SANDFIRE RESOURCES LIMITED — Capital/Financing Update 2009

Jul 21, 2009

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22 July 2009 Australian Securities Exchange Company Announcements Office

SANDFIRE RESOURCES NL (ASX: SFR, SFRCA) NON-RENOUNCEABLE ENTITLEMENT OFFER

Sandfire Resources NL ( Sandfire or the Company ) is pleased to announce that it will be offering eligible shareholders (being holders of ordinary fully paid shares and contributing shares) the opportunity to acquire additional fully paid ordinary shares (New Shares) in the capital of the Company via a non-renounceable entitlement offer (Entitlement Offer) on the basis of one (1) New Share for every ten (10) Shares held at the record date of 31 July 2009 (Record Date), with any fractional entitlement being rounded down.

New Shares under the Entitlement Offer will be offered at $1.20 cent per Share. The offer price represents a substantial discount to the closing price of Sandfire’s shares on the day prior to this announcement. The number of Shares which will be issued under the Entitlement Offer is approximately 9,654,595.

The Company does not expect the Entitlement Offer to result in any material change to the control of the Company.

The proposed timetable for the Entitlement Offer is set out below.

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Entitlement Offer announced via ASX	22 July 2009
Notice to shareholders containing Appendix 3B information and	24 July 2009
details of the timetable
Ex Date	27 July 2009
Record Date (date for determining entitlements of Eligible	31 July 2009
Shareholders to participate in the Offer)
Offer Document and Entitlement and Acceptance form despatched to	5 August 2009
eligible shareholders
Close Date (date on which acceptances close)*	19 August 2009
New Shares quoted on a deferred settlement basis**	20 August 2009
Company to notify ASX of under-subscriptions (if any)**	24 August 2009
Issue of New Shares and despatch of holding statements**	27 August 2009

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Subject to the Listing Rules, the directors reserve the right to extend the Closing Date for the Offer at their discretion. Should this occur, the extension will have a consequential effect on the anticipated date of issue for the new shares. *These dates are indicative only.

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NON-RENOUNCEABLE ENTITLEMENT OFFER

22 July 2009 P a g e | 2

Documents attached to this announcement in relation to the Entitlement Offer:

1. Notice under Section 708AA(2)(f) of the Corporations Act 2001 (Cth); 2. Appendix 3B;

2. Chairman’s letter to shareholders;

3. Offer Document with attached Entitlement and Acceptance Form; 5. letter to option holders.

Jean Mathie Company Secretary

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22 July 2009

Australian Securities Exchange Company Announcements Office

SANDFIRE RESOURCES NL NOTICE UNDER SECTION 708AA(2)(f) OF THE CORPORATIONS ACT 2001 (Cth) (the Act)

Sandfire Resources NL (the Company or Sandfire ) will announce on 22 July 2009 that it is making a non-renounceable pro rata entitlement offer ( Entitlement Offer ) under which eligible shareholders will be entitled to subscribe for one fully paid ordinary share ( New Share ) in the Company for every ten Sandfire ordinary shares (both fully paid and contributing) held as at 5.00pm WST on 31 July 2009, at an issue price of $1.20 per New Share to raise up to $11,585,514 (before costs).

Sandfire advises that:

• a) it will offer the New Shares in the Entitlement Offer without disclosure to investors under part 6D.2 of the Act (as notionally modified by CO 08/35);

• b) this notice is being given under section 708AA(2)(f) of the Act (as notionally modified by CO 08/35);

• c) as at the date of this notice, Sandfire has complied with:

• i. the provisions of Chapter 2M of the Act as they apply to Sandfire; and

• ii. section 674 of the Act;

• d) as at the date of this notice, there is no “excluded information” of the type referred to in sections 708AA(8) or 708AA(9) of the Act (as notionally modified by CO08/35); and

• e) it does not expect the issue of New Shares pursuant to the Entitlement Offer to have any material effect or consequence on the control of Sandfire.

A further notice under section 708AA(2) of the Act will be lodged with ASX within the 24 hour period before the Offer Document and Entitlement and Acceptance Forms are sent to shareholders, as required by section 708AA(2)(f) of the Act.

