SANDFIRE RESOURCES LIMITED — Capital/Financing Update 2006

Sep 3, 2006

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX's property and may be made public.

Introduced 1/7/96. Origin: Appendix 5. Amended 1/7/98, 1/9/99, 1/7/2000, 30/9/2001, 11/3/2002, 1/1/2003.

Name of entity

SANDFIRE RESOURCES NL

ABN

55 105 154 185

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

	+ Class of + securities issued or to be issued	Ordinary Shares Options to convert to ordinary shares on terms shown at Annexure A
$\mathfrak{2}$	Number of + securities issued or to be issued (if known) or maximum number which may be issued	8,000,000 Ordinary shares (Includes 5 million shares approved at GM 30 Jun 06) 6,900,000 options - terms at Annexure A. (Approved at GM 30 Jun 06)
3	Principal terms of the "securities" expiry date; if partly paid securities, the amount outstanding and due dates for payment; if convertible securities. the conversion price and dates for conversion)	(eg, if options, exercise price and New class of options with terms shown at Annexure A

⁺ See chapter 19 for defined terms.

respects from the date of allotment with an existing 'class of quoted *securities?	Ordinary Shares rank equally with SFR
If the additional securities do not rank equally, please state: the date from which they do the extent to which they participate for the next dividend, of $(in$ the case $a -$ trust. distribution) or interest payment the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment
Issue price or consideration	Ordinary Shares - 55 cents Options - Nil issues price.
Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets)	and general working capital Mining Tenements from Mr Nicholas Paspaley an underwriting agreement of Meeting of shareholders held 30 June 2006.	8 million shares for exploration on new tenements 5.4 million options for purchase a number of 1.5 million options to Argonaut Capital as part of Full details in Explanatory Memorandum to Notice
Dates of entering *securities into uncertificated holdings or despatch of certificates	register.	The ASIC Form 484 will be submitted and as soon as this Appendix has been lodged with the ASX, the Share Registry will be sent copies and requested to enter the new securities into our
$^{\rm +}$ class and Number all oг *securities quoted on ASX (including the securities in clause 2 if applicable)	${\rm SFR}$ 62,098,626 SFRCA 12,425,652	*Class Ordinary Fully Paid Partly paid to \$0.0001 cents with 15 cents to pay
	Do the "securities rank equally in all	Options - New Class Number

$\ddot{9}$ Number and ⁺class of all *securities not quoted on ASX (including the securities in clause 2 if applicable)

Number	*Class
SFRAM 2,600,000	Opt Exp 31Dec08 Ex 25
	cents
SFRAP - 925,000	Opt Exp 30 Sep 08 Ex 20
	cents
New class 6,900,000	Opt Exp 30 June 07 Ex
	60 cents

10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)

Not applicable

Part 2 - Bonus issue or pro rata issue

11	holder security Is approval required?	N/A
12	Is the issue renounceable or non- renounceable?	N/A
13	Ratio in which the "securities will be offered	N/A
14	Class of securities to which the offer relates	N/A
15	determine *Record date to entitlements	N/A
16	Will holdings on different registers (or subregisters) be aggregated for calculating entitlements?	N/A
17	Policy for deciding entitlements in relation to fractions	N/A
18	Names of countries in which the entity has "security holders who will not be sent new issue documents	N/A
	Note: Security holders must be told how their entitlements are to be dealt with.
	Cross reference: rule 7.7.
19	Closing date for receipt of acceptances or renunciations	N/A

N/A 20. Names of any underwriters 21 Amount of any underwriting fee or N/A commission N/A 22 Names of any brokers to the issue 23. Fee or commission payable to the N/A broker to the issue N/A Amount of any handling fee 24. payable to brokers who lodge acceptances or renunciations on behalf of "security holders If the issue is contingent N/A 25. on "security holders" approval, the date of the meeting 26. Date entitlement and acceptance N/A form and prospectus or Product Disclosure Statement will be sent to persons entitled 27. If the entity has issued options, and N/A the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders Date rights trading will begin (if 28 N/A applicable) Date rights trading will end (if $N/A$ ) 29. applicable) N/A 30 How do "security holders sell their in full through entitlements -8 broker? N/A 31 How do "security holders sell part of their entitlements through a broker and accept for the balance?

$+$ See chapter 19 for defined terms.

