SANDFIRE RESOURCES LIMITED — Annual Report 2019

Nov 26, 2019

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Strong Foundations, New Opportunities Beginning our transformation to a global, diversified and sustainable metals company 2019 Annual General Meeting l Wednesday, 27 November 2019

FULL YEAR FINANCIAL AND PRODUCTION RESULTS SUMMARY

FY2019 – Another exceptional year

• Record production, record low costs

• Successful ramp-up of the Monty Copper-Gold Mine

• Strong profit and dividend

• Black Butte EIS and Feasibility Study progressed

• Strong exploration commitment

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COPPER AND GOLD PRODUCTION
C1 CASH OPERATING COST
69,394
TONNES OF CONTAINED COPPER
US$0.83
PER POUND
44,455
OUNCES OF CONTAINED GOLD
NET PROFIT AFTER TAX EARNINGS PER SHARE
(attributable to equity holders of parent)
$106.5M 65.23c
SALES REVENUE CASH FLOW FROM OPERATING
ACTIVITIES
$592.2M $210.4M
$267.4 million prior to payments for exploration and
evaluation expenses
CASH & DEPOSITS DECLARED DIVIDENDS
$247.4M 23c FY19
at 30 June 2019
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Seven years of consistent delivery…

CUMULATIVE PRODUCTION TO END OF FY2019 over 470,000 TONNES OF CONTAINED COPPER 275,000 OUNCES OF CONTAINED GOLD

$3.6 billion IN CUMULATIVE SALES REVENUE

$1.7 billion IN CUMULATIVE OPERATING CASH-FLOW (prior to exploration and evaluation expenditure)

$163 million ($1.02 PER SHARE) IN CUMULATIVE DIVIDENDS TO SHAREHOLDERS

$566 million

IN CUMULATIVE NET PROFIT AFTER TAX (attributable to members)

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Building on the foundations of a world-class project at DeGrussa, Sandfire is aiming to apply the same disciplined approach, consistent delivery and focus to its next chapter of growth…

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• 12% decrease in total recordable injury frequency rate (TRIFR) to 6.2 with a continued focus on reaching our target of 4.5

• Increased female representation across the business to 23% (above industry average)

• Strong emphasis on building sustainable community partnerships and sponsorships programs

• Rolled out Mental Health Wellness training across our business, including employees and contractors

• Values workshops delivered to employees to further embed Sandfire values within our business

• Recognition for DeGrussa Solar Project which received the coveted “Golden Gecko” award for Environmental Excellence

“We continued to focus on listening to our stakeholders and driving positive outcomes on the issues that matter most to them…”

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Exploration Portfolio

• Development Pipeline ► Tshukudu Operations, Botswana - T3 Copper-Silver Project - T1, A4 Expansion Projects

Operating Mines

• Greater Doolgunna Project, WA

• DeGrussa Operations, WA - DeGrussa Copper-Gold Mine - Monty Copper-Gold Mine

• East Coast Portfolio (NSW, Qld)

• ► Kalahari Copper Belt, Botswana – 11,700km[2]

• Black Butte Copper Project, USA (85%)

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Doolgunna Operations, WA

Exploration

• DeGrussa Copper-Gold Mine

• Greater Doolgunna Project, WA

• East Coast Portfolio (NSW, Qld)

• Monty Copper-Gold Mine

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• 1.6Mtpa Concentrator fed by two underground mines – DeGrussa and Monty

• 7-year track record of consistent delivery

• High-grade Monty ore successfully introduced this year

• FY2020 guidance: 1.6Mt milled at average feed grade of 4.7% Cu

• Concentrator performing well with expected recoveries of 91% for Cu and 45% for Au in FY2020

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PRODUCTION OVERVIEW – Key Figures

