SANDFIRE RESOURCES LIMITED - Capital/Financing Update 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: [email protected] Web: www.sandfire.com.au

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ASX/Media Release 27 April 2011

DEGRUSSA UNDERGROUND DEVELOPMENT COMMENCES

MAIDEN BLAST MARKS THE START OF BOX-CUT EXCAVATION FOR “EVANS DECLINE”

Sandfire Resources NL (ASX : SFR ; “Sandfire”) is pleased to advise that excavation of the box-cut to establish the portal entrance to the decline to access the underground orebodies at its 100%-owned DeGrussa Copper-Gold Project in Western Australia has commenced following approval to commence mining and development from the Department of Mines and Petroleum.

The maiden blast for the box-cut excavation, which is located 300 metres from the planned open pit, occurred at 5.30pm on Thursday, 21 April 2011 ( see left-hand picture below ) and the first load-out of blasted material from the box-cut was completed at 6.15am on Saturday, 23 April ( see right-hand picture below ).

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The decline portal will be established within a few weeks and decline development will commence, continuing for the next 18 months. Based on current schedules, ore drive development (and ore production) will commence in Q1 CY2012 with the first stope expected to come on stream in Q4 CY2012, and the underground operation ramping up to its full 1.5Mtpa production rate by Q2 CY2013.

The underground decline has been named the “Evans Decline”, after Sandfire’s Technical Director, Mr John Evans, in recognition of his instrumental role in the discovery and drill-out of the DeGrussa CopperGold Project.

Waste pre-stripping of the open pit has also commenced to provide initial ore for commissioning of the DeGrussa concentrator as well as initial Direct Shipping Ore for sale to customers.

Camp construction is advancing well with capacity to accommodate 150 people in place. The camp is expected to be able to accommodate 250 people by the end of Q2 CY2011.

The maiden blast – which comes almost exactly two years after the first cautionary announcement was issued about the discovery of massive sulphide mineralisation on 30 April 2009 – marks another key step towards development of a premier copper-gold mine at DeGrussa.

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27 April 2011

Sandfire’s Managing Director, Mr K arl Simich, said the maiden blast was anot h er fantastic milestone for the Company and the Project. “It i s hard to believe that it was just two years a go that we received the first indications of a significant dis c overy at DeGrussa during a small RC drill c ampaign targeting oxide gold mineralisation,” he said.

“We are now embarking on the development of a world-class mining o p eration with full on-site construction on track to start by m id-year. That should put us on track to pr o duce our first copper at DeGrussa within three years of the discovery – an outstanding achievement,” Mr Simich added.

ENDS

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

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