SANDFIRE RESOURCES LIMITED — Capital/Financing Update 2011

Dec 19, 2011

Sandfire Resources NL ABN 55 105 154 185 Level 2, 31 Ventnor Ave, West Perth Western Australia 6005 Phone: +61 8 6430 3800 Fax: +61 8 6430 3849 Email: info@sandfire.com.au Web: www.sandfire.com.au

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ASX/Media Release 20 December 2011

DEGRUSSA PROJECT PICTORIAL UPDATE

Sandfire Resources NL is pleased to provide a pictorial update on the ongoing progress of construction and infrastructure development at DeGrussa.

• Underground mine development is progressing on schedule with the “Evans Decline” currently advanced +870 metres from the portal, with approximately 580m of decline development remaining before the first ore is accessed. A second jumbo is also now operating underground.

• Open pit mining is progressing on schedule with a total 4.4 million bank cubic metres (bcm) of material mined to date from the Stage 1 open pit, which is over 56 per cent complete. The open pit is currently at a depth of 37 metres below surface with oxide copper mineralisation now exposed (approximately 18m above Direct Shipping Ore).

• Process Plant construction is 25% complete with construction of major concrete foundations for the SAG mill and crushed ore bin complete and concrete foundations for the crusher pocket, ball mill and thickeners well advanced. Excavations have commenced for the filter foundations and the concentrate shed. Construction remains on schedule for feeding ore into the SAG Mill in Q3 2012.

• Kalgoorlie Power Systems (KPS) have completed the power station building, ready for installation of generating units in January 2012. The 11 kV Switchroom, complete with high voltage gear has arrived on site. Commissioning of an initial 4 MVA power generating capacity is on schedule for February 2012.

• Major equipment delivery remains on schedule to arrive on site during March 2012. The Concentrate Filter shipment was dispatched on 16 December.

• Permanent fibre optic communication networks are now established across the site.

• All site office buildings have been installed.

• Installation of the 600 accommodation village rooms is complete and softscaping and landscaping of the common user areas has commenced.

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High Grade Oxide Copper Stockpile showing cooperite, malachite and chrysocholla (bright blue)

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ASX / Media Release

20 December 2011

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Open pit 37 m below surface (approximately 18m above Direct Shipping Ore)

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4.4 million bank cubic metres (bcm) of material mined to date

Waste dump haul road to tailings storage facility (background)

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Recording multi element grades with a portable XRF on the High Grade Oxide Copper Stockpile

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Evans decline advanced 870 metres

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ASX / Media Release

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Plant Equipment in Production

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Flotation Cell Insert
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Jaw Crusher Factory Testing
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Flotation Cell Tank
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SAG Mill Shell
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Ball Mill Ring Gear Machining
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Process Plant Construction

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Ball Mill Concrete Pour
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Coarse Ore Bin Strake
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Coarse Ore Bin Reclaim Tunnel

Concentrate Shed Pad

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Mill Concrete Work
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Crusher Pocket
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Power House Switch Room
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Power House (left) and Fuel Farm (right)

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Powerhouse Fuel Tanks
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Process Infrastructure Area
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Underground Workshop
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Emergency Response Training Centre
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On Site Laboratory
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Site Warehouse
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ENDS

For further information contact: Sandfire Resources NL Karl Simich – Managing Director/CEO Office: +61 8 6430 3800

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

Figure 1 – DeGrussa Copper Mine location

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Forward-Looking Statements

Certain statements made during or in connection with this statement contain or comprise certain forward-looking statements regarding Sandfire’s Mineral Resources and Reserves, exploration operations, project development operations, production rates, life of mine, projected cash flow, capital expenditure, operating costs and other economic performance and financial condition as well as general market outlook. Although Sandfire believes that the expectations reflected in such forward-looking statements are reasonable, such expectations are only predictions and are subject to inherent risks and uncertainties which could cause actual values, results, performance or achievements to differ materially from those expressed, implied or projected in any forward looking statements and no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of, among other factors, changes in economic and market conditions, delays or changes in project development, success of business and operating initiatives, changes in the regulatory environment and other government actions, fluctuations in metals prices and exchange rates and business and operational risk management. Except for statutory liability which cannot be excluded, each of Sandfire, its officers, employees and advisors expressly disclaim any responsibility for the accuracy or completeness of the material contained in this statement and excludes all liability whatsoever (including in negligence) for any loss or damage which may be suffered by any person as a consequence of any information in this statement or any error or omission. Sandfire undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after today's date or to reflect the occurrence of unanticipated events other than required by the Corporations Act and ASX Listing Rules. Accordingly you should not place undue reliance on any forward looking statement.

Exploration and Resource Targets

Any discussion in relation to the potential quantity and grade of Exploration Targets for the DeGrussa Project is only conceptual in nature. While Sandfire is confident that it will report additional JORC compliant resources for the DeGrussa Project, there has been insufficient exploration to define mineral resources in addition to the current JORC compliant resource inventory and it is uncertain if further exploration will result in the determination of additional JORC compliant Mineral Resources.

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