SANDFIRE RESOURCES LIMITED — Capital/Financing Update 2004

Mar 1, 2004

SANDFIRE RESOURCES NL ABN 55 105 154 185 TERMS OF OPTIONS

Following are the terms of the options the Company has on issue:

• a) Definitions:
  • Exercise Price means the exercise price of each option, being 25 cents. $\left( 0\right)$
  • (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.
  • Option Underwriter means any person or persons (other than the Company) that is party to an Option (vi) Underwriting Agreement.
  • Option Underwriting Agreement means all agreements made prior to the Expiry Date between the (vii) Company and an Option Underwriter whereby the Option Underwriter agrees to exercise the Underwritten Options prior to the Underwritten Expiry 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.
  • $(x)$ Unexercised Option Holder means any person or persons registered as the holder of Unexercised Options.
  • Unexercised Options means all options not exercised on or before the Expiry Date. (xii)
• b) Each option carries the right to subscribe for one Share.
• c) Options may be exercised by delivering to the Company's registered office or the Company's share registry an Exercise Notice at any time prior to the Exercise Date.
• The Exercise Notice must state the number of options to be exercised and be accompanied by the relevant holding d) 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.
• $e)$ If the Company has entered into an Option Underwriting Agreement, then at the Expiry Date all Unexercised Option 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.
• $\mathfrak{h}$ 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 g) by ASX within 7 days of the date of issue.
• Shares issued pursuant to an exercise of options shall rank, from the date of issue, pari passu with then existing Shares h) in all respects.
• j) 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 ĵ) accordance with ASX Listing Rules.
• k) Subject to the Corporations Act 2001 and ASX Listing Rules, options do not confer the right to a change in exercise price.
• I) 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).