HAMMER METALS LIMITED — Capital/Financing Update 2011

May 9, 2011

10[th] May 2011

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ASX RELEASE

MAIDEN RESOURCE ESTIMATE FOR THE GALLANT GOLD DEPOSIT AT LAKE CAREY

HIGHLIGHTS

• New Inferred Mineral Resource estimated for the Gallant deposit of 280,000t at a grade of 2.2g/t for 20,100oz of contained gold at a 1.0g/t cut-off grade.

• Gallant is potentially amenable to open pit development in conjunction with the nearby Fortitude deposit.

• The deposit is hosted by sulphidic interflow chemical sediments along a sheared mafic-intermediate volcanic lithological contact within the Bindah Shear Zone.

Midas Resources Limited (ASX:MDS) (“Midas” or “the Company”) is pleased to report that the Company has received the results of a new Mineral Resource estimate for the Gallant gold deposit. Gallant is situated on the Bindah Shear 3km west of the Fortitude deposit. Both deposits fall within Midas’ Lake Carey Project situated 80km south of Laverton in the North Eastern Goldfields region of Western Australia.

The resource work was carried out by Runge Limited, a major mining consultancy group, and it is reported in accordance with recommendations in the Australasian Code for Reporting of Mineral Resources and Ore Reserves (2004) by the Joint Ore Reserves Committee (JORC). This estimate meets the criteria for an Inferred Mineral Resource.

The Mineral Resource was estimated using Inverse Distance Squared (ID[2] ) grade interpolation, constrained by resource outlines based on geologically-directed mineralisation envelopes prepared using a nominal 0.5g/t Au cut-off grade and a minimum downhole intercept length of 2m.

The Mineral Resource, reported at a 1 g/t Au cut-off grade, is reported in Table 1, below:

Table 1: Gallant May 2011 Inferred Mineral Resource Estimate (1.0g/t Cut-off)

Zone Type	Tonnes Au Au t g/t Ounces
Oxide Transitional Fresh	119,000 2.3 8,900 82,000 2.4 6,200 79,000 2.0 5,100
**Total **	280,000 2.2 20,100

The Gallant deposit is hosted by sulphidic interflow chemical sediments along a sheared mafic-intermediate volcanic lithological contact within the Bindah Shear Zone. It is covered by up to 10m of lacustrine clays and aeolian sands that surround Lake Carey. In the primary zone gold, with minor copper mineralization, occurs within semi-massive

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sulphides and it is associated with a prominent magnetite horizon. Figure 1 below shows the location of the Gallant prospect in relation to the nearby Fortitude deposit and other prospects within Midas’ Lake Carey project. Figure 2 shows the Gallant Mineral Resource area.

Figure 1 Lake Carey Project

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Figure 2 Gallant Resource and Bravado Prospect

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The drillhole database contained records for 63 reverse circulation holes, 7 diamond holes and 106 aircore holes for 10,177m of drilling. Intercepts from 8 reverse circulation holes, 6 diamond holes and 22 aircore holes were used to construct resource grade envelopes. Drilling in the resource extends to a vertical depth of approximately 240m and the mineralisation was modelled from surface to a depth of approximately 180m below surface. Drill holes occur at 25m spacing on 50 to 100m spaced northeast-southwest orientated drill sections. The Gallant resource extends over a strike length of 300m (from GDA 6,756,800mN to GDA 6,757,100mN).

PLANS

Managing Director Geoff Balfe said that rises in the gold price over the last 12 months have lifted the status of Gallant from an area of “interesting gold mineralisation” to one of a potentially low-cost open-pittable gold deposit that could be developed jointly with the mining of the larger nearby Fortitude gold deposit.

Further work will be carried out to determine the extent of additional drilling and testwork that is necessary to raise the classification of the Mineral Resource to Measured and Indicated status under the JORC Code, which is a requirement for Reserve estimation and Feasibility studies.

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

G D Balfe Managing Director/CEO

The information within this report as it relates to Mineral Resources was managed by Mr. Robert Williams, a member of the Australasian Institute of Mining and Metallurgy. Mr. Williams is employed by Runge Limited and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he was undertaking to qualify as Competent Persons as defined in the 2004 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr. Williams consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

The information in this report as it relates to exploration results and geology was 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.

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

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

ABN 87 095 092 158