SANDFIRE RESOURCES LIMITED — Capital/Financing Update 2011

Dec 14, 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 15 December 2011

DIRECT SHIPPING ORE SALES CONTRACT SIGNED WITH CHINA’S YUNNAN COPPER

SECOND SALES CONTRACT COMPLETES OFF-TAKE FOR HIGH-GRADE DSO

Sandfire Resources NL (ASX : SFR ; “Sandfire”) is pleased to advise that it has entered into a product sales agreement with Yunnan Copper Corporation Ltd for the remaining high-grade Direct Shipping Ore (DSO) to be produced from its 100%-owned DeGrussa Copper-Gold Project in Western Australia.

The contract is for the purchase of a minimum of 70,000 dry metric tonnes (dmt) of DSO between April 2012 and March 2013, representing the remaining 50 per cent of DSO production. This is the second product sales agreement to be concluded by Sandfire, following the DSO sales contract signed with MRI Trading AG in early November 2011.

The DSO will be produced as part of an initial open pit mining operation which is well advanced and on track to extract first chalcocite DSO in March 2012. The open pit will extract an estimated 143,000t of DSO reserves grading 25.6% copper and 2.5g/t gold containing approximately 37,000t of copper.

Yunnan Copper will purchase the DSO on a CIF (Cost, Insurance and Freight) basis with the remaining commercial terms of the contract being confidential. The first shipment under the contract is scheduled for the second Quarter of 2012.

Yunnan Copper was originally established in 1958 in Kunming, Yunnan Province as a copper smelter. Today it is the third largest copper producer in China. Aluminium Corp of China (Chinalco), the world’s second-largest alumina producer and largest aluminium producer in China, holds a controlling stake in Yunnan Copper.

Sandfire’s Managing Director, Mr Karl Simich, said he was pleased to have commenced a relationship with one of China’s leading copper producers for the sale of DSO which completes off-take arrangements for DSO production from the DeGrussa Project.

“This builds on the strong relationships and strategic partnerships we already have in place globally and ensures that we have comprehensive off-take arrangements in place to cover the entire output of highgrade direct shipping ore that will be produced during 2012 and into early 2013,” Mr Simich said.

“We look forward to working closely with Yunnan Copper Corporation. This will give Sandfire and the DeGrussa Project valuable exposure in the world’s most dynamic and fastest growing economy.”

“We are continuing discussions with several parties regarding the sale of concentrate from the underground operation and look forward to concluding suitable sales agreements in 2012.”

“I would like to take this opportunity to thank everyone within the Sandfire team for the diligent and focused way they have gone about their business this year, ensuring that 2012 will be the most important year in our history – the year of delivery and production.”

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15 December 2011

Project Development Update

Construction and mine development activities at DeGrussa continue to make e x cellent progress, with the overall Project Master Schedule indicating 53 per cent completion at the end of N ovember 2011.

The Stage 1 open pit remains a h ead of the DFS schedule, with total material moved now past 50 percent. The open pit is on track to achieve first chalcocite DSO in March 2012. In addition, a high-grade parcel of potentially direct shippab l e oxide ore was mined during November a nd delivered to the DSO pad. The Evans Decline had advanced over 800m from the portal by the end o f November, with first ore on track to be mined in March 2012. Total underground development has passed the 1km mark.

Construction of the 1.5Mtpa DeGrussa Concentrator was 25 per cent complet e at the end of November with construction of major concr e te foundations for the SAG mill and cru s hed ore bin completed. Concrete foundations for the cru s her pocket, ball mill and thickeners were well advanced, with six construction work fronts now established. The construction program remains on schedule for feeding first ore into the SAG mill in Q3 2012.

The sealed access road is complet e and all office buildings are now on site an d installed. All permanent Accommodation Village rooms are o n site and in the final phase of installation. T he Next G mobile phone service has been successfully com m issioned and construction of the Aerodrom e is well advanced.

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 (Nichol a s Read) Mobile: +61 421 619 084 (Paul Armstrong)

Figure 1 – DeGrussa Copper Mine location

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15 December 2011

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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