SANDFIRE RESOURCES LIMITED — Capital/Financing Update 2011

Jun 1, 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 2 June 2011

SANDFIRE AWARDS UNDERGROUND MINING AND PROCESS PLANT CONTRACTS FOR DEGRUSSA

Sandfire Resources NL (ASX : SFR ; “Sandfire”) is pleased to announce the award of two key contracts for its 100%-owned DeGrussa Copper-Gold Project in Western Australia with a combined value of $194 million.

An initial 3-year contract for underground mining services has been awarded to the specialist underground mining contractor Australian Contract Mining Pty Ltd (“ACM”), commencing in May 2011. The contract is a measure and value contract with an estimated value of $129 million over this initial term. Sandfire has an option to renew the contract for a further two years on the same terms and conditions after expiration of the initial 3 year term. ACM has mobilised to Site and commenced work under the contract.

The Process Plant Package Engineering, Procurement and Construction (EPC) contract for the processing facility at DeGrussa has been awarded to Abesque Engineering Limited, a subsidiary of the WA-based listed company Forge Group Limited (ASX: FGE).

The EPC contract, which is a lump sum contract and has a value of $65 million, involves the design, supply, installation and commissioning of the processing facilities for the DeGrussa Project. Site works for the process plant construction are scheduled to commence in September 2011, with practical completion scheduled for August 2012.

The process plant will have a capacity of 1.5Mtpa and will produce a nominal 230,000 dry tonnes of copper concentrates per annum.

Sandfire’s Managing Director, Mr Karl Simich, said he was very pleased to announce the award of the key underground mining and process plant construction contracts to two West Australian companies. “We are looking forward to working with ACM and Abesque in delivering these very important components of the DeGrussa Project,” Mr Simich said.

“The underground mine will form the centrepiece of the DeGrussa operation once the initial open pit operation is concluded, and we expect to be mining underground for many years into the future,” he continued. “We look forward to establishing a strong and co-operative relationship with ACM to establish an efficient and productive underground mining operation.”

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)

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ASX / Media Release

2 June 2011

Figure 1 – DeGrussa Copper-Gold Project location

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Forward-Looking Statements

Certain statements made during or in conne c tion with this statement contain or comprise certain for w ard-looking statements regarding Sandfire’s Mineral Resources and Reserves, e x ploration operations, project development operations, prod u ction 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 expectatio n s reflected in such forward-looking statements are reaso n able, such expectations are only predictions and are subject to inherent risks an d uncertainties which could cause actual values, results, performance or achievements to differ materially from those expressed, implied or proj e cted in any forward looking statements and no assurance c a n be given that such expectations will prove to have been correct. Accordingly, re s ults could differ materially from those set out in the forward-looking statements as a result of, among other factors, changes in economic a n d market conditions, delays or changes in project devel o pment, success of business and operating initiatives, changes in the regulatory e n vironment and other government actions, fluctuations in me t als prices and exchange rates and business and operational risk management. Exc e pt for statutory liability which cannot be excluded, each of S a ndfire, its officers, employees and advisors expressly disclaim any responsibility f o r the accuracy or completeness of the material contained in this statement and excludes all liability whatsoever (including in negligence) for a ny loss or damage which may be suffered by any person as a consequence of any information in this statement or any error or omission. Sand f ire undertakes no obligation to update publicly or release an y 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. Accor d ingly you should not place undue reliance on any forward looking statement.

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