SANDFIRE RESOURCES LIMITED — Capital/Financing Update 2004

Mar 16, 2004

3.0 WAT MER AVENUE. WEST PERTH 6005 WESTERN AUSTRALIA

PARKY ABS WEST PERTH 6872 WESTERN AUSTRALIA

T +61 8 9321 5887 F +61 8 9321 5884 E admin@sandfire.com.au www.sandfire.com.au

17 March 2004

ASX ANNOUNCEMENT

RIGHTS ISSUE AND CORRECTION TO PROSPECTUS

For the purpose of positioning the Company for future capital raisings. Sandfire intends to undertake a 1:2 non renounceable rights issue of options (Listed Options) (with 2 cents to be paid for each Listed Option on application and exercisable at 10 cents on or before 30 September 2005) to acquire a contributing share (Contributing Share) of the same class as the contributing shares described in the Company's prospectus dated 14 January 2004. Further proposed terms of the rights issue include:

• $\mathbf{L}$ the record date is 14 May 2004;
• application will made for the Listed Options to be quoted on ASX; $2.$
• 1. application will be made for quotation of the Contributing Shares as soon as there is sufficient spread to support their quotation on ASX;
• $4.$ any shortfall will be placed at the discretion of directors.

The total cost of acquiring an ordinary fully paid share by subscribing for a Listed Option (2 cents), then exercising the option (another 10 cents) and then paying up the uncalled amount of the contributing share (another 15 cents) is 27 cents.

The Company has been made aware of a factual error in its Prospectus dated 14 January 2004. The error relates to a statement made in the Independent Geologist's Report. The statement refers to resources attributed to the Cheela, Electric Dingo and Ibex prospects on page 34 of the Prospectus. The Company has checked the statement with the Independent Geologist who has confirmed that the statement:

• a) is factually incorrect;
• was not based on, or derived from, any statement or material published by Newcrest Mining $\mathbf{b}$ Limited, Sipa Resources Limited (or either of their subsidiaries) or Bacome Pty Ltd; and
• was made without the prior knowledge or consent of Newcrest Mining Limited, Sipa Resources $\mathbf{c}$ Limited (or either of their subsidiaries) or Bacome Pty Ltd.

The statement relating to the three prospects should have referred to drill intercepts:

• Cheela 36m @ 2.2 $g/t$ ;
• Electric Dingo 17m $@3.5 g/t$ ; and
• Ibex 14m $@$ 5.5 g/t. $\bullet$

As a consequence of the Company's reliance on the erroneous statement, the references to a resource of 7 Moz on pages 3 and 10 of the Prospectus are also incorrect and, as far as the Company is now aware, there are no published resource estimates for these prospects. However, in the Company's view, this error does not detract from the prospectivity of the zone discussed in the Prospectus. In particular, the Company's view on the Urandy Project remains unaltered.

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PETER THOMAS - CHAIRMAN SANDFIRE RESOURCES NL Telephone: (08) 9481 2522