HAMMER METALS LIMITED — Capital/Financing Update 2011

Feb 17, 2011

18 February, 2011

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ASX RELEASE

EXPLORATION AND DEVELOPMENT UPDATE

EXPANDED CONCEPT STUDY TO ADVANCE LAKE CAREY GOLD PROJECT

HIGHLIGHTS

• Concept study initiated for Lake Carey gold project, to include assessment of underground mining potential at Fortitude project.

• Midas investigating potential for mining shallow oxidized gold deposits at Lake Carey, followed by decline development to access the deeper primary mineralisation at Fortitude.

• Study based on ore treatment through a Midas-owned modular gold plant.

• Identification of new exploration targets within the Fortitude mineralized system to be a high priority if mining is supported by Concept Study.

Resources developer, Midas Resources Limited (“Midas” or “the Company”) (ASX:MDS), is pleased to provide a development update at its 100%-owned Lake Carey gold project, in WA’s north eastern goldfields.

The Company has appointed Perth based project management group Management Consultants Mining (MCM) to undertake a Concept Study into mining of the Lake Carey gold deposits, including an underground development.

It will include the open pit mining of shallow oxidised gold mineralisation with development of a decline at Fortitude to access the deeper primary gold lodes at Fortitude. Parameters of the study will include an initial proposed throughput of . 300,000tpa

The study will be carried out at a Scoping Study level of detail, and Midas is expecting to have it completed in the first half of 2011. A positive result would justify taking the project to a more detailed feasibility study.

The conceptual study will be based on treatment of ore through a modular plant, capable of treating both soft oxidised ores and the harder deeper primary ores at Fortitude.

Ownership of a treatment plant is considered a key part of the Company’s development strategy as it creates synergies for the acquisition of additional resources in the area. Alternatively, the modular plant design will allow it to be relocated to another resource area if justified.

ABN 87 095 092 158

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The current Mineral Resource at Fortitude as estimated by the method of selective uniform conditioning and released to ASX on May 6, 2010 is:

	Runge May 2010	Runge May 2010	Runge May 2010
	Selective (UC) Resource Estimate at a 1g/t Au cut-off
	Tonnes (t)	Grade (g/t)	Ounces (oz)
Indicated	2,113,000	2.3	157,000
Inferred	2,755,000	2.2	198,300
Total	4,868,000	2.3	356,000

Note: rounding discrepancies may occur

The project is located 35 km by existing road from Anglogold Ashanti's Sunrise Dam mining operation, where past production and current resources total approximately 8 million contained ounces, and is well serviced by existing roads.

The Company will release more information following completion of the Concept Study.

For more information, please contact:

Geoff Balfe Managing Director +61 8 9388 2211

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

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

G D Balfe Managing Director/CEO

ABN 87 095 092 158

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Any reference to “ore” is as a generic term and implies no economic significance as defined in the Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves, 2004 edition (the JORC Code).

The information in this report is based on information compiled by Mr Geoff Balfe, who is a Member of the Australasian Institute of Mining and Metallurgy and a full time employee of the Company. Mr Balfe has sufficient experience which is relevant to the style of mineralisation and type of deposits 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 Balfe 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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Figure 1. Lake Carey Tenements and Prospects

Investor Information

Principal Office Level One 282 Rokeby Road Subiaco WA6008

Capital Structure

Ordinary Shares (MDS): 328.9 million Listed Options 10c (MDSOB): 50.2 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

ABN 87 095 092 158