	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020 (guidance)
Copper (Cu)	64,017t	67,690t	67,154t	68,202t	67,088t	64,918t	69,394t	70-72kt
Production
Gold (Au)	42,679oz	33,893oz	37,386oz	37,612oz	38,623oz	39,273oz	44,455oz	38-40koz
C1 Cash - Operating Costs (US$/lb)	1.24	1.18	1.09	0.95	0.93	0.93	0.83	0.90 – 0.95

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Debt-free with a rising production profile and harvesting cash

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Mine Office
Waste Dump, Crushing &
Screening Pad
ROM Pad
Discharge Pond
PAF Runoff Pond
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Laydown Yard
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Haul Road

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Boxcut
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Sandfire has more than tripled its ground position in the past two years

• ►Strategic 6,940km[2] footprint across the Bryah Basin – both 100% and through multiple joint ventures

• ►80km strike length of prospective VMS lithologies – strategic focus on southern limb of Bryah Basin

• ►Three centres of sulphide mineralisation discovered to date – DeGrussa, Monty, Morck Well

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Original Tenements: 400km²
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• ►Extensive and multi-pronged exploration programs continuing

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• Production guidance 70-72kt Cu, 38-40koz Au at C1 US$0.90-0.95/lb

• Ongoing plant and reagent optimisation to accommodate treatment of crown pillar ore (~10% of ore feed)

• Continued evaluation and feasibility work on mine life extension projects:

• DeGrussa Oxide Copper Project

• Tailings Retreatment Project

• Regional projects

• Continued expansive exploration commitment with up to ~$25m exploration budget for FY2020

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Tshukudu Operations, Botswana

• T3 Copper-Silver Project

• T1, A4 Expansion Projects

• 11,700km[2] exploration portfolio

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Sandfire EMEA │ Tshukudu Operations, Botswana
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• 100%-owned T3 Copper-Silver Deposit and extensive exploration land-

• holding in under-explored Kalahari Copper Belt, Botswana

• Safe, democratic, politically stable and mining-friendly jurisdiction

• Supportive Government (rated #1 in Africa and #32 globally by Fraser Institute Annual Survey of Mining Companies)

• Skilled workforce, good infrastructure and sound mining legislation and environmental controls

• Strong local support for T3, with the project able to leverage off extensive local infrastructure and support

• T3 the first of what is targeted to be a strong pipeline of resource development projects

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Sandfire EMEA │T3 – Advanced Development Asset
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T3 Reserves & Resources
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Ore Reserves1	Tonnes (Mt)	Copper	Copper	Silver	Silver
		(%)	Kt	(g/t)	Moz
Proven	-	-	-	-	-
Probable	34.4	1.0	342.7	13.2	14.6
Total 34.4		1.0 342.7 13.2 14.6
Mineral Resource2	Tonnes (Mt)	Copper		Silver
		(%)	Kt	(g/t)	Moz
Indicated	36.6	1.1	417.0	16.0	18.6
Inferred	23.5	0.7	173.3	11.0	8.3
Total3	60.2	1.0	590.4	14.0	26.9

T3 Resource Classification

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Pit Shell per Feasibility Study
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Indicated
Inferred
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T3 Site Layout [4]
Process
Plant
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T3 Process Plant [5]
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• 1 MOD ASX Announcement, dated 25 March 2019, Page 2

• 2 MOD ASX Announcement, dated 16 July 2018 (Inclusive of ore reserves, 0.4% Cu cut-off)

• 3 Numbers may not add due to rounding. 4 MOD T3 Feasibility Study ASX Announcement, dated 28 March 2019, Page 28.

• 5 MOD T3 Feasibility Study ASX Announcement, dated 28 March 2019, Page 23.

