FORTUNA METALS LTD — Share Issue/Capital Change 2011

Jul 4, 2011

ABN96095684389

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ADDRESS PHONE EMAIL PO Box 35 +61 (08) 9295 0388 info@frontierresources.com.au NORTH PERTH WA 6906 FAX WEBSITE Australia +61 (08) 9295 3480 www.frontierresources.com.au

ASX:FNT

ANNOUNCEMENTS OFFICE ASX ANNOUNCEMENT

5 July 2011

ALLOTMENT OF EMPLOYEE OPTIONS

I am pleased to advise that the Company has issued 10,200,000 Employee Options under the Company’s Employee Share Option Plan, as detailed below:

• 3,300,000 Employee Options exercisable at 25 cents per Option on or before 31 June 2015; and

• 6,900,000 Employee Options exercisable at 22 per Option on or before 31 June 2015.

An Appendix 3B for (New issue announcement, application for quotation of additional securities and agreement) is attached detailing the issue.

FRONTIER RESOURCES LTD

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P.A.McNeil, M.Sc. CHAIRMAN / MANAGING DIRECTOR

Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003.

Name of entity

FRONTIER RESOURCES LIMITED

ABN

96 095 684 389

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1+Class of+securities issued or to beissued2Number of+securities issued or tobe issued (if known) or maximumnumber which may be issued3Principal terms of the+securities (eg,if options, exercise price and expirydate; if partly paid+securities, theamount outstanding and due datesforpayment;if+convertiblesecurities, the conversion price anddates for conversion)	OPTIONS
	10,200,000
	1. 3,300,00025CENTOPTIONSTOACQUIRE ONE (1) SHARE IN THECOMPANY ON OR BEFORE 31 JUNE20152. 6,900,00022CENTOPTIONSTOACQUIRE ONE (1) SHARE IN THECOMPANY ON OR BEFORE 31 JUNE2015

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

4 Do the[+] securities rank equally in all NO – TO BE RANKED EQUALLY UPON respects from the date of allotment EXERCISE with an existing[+] class of quoted +securities? If the additional securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration Nil 6 Purpose of the issue OPTIONS GRANTED THROUGH THE (If issued as consideration for the FRONTIER RESOURCES LIMITED acquisition of assets, clearly identify EMPLOYEE SHARE OPTION PLAN those assets) 7 Dates of entering[+] securities into 5 JULY 2011 uncertificated holdings or despatch of certificates Number +Class 8 Number and +class of all 294,455,036 ORDINARY +securities quoted on ASX SHARES ( including the securities in clause 2 if applicable)

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

9Numberand+classofall+securities not quoted on ASX(_including_the securities in clause 2if applicable)10Dividend policy (in the case of atrust, distribution policy) on theincreased capital (interests)	Number	+Class
	3,300,0006,900,0004,500,0001,250,0002,000,0002,500,0002,500,000	NON-TRANSFERABLEEMPLOYEE OPTIONS 25CENTS, 30/06/15NON-TRANSFERABLEEMPLOYEE OPTIONS 22CENTS, 30/06/15NON-TRANSFERABLEEMPLOYEE OPTIONS 11CENTS, 30/12/14NON-TRANSFERABLEDIRECTOROPTIONS4CENTS, 31/12/12NON-TRANSFERABLEDIRECTOROPTION5CENTS, 31/12/12NON-TRANSFERABLEDIRECTORS OPTIONS 9CENTS, 31/12/12NON-TRANSFERABLEDIRECTORS OPTIONS 10CENTS, 31/12/12
	NO DIVIDEND DISTRIBUTION ISENVISAGED IN THE NEAR FUTURE

Part 2 - Bonus issue or pro rata issue

11	Issecurity	holderapproval
	required?
12	Is the issue renounceable or non-
	renounceable?
13	Ratio in which	the+securities will
	be offered
14	+Class of+securities to which the
	offer relates

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

15+Recorddatetodetermineentitlements16Will holdings on different registers(or subregisters) be aggregated forcalculating entitlements?17Policy for deciding entitlements inrelation to fractions18Names of countries in which theentity has+security holders who willnot be sent new issue documentsNote: Security holders must be told how theirentitlements are to be dealt with.Cross reference: rule 7.7.19Closingdateforreceiptofacceptances or renunciations20Names of any underwriters21Amount of any underwriting fee orcommission22Names of any brokers to the issue23Fee or commission payable to thebroker to the issue24Amount of any handling fee payableto brokers who lodge acceptancesor renunciations on behalf of+security holders25If the issue is contingent on+security holders’ approval, the dateof the meeting26Date entitlement and acceptanceform and prospectus or ProductDisclosure Statement will be sent topersons entitled27If the entity has issued options, andthe terms entitle option holders toparticipate on exercise, the date onwhich notices will be sent to optionholders

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

28	Date rights trading will begin (if
	applicable)
29	Date rights trading will end (if
	applicable)
30	How do+security holders sell their
	entitlements_in full_through a
	broker?
31	How do+security holders sell_part_
	of their entitlements through a
	broker and accept for the balance?
32	How do+security holders dispose of
	their entitlements (except by sale
	through a broker)?
33	+Despatch date

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

34 Type of securities ( tick one )

(a) X Securities described in Part 1

(b)[All other securities ]

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35[If the ][+][securities are ][+][equity securities, the names of the 20 largest holders of the ] additional[+] securities, and the number and percentage of additional[+] securities held by those holders

36[If the ] +securities setting out the number of holders in the categories[+][securities are ][+][equity securities, a distribution schedule of the additional ]

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over 37[A copy of any trust deed for the additional ][+][securities ]

Entities that have ticked box 34(b)

38 Number of securities for which +quotation is sought 39 Class of +securities for which quotation is sought 40 Do the[+] securities rank equally in all respects from the date of allotment with an existing[+] class of quoted +securities? If the additional securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another security, clearly identify that other security) Number +Class 42 Number and[+] class of all[+] securities quoted on ASX ( including the securities in clause 38)

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the[+] securities on any conditions it decides.

• 2 We warrant the following to ASX.

  • The issue of the[+] securities to be quoted complies with the law and is not for an illegal purpose.

  • There is no reason why those[+] securities should not be granted[+] quotation.

  • An offer of the[+] securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any[+] securities to be quoted and that no-one has any right to return any[+] securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the[+] securities be quoted.

• We warrant that if confirmation is required under section 1017F of the Corporations Act in relation to the[+] securities to be quoted, it has been provided at the time that we request that the[+] securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the[+] securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before[+] quotation of the[+] securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

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JULIA BECKETT COMPANY SECRETARY

• See chapter 19 for defined terms.

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Appendix 3B Page 7