SANDFIRE RESOURCES LIMITED — Capital/Financing Update 2005

Oct 13, 2005

SANDFIRE RESOURCES NL

ABN 55 105 154 185

DRILLING UPDATE

HIGHLIGHTS

• Drilling at Sandfire has commenced. $\bullet$
• Drilling at Mt Genoa is in progress. ۰
• Drill targets defined at Red Bore within the $\bullet$ Doolgunna project.
• Significant anomalous gold results returned from $\bullet$ the first phase of sampling in the western part of the Doolgunna project area. Infill sampling planned to firm up drill targets.

ASX CODE: SFR

SFRCA

OFFICE AT: 1 VENTNOR AVENUE WEST PERTH 6005 WESTERN AUSTRALIA

T: +61 8 9226 5833 F: +61 8 9226 5844 E: admin@sandfire.com.au www.sandfire.com.au

CORRESPONDENCE: PO BOX 1495 WEST PERTH 6872 WESTERN AUSTRALIA

Sandfire Project

(Lead-Zinc; Sandfire 100%)

Preparations for the drilling programme are complete.

Drilling Target 1 has commenced and is due for completion in early November. The planned depth of this hole is 1350m.

At the date of this announcement, the hole is at 182m.

Mt Augustus

(Lead-Zinc, Copper and Gold; Sandfire $100\%$ )

As previously announced, three induced polarisation targets were planned for drilling at Mt Genoa. The first two holes were completed as planned. The third hole is still in progress.

The first drill hole Target 1 has been completed at 352m. The hole intersected a flat lying sequence of fine grain sandstones and grits from 120m. The interval from 150m to 210m was mineralised with pyrite, pyrrhotite and minor chalcopyrite. This sulphide interval is the likely source of the Target 1 The assessment of this anomalies.

flstien

Greg Steemson Managing Director 14 October 2005

result will be completed once assays have been received.

The second drill hole testing Target 3 intersected a sequence of micaceous fine grained sandstones. Visually this hole did not intersect any significant mineralisation. Assays are awaited.

The third drill hole testing Target 2 is in progress. Pyritic sandstones have been intersected from $113m$ $t_{\Omega}$ $120m$ . Mechanical problems with the drill rig have delayed the completion of this hole.

Doolgunna

(Gold, Copper; Sandfire 100%)

The first batch of soil results from samples collected from the Old Highway area has been received. Anomalous gold values to 89 ppb extending over approximately 2,400m in strike and up to 700m wide have been returned from this program. Infill sampling is being planned.

This new area is in addition to the anomalies located in the Red Bore area announced previously.

Heritage notices are being prepared to enable drill testing of these anomalies.

The information in this report that relates to Exploration Results is based on information complied by Greg Steemson who is a Fellow of the Australian Institute of Geoscientists. Greg Steemson 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. Greg Stemson consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

Corporate Information

Directors and Executive Management

P S Thomas:	Non-Exec Chairman
G H Steemson:	Managing Director
G Hutton:	Executive Director
M Smartt:	Company Secretary

Issued Capital

As at the date of this report the issued capital of the company is comprised of:

• 39,215,000 f/p shares $\bullet$
• 12,666,728 contributing shares with $\bullet$ \$0.15 to pay, no call before 3/3/07
• 3m 31/12/08 \$0.25 opts ۰
• 1m 30/09/08 20c opts $\bullet$

Substantial Shareholders

Faustus Nominees: 14.52% Resource Development Company: 9.42%

Shareholder Enquiries

Matters related to shares held, change of address, tax file numbers and the like should be directed to the Company's Registry: Security Transfer Registrars Pty Ltd Phone - 08 9315 0933