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SANDFIRE RESOURCES LIMITED Capital/Financing Update 2009

Nov 26, 2009

65773_rns_2009-11-26_cda2ff04-80aa-403c-83de-329a5f71ac7b.pdf

Capital/Financing Update

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ASX RELEASE

27 November 2009

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DRILLING STRENGTHENS THIRD VMS COPPER-GOLD DISCOVERY AT DOOLGUNNA

SANDFIRE ADVANCES TOWARDS MAIDEN JORC RESOURCE FOR DeGRUSSA & CONDUCTOR 1 DEPOSITS

HIGHLIGHTS

  • Significant new intersection reinforces Conductor 4 discovery, 200m east of DeGrussa:

    • 17.7m @ 5.5% Cu, 2.0g/t Au (DGDD-035).

  • Further drilling underway to test down-plunge extensions of Conductor 4 deposit.

  • Further excellent intersections from Conductor 1 continue to reinforce high-grade, thickness and extent of the mineralisation:

  • 6.8m @ 10.9% Cu, 3.4g/t Au and 23.3m @ 3.4% Cu, 1.5g/t Au (DGDD-039)

  • o 37.6m @ 3.0% Cu, 1.8g/t Au (DGDD-041) o 23.4m @ 4.1% Cu, 1.4g/t Au (DGDD-045)

  • 15.7m @ 4.0% Cu, 2.6 g/t Au and 10.0m @ 4.7% Cu, 0.3g/t Au (DGDD-036)

  • 14.7m @ 6.6% Cu, 2.9g/t Au and 14.1m @ 7.3% Cu, 1.5g/t Au (DGDD-037).

  • Coffey Mining engaged to calculate initial JORC resource for DeGrussa and Conductor 1 deposits, due in Q1 2010, and undertake preliminary geotechnical studies.

  • Progressive program of drilling, down-hole EM (DHEM) and ground EM surveys in progress to test multiple regional VMS targets.

Sandfire Resources NL ( ASX : SFR; Sandfire) is pleased to report that the latest assay results from its 100%-owned Doolgunna Copper-Gold Project in Western Australia have provided further confidence in an emerging high-grade VMS deposit at Conductor 4, located immediately adjacent to the DeGrussa and Conductor 1 deposits.

The second batch of assay results from Conductor 4 returned an intersection of 17.7m grading 5.4% copper and 1.9g/t gold, 1.2% Zn and 12.9g/t Ag from a down-hole depth of 629 metres in hole DGDD-035 ( see updated drilling location plan in Figure 2 attached ).

This hole lies midway between the previously reported high-grade intersection in DGDD-016 (5.1m @ 15.0% copper, 3.7g/t gold from 670.9m) and the 5 metre intersection of sulphides/massive sulphides from a down-hole depth of 670.9m in DGDD-043 ( see Figure 2 ) – a lateral distance of 160 metres.

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A fourth diamond hole is currently in progress to test for down-plunge extensions of the Conductor 4 mineralisation beneath the high-grade intersection in DGDD-035. The mineralisation identified at Conductor 4 is consistent with Sandfire’s geological model for these discoveries as volcanogenic massive sulphide (VMS) deposits, which typically occur in clusters.

Sandfire is also pleased to report that assay results have been received from a further eight drill holes at Conductor 1, confirming the high-grade and broad widths of mineralisation within this deposit. Latest assay results are summarised in the table below.

Hole Number Deposit From
(m)		 To
(m)		 Total
(m)		 (Cu)
(%)		 (Au)
(g/t)		 (Zn)
(%)		 (Ag)
(g/t)
DGDD-036 Conductor 1
Conductor 1		 202.9
267.0		 218.6
277.0		 15.7
10.0		 4.0
4.7		 2.6
0.3		 1.0
0.1		 11.6
4.1
DGDD-037 Conductor 1
Conductor 1		 157.7
199.0		 172.4
213.1		 14.7
14.1		 6.6
7.3		 2.9
1.5		 2.0
0.5		 19.7
11.6
DGDD-038 Conductor 1 155.0 156.0 1.0 4.3 2.4 1.2 7.5
DGDD-039 Conductor 1
Conductor 1		 95.0
122.3		 101.8
145.6		 6.8
23.3		 10.9
3.4		 3.4
1.5		 1.7
1.9		 22.3
10.0
DGDD-040 Conductor 1 127.9 132.5 4.6 1.8 0.7 0.5 2.5
DGDD-041 Conductor 1 135.4 173.0 37.6 3.0 1.8 1.4 10.6
DGDD-045 Conductor 1
Conductor 1		 130.0
144.6		 132.4
168.0		 2.4
23.4		 6.0
4.1		 0.3
1.4		 0.1
1.0		 9.4
9.9
DGDD-048 Conductor 1 178.3 180.7 2.4 8.9 0.5 0.1 7.3