Jean Mathie

COMPANY SECRETARY

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Appendix 3B New issue announcement

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).

1 +Class of+securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the+securities (eg, if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion). 4 Do the +securities rank equally in all 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	Ord Shares
	Up to 9,654,594
	Same terms as existing ordinary shares.
	Yes

• See chapter 19 for defined terms.

Appendix 3B Page 1

1/1/2003

• 5 Issue price or consideration $1.20 per share

6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets)

Shares to be issued in accordance with a non- renounceable entitlements issue determined on the basis of one share for every ten shares held at the record date of 31 July 2009. Funds raised will be used accelerate the drilling activities at the Doolgunna Project with a view to testing the overall extent and scale of the mineralisation defined to date at the DeGrussa and Conductor 1 prospects and progress exploration across the balance of our exploration portfolio, which includes manganese, iron ore, base metal and gold exploration projects in Western Australia and the Northern Territory.

• 7 Dates of entering[+] securities into uncertificated holdings or despatch of certificates

Expected to be 20 August 2009

8 Number and+class of all+securities quoted on ASX (_including_the securities in clause 2 if applicable) 9 Number and+class of all+securities not quoted on ASX (_including_the securities in clause 2 if applicable)	Number	~~+~~Class
	94,225,010 11,975,529	Ordinary fully paid shares Ordinary contributing shares paid to$0.0001 with$0.15payable
	Number	~~+~~Class
	2,000,000 840,000 1,420,000 6,000,000 1,000,000	Options exercisable at $0.50 expiring 30/09/11 Options exercisable at $0.35 expiring 07/02/11 Options exercisable at $0.40 expiring 08/08/11 Options exercisable in three tranches at $0.60, $0.80 and $1.00 respectively expiring 12/07/13 Options exercisable at $1.40 expiring06/07/2012

• 10 Dividend policy (in the case of a The Company does not have a dividend policy. trust, distribution policy) on the increased capital (interests)

Part 2 - Bonus issue or pro rata issue

11 Is security holder approval required? 12 Is the issue renounceable or non- renounceable? 13 Ratio in which the+securities will be offered 14 +Class of+securities to which the offer relates	No
	Non-renounceable
	1 share for every 10 shares held at the Record Date.
	Ordinary fully paid shares and ordinary contributing shares.

• See chapter 19 for defined terms.

Appendix 3B Page 2

1/1/2003

15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has+security holders who will not be sent new issue documents 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 20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of+security holders 25 If the issue is contingent on+security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and prospectus or Product Disclosure Statement will be sent to persons entitled 27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable)	31 July 2009
	No
	All fractions will be rounded down.
	None
	19 August 2009
	N/A
	N/A
	Argonaut Securities PtyLimited
	One percent of gross amount raised plus GST.
	N/A
	N/A
	5 August 2009
	22 July 2009
	N/A
	N/A

• See chapter 19 for defined terms.

Appendix 3B Page 3

1/1/2003

• 30 How do[+] security holders sell their N/A entitlements in full through a broker?

• 31 How do[+] security holders sell part of N/A their entitlements through a broker and accept for the balance?

• 32 How do[+] security holders dispose of N/A their entitlements (except by sale through a broker)?

• 33 +Despatch date 27 August 2009

Part 3 - Quotation of securities

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

• 34 Type of securities

• ( tick one )

(a)  Securities described in Part 1

• (b)[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

36[If the ] +securities setting out the number of holders in the categories[+][securities are ][+][equity securities, a distribution schedule of the additional ] 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 ] 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

• See chapter 19 for defined terms.

Appendix 3B Page 4

1/1/2003

• 40 Do the[+] securities rank equally in all 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)

• 42 Number and[+] class of all[+] securities quoted on ASX ( including the securities in clause 38)

Quotation agreement

• 1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the +securities on any conditions it decides.

• 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 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.

• 3 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.

• 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: ............................................................ Date: 22 July 2009

(company secretary) Print name: Jean Mathie

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• See chapter 19 for defined terms.

