SANDFIRE RESOURCES LIMITED — Capital/Financing Update 2012

May 21, 2012

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

22 May 2012

SANDFIRE COMPLETES FIRST SHIPMENT OF DSO CHALCOCITE

Sandfire Resources NL (ASX: SFR ; “Sandfire”) is pleased to announce that it has completed the first shipment of Direct Shipping Ore (DSO) from its flagship DeGrussa Copper-Gold Project, located 900km north of Perth in Western Australia following the announcement of first production from the open pit during the March 2012 quarter.

The first shipment – comprising 6,600 dry tonnes of DSO grading approximately 30% Cu has departed from Geraldton on the Flinterland for delivery to customers in China. The shipment has an estimated value at the current spot copper price of approximately A$13 million, with final pricing subject to a quotational period. The high-grade DSO mined from the open pit will be sold under two sales contracts, with MRI Trading AG and Yunnan Copper Corporation Ltd.

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This first shipment marks Sandfire’s transition to producer status in the open pit operations, with regular DSO shipments expected over the remainder of CY2012 as the open pit progresses through chalcocite, oxide and sulphide material. The open pit mine commenced in May 2011 and is on schedule, with over 7.7 million bank cubic metres of material mined to date.

Sandfire’s Managing Director, Mr Karl Simich, said the first shipment of DeGrussa copper ore three years after the discovery of DeGrussa marked another outstanding achievement by the Company, and signals its formal transition to producer status and elevating it to the ranks of Australian mining companies.

• Estimate based on spot copper price of USD7,702/t and AUD/USD 0.985 (21 May 2012)

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“The sale of this remarkably high-g r ade ore over the coming months will, at cur r ent spot prices, generate significant value for the Company and its shareholders over a 9-month period. ” Mr Simich said.

“The overall project is now more th a n 80 per cent complete and we remain on schedule and on budget, with the overall objective of deliveri n g first underground ore to the SAG mill during Q3 CY2012. That will put us on track to ramp up production to an annualised level of 77,000tpa of c o pper and 36,000ozpa of gold by early CY 2013.”

Underground mine development i s also progressing on