FORTUNA METALS LTD - Regulatory Filings 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

25th March 2010

Gold Mineralised System (5km x 4km) Confirmed by Grid Based Soil Assays Andewa Project, Papua New Guinea

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Frontier Resources Ltd is extremely pleased to announce assay results from 21 sq km of grid based soil sampling that was conducted from mid to late 2010 at EL 1345 - Andewa.
The 4,530 soil assays have confirmed that a very large scale gold mineralised system is present.
Gold, copper, molybdenum, arsenic and antimony in soils are coincident (variably) with the high chargeability zones at 50m below topography and to depth.
Conductive zones have been defined indicating the probability of semi-massive sulphides.
Systematic drilling within the mineralised system is scheduled for May and has a high probability of ultimately demonstrating a World Class gold and/or gold-copper-molybdenum deposit.

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Andewa has good access by sea from the nearby port of Kimbe and requires only one bridge for land access by road. Strong relationships have been built with landowners living on the coast but it is noted that there are no permanent villages in or near the gridded area.

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The total extent of the relatively cohesive gold in soil anomaly at the 0.02 g/t gold (20ppb) cutoff is in excess of 5km long (east to west) and 4 km wide (north to south) (refer to figure 2).

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Peak soil assay grades were 18.9 g/t gold and 0.19% copper.

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About 44% of the total samples are classified as anomalous (greater than 0.02 g/t gold) and cover an area of about 9.3 sq km or 44% of the gridded area.

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About 11.3% of the assays and area noted above are moderately anomalous (0.05 to 0.10g/t gold) and cover an area of 2.4 sq km and an additional 5.1% of assays are strongly mineralised (greater than 0.10 g/t gold) and cover an additional area of about 1.1 sq km.

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There is a very strong multi-element soil anomaly in the NE sector of the grid corresponding to an extensive near and on surface chargeability anomaly.

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The area above has the strongest and most extensive gold in soil recorded on the gridded area and it also contains extensive and moderate to very strong copper, molybdenum, arsenic and antimony mineralisation indicative of epithermal and /or porphyry copper-gold-molybdenum mineralisation.

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The main or central gold anomaly trends pseudo east - west then turns to the north east. This anomaly is in excess of 5km long north east to south west at over 0.05 g/t gold (50 ppb).
There are 2 additional major gold in soil anomalies (over 0.05 g/t gold) that are approximately 1.5km long and another that is approximately 1km long. The anomalies generally appear to

trend north easterly. In addition, there are eight multi-line /multi-point soil anomalies that warrant follow-up.

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The highest tenor and longest gold intercepts demonstrated by the grid based soil sampling were 425m of 0.46 g/t gold + 400 ppm copper, 800m of 0.12 g/t gold + 226 ppm copper, 275m of 0.21 g/t gold + 586 ppm copper, 525m of 0.12 g/t gold + 279 ppm copper and 800m of 0.09 g/t gold + 184 ppm copper, in different sectors of the grid. There are many additional significant intercepts.
The gold in soil anomalies corresponds to the chargeability at 50m below topography quite well, but there are exceptions (as divergence as to be expected - refer to figure 3).
Gold in soils plotted on the 400m below topography chargeability plan also show generally good correlation between the chargeability anomalies and the higher tenor gold in soil results (see figure 4 and associated discussion).
Gold in soil assays are plotted on an image of resistivity 50m below topography (figure 5) and some significant gold anomalies correspond to the shoulders of the highly resistive zones, but other strong gold anomalies appear to have an inverse relationship to the resistivity.
Only very limited areas of the grid were below gold detection limits (they were not gold anomalous at all), which is very encouraging.

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The copper in soil anomaly is relatively coincident with the gold anomaly (at greater than 150 ppm and 0.05 g/t, respectively) and there is a good general correlation between higher tenor copper and higher tenor gold zones (that are greater than 300ppm and 0.1 g/t, respectively -see figure 6). Copper shows a generally inverse relationship with resistivity.

Chairman / Managing Director Peter McNeil M.Sc. commented:

Frontier’s exploration in 2010, subsequent to announcing the OTML JV, focussed solely on the Andewa licence. The enormous 3D-IP grid that we completed was a calculated risk during a time of global uncertainty. The program was remarkably successful and has now rewarded directors and shareholders for their faith in the concept and the project.

Andewa’s geological / structural location is conceptually identical to Lihir’s (based on my own experience working there) and Frontier have now geochemically and geophysically demonstrated the potential for a similar, large scale World Class epithermal gold deposit.

Frontier’s drilling on this highly prospective project area will now commence later in May due to shipping issues. I await this program with anticipation and plan to be onsite initially to supervise the drilling.

The 3D-IP geophysical program demonstrated 3 very strong to intense chargeability anomalies covering a total area of 7 sq km, plus numerous related and proximal (or coincident) resistivity and conductivity anomalies that warrant drilling in their own right.

Rock chip-channel outcrop sample results recently released demonstrated gold mineralisation on surface that was widely distributed throughout the gridded area. This scattering of outcrops is partly to mostly due to their limited occurrences, that are normally restricted to creeks. Two highly significant outcrops were discovered and sampled, returning intercepts including 15m grading 15.48 g/t gold. Significant higher grade silver was also noted locally.