Appendix 3B Page 5

1/1/2003

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22 July 2009

Dear Shareholder

I am pleased to enclose an Entitlement Offer Document for a non-renounceable pro rata offer of New Shares being undertaken by Sandfire Resources NL ( Sandfire or the Company ) on the basis of one (1) new share for every ten shares (10) held at an issue price of $1.20 per share to raise approximately $11.59 million before costs.

Perth-based Argonaut Securities Limited has been appointed to act as Advisor and Broker to the Entitlement Offer which opens on 5 August 2009 and closes at 5.00pm (WST) on 19 August 2009.

The issue price represents a substantial discount to the closing price of Sandfire shares on 21 July, the date prior to which the Entitlement Offer Document was lodged with the Australian Securities Exchange and Australian Securities and Investments Commission.

This deep discount represents a very attractive opportunity for shareholders to increase their current holdings, thereby increasing their exposure to the Company’s exciting highgrade copper-gold discovery at its 100%-owned Doolgunna Project in Western Australia.

The funds raised will be used to accelerate Sandfire’s drilling activities at Doolgunna, with a view to testing the overall extent and scale of the mineralisation defined to date at the DeGrussa and adjacent Conductor 1 prospects and commencing in-fill resource definition drilling later this year hopefully aimed at delivering an initial JORC compliant resource estimate.

The results received from drilling so far have been very encouraging, suggesting that Doolgunna has the potential to be one of the more significant greenfields minerals discoveries seen in Western Australia’s Northeastern Goldfields in recent times.

Only with more drilling will our geologists be able to determine the scale and economic potential of what has been discovered so far – and this will be our major focus in the forthcoming months.

The funds raised will also enable us to meet our ongoing expenditure commitments and progress exploration across the balance of our exploration portfolio, which includes advanced manganese, iron ore, base metal and gold exploration projects in Western Australia and the Northern Territory. However, our priority will be to allocate as many resources as possible to the Doolgunna Project in the short to medium term.

While investment in exploration has inherent risks, your Directors are very encouraged by the results received to date and believe that this represents an outstanding opportunity to increase your exposure to one of the most significant greenfields mineral discoveries of recent times.

I encourage you to read this Offer Document carefully and consult your financial advisor when considering whether to take up your entitlement.

Yours sincerely

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MILES KENNEDY CHAIRMAN

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ENTITLEMENT OFFER DOCUMENT

22 July 2009

A non-renounceable pro rata offer of New Shares at an issue price of $1.20 per New Share on the basis of one New Share for every ten Shares held on the Record Date to raise approximately $11.59 million (before issue costs).

IMPORTANT NOTICE

This document is not a prospectus. It does not contain all the information that an investor would find in a prospectus or which may be required in order to make an informed investment decision regarding or about the rights attaching to the New Shares offered by this document.

This document is important and requires your immediate attention . It should be read in its entirety. If you do not understand its content or are in doubt as to the course you should follow, you should consult your stockbroker or other professional adviser without delay.

The Entitlement Offer opens on 5 August 2009 and closes at 5.00pm (WST) on 19 August 2009 (unless extended by the directors) . Acceptances must be received before that time. Please read the instructions in this document and on the accompanying Entitlement and Acceptance Form regarding the acceptance of your Entitlement.

Advisor and Broker to the Entitlement Offer

Argonaut Securities Pty Limited (ABN 72 108 330 650)

Sandfire Resources NL

(ABN 55 105 154 185) 1 Ventnor Avenue West Perth WA 6005 PO Box 1495 West Perth WA 6872 T +61 8 9226 5833 F+61 8 9226 5844 E admin@sandfire.com.au W www.sandfire.com.au

OFFER DOCUMENT

IMPORTANT NOTICE

THIS DOCUMENT IS NOT A PROSPECTUS

It does not contain all of the information that an investor would find in a prospectus or which may be required in order to make an informed investment decision regarding, or about the rights attaching to, the New Shares offered by this document.

This Entitlement Offer Document does not constitute an offer in any jurisdiction in which, or to any person to whom, it would not be lawful to make such an offer. Where this Entitlement Offer Document has been received, or accessed, in a jurisdiction outside Australia by Non-Residents, and where that jurisdiction’s securities legislation requires registration of this Entitlement Offer Document, this Entitlement Offer Document is provided for information purposes only. Non-Residents should refer to ADDITIONAL INFORMATION - Non-Residents for further details.