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Sandfire EMEA │T3 – Advanced Development Asset
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Open Pit Copper Development Project With >11 Year Life

T3 March 2019 Feasibility Study

Ore Tonnes Mined	34.4Mt
Average Grade(Cu)	1.0%
Copper in Concentrate	318.4kt
Concentrate Grade(Cu)	30.4%
Recovery (Cu)	92.9%
StripRatio	5.7:1
Production(LOM Average)	28ktpa Cu2
C1 Costs / AISC(LOM Average)	US$1.35/lb3/ US$1.56/lb3
Plant Capacity	3.0 Mtpa
Mine Life(Processing)	11.5years
Development Capital	US$182m

• 6 stage single open pit mine plan

• • Designed to partly defer CAPEX

Mine Plan

• Conventional load & haul / drill & blast

• • Local mining contractor to be used

Mining Method

• Chalcopyrite, bornite and chalcocite

• Metallurgy • Sulphide, with shallow oxidation

Single Open Pit Mine Plan (6 Stage)

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• 3.0Mtpa Crusher, SAG and Ball Mill

• • Conventional Flotation Circuit • High quality concentrate (LOM average 30.4% Cu)

Processing

• Grid power scheduled for Q1 2020

• •

• Infrastructure Close proximity to Ghanzi highway • TSF HDPE lined[4]

• Landowner/access agreements in place

• Permitting • Mining Licence expected Q1 2020

1 MOD T3 Feasibility Study ASX Announcement, dated 28 March 2019.

• 4 Tailings Storage Facility with High-Density Polyethylene geomembrane lining.

2 Copper in concentrate.

• 3 Per pound of copper produced, net of silver by-product credits.

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Growth │ Tshukudu – Belt-scale Exploration Opportunity
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• Highly prospective, under-explored region containing sedimentary-style copper deposits (similar to Zambia/DRC)

• Outstanding near-mine growth potential:

• T3 Expansion Project (~950km[2] area surrounding T3) – intercepts of up to 52m @ 1.5% Cu (A4)

• T1 Resource (2.7Mt at 2% Cu)

• Exceptional pipeline of regional exploration projects:

• T20 Exploration Project (~3,350km[2] area west of T3)

• Intercepts include 2m @ 6.1% Cu at T4

• Regional copper endowment highlighted by neighbouring Khoemacau Project, east of T3 (Cupric Canyon):

• Total defined resources of 502Mt with 185Mt of high-grade copper at +2% Cu and +27g/t Ag[1]

• Development of modern underground copper-silver mine underway at Zone 5 (92Mt Measured and Indicated Resource) – targeting +60ktpa of Cu and 2Mozpa of Ag production[2]

• 1 Total Resource: 502Mt at 1% Cu and 17g/t Ag, including High Grade NE Resources of 185Mt @ 2% Cu and 27g/t Ag 2 Zone 5 Starter Project Resource: 92Mt @ 2.1% Cu and 22g/t Ag

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Significant Landholding (~11,700km [2] )
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Tshukudu represents a belt-scale exploration opportunity which covers almost three-quarters of the Kalahari Copper Belt. The significant endowment of the region is highlighted by the 502Mt of defined resources at the neighbouring Khoemacau Project.

Source: Khoemacau Copper Mining, Botswana Resource Sector Conference Presentation, 10 June 2019

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Sandfire EMEA │Tshukudu Operations – Outlook for FY2020
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• Optimisation of T3 Feasibility Study underway, including mine scheduling, additional drilling, plant size optimisation

• ► ESIA approval and grant of Mining Licence expected Q1 2020

• Updated Feasibility Study and Ore Reserve expected Q2 2020

• Project financing discussions underway

• Decision to Mine targeted by end of Q2 2020

• Expanded exploration program targeting:

• High-grade discoveries to displace T3 ore;

• Mine life extensions;

• Major new discoveries to unlock the potential of broader regional land-holding

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Sandfire Resources America Inc (85%)

• Black Butte Copper Project, Montana, USA

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Sandfire Americas │Black Butte Copper Project, USA
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• Advanced, high-quality underground copper project in Tier-1 location

• 85% stake in copper development subsidiary Sandfire Resources America Inc. (TSX-V: SFR) ~A$60M invested to date

