SANDFIRE RESOURCES LIMITED — Capital/Financing Update 2004

Apr 29, 2004

po nox 806West Perth 6872Western Australia

T +61 & 9321 5887F +61 & 9321 5884E admin@sandfire.com.suwww.sandfire.com.au

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30 April 2004

Australian Stock Exchange Limited Company Announcements Platform Exchange Centre 20 Bridge Street SYDNEY NSW 2000

The Company has today despatched the attached notice to all option holders advising them of their rights with regard to the non-renounceable rights issue announced by the directors on 17 March 2004.

Jean Mathie COMPANY SECRETARY po nox 606West Perth 6872Western Australia

7 +61 & 9321 5887F +61 & 9321 5884E admin@andfire.com.au sussess manifica rever ass

Optionholding As At 28 April 2004: ..................... Amount To Pay If All Options Exercised: 8. . . . . . . . . . . . . . . . . . .

29 April 2004

Dear Option Holder

NON-RENOUNCEABLE RIGHTS ISSUE

The directors of Sandfire Resources NL (Sandfire or the Company) announced to ASX on 17 March 2004, that the Company would make a non-renounceable rights issue of listed options at the price of $0.02 per option on the basis of one listed option for every two ordinary shares held. The listed options will be exercisable at 10 cents on or before 30 September 2005 to acquire a contributing share. A contributing share has $0.15 to be paid up which the Company will not call before 28 February 2007.

The terms and conditions of the options you currently hold do not entitle you, as an option holder, to participate in the abovementioned issue.

If you wish to participate in the issue by virtue of the Sandfire shares your options entitled you to acquire, you must exercise your options in time for the new shares to be allotted prior to the 14 May 2004 (Record Date). To ensure that your new Sandfire shares are allotted prior to the Record Date, your Notice of Exercise of Options together with a cheque for the necessary amount must be received by our share registry, Security Transfer Registrars Pty Ltd, no later than 13 May 2004. Any Notice of Exercise of Options received after this date cannot be assured of allotment prior to the Record Date. In order to assist, we have attached hereto the Notice of Exercise of Options. Details of your option holding as of today's date are as set out above.

This notice is important and requires immediate attention. If you are in doubt as to the action you should take in relation to this notice, you should consult your professional adviser for advice immediately.

If you have any further questions please do not hesitate to contact this office or our Registry on telephone (08) 9315 2333, facsimile (08) 9315 2233 or e-mail registrar@securitytransfer.com.au.

Yours faithfully

JEAN MATHIE COMPANY SECRETARY

SANDFIRE RESOURCES NL

ACN 77 085 806 284

TERMS AND CONDITIONS OF OPTIONS

EXPIRING 31 DECEMBER 2008 (25 cents)

Definitions: $\mathbf{a}$

• Exercise Price means the exercise price of each option, being 25 cents. $(1)$
• (ii) Expiry Date means 5.00pm (WST) on 31 December 2008.
• (iii) Exercise Date means the Expiry Date or, if applicable, the Underwritten Expiry Date.
• (iv) Exercise Notice means the form prescribed by the Company from time to time for the purpose of exercising options.
• $(v)$ Option Holder means the person or persons registered as the holder of one or more options from time to time.
• (vi) Option Underwriter means any person or persons (other than the Company) that is party to an Option Underwriting Agreement.
• (vii) Option Underwriting Agreement means all agreements made prior to the Expiry Date between the Company and an Option Underwriter whereby the Option Underwriter agrees to exercise the Underwritten Options prior to the Underwritten Exoiry Date.
• (viii)Share means a fully paid ordinary share in the capital of the Company.
• (ix) Underwritten Expiry Date means, if the Company has entered into an Option Underwriting Agreement, 5,00pm (WST) 14 days after the Expiry Date.
• (x) Underwritten Options means that number of Unexercised Options the subject of an Option Underwriting Agreement.
• (xi) Unexercised Option Holder means any person or persons registered as the holder of Unexercised Options.
• (xii) Unexercised Options means all options not exercised on or before the Expiry Date.
• $b)$ Each option carries the right to subscribe for one Share.
• Options may be exercised by delivering to the Company's registered office or the Company's share registry an Exercise $\mathbf{c}$ Notice at any time prior to the Exercise Date.
• d) The Exercise Notice must state the number of options to be exercised and be accompanied by the relevant holding statement(s) and a cheque (in Australian currency) made payable to the Company for an amount being the result of the Exercise Price multiplied by the number of options being exercised.
• If the Company has entered into an Option Underwriting Agreement, then at the Expiry Date all Unexercised Option $e)$ Holders immediately, unconditionally and irrevocably appoint the Company as the Option Holder's agent to transfer all Unexercised Options the subject of an Option Underwriting Agreement to the Option Underwriter and the Option Underwriter is entitled to exercise the options prior to the Underwritten Expiry Date.
• $\hat{\Pi}$ Following receipt of a properly executed Exercise Notice and application monies in respect of the exercise of any options by the Exercise Date, the Company will issue the resultant Shares and deliver notification of shareholdings.
• The Company will make application to have the Shares (issued pursuant to an exercise of options) listed for quotation by $g$ ) ASX within 7 days of the date of issue.
• $\mathbf{h}$ Shares issued pursuant to an exercise of options shall rank, from the date of issue, pari passu with then existing Shares in all respects.
• $\mathbf{i}$ Options carry no right to participate in pro rata issues of securities to shareholders unless the options are exercised before the record date for determining entitlements to the relevant pro rata issue.
• Each Option Holder will be notified by the Company of any proposed pro rata issue of securities to shareholders in j) accordance with ASX Listing Rules.
• $\bf k$ Subject to the Corporations Act 2001 and ASX Listing Rules, options do not confer the right to a change in exercise price.

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Ĭ) In the event of a reorganisation (including reconstruction, consolidation, subdivision, reduction, or return) of the capital of the Company, the terms of the options will be changed to the extent necessary to comply with the requirements of the ASX Listing Rules (in force at the time of the reorganisation).

NOTICE OF EXERCISE OF OPTIONS EXPIRING 31 DECEMBER 2008

The Directors Sandfire Resources NL 12 Walker Avenue WEST PERTH WA 6005 Share Registry Security Transfer Registrars Ptv Ltd PO Box 6405 EAST PERTH WA 6892

Holder Number:

$1/We$

Number in words		Number in figures
	Ordinary shares in the Company at a price of $0.25 each, and I/we enclose application money of $
	request that you allot me/as such shares, which Liwe agree to accept subject to the Company's Constitution.

Signature/s

This application, with money, in Australian Currency, should be lodged at the Company's Share Registry on or before the Expiry Date. NOTE: Cheque should be made payable to SANDFIRE RESOURCES NL