The Company reserves the right not to accept an application from any person if it has reason to believe that when the person was given the application, that person was not provided with a complete and unaltered copy of this Entitlement Offer Document and any relevant supplementary or replacement Offer Document. If you have received an Entitlement and Acceptance Form for the securities offered by this Entitlement Offer Document without a complete and unaltered copy of this Entitlement Offer Document, please contact the Company who will send you a copy of this Entitlement Offer Document free of charge.

This Entitlement Offer Document should be read in its entirety before deciding to invest in the securities offered by this Entitlement Offer Document. The directors consider an investment in the securities offered by this Entitlement Offer Document to be speculative and recommend that you consult your financial adviser as to the course you should follow with respect to the Entitlement Offer.

In particular, potential investors should consider the risk factors that could affect the financial performance of the Company and consider these factors in the light of personal circumstances, including financial and taxation issues (refer to ADDITIONAL INFORMATION) .

Neither the Company nor its directors nor any party named in this Entitlement Offer Document guarantee any return on capital or the performance of the Company, and no person is authorised to give any information or to make any representation in connection with the Entitlement Offer. Only information and representations contained in this Entitlement Offer Document may be relied on as having been authorised by the Company in connection with the Entitlement Offer.

Definitions (often with the first letter capitalised) appear both in the body of this Entitlement Offer Document (refer to bold type) as well as in the Glossary.

DETAILS OF THE ENTITLEMENT OFFER

The Entitlement Offer

The Company is making a non-renounceable pro rata entitlement issue of New Shares to eligible shareholders at an issue price of $1.20 per New Share on the basis of one New Share for every ten Shares or Contributing Shares, held on the Record Date ( the Entitlement Offer ). Fractional entitlements to New Shares will be rounded down to the next whole number.

As at 22 July 2009, the Company had on issue 84,570,415 Shares, 11,975,529 Contributing Shares (which carry the right to participate in the Entitlement Offer) and 11,260,000 options (which carry no right to participate in the Entitlement Offer). Approximately 9,654,595 New Shares will be offered under the Entitlement Offer which, if fully subscribed, will raise approximately $11.59 million (before issue costs) assuming none of the options are exercised before the Record Date.

The Entitlement Offer is not underwritten and there is no minimum subscription for the Entitlement Offer.

Advisor and Broker to the Offer

Argonaut Securities Pty Limited (ABN 72 108 330 650) ( Argonaut ) has been appointed to act as advisor and broker to the Entitlement Offer and will be entitled to a fee of 1% (plus any applicable GST) of the gross amount raised under the Entitlement Offer.

Shortfall

If any shareholders do not take up their whole Entitlement, the number of New Shares not taken up will form the Shortfall ( Shortfall ).

Pursuant to the exception contained in Exception 3 of ASX Listing Rule 7.2, the directors, as part of the Entitlement Offer, reserve the right to issue the Shortfall at their discretion within three (3) months after the close of the Entitlement Offer, at an issue price of not less than $1.20 for each New Share comprised in the Shortfall.

Sandfire Resources NL

2

OFFER DOCUMENT

Acting On Your Entitlement

The number of New Shares to which a shareholder is entitled ( Entitlement ) under the Entitlement Offer is shown on the form accompanying this Entitlement Offer Document and headed Entitlement and Acceptance Form .

As the Entitlement Offer is non-renounceable, shareholders may not sell or transfer any part of their Entitlements.

If you do not take up your full Entitlement, your percentage shareholding in the Company will be diluted as a result of New Shares issued under this Entitlement Offer Document.

As a shareholder you may:

• a) take up your full Entitlement;

• b) take up part of your Entitlement and allow the balance to lapse;

• c) do nothing (in which case you will receive no benefit from your Entitlement).

To take up your full Entitlement

If you wish to take up your full Entitlement, you must complete and lodge the Entitlement and Acceptance Form with payment of your application monies in accordance with the instructions set out in the Entitlement and Acceptance Form by no later than 5.00pm WST on 19 August 2009.