The high gold and silver assays in rocks are likely related to structurally controlled, epithermal gold / silver mineralisation and further at depth to other deposit variants including possible 'telescoped' porphyry copper-gold-molybdenum mineralisation. However, the true nature of both the geophysical and geochemical anomalies at Mt Andewa can only be determined via mechanical surface trenching and subsequent diamond core drilling. Frontier has begun planning for this next phase of the operation.

Hand trenching of conductivity anomalies (likely representing concentrations of semi-massive sulphides as opposed to chargeability anomalies that likely represent disseminated sulphide) and

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gold anomalies is currently being undertaken, along with infill soil sampling to better define the gold anomalous zones and assist in discriminating drilling targets.

The Andewa gold in soil anomaly, as it is now known, is 9.3 sq km and is the largest in extent or total area I have ever worked upon. The strongly mineralised soils cover a total area of approximately 1.2 sq km and peak at 18 g/t gold. The generally high tenor of the soils is very interesting because only 6% or about 1.2 sqkm of the 21 sq km grid were below the limits of detection [BDL]. This is a very low ratio for an enormous soil grid in PNG), which means 94% of the grid is to some level gold anomalous.

There is locally good correlation between higher tenor soil assays and higher chargeability zones, with the very low chargeability zones virtually always very weakly or unmineralised . This is very encouraging for the probability of demonstrating mineralisation associated with the chargeability anomalies (because the gold in soils have already correlated well to them.

Much of the gold anomalous area within the Andewa crater has now been adequately defined in my opinion for first pass exploration. However, both the geophysical and the soil + rock geochemical anomalies extend of the grid in the south-east and south-central sectors, indicating that additional follow up grid based soil sampling and 3D-IP will be eventually required to fully close off the mineralised system within the crater area.

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. Frontier’s Likuruanga EL and East and Central New Britain EL applications in Joint Venture with Ok Tedi Mining Ltd are also shown on the plan.

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Figure 1
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Table 1.

Approximate statistics relating to the grid based gold in soil assays.

Significantly, 45% of the total samples are classified as anomalous (greater than 0.02 g/t gold) and cover an area of about 9.3 sq km or 44% of the gridded area.

About 11% of the assays are moderately anomalous (0.05 to 0.10g/t gold) and cover an area of 2.4 sq km. An additional 5.1 % are strongly mineralised (greater than 0.10 g/t gold) and cover an area of 1.1 sq km.

Soil Assay Range (g/tgold)	Soil Assay Range (g/tgold)	Number of Samples	Percentage of Total	Approximate Area (sq km)
From	To
>1.0		10	0.2%	0.05
0.50	1.00	14	0.3%	0.06
0.10	0.50	210	4.6%	0.97
0.05	0.10	514	11.3%	2.4
0.02	0.05	1247	27.5%	5.8
BDL	0.02	2534	56.0%	11.7

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Figure 2. Individual gold in soil assays at the Andewa Project plotted on a thematic contoured image of the gold results (inverse distance algorithm), showing the location and major trends of the mineralised zones. Note that 0.02 g/t gold (20 ppb) was chosen as the base mineralised threshold to define the total extent of the system and this is represented basically by light green and hotter colours (blue is NOT mineralised). 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); these zones are represented basically by yellow and hotter colours and by orange and hotter colours, respectively.

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Figure 2
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Figure 3. Gold in soil assay value ranges plotted as coloured dots on an image of chargeability at 50m below topography. Note that there is locally good correlation between higher tenor soil assays and higher chargeable zones, but it is not a 1:1 correlation. The zones that are NOT anomalous in soils generally have a very good correlation with very low chargeability zones. This is very encouraging for the probability of demonstrating mineralisation associated with the chargeability anomalies, because the soils already do such.

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Figure 3
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Figure 4. Gold in soil assays at the Andewa Project on an image of chargeability 400m below topography. There is good general correlation between higher tenor soil assays and higher tenor chargeable zones. The gold anomalies at the Ekhos Zone (in the east) correspond very well to the subsurface highly chargeable zone.

The large cohesive anomaly in the central west appears to have a zone with no gold in soil anomalism above it, however, this is only apparent, as the chargeable zone dips to the north-east from the surface further to the south-west and hence it plunges under the zone with no gold anomalies.

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Figure 4
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Figure 5.
Gold in soil assays on
an image of resistivity
50m below
topography.
Note that there are
some significant gold
anomalies that
correspond to the
shoulders of the highly
resistive zones, but
other strong gold
anomalies such as in
the north-east of the
grid, appear to have
an inverse relationship
to the resistivity (i.e.
the assays are
strongest where the
resistivity is weakest).

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Figure 5
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Figure 6. Copper in soil assays on an image of chargeability 50m below topography. There is a reasonable correlation between stronger copper assays and stronger chargeability zones.

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Figure 6
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Figure 7.

Very tightly located molybdenum in soil assays. There is a good correlation between stronger copper assays, molybdenum and arsenic assays and a major NW trending chargeability zone. Elevated molybdenum assays can be indicative of porphyry copper mineralisation and is a useful vector.

Figure 7

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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.