HAMMER METALS LIMITED — Capital/Financing Update 2012

Apr 16, 2012

==> picture [595 x 91] intentionally omitted <==

ASX Announcement ASX Code: MDS ABN 87 095 092 158

Fortitude Gold Project - Development Update

17 April, 2012

Company Facts

Diversified exploration and development company Midas Resources (ASX: MDS ) is a gold-copper focussed company with significant gold projects at Lake Carey, south of Laverton, and in the LeonoraKookynie area. The Company also has a - significant tenement position in the multi metal Paterson Province where it is exploring for copper-gold deposits.

Highlights:

• Metallurgical testwork confirms excellent heap leach gold recoveries ranging from 86% to 96% for the oxide and transitional zones

• Company commencing scoping level mining study based on heap leach treatment of oxide and transitional zones

• Study into stand-alone 400,000tpa CIL plant running in parallel to heap leach study

Key Projects:

• Lake Carey (100%)

• Leonora Gold Project (100%)

• Paterson Province (100%)  West Pilbara Iron Ore (100%)

Resources developer, Midas Resources Limited (“Midas” or “the Company”) (ASX:MDS), is pleased to provide an update on the progress of metallurgical testwork at its 100% owned Lake Carey gold project, situated in the Laverton Tectonic Zone in Western Australia's North Eastern Goldfields. The project includes the Fortitude gold deposit and adjacent satellite deposits.

Corporate Structure

Shares on issue	493.4m
ns Listed Optio	48.0m
s Performance Option	4.05m
eek high 52 w	A$0.07
52 week low	A$0.01
at bank Cash	A$1.5m

HEAP LEACH STUDY

The Company is carrying out an evaluation of the amenability of Fortitude deposit to treatment of ore by heap leach. The study involves a program of metallurgical testwork to establish leach recovery data for input to a scoping level mining study to be carried out by mining software and mining consultants company, Runge Limited.

Company Directors

John Hopkins Chairman

Geoff Balfe Managing Director

Terry Streeter Non-Executive Director

Company Secretary Mark Pitts

Kappes, Cassiday and Associates is providing the technical advice on heap leach metallurgy.

The current testwork is based on Intermittent Bottle Roll Tests (IBRT) carried out on representative composites of Fortitude RC drill samples. The testwork was carried out using Fortitude deposit site water with comparative tests done using Perth tap water. Gold recoveries are excellent for the oxide and transitional zones, ranging between 86% and 96%. Reagent consumption (lime) is considered moderately high for tests using Fortitude deposit site water and Midas has recently applied for and had granted two additional exploration licences (E39/1646 & E39/1647) covering areas with potential for suitable process water.

ABN 87 095 092 158

==> picture [592 x 92] intentionally omitted <==

The Company has commenced the next stage of the evaluation which involves pit optimisation, pit design, production scheduling and financial analysis. These studies are initially being carried out at a scoping level of detail but can be upgraded to pre-feasibility level as justified.

Midas CEO Geoff Balfe said that the results of the metallurgical testwork into heap leach amenability were encouraging and would be input to the scoping study. Based on the results of the scoping study decisions could be made to progress to a definitive feasibility study involving column leach testwork. The Company will also continue with plans to evaluate a stand-alone 400,000tpa CIL plant so that an informed decision concerning the direction and scope of further feasibility work could be made. Como Engineering has provided CAPEX and OPEX estimates for a CIL plant to facilitate this study.

MINERAL RESOURCE ESTIMATE

In May 2010 Runge Limited produced a JORC-compliant Ordinary Kriged (OK) Mineral Resource estimate for Midas’ Fortitude gold deposit which was released to ASX on May 5, 2010:

Fortitude OK Mineral Resource Estimate (1.0g/t Au cut-off):

Fortitude OK Mineral Resource Estimate (1.0g/t Au cut-off):	Fortitude OK Mineral Resource Estimate (1.0g/t Au cut-off):	Fortitude OK Mineral Resource Estimate (1.0g/t Au cut-off):	Fortitude OK Mineral Resource Estimate (1.0g/t Au cut-off):
titude O For K	ra s Es (1 /t -o Mine l Re ource timate .0g Au cut ff):
Zone	Indi cated	re Infer d	Total
	Tonnes g/t Ounces Au Au	Tonnes g/t Ounces Au Au	Tonnes Au g/t Au Ounces
Oxide Transitional Fresh	572,800 2.1 38,700 150,900 1.8 8,700 2,034,700 1.9 124,900	221,000 1.9 13,500 148,200 1.9 9,100 3,161,200 1.9 190,900	794,000 2.0 51,400 299,000 1.9 18,000 5,196,000 1.9 315,800
Total	2,758,000 1.9 172,000	3,530,000 1.9 213,300	6,289,000 1.9 385,300

The estimate of Mineral Resources complies with recommendations in the Australasian Code for Reporting of Mineral Resources and Ore Reserves (2004) by the Joint Ore Reserves Committee (JORC).

Runge Limited will carry out a pit optimisation for the heap leach study based on mining of the Oxide and Transitional zones. Decisions to proceed to Pit Design and production scheduling will then be made depending on progressive results.

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

G D Balfe Managing Director/CEO

Note: 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).

2

==> picture [595 x 91] intentionally omitted <==

Competent Person’s Statement:

________________ The information in this report as it relates to estimation of the in-pit Mineral Resources 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 his information in the form and context in which it appears.

__________________

Media and Investor queries: Warrick Hazeldine/Karen Oswald Purple Communications +61 8 6314 6300

---

==> picture [489 x 345] intentionally omitted <==

Figure 1. Fortitude Project Showing recently granted Tenements E39/1646 and E39/1647

ABN 87 095 092 158