HAMMER METALS LIMITED — Capital/Financing Update 2006

Jun 15, 2006

A.B.N. 87 095 092 158

973 Wellington Street, West Perth 6005 PO Box 887, West Perth, Western Australia 6872 Telephone: +61 8 9481 5311 Facsimile: +61 8 9486 1502 Email: office@midasresources.com.au Website: www.midasresources.com.au

16 June 2006

The Manager Australian Stock Exchange Limited ("ASX") Company Announcements Office

No. of pages: $\theta$

Dear Sir.

PLACEMENT

Midas Resources Limited ("the Company") has made a placement of 4,125,000 shares effective 15 June 2006 to raise \$330,000 pursuant to an offer made to sophisticated investors and professional investors (as described in Section 708 of the Corporations Act). The shares issued are part of a class of securities quoted on the Australian Stock Exchange Limited.

This raising will be used to fund the Company's exploration activities in Australia and Alaska as well as general working capital.

The Company gives this notice pursuant to Section 708A(5)(e) of the Corporations Act. The shares are issued without disclosure to investors under Part 6D.2, in reliance on Section 708A(5) of the Corporations Act. The Company, as at the date of this notice, has complied with:

• the provisions of Chapter 2M of the Corporations Act; and $\bullet$
• $\bullet$ Section 674 of the Corporations Act.

There is no excluded information for the purposes of Sections 708A(7) and (8) of the Corporations Act.

Yours faithfully

Phillip MacLeod Company Secretary

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.

Name of entity

Midas Resources Limited

ABN

87 095 092 158

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).

$\mathbf{1}$ ⁺Class of ⁺securities issued or to be issued

Ordinary shares

• $\overline{2}$ Number of *securities issued or to be issued (if known) or maximum number which may be issued
• Principal terms of the ⁺securities 3 (eg, if options, exercise price and date; if partly paid expiry *securities, the amount outstanding and due dates for payment; if securities, +convertible the conversion price and dates for conversion)

4,125,000

Fully paid

⁺ See chapter 19 for defined terms.

4	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	Yes
	which the extent to they participate for the next dividend, οf (in the case 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	8 cents per share.
6.	Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets)	Funds raised for exploration activities in Australia and Alaska and general working capital.
7	Dates of entering *securities into uncertificated holdings or despatch of certificates	15 June 2006
8	Number and class of all securities quoted on ASX (including the securities in clause	Number 97,655,113	*Class Fully paid ordinary shares.
	2 if applicable)	21,186,482	Options exercisable at \$0.25 each expiring 1 December 2006

⁺ See chapter 19 for defined terms.

Number	+ Class
250,000 all *securities not quoted on ASX	Options expiring 1 December 2006 exercisable at \$0.20 each.
250,000	Options expiring 1 December 2006 exercisable at \$0.25 each.
250,000	Options expiring 1 December 2006 exercisable at \$0.30 each.
250,000	Options expiring 1 December 2006 exercisable at \$0.35 each.
450,000	Options expiring 24 November 2008 exercisable at \$0.20 each.

Dividend policy (in the case of a trust, distribution policy) on the $10₁$ increased capital (interests)

Part 2 - Bonus issue or pro rata issue

11	approval holder security Is. 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
15	determine *Record date to. entitlements

⁺ See chapter 19 for defined terms.

16	Will holdings on different registers (or subregisters) be aggregated for calculating entitlements?
17	Policy for deciding entitlements in relation to fractions
18	Names of countries in which the
	entity has *security holders who will not sent new issue Ъe documents
	Note: Security holders must be told how their entitlements are to be dealt with.
	Cross reference: rule 7.7.
19	Closing date of for receipt acceptances or renunciations
20.	Names of any underwriters
21	Amount of any underwriting fee or commission
22	Names of any brokers to the issue
23	Fee or commission payable to the broker to the issue
24	any handling fee Amount of payable to brokers who lodge acceptances or renunciations on behalf of *security holders
25	If the issue is contingent on approval, *security holders' the date of the meeting
26	Date entitlement and acceptance
	form and prospectus or Product Disclosure Statement will be sent to persons entitled
27	If the entity has issued options, and
	the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders
28	Date rights trading will begin (if
	applicable)

⁺ See chapter 19 for defined terms.

• 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

the contract of the contract of the contract of the contract of the contract of

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)
• $(a)$ Securities described in Part 1 ΙXΙ

$(b)$

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 conve

⁺ See chapter 19 for defined terms.

Entities that have ticked box 34(a)

Additional securities forming a new class of securities (If the additional securities do not form a new class, go to 43)

documents	Tick to indicate you are providing the information or	Information to be provided for options following the grant of the securities
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 are "equity securities, a distribution schedule of the additional *securities setting out the number of holders in the categories $1 - 1,000$ $1,001 - 5,000$ $5,001 - 10,000$ $10,001 - 100,000$ $100,001$ and over
37	A copy of any trust deed for the additional *securities
(now go to 43)

Entities that have ticked box 34(b)

38.	Number of securities for which *quotation is sought
39.	of "securities for which Class: 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 extent to which they the. participate for the next dividend, the case of $\sin$ trust. a 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

$+$ See chapter 19 for defined terms.

$41$ 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)

$42$ Number and *class of all *securities quoted on ASX (including the securities in clause 38)

Number	+ Class

(now go to $43$ )

All entities

Fees

43	Payment method (tick one)
		Cheque attached
		Electronic payment made Note: Payment may be made electronically if Appendix 3B is given to ASX electronically at the same time.
		Periodic payment as agreed with the home branch has been arranged Note: Accanoements can be made for envolvee incentive schemes that involve frequent issues of securities

Quotation agreement

• $\mathbbm{I}$ *Quotation of our additional *securities is in ASX's absolute discretion. ASX may quote the *securities on any conditions it decides.
• $\overline{2}$ We warrant the following to ASX.
• The issue of the *securities to be quoted complies with the law and is not for $\bullet$ 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

⁺ See chapter 19 for defined terms.

• 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 $\bullet$ *securities to be quoted under section 1019B of the Corporations Act at the time that we request that the *securities be quoted.
• $\overline{3}$ 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.
• $\overline{4}$ 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.

Sign here:	Phillip MacLeod
	Company Secretary

Date: 16 June 2006

Print name: Phillip MacLeod

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$+$ See chapter 19 for defined terms.