HAMMER METALS LIMITED — Capital/Financing Update 2011

Oct 9, 2011

10 October, 2011

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ASX RELEASE

STRONG GOLD RESULTS FROM THE LEONORA GOLD PROJECT

HIGHLIGHTS

• Encouraging sample results from old mine workings at the Blue Bell Prospect in E 40/295.

• First stage sampling of gold workings in the newly applied for tenement P 40/1282 also returned strongly anomalous gold results.

Australian resources developer, Midas Resources Limited (“Midas” or “the Company”) (ASX: MDS), is pleased to announce highly anomalous sample results from the Bluebell Prospect in E40/295 and from new tenement P40/1282 at the Company’s Leonora Gold Project located in Western Australia (fig 1).

Bluebell Prospect E40/295

The tenement contains many areas of historic gold workings along major shear trends. Recent sampling of extensive workings at the Bluebell prospect returned gold values between 0.8g/t Au and 15g/t. On granting of the tenement, which is expected in Q4 2011, a program of surface geochemical exploration is planned over the identified target area, followed by drilltesting of priority targets.

The Bluebell prospect comprises a significant number of shallow prospecting pits along a generally north-south structural corridor. During Q3 2011 the Company collected six samples of quartz vein material from old mine dumps around several of the mine shafts. A second round of sampling in September 2011 has extended the area sampled to about 100m x 50m (fig 2), with the collection of a further nine samples of quartz vein material from the old workings. All samples have reported strongly anomalous gold values:

Table 1. Gold results from samples collected from old workings at Bluebell prospect.

DATE	SAMPLE ID	**SAMPLE MEDIUM **	Au g/t	MGA **EAST **	MGA NORTH
July 2011	E24671	Vein quartz and sheared host	15.300	347651	6771929
July 2011	E24672	Vein quartz and sheared host	2.080	347663	6771946
July 2011	E24673	Vein quartz and sheared host	4.240	347645	6771944
July 2011	E24674	Vein quartz and sheared host	10.470	347619	6771937
July 2011	E24675	Vein quartz and sheared host	9.850	347601	6771929
July 2011	E24676	Vein quartz and sheared host	3.825	347568	6771845
Sept 2011	MB05709	Vein quartz and sheared host	9.860	347672	6771956
Sept 2011	MB05710	Vein quartz and sheared host	0.800	347699	6771966
Sept 2011	MB05711	Vein quartz and sheared host	3.410	347612	6771912
Sept 2011	MB05712	Vein quartz and sheared host	1.135	347645	6771900
Sept 2011	MB05713	Vein quartz and sheared host	7.580	347616	6771900
Sept 2011	MB05714	Vein quartz and sheared host	15.290	347599	6771872
Sept 2011	MB05715	Vein quartz and sheared host	2.450	347588	6771899
Sept 2011	MB05716	Vein quartz and sheared host	14.800	347564	6771893
Sept2011	MB05717	Veinquartzand shearedhost	1.235	347595	6771862

ABN 87 095 092 158

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E40/295 is expected to be granted in the next Quarter and the Company is planning a program of geochemical drilling over the extensive gold workings at Bluebell.

Kookynie P40/1282

Tenement P40/1282 was applied for by Midas in August 2011 after it was forfeited by the previous holder. It lies 1.6km east of Midas’ granted tenement E40/294, and 5km west of the historic Kookynie mining centre. The license occurs within a very active historical mining area and it contains two north-northeast trending lines of gold workings (fig 3). Field investigation in September included the collection of fifteen samples of quartz vein material from the old mine workings. Strongly anomalous gold values were returned from both trends. The anomalous workings on the southern part of the eastern trend have been percussion drill-tested by previous explorers. Samples taken from drill spoil returned gold values of 1.37 and 0.79g/t. No drillholes were observed elsewhere in the tenement, with the western trend in particular apparently untested by modern exploration methods.

DATE	SAMPLE ID	**SAMPLE MEDIUM **	Au g/t	**MGA EAST **	MGA NORTH
Sept 2011	E24693	Vein quartz	0.022	349141	6752403
Sept 2011	E24694	Sheared host	0.002	349141	6752403
Sept 2011	E24695	Vein quartz	0.086	349136	6752405
Sept 2011	E24697	Vein quartz	4.130	349088	6752171
Sept 2011	E24698	Vein quartz	0.022	348735	6752275
Sept 2011	E24699	Vein quartz	0.880	348753	6752253
Sept 2011	E24700	Rock Chip	0.005	348818	6752444
Sept 2011	MB05701	Vein quartz	0.155	348649	6751976
Sept 2011	MB05702	Vein quartz	0.615	348622	6751932
Sept 2011	MB05703	Vein quartz	1.350	348569	6751836
Sept 2011	MB05704	Vein quartz and sheared host	1.180	348839	6751924
Sept 2011	MB05705	Vein quartz	12.600	348818	6751865
Sept 2011	MB05706	Vein quartz	1.600	348799	6751802
Sept 2011	MB05707	Drill Spoil	1.370	348809	6751817
Sept 2011	MB05708	DrillSpoil	0.790	348859	6751869

Comment

Managing Director Geoff Balfe commented that the sample results from both areas are very encouraging, and that they augur well for the programs ahead. “The extensive presence of highly mineralised quartz in widespread workings at Bluebell was possibly indicative of either multiple veins, as in a stockwork, or a very shallowly dipping vein that was present over a large area. In either case there is potential here for an open pit target”, Mr Balfe said. “The new tenement at Kookynie was also considered to be highly prospective, with many gold workings.

ABN 87 095 092 158

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For and on behalf of the Board of Midas Resources Limited,

G D Balfe

Managing Director/CEO

The information in this report is based on information compiled by Mr John Downing, who is a Member of the Australasian Institute of Geoscientists and a full time employee of the Company. Mr Downing has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves'. Mr Downing consents to the inclusion in the report of the matters based on the information in the form and context in which it appears.

Media and Investor queries: Warrick Hazeldine/Ryan McKinlay Purple Communications +61 8 6314 6300

Investor Information :

Principal Office Level One 282 Rokeby Road Subiaco WA6008

Capital Structure

Ordinary Shares (MDS): 325,077,680 Listed Options 3c (MDSOC): 48.0 million Unlisted Options: 4.3 million

Web: www.midasresources.com.au Tel: 61 8 9388 2211 Fax: 61 8 9388 2600

ABN 87 095 092 158

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Figure 1. Midas tenements south of Leonora.

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Figure 2 Bluebell prospect showing historic workings, located drillholes and Gold Sampling Results

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Figure 3. P40/1282 showing historic workings, located drillholes and Gold Sampling Results

ABN 87 095 092 158