HAMMER METALS LIMITED — Capital/Financing Update 2011

Jul 24, 2011

25 July 2011

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ASX RELEASE

DRILLING TO COMMENCE AT REACH

HIGHLIGHTS

• RC Drilling to commence at the Reach Prospect in the Company’s Leonora Gold Project area.

• All necessary approvals have been obtained.

• Rock chip sampling by Midas previously identified strong gold mineralisation in a quartz vein. A six hole, 600m RC program is planned as an initial test of the vein system.

Resources developer, Midas Resources Limited (“Midas” or “the Company”) (ASX: MDS), is pleased to an nounce the commencement of RC drilling at the Reach Prospect at the Company’s Leonora Gold Project in Western Australia.

The Leonora Project (fig 1) comprises mining lease M 37/1297 over gold mineralisation at the Sunset Well group of tenements and Exploration Licences E 40/294, E 40/295 and E 37/1104 (M37/1297 and E40/295 and E37/1104 are applications).

Reach Prospect

Midas has conducted a review of historical exploration over the recently granted tenement, E40/294, which revealed several gold anomalies that have not been tested by drilling (fig 2).

One of these anomalous targets is the Reach prospect, where Midas previously reported highly anomalous gold values from rock-chip samples from old mine workings (Table A, below).

Table A: Rock Chip Results From Reach

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The historic workings are located along a 1.5 metre wide north-dipping quartz vein that subcrops intermittently over a strike length of 100m. A six-hole, 600m RC drilling program is scheduled to commence next month, to test the quartz vein down-dip of the old workings along the exposed, known strike-extent. Additional holes can be drilled to target extensions of the vein along-strike if extensions of the vein are indicated.

ABN 87 095 092 158

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All necessary approvals have been obtained including a successful Heritage survey by Native Title (NT) stakeholders and approval for ground disturbance from the Department of Mines and Petroleum.

Wet weather has affected some tracks in the area and continued wet weather could cause minor delays in moving the rig on site.

Other Targets

The Company has identified an area of gold anomalism in historic auger and RAB holes in the George Bore area. The previous tenement holders did not drill test this anomaly. Due to the low density of the previous sampling, Midas plans to verify the gold anomaly with more detailed auger or RAB drilling before deciding on an appropriate program of drill testing.

In addition to the targets discussed above, the Company is encouraged by the evidence of significant gold anomalism within the tenements and the very favourable geology and structure of the area between Kookynie and Leonora. A number of additional gold anomalies have been identified by the review of historic exploration and these anomalies are actively being followed up with the objective of establishing a pipeline of drill targets.

With respect to the granting of E40/295 and E37/1104, there are no third party objections to the grant of these tenements. The Company has signed Heritage agreements for both tenements enabling the DMP to process the applications.

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

ABN 87 095 092 158

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Investor Information

Principal Office Level One 282 Rokeby Road Subiaco WA6008

Capital Structure Ordinary Shares (MDS): 328.9 million Listed Options 3c (MDSOC): 48.1 million Unlisted Options: 4.3 million

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

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Figure 1 – Leonora Project Tenements

ABN 87 095 092 158

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Figure 2 – Gold Targets in E 40/294

ABN 87 095 092 158