SANDFIRE RESOURCES LIMITED — Capital/Financing Update 2011

Sep 28, 2011

ASX/Media Release 29 September 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.

• Engineering, procurement and construction (EPC) contractor, Abesque Engineering and Construction Ltd, has mobilised to site on schedule for the start of plant construction and first concrete for the plant footings has been poured. Plant construction is expected take approximately 12 months, with practical completion and commissioning scheduled for Q3 of 2012.
• Manufacture of the major equipment ordered by Sandfire earlier in 2011 is progressing on schedule. Some components are currently being packed for shipping and the first items are due to arrive during Q4 of 2011.
• All major bulk earthworks for the plant site have been completed, including pads, settlement and water ponds.
• Underground mine development is progressing on schedule with the "Evans Decline" currently advanced +500 metres from the portal, with approximately 950m of decline development remaining before the first ore is accessed.
• Open pit mining is progressing on schedule with a total 2.5 million bank cubic metres (bcm) of material mined to date from the Stage 1 open pit, which is 30 per cent complete. The open pit is currently at a depth of 20 metres below surface.
• The 200-room Construction Camp has been completed and is fully operational, including the kitchen/diner, recreation and other core facilities. The 400-room Permanent Mine Village will be fully installed on site by the end of October 2011.
• Site communications has been upgraded by the connection of a fibre-optic link to Telstra's network. Next G mobile phone coverage will be extended to the site once installation by Telstra is completed.
• Contracts for construction of the DeGrussa Aerodrome and Tailings Storage Facility are being finalised and final designs for the water borefield are progressing.
• Port discussions are progressing to secure berth capacity to accommodate exports of DeGrussa product.
• Discussions are well advanced with selected off-take partners for the sale of the high grade directly shippable material commencing Q2 of CY 2012. Further, Sandfire has commenced discussions with multiple parties for the sale of concentrate.

Underground decline – progressed to 500 metres

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-Gold Project location

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.