97, 1/7/98, 30/9/2001.

Name of entity FRONTIER RESOURCES LIMITED

	ACN 095 684 389 Consolidated statement of cash flows		Quarter ended (“current quarter”) December 2013	Quarter ended (“current quarter”) December 2013
			December 2013
Cash flows related to operating activities 1.1 Receipts from product sales and related debtors 1.2 Payments for (a) exploration and evaluation (b) development (c) production (d) administration 1.3 Dividends received 1.4 Interest and other items of a similar nature received 1.5 Interest and other costs of finance paid 1.6 Income taxes paid 1.7 Other Expenditure reimbursable by others NetOperating Cash Flows		Current quarter $A’000		Year to date 6 Months $A’000
		(103) (134) -		(560) (337) 3
		(237)		(894)
Cash flows related to investing activities 1.8 Payment for purchases of: (a)prospects (b)investment in listed entity (c) other fixed assets 1.9 Proceeds from sale of: (a)prospects (c)other fixed assets 1.10 Loans to other entities 1.11 Loans repaid by other entities 1.12 Other (provide details if material) Cash held by subsidiary no longer consolidated JV contributions on tenements JV spending on tenements Net investing cash flows 1.13 Total operating and investing cash flows (carried forward)		(1) 100 (1)		24 100 4
		98		128
		(139)		(766)

• See chapter 19 for defined terms.

Appendix 5B Page 1

Appendix 5B Mining exploration entity quarterly report

1.13 Total operating and investing cash flows (brought forward)	(139)	(766)
Cash flows related to financing activities 1.14 Proceeds from issues of shares, options, etc. net of costs 1.15 Proceeds from sale of forfeited shares 1.16 Proceeds from borrowings 1.17 Repayment of borrowings 1.18 Dividends paid 1.19 Other (provide details if material) Net financing cash flows	95	95
	95	95
Net increase (decrease) in cash held 1.20 Cash at beginning of quarter/year to date 1.21 Exchange rate adjustments to item 1.20 1.22 Cash at end ofquarter	(44) 108 -	(671) 734 1
	64	64

Payments to directors of the entity and associates of the directors Payments to related entities of the entity and associates of the related entities

1.23 1.24	Aggregate amount of payments to the parties included in item 1.2 Aggregate amount of loans to the parties included in item 1.10	Current quarter $A'000
		69
1.25	Explanation necessaryfor an understandingof the transactions
	Consulting Fees and Director Fees

Non-cash financing and investing activities

• 2.1 Details of financing and investing transactions which have had a material effect on consolidated assets and liabilities but did not involve cash flows

• 2.2 Details of outlays made by other entities to establish or increase their share in projects in which the reporting entity has an interest

• See chapter 19 for defined terms.

Appendix 5B Page 2

Appendix 5B Mining exploration entity quarterly report

Financing facilities available

Add notes as necessary for an understanding of the position.

3.1	Loan facilities
3.2	Credit standby arrangements

Amount available	Amount used
$A’000	$A’000

Estimated cash outflows for next quarter

	4.1 Exploration and evaluation 4.2 Development 4.3 Production 4.4 Administration Total	$A’000
		10
		40
		50

Reconciliation of cash

Reconciliation of cash
Reconciliation of cash at the end of the quarter (as shown in the consolidated statement of cash flows) to the related items in the accounts is as follows.	Current quarter $A’000	Previous quarter $A’000
5.1 Cash on hand and at bank 5.2 Deposits at call 5.3 Bank overdraft 5.4 Other – cash held by subsidiary	64	27
	-	81
Total: cash at end of quarter(item 1.22)	64	108

Changes in interests in mining tenements

Interests in Mining Tenements

Disclosure in accordance with ASX Listing Rule 5.3.3

	6.1	Project/ Tenements	Location	Held at end of quarter	Acquired during thequarter	Disposed during the quarter
		EL 1345 – Andewa	Papua New Guinea	100%	-	-
		EL 1591 – Mt Schrader	Papua New Guinea	100%	-	-
		EL 1595 – Bulago	Papua New Guinea	100%	-	-

• See chapter 19 for defined terms.