• One of the top-10 undeveloped copper projects worldwide by grade

• Updated NI 43-101 Mineral Resource estimate completed for the Johnny Lee :

• Deposit, following 48 additional diamond drill-holes[2]

• ►Measured and Indicated Resource: 10.9Mt at 2.9% Cu for 311,000t of contained copper

• ►Inferred Resource of 2.7Mt at 3.0% Cu for 80,000t of contained copper

• Mineral Resource underpins ongoing Feasibility Study and future development decision

• Permitting well advanced with Mine Operating Permit (MOP) for the Johnny Lee deposit found to be “Complete and Compliant” by Montana Department of Environmental Quality (DEQ)

• Draft Environmental Impact Statement (EIS) outlining final permitting steps released by DEQ

1 Calculation of acquisition cost includes the Johnny Lee and Lowry Resources.

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2 Refer Sandfire ASX Announcement, dated 30 October 2019. Excludes the Lowry Resource.

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Sandfire Americas │Black Butte – Outlook for FY2020
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• Feasibility Study advanced on highly engineered, state-of-the-art underground mine

• Very small surface footprint – will be 100% reclaimed

• Mine design, layout and geology ensures that water quality and quantity will be protected

• Stringent monitoring and approval process

• Final EIS and Record of Decision pending

• Development decision post EIS/ROD and completion of Feasibility Study

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Modern mine design restores the site to original land uses and water flows, fully protecting water and landscapes long term.

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Strong foundations with +7-year track record of delivery Record production in FY19, further growth in FY20 Strong balance sheet Aggregating quality copper development assets MOD acquisition adds a third global hub Committed to organic growth via exploration Strongly positioned with capacity to grow

Sandfire is a high-margin, low-cost Australian copper-gold producer which has embarked on its next chapter of growth

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Currency in AUD unless otherwise stated.

This presentation has been prepared by Sandfire Resources NL. This document contains background information about Sandfire Resources NL current at the date of this presentation. The presentation is in summary form and does not purport be all inclusive or complete. Recipients should conduct their own investigations and perform their own analysis in order to satisfy themselves as to the accuracy and completeness of the information, statements and opinions contained in this presentation.

This presentation is for information purposes only. Neither this presentation nor the information contained in it constitutes an offer, invitation, solicitation or recommendation in relation to the purchase or sale of shares in any jurisdiction.

This presentation may not be distributed in any jurisdiction except in accordance with the legal requirements applicable in such jurisdiction. Recipients should inform themselves of the restrictions that apply in their own jurisdiction. A failure to do so may result in a violation of securities laws in such jurisdiction.

This presentation does not constitute investment advice and has been prepared without taking into account the recipient's investment objectives, financial circumstances or particular needs and the opinions and recommendations in this presentation are not intended to represent recommendations of particular investments to particular persons. Recipients should seek professional advice when deciding if an investment is appropriate. All securities transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments.

To the fullest extent permitted by law, Sandfire Resources NL, its officers, employees, agents and advisers do not make any representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of any information, statements, opinions, estimates, forecasts or other representations contained in this presentation. No responsibility for any errors or omissions from this presentation arising out of negligence or otherwise is accepted.

Forward-Looking Statements

This presentation may include forward-looking statements. Forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions which are outside the control of Sandfire Resources NL. Actual values, results or events may be materially different to those expressed or implied in this presentation. Given these uncertainties, recipients are cautioned not to place reliance on forward looking statements. Any forward looking statements in this presentation speak only at the date of issue of this presentation. Subject to any continuing obligations under applicable law and the ASX Listing Rules, Sandfire Resources NL does not undertake any obligation to update or revise any information or any of the forward looking statements in this presentation or any changes in events, conditions or circumstances on which any such forward looking statement is based.

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Strong Foundations, New Opportunities Beginning our transformation to become a global, diversified and sustainable metals company 2019 Annual General Meeting l Wednesday, 27 November 2019