Your acceptance must not exceed your full Entitlement (as shown on your Entitlement and Acceptance Form) and if it does it will be deemed to be for your full Entitlement only, and any surplus application monies will be returned to you.

To take up part of your Entitlement and allow the balance to lapse

If you wish to take up part of your Entitlement and allow the balance to lapse, you must complete and lodge the Entitlement and Acceptance Form in respect of the number of New Shares you wish to apply for with payment for your application monies in respect of the New Shares taken up, in accordance with the instructions set out in the Entitlement and Acceptance Form by no later than 5.00pm WST on 19 August 2009.

Closing Date

The closing date ( Closing Date ) for acceptances will be 5.00 pm WST on 19 August 2009. Subject to ASX Listing Rules, the directors may extend this Closing Date (with or without notice and either before or after that date).

Issue of New Shares

The New Shares will be issued, and holding statements dispatched to shareholders to whom New Shares have been issued, as soon as practicable after the Closing Date.

Application Monies

Application monies will be held in a separate bank account on behalf of applicants until the New Shares are issued. If any application is rejected in whole or in part, the amount tendered in respect of New Shares that have not been issued will be repaid to the unsuccessful applicant without interest.

ASX Listing

Application will be made to the ASX for quotation of the New Shares. The fact that ASX may grant official quotation to these securities is not to be taken in any way as an indication of the merits of the Company or the New Shares.

Sandfire Resources NL

3

OFFER DOCUMENT

TIMETABLE

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EVENT

DATE

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Announcement of Entitlement Offer; Offer Document and Appendix 3B lodged with ASX	22 July 2009
Record Date for determining Entitlements to New Shares	31 July 2009
Despatch of Offer Document and Entitlement and Acceptance Form - Offer Open Date	5 August 2009
Entitlement Offer closes	19 August 2009
Company notifies ASX of under subscriptions	24 August 2009
Allotment of New Shares and despatch of holding statements	27 August 2009
Expected date for trading of New Shares	28 August 2009

The Company reserves the right, subject to the Corporations Act, ASX Listing Rules and other applicable laws, without notice to vary the times and dates of the Entitlement Offer, including extending the Entitlement Offer or accepting late applications, either generally or in particular cases.

USE OF PROCEEDS

Table 1 below sets out how the Company intends, as at the date of this Entitlement Offer Document, to apply the funds raised pursuant to this Entitlement Offer Document.

Table 1

Details	$
Working capital to fund exploration and operational expenditure	11,421,614
Estimated costs of the Entitlement Offer (inclusive of GST)1	163,900
Total	11,585,514

Note [1] : This includes the fee of 1% of the gross amount raised under the Entitlements Issue payable to Argonaut (plus GST).

The Company intends to apply the funds raised to accelerate the drilling activities at the Doolgunna Project, with a view to testing the overall extent and scale of the mineralisation defined to date at the DeGrussa and adjacent Conductor 1 prospects and commencing in-fill resource definition drilling this year.

The funds raised will also enable the Company to meet its ongoing expenditure commitments and progress exploration activities across the balance of its exploration portfolio, which includes manganese, iron ore, base metal and gold exploration projects in Western Australia and the Northern Territory. However, the priority for the Company will be to allocate a majority of its resources to the Doolgunna Project in the short to medium term.

In the opinion of the directors, the Company will not be materially disadvantaged if the Entitlement Offer is not fully subscribed. The Company will still be able to pursue its objectives but will do so at a reduced rate than if the Entitlement Offer had been fully subscribed.

Given the nature of the Company’s business, the allocation of funds detailed in the above table may change depending on environmental, regulatory, market conditions and other natural and commercial factors.

EFFECT ON COMPANY

Effect on Financial Position

Assuming that the Entitlement Offer is fully subscribed, the Company’s cash reserves, contributed equity and net assets will increase by approximately $11,421,614, which is the amount that would be raised pursuant to the Entitlement Offer (approximately $11,585,514), less the estimated costs of the Entitlement Offer (approximately $163,900).