Appendix 5B Page 3

Appendix 5B Mining exploration entity quarterly report

	EL 1597 – Leonard Schultz	Papua New Guinea	100%
	EL 1531 – Likuruanga	Papua New Guinea	100%
	EL 1592 – East New Britain	Papua New Guinea	100%
	EL 1598 – Central New Britain	Papua New Guinea	100%
	EL 1594 – Sudest	Papua New Guinea	100%
6.2	Farm-in Agreements / Tenements	Location	Held at end of quarter	Acquired during thequarter	Disposed during the quarter
	ELA 2047 – Whiteman Range	Papua New Guinea	50%
	ELA 2057 – Gasmata	Papua New Guinea	50%
	ELA – 2058 – Nakanai Mountains	Papua New Guinea	0%		Disposed of
	ELA 2045 – Aria River	Papua New Guinea	50%
	ELA 2046 – Open Bay	Papua New Guinea	0%		Disposed of
6.3	Farm-out Agreements / Tenements	Location	Held at end of quarter	Acquired during thequarter	Disposed during the quarter

Issued and quoted securities at end of current quarter

Description includes rate of interest and any redemption or conversion rights together with prices and dates.

	Total number	Number quoted	Issue price per security (see note 3) (cents)	Amount paid up per security (see note 3) (cents)
7.1 Preference +securities (description)	Nil	Nil

• See chapter 19 for defined terms.

Appendix 5B Page 4

Appendix 5B Mining exploration entity quarterly report

7.2 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs, redemptions
7.3 +Ordinary securities 7.4 Changes during quarter (a) Increases through issues (b) Decreases through returns of capital, buy- backs	317,645,774	317,645,774
	13,599,092	13,599,092	0.007	0.007
7.5 +Convertible debt securities (description) 7.6 Changes during quarter (a) Increases through issues (b) Decreases through securities matured, converted	Nil	Nil
7.7 Options (description and conversion factor) 7.8 Issued during quarter 7.9 Exercised during quarter 7.10 Expired during quarter	4,500,000 2,220,000 2,320,000		Exercise price 11.0 cents 16.5 cents 11 cents	Expiry date 30-Dec-14 30-Dec-14 30-Dec-14
	200,000		4.0 cents	19-Oct-13
7.11 Debentures (totals only)	Nil	Nil
7.12 Unsecured notes(totals only)	Nil	Nil

• See chapter 19 for defined terms.

Appendix 5B Page 5

Appendix 5B Mining exploration entity quarterly report

Compliance statement

• 1 This statement has been prepared under accounting policies which comply with accounting standards as defined in the Corporations Act or other standards acceptable to ASX (see note 4).

• 2 This statement does give a true and fair view of the matters disclosed.

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Sign here: ............................................................ Date: 31 January 2014
(Company secretary)
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Print name: Jay Stephenson

Notes

1 The quarterly report provides a basis for informing the market how the entity’s activities have been financed for the past quarter and the effect on its cash position. An entity wanting to disclose additional information is encouraged to do so, in a note or notes attached to this report.

2 The “Nature of interest” (items 6.1 and 6.2) includes options in respect of interests in mining tenements acquired, exercised or lapsed during the reporting period. If the entity is involved in a joint venture agreement and there are conditions precedent which will change its percentage interest in a mining tenement, it should disclose the change of percentage interest and conditions precedent in the list required for items 6.1 and 6.2.

3 Issued and quoted securities The issue price and amount paid up is not required in items 7.1 and 7.3 for fully paid securities .

4 The definitions in, and provisions of, AASB 1022: Accounting for Extractive Industries and AASB 1026: Statement of Cash Flows apply to this report. 5 Accounting Standards ASX will accept, for example, the use of International Accounting Standards for foreign entities. If the standards used do not address a topic, the Australian standard on that topic (if any) must be complied with. == == == == ==

• See chapter 19 for defined terms.

Appendix 5B Page 6