HAMMER METALS LIMITED — Capital/Financing Update 2011

Sep 11, 2011

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9 September 2011

Dear Optionholder,

On 9 September 2011, Midas Resources Limited ( Company ) lodged a prospectus ( Prospectus ) with ASIC for a renounceable pro rata rights issue ( Rights Issue ) of eight (8) fully paid ordinary shares ( New Shares ) for every fifteen (15) fully paid ordinary shares held as at 5:00pm (WST) on 23 September 2011 to shareholders with a registered address in Australia or New Zealand ( Eligible Shareholders ).

Pursuant to the Rights Issue, the Company will issue up to approximately 173,306,075 New Shares at an issue price of $0.018 each to raise a maximum of approximately $3.12 million (before expenses of the issue). The Rights Issue is being fully underwritten by Patersons Securities Limited.

The Prospectus for the Rights Issue is available on the ASX Limited website www.asx.com.au and also on the Company’s website www.midasresources.com.au. The Record Date for the purposes of determining security holders entitled to participate in the Rights Issue is 23 September 2011 at 5.00pm (WST). The Prospectus for the Rights Issue will be despatched to all Eligible Shareholders soon after the Record Date.

The purpose of this letter is to give you notice that if you wish to participate in the Rights Issue, you must exercise your options before the Record Date.

To ensure that you are allotted shares before the Record Date, your option exercise notice together with the correct monies must be received by the Company’s share registry, Advanced Share Registry Services, no later than 19 September 2011. Any notice of exercise of option received after this date cannot be assured of allotment before the Record Date.

An option exercise notice is enclosed with this notice, contacts for Advanced Share Registry Services are (08) 9389 8033, or by facsimile on (08) 9389 7871 should you have any queries.

If you do not wish to participate in the Rights Issue (in respect of your options) you do not need to take any action. Before deciding whether to exercise all or any of your options, you should consider the terms of the Rights Issue carefully and if in any doubt, consult with your professional advisor.

Yours faithfully

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Geoff Balfe Managing Director

Midas Resources Limited ABN 87 095 092 158 Level 1, 282 Rokeby Road, Subiaco WA 6904 t - +61 8 9388 2211 f - +61 8 9388 2600

e – office@midasresources.com.au w – www.midasresources.com.au