Effect on Capital Structure

The capital structure of the Company following completion of the Entitlement Offer (assuming that the Entitlement Offer is fully subscribed and no options are exercised after the date of this Entitlement

Sandfire Resources NL

4

OFFER DOCUMENT

Offer Document but prior to the Record Date) is summarised in Table 2 below.

Table 2

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Table 2
Shares	Number
Shares on issue at the date of this Entitlement Offer Document	84,570,415
Contributing Shares on issue at the date of this Entitlement Offer Document	11,975,529
Shares to be issued pursuant to the Entitlement Offer1	9,654,595
Shares (including Contributing Shares) on issue on completion of the Entitlement Offer 1	106,200,539
Options
Options exercisable at $0.50 expiring 30/09/2011	2,000,000
Options exercisable at $0.35 expiring 07/02/2011	840,000
Options exercisable at $0.40 expiring 08/08/2011	1,420,000
Options exercisable in three tranches at $0.60, $0.80 and $1.00 respectively	6,000,000
expiring 12/07/2013
Options exercisable at $1.40 expiring 06/07/2012	1,000,000
Options on issue on completion of the Entitlement Offer	11,260,000
Maximum number of Shares on a fully diluted basis following completion of the Entitlement Offer1	117,460,539

Note [1] : The above table does not take into account the Entitlements that would attach to Shares that would be issued if any of the options described in the table were exercised before the Record Date.

If the Entitlement Offer is not fully subscribed, the number of Shares specified in the above table on completion of the Entitlement Offer will decrease by the under-subscribed amount.

ADDITIONAL INFORMATION

Risks

Exploration and mining, by their nature, contain elements of significant risk. Ultimate success depends on the discovery and extraction of economically recoverable mineral resources, obtaining and maintaining the necessary titles and other government regulatory approvals, obtaining and servicing of funding arrangements and otherwise funding the exploration and mining operations.

The value of the Company’s securities is likely to fluctuate depending on various factors including the success of its operations and programmes, the general economic and stock market conditions in Australia and worldwide, the price of commodities, exchange rates, unexpected variations in exploration, mining, development and operating costs and political and social changes. Many of these factors are beyond the Company’s control.

The above statement of risk factors is by way of illustration only. There are numerous other risk factors inherent in an investment in the Company’s securities, and there can be no assurance whatsoever that a return on investment will be obtained by investing in the Company’s securities, or that the investment therein will not be lost. Further, an investment in the Company’s securities should be considered in light of recent Australian and world events, which have had a significant impact on the stability of financial markets in Australia and worldwide and the ultimate consequences of which cannot be predicted with any certainty.

Taxation implications for Shareholders

The directors do not consider it appropriate to give shareholders advice regarding the potential taxation consequences of subscribing for New Shares under the Entitlement Offer and the Company, its officers and advisors do not accept any liability or responsibility in respect of any such taxation consequences to shareholders.

Furthermore, the taxation implications for each shareholder will also depend on their particular circumstances, and the directors accordingly recommend that you seek your own professional tax advice concerning the tax consequences for you which arise from the Entitlement Offer. You should seek this advice whether or not you wish to take up your Entitlement.

Non-Residents

Non-Residents should consult their professional advisors as to whether any formalities need to be observed (either by themselves or the Company) to enable them to subscribe for New Shares. It is the responsibility of Non-Residents to obtain all necessary approvals so they may legally subscribe for (and be issued) the New Shares. The return of a completed application form from a Non-Resident applicant will be taken by the Company to constitute a representation and warranty by the applicant that all relevant approvals have been obtained and that the Company may legally issue the New Shares to the applicant.

Sandfire Resources NL

5

OFFER DOCUMENT

Rights and Liabilities Attaching to Shares

New Shares issued under this Entitlement Offer Document will, from the time they are issued, rank pari passu in all respects with the Company’s existing Shares.

Glossary

ASIC Australian Securities & Investments Commission ASX ASX Limited (ABN 98 008 624 691) Company Sandfire Resources NL (ABN 55 105 154 185) Company’s Share Registrars Security Transfer Registrars Pty Ltd Contributing Shares Partly paid ordinary shares in the capital of the Company Non-Residents Persons domiciled outside Australia Record Date 5.00 pm (WST) on 31 July 2009 Share Fully paid ordinary share in the capital of the Company WST Australian Western Standard Time $ Australian dollar

CONSENTS

Security Transfer Registrars Pty Limited (the Company’s Share Registrars) has been named in this Entitlement Offer Document for information purposes only and has not consented to being named herein.

Argonaut Securities Pty Limited has given, and at the time of issue, has not withdrawn its consent to be named as Advisor and Broker to the Entitlement Offer under this Entitlement Offer Document, in the form and context in which it is named.

Argonaut was not involved in the preparation of any part of this Entitlement Offer Document and did not authorise or cause the issue of this Entitlement Offer Document. Argonaut makes no express or implied representation or warranty in relation to Sandfire Resources NL, this Entitlement Offer Document or the Entitlement Offer and does not make any statement in this Entitlement Offer Document, nor is any statement in it based on any statement made by Argonaut. To the maximum extent permitted by law, Argonaut expressly disclaims and takes no responsibility for any material in, or omission from, this Entitlement Offer Document other than the reference to its name.

Directors’ Consent

This Entitlement Offer Document has been issued by Sandfire Resources NL and each director has consented to the lodgement of this Entitlement Offer Document with ASX.

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MILES KENNEDY CHAIRMAN

Sandfire Resources NL

6

THIS DOCUMENT IS IMPORTANT. IF YOU ARE IN DOUBT AS TO HOW TO DEAL WITH IT, PLEASE CONTACT YOUR STOCK BROKER OR LICENSED PROFESSIONAL ADVISOR.

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ENTITLEMENT AND ACCEPTANCE APPLICATION FORM

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SANDFIRE RESOURCES NL

REGISTERED OFFICE:

SHARE REGISTRY: Security Transfer Registrars Pty Ltd All Correspondence to: PO BOX 535, APPLECROSS WA 6953 AUSTRALIA 770 Canning Highway, APPLECROSS WA 6153 AUSTRALIA T: +61 8 9315 2333 F: +61 8 9315 2233 E: registrar@securitytransfer.com.au W: www.securitytransfer.com.au

1 Ventnor Avenue West Perth WA 6005 AUSTRALIA

ABN: 55 105 154 185

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Code:

Holder Number: Holding as at 5.00pm WST on 31 July 2009: Entitlement to Securities 1:10: Amount payable on acceptance @ $1.20 per Security:

NON-RENOUNCEABLE SHARE OFFER CLOSING AT 5.00PM WST ON 19 AUGUST 2009

(1) I/We the above named being registered at 5.00pm WST on the 31 July 2009 as holder(s) of Securities in the Company hereby accept as follows:

NUMBER OF NEW SHARES AMOUNT ENCLOSED ACCEPTED/APPLIED FOR @ $1.20 PER SHARE Entitlement or Part Thereof , , $ , , .

• (2) I/We have enclosed/made payment for amount shown above (following the payment instructions as detailed overleaf).

• (3) I/We hereby authorise you to place my/our name(s) on the register of members in respect of the number of New Securities allotted to me/us.

• (4) I/We agree to be bound by the Constitution of the Company.

(5) I/We understand that if any information on this form is not completed correctly, or if the accompanying payment is for the wrong amount, it may still be accepted. Any decision of the Directors as to whether to accept this form, and how to construe, amend or complete it shall be final.

(6) I/We authorise the Company to send me/us a substituted form if this form ceases to be current.

(7) I/We declare that I/we have received a full and unaltered version of the Prospectus either in an electronic or paper format.

(8) My/Our contact details in case of enquiries are:

NAME

TELEPHONE NUMBER ( )

EMAIL ADDRESS

@

RETURN OF THIS DOCUMENT WITH THE REQUIRED REMITTANCE WILL CONSTITUTE YOUR ACCEPTANCE OF THE SECURITIES BEING OFFERED. REGISTRY DATE STAMP PAYMENT INFORMATION - Please also refer to payment instructions overleaf. CHEQUE/MONEY ORDER Biller Code: 798595 All cheques (expressed in Australian currency) are Ref: to be made payable to SANDFIRE RESOURCES SANDFIRE RESOURCES NL and crossed "Not Negotiable".and crossed "Not Negotiable". BPAY® this payment via internet or phone banking.this payment via internet or phone banking. E & O.E.

PAYMENT INFORMATION - Please also refer to payment instructions overleaf. CHEQUE/MONEY ORDER Biller Code: 798595 All cheques (expressed in Australian currency) are Ref: to be made payable to SANDFIRE RESOURCES SANDFIRE RESOURCES NL and crossed "Not Negotiable".and crossed "Not Negotiable". BPAY® this payment via internet or phone banking.this payment via internet or phone banking.

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5528330680

6718330682

LODGEMENT INSTRUCTIONS

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PAYMENT INSTRUCTIONS

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Biller Code: 798595
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BPAY® this payment via internet or phone banking. Your reference number is quoted on the front of this form.

Applicants should be aware of their financial institution's cut-off time (the time payment must be made to be processed overnight). It is the Applicant's responsibility to ensure funds are submitted correctly by the closing date and time.

You do not need to return this form if you have made payment via BPAY.

Your BPAY reference number will process your payment to your entitlement electronically and you will be deemed to have applied for such Securities for which you have paid.

CHEQUE/MONEY ORDER

All cheques should be drawn on an Australian bank and expressed in Australian currency and crossed "Not Negotiable".

Sufficient cleared funds should be held in your account as your acceptance may be rejected if your cheque is dishonoured.

Cheques or bank drafts drawn on overseas banks in Australian or any foreign currency will NOT be accepted. Any such cheques will be returned and the acceptance deemed to be invalid.

Do not forward cash as receipts will not be issued.

When completed, this form together with the appropriate payment should be forwarded to the share registry:

Security Transfer Registrars Pty Ltd PO Box 535, APPLECROSS WA 6953.

Applications must be received by Security Transfer Registrars Pty Ltd no later than 5.00pm WST on the closing date.

EXPLANATION OF ENTITLEMENT

1. The front of this form sets out the number of Securities and

the price payable on acceptance of each Security.

1. Your entitlement may be accepted either in full or in part. There is no minimum acceptance.

ENQUIRIES

All enquiries should be directed to the Company's share registry:

Security Transfer Registrars Pty Ltd

PO Box 535, Applecross WA 6953 AUSTRALIA

770 Canning Highway, Applecross WA 6153 AUSTRALIA

Telephone +61 8 9315 2333 Facsimile +61 8 9315 2233 Email registrar@securitytransfer.com.au

PRIVACY STATEMENT

Personal information is collected on this form by Security Transfer Registrars Pty Ltd as the registrar for securities issuers for the purpose of maintaining registers of securityholders, facilitating distribution payments and other corporate actions and communications. Your personal details may be disclosed to related bodies corporate, to external service providers such as mail and print providers, or as otherwise required or permitted by law. If you would like details of your personal information held by Security Transfer Registrars Pty Ltd or you would like to correct information that is inaccurate please contact them on the address on this form.

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22 July 2009

Dear Option holder

NOTICE OF NON-RENOUNCEABLE ENTITLEMENT OFFER TO SHAREHOLDERS

We are writing to you in relation to your option holding in Sandfire Resources NL ( Company ).

The Company has announced to ASX Limited ( ASX ) the details of a pro rata nonrenounceable entitlement offer on the basis of one (1) new fully paid ordinary share ( New Share ) for every ten (10) Shares held by shareholders of the Company as at 5.00pm WST on 31 July 2009 at an issue price of $1.20 per New Share ( Offer ).

Pursuant to the terms of the options that were issued to you, the Company is required to notify you of your right to participate in any pro rata issue of securities if you exercise your options prior to the record date for the pro rata issue.

Accordingly, take notice that in order to participate in the Offer, you will need to exercise your options prior to the record date for the Offer, being 31 July 2009 .

The Company has lodged an Offer Document in relation to the Offer at the Australian Securities and Investments Commission and that Offer Document will be dispatched to shareholders of the Company on 5 August 2009. The Offer Document outlines the Offer in detail.

Should you have any queries in relation to this matter, please do not hesitate to contact the Company.

Yours faithfully

Jean Mathie

COMPANY SECRETARY

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