32 How do "security holders dispose of their entitlements (except by sale through a broker)?

33 *Despatch date

N/A

$N/A$

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of securities $(iick one)$
• $\left( a\right)$

8 million Ordinary shares only - Code SFR

|--|

All other securities

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

• 35 If the *securities are *equity securities, the names of the 20 largest holders of the additional "securities, and the number and percentage of additional "securities held by those holders
• If the "securities are "equity securities, a distribution schedule of the additional 36 *securities setting out the number of holders in the categories $1 - 1,000$ $1.001 - 5.000$ 5,001 - 10,000 $10,001 - 100,000$ 100.001 and over 37 A copy of any trust deed for the additional "securities

⁺ See chapter 19 for defined terms.

Entities that have ticked box 34(b)

• 38 Number of securities for which *quotation is sought
• 39 Class of "securities for which quotation is sought
• Do the ⁺securities rank equally in all 40 respects from the date of allotment with an existing *class of quoted *securities?

If the additional securities do not rank equally, please state:

• the date from which they do
• the extent to which they participate for the next dividend. (in the case of a trust, distribution) or interest payment
• the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment
• 41 Reason for request for quotation now

Example: In the case of restricted securities, end of restriction period

(if issued upon conversion of another security, clearly identify that other security)

Number and "class of all "securities 42 quoted on ASX (including the securities in clause 38)

	Number	+ Class
S
ð

⁺ See chapter 19 for defined terms.

Ouotation agreement

• $\mathbf{I}$ *Ouotation of our additional *securities is in ASX's absolute discretion. ASX may quote the *securities on any conditions it decides.
• $\overline{2}$ We warrant the following to ASX.
• The issue of the *securities to be quoted complies with the law and is not for an illegal purpose.
• There is no reason why those 'securities should not be granted 'quotation.
• An offer of the ⁺securities for sale within 12 months after their issue will not require disclosure under section $707(3)$ or section $1012C(6)$ of the Corporations Act.

Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any "securities to be quoted and that no-one has any right to return any *securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the "securities be quoted.
• We warrant that if confirmation is required under section 1017F of the $\bullet$ Corporations Act in relation to the *securities to be quoted, it has been provided at the time that we request that the "securities be quoted.
• If we are a trust, we warrant that no person has the right to return the *securities to be quoted under section 1019B of the Corporations Act at the time that we request that the "securities be quoted.

⁺ See chapter 19 for defined terms.

• $\mathfrak{Z}$ We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.
• $\overline{4}$ We give ASX the information and documents required by this form. If any information or document not available now, will give it to ASX before *quotation of the *securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: 4 September 2006 ...................................... (Director/Company secretary)

Print name: Malcolm K Smartt

⁺ See chapter 19 for defined terms.

Annexure 'A'

Material Terms and Conditions of Options

• The Options will entitle the holders to subscribe for Shares in the Company on the following terms:
• $(a)$ each Option entitles the holder, when exercised, to one (1) ordinary fully paid share (Share) in the Company;
• $(b)$ the Options are exercisable at any time on or prior to 5.00pm (Western Standard Time) on 30 June 2007 (Expiry Date) by completing an Option exercise form and delivering it together with the payment for the number of Shares in respect of which the Options are exercised to the registered office of the Company;
• $(c)$ each option may be exercised by notice in writing to the Company during the period referred to in condition (a), accompanied by payment of 60 cents per share:
• $(d)$ an Option does not confer the right to a change in exercise price or a change in the number of underlying shares over which the Option can be exercised
• $(e)$ the Options will be unlisted;
• $(f)$ the Options are not transferable;
• all Shares issued upon exercise of the Options will rank pari passu in all $(g)$ respects with the Company's then issued Shares. The Company will apply for the quotation on ASX of all Shares issued upon exercise of the Options;
• $(h)$ there are no participating rights or entitlements inherent in the Options and holders will not be entitled to participate in new issues of capital offered to Shareholders during the currency of the Options. However, the Company will ensure that for the purposes of determining entitlements to any such issue, the record date will be at least 7 Business Days after the issue is announced. This will give Option holders the opportunity to exercise their Options prior to the date for determining entitlements to participate in any such issue; and
• if at any time the issued capital of the Company is reorganised, the rights $(i)$ of an Option holder are to be changed to the extent necessary to comply with the Listing Rules applying to the reorganisation of capital at the time of the reorganisation.

⁺ See chapter 19 for defined terms.