Significant mineralised intercepts also continue to be recorded ( see summary of new mineralised intercepts attached ) with assay results awaited.

Doolgunna Project Update

Two diamond drill rigs are continuing an intensive program of in-fill resource definition drilling on a 40m by 40m surface drill-hole pattern covering the DeGrussa and Conductor 1 deposits, with the first objective of generating an initial JORC compliant Mineral Resource estimate for these deposits during the first Quarter of 2010.

To this end, Sandfire has engaged Coffey Mining Consultants to complete the initial Mineral Resource estimate.

Sandfire has also engaged Coffey Mining to commence preliminary geotechnical studies, with detailed geotechnical logging of the drill core currently underway. Sandfire has either geotechnically logged or carried out acoustic down-hole surveying to assist with geotechnical logging for all holes completed to date.

Regional Exploration

Reverse Circulation (RC) drill testing of the regional VTEM targets identified from the previously completed 150km[2] regional airborne EM survey over Sandfire’s tenement holdings at Doolgunna is being undertaken on a progressive basis. A program of down-hole electromagnetic (DHEM) surveys is also in progress to more precisely locate the conductors identified from the airborne EM survey.

A moving loop, ground EM survey program is also continuing to further assess key targets within the host sequence of the Narracoota Volcanics. The objective of Sandfire’s regional program is to test the potential for the Doolgunna Project to emerge as a new VMS camp with multiple deposits.

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W JOHN EVANS

TECHNICAL DIRECTOR (AUSIMM Competent Person)

Competent Person’s Statement

The information in this report that relates to Exploration Results is based on information compiled by John Evans who is a Fellow of the Australasian Institute of Mining and Metallurgy. John Evans 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 of Reporting of Exploration Results, Mineral Resources and Ore Reserves. John Evans consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

For further information contact: Sandfire Resources NL Karl Simich – Managing Director John Evans – Technical Director Office: +61 8 9226 5833

Read Corporate

Mobile: +61 419 929 046 (Nicholas Read) Mobile: +61 421 619 084 (Paul Armstrong)

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Figure 1 – Doolgunna tenements showing DeGrussa and prospective 22km long Volcanic Sequence

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Figure 2 – Diamond Core Drilling Program: DeGrussa, Conductor 1 and Conductor 4

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Table 1: Summary Of All Assay Results To Date For Diamond Core Drilling, Doolgunna Project

Interval (down hole) Interval (down hole) Interval (down hole) Copper Gold Zinc Silver
Hole Number Deposit From
(m)		 To
(m)		 Total
(m)		 (Cu)
(%)		 (Au)
(g/t)		 (Zn)
(%)		 (Ag)
(g/t)
DGDD-001 DeGrussa
Conductor 1		 146.1
319.0		 207.8
356.3		 53.2
25.1		 17.3
3.4		 2.6
1.6		 -
1.5		 -
16.7
DGDD-003 Conductor 1 322.2 344.1 21.9 5.0 2.0 1.8 14.9
DGDD-004 Conductor 1 267.8 281.5 13.7 6.7 2.6 2.2 26.2
DGDD-005 Footwall
Footwall		 481.9
502.5		 484.0
506		 2.1
3.5		 4.5
5.1		 1.3
1.1		 0.5
0.3		 18.6
13.8
DGDD-006 Conductor 1 283.0 323.7 36.7 4.6 3.0 0.9 18.8
DGDD-007 DeGrussa
Conductor 1		 242.5
378.1		 292.6
387		 50.1
8.9		 8.4
5.0		 2.9
1.5		 1.6
1.4		 30.8
26.8
DGDD-008 DeGrussa
Conductor 1		 245.0
347.4		 287.0
363.0		 42.0
15.6		 6.6
3.1		 2.4
2.5		 1.4
3.6		 20.5
24.3
DGDD-010 Conductor 1 370.8 383.0 12.2 2.3 1.4 2.4 21.0
DGDD-011 DeGrussa
Conductor 1		 279.2
335.0		 281.0
338.0		 1.8
3.0		 3.1
1.8		 1.6
0.4		 0.9
-		 9.0
4.9
DGDD-012 DeGrussa Oxide
DeGrussa Oxide
Conductor 1		 73.8
107.0
267.0		 102.0
111.0
291.6		 28.2
4.0
24.6		 2.8
3.3
9.4		 3.8
0.1
1.8		 -
-
0.9		 11.4
3.4
16.5
DGDD-013 DeGrussa
Conductor 1		 202.3
358.0		 212.6
363.0		 10.3
5.0		 5.9
1.2		 1.8
3.6		 2.4
0.3		 34.9
12.2
DGDD-014 DeGrussa
DeGrussa
DeGrussa
Conductor 1		 121.0
130.0
187.0
306.5		 130.1
169.0
217.0
332.6		 9.1
38.9
30.0
26.1		 34.1
4.7
8.6
7.3		 3.3
2.2
2.8
3.1		 -
2.9
0.7
1.9		 29.9
24.9
20.5
27.7
DGDD-015 DeGrussa
Conductor 1
Conductor 1
Conductor 1		 257.8
400.9
434.3
444.2		 298.8
410.9
437.0
450.0		 40.8
10.0
2.7
5.8		 13.7
2.9
15.4
3.6		 2.4
2.0
2.3
2.8		 -
-
-		 33.2
14.0
57.3
27.2
DGDD-016 Conductor 4 670.9 676.0 5.1 15.0 3.7 - 25.3
DGDD-017 DeGrussa
Conductor 1		 238.2
286.1		 244.0
323.0		 5.8
36.9		 3.3
4.0		 0.9
1.7		 -
1.3		 8.1
15.3
DGDD-018 DeGrussa
Conductor 1
Conductor 1		 121.0
255.7
261.8		 138.7
258.0
282.0		 17.7
2.4
20.2		 5.8
2.4
4.8		 2.1
2.0
2.1		 -
-
2.1		 12.8
5.9
17.5
DGDD-019 Conductor 1
Conductor 1
Conductor 1		 496.7
504.3
518.4		 500.0
510.0
531.4		 3.3
5.7
13.0		 2.3
5.8
4.8		 0.9
1.6
1.9		 -
-
-		 14.0
21.3
13.9
DGDD-021 Conductor 1 362.9 399.2 37.1 9.4 3.7 - 22.8
DGDD-023 Conductor 1 353.1 382.7 29.6 4.2 2.2 - 10.0
DGDD-024 Conductor 1 407.5 421.1 13.6 10.2 2.8 - 22.4
DGDD-035 Conductor 4 629.0 646.7 17.7 5.4 1.9 1.2 12.9
DGDD-036 Conductor 1
Conductor 1		 202.9
267.0		 218.6
277.0		 15.7
10.0		 4.0
4.7		 2.6
0.3		 1.0
0.1		 11.6
4.1
DGDD-037 Conductor 1
Conductor 1		 157.7
199.0		 172.4
213.1		 14.7
14.1		 6.6
7.3		 2.9
1.5		 2.0
0.5		 19.7
11.6
DGDD-038 Conductor 1 155.0 156.0 1.0 4.3 2.4 1.2 7.5
DGDD-039 Conductor 1
Conductor 1		 95.0
122.3		 101.8
145.6		 6.8
23.3		 10.9
3.4		 3.4
1.5		 1.7
1.9		 22.3
10.0
DGDD-040 Conductor 1 127.9 132.5 4.6 1.8 0.7 0.5 2.5
DGDD-041 Conductor 1 135.4 173.0 37.6 3.0 1.8 1.4 10.6
DGDD-045 Conductor 1
Conductor 1		 130.0
144.6		 132.4
168.0		 2.4
23.4		 6.0
4.1		 0.3
1.4		 0.1
1.0		 9.4
9.9
DGDD-048 Conductor 1 178.3 180.7 2.4 8.9 0.5 0.1 7.3

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New significant mineralised intercepts recorded from diamond drilling since the ASX Announcement of 9 November 2009 (Note: all intervals are downhole)

Hole
DGDD049		 Hole
DGDD049
Deposit From
To
Interval (m)		 **Type **
Conductor 1 189.0
189.5
0.5		 Massive sulphides
Conductor 1 221.7
225.0
3.3		 Sulphides/Massive sulphides
Conductor 1 260.0
293.7
33.7		 Sulphides/Massive sulphides
Hole
DGDD050
Deposit From
To
Interval (m)		 **Type **
Conductor 1 278.5
290.1
11.6		 3.65m massive sulphides over
disseminated blebs of sulphide
Hole
DGDD051
Deposit From
To
Interval (m)		 **Type **
Conductor 1 354.5
371.4
16.9		 7.05m massive sulphides over stringers
and blebs of sulphide
Hole
DGDD052
Deposit From
To
Interval (m)		 **Type **
Conductor 1 316.6
325.3
8.7		 Massive and semi-massive sulphides
Hole
DGDD053
Deposit From
To
Interval (m)		 **Type **
DeGrussa 239.9
247.6
7.7		 Massive and semi-massive sulphides
Conductor 1 357.6
358.1
0.5		 Semi-massive sulphides
Conductor 1 390.8
407.6
16.8		 Massive and semi-massive sulphides
Hole
DGDD054
Deposit From
To
Interval (m)		 **Type **
Conductor 1 160.2
169.1
8.9		 Sulphide stringers
Hole
DGDD055
Deposit From
To
Interval (m)		 **Type **
Conductor 1 133.8
134.2
0.4		 Sulphide stringers
Hole
DGDD056
Deposit From
To
Interval (m)		 **Type **
Conductor 1 111.0
117.2
6.2		 Massive sulphide

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Hole
DGDD057		 Hole
DGDD057
Deposit From
To
Interval (m)		 **Type **
Conductor 1 238.3
242.5
4.2		 Massive sulphide (Chalcopyrite-rich)
Hole
DGDD058
Deposit From
To
Interval (m)		 **Type **
Conductor 1 112.1
115.1
3.0		 Massive sulphide (pyrite)
Hole
DGDD063
Deposit From
To
Interval (m)		 **Type **
Conductor 1 65.9
67.9
2.0		 Gossanous Cu-bearing Fe-rich zone in
highly weathered rock
Hole
DGDD064
Deposit From
To
Interval (m)		 **Type **
Conductor 1 179.5
214.8
35.3		 Massive and semi-massive sulphides
Conductor 1 217.2
218.6
1.4		 Massive sulphides
Conductor 1 228.0
229.1
1.1		 Semi-massive sulphides
Hole
DGDD065
Deposit From
To
Interval (m)		 **Type **
Conductor 1 174.6
190.0
15.4		 Chacocite gravel over 9.6m massive and
semi-massive sulphides
Hole
DGDD066
Deposit From
To
Interval (m)		 **Type **
Conductor 1 193.2
210.8
17.6		 Includes 15.6m massive sulphides
Hole
DGDD067
Deposit From
To
Interval (m)		 **Type **
Conductor 1 223.8
224.5
0.7		 Weathered massive sulphides
Hole
DGDD068
Deposit From
To
Interval (m)		 **Type **
Conductor 1 235.5
252.0
16.5		 Total of 5.0m stringer sulphides in three
pods

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|Page|9|Page|9|
|---|---|
|Hole
DGDD069||
|Deposit|From
To
Interval (m)
Type |
|DeGrussa|273.2
277.6
4.4
Includes 2.12m of massive and semi-
massive sulphides, high chalcopyrite
content|
|Conductor 1|407.6
423.6
16.0
Intersection includes 13.5m of massive
and semi-massive sulphides|
|Hole
DGDD070||
|Deposit|From
To
Interval (m)
Type |
|Conductor 1|154.3
179.2
24.9
18.8m massive and semi-massive
sulphides over stringer zone|

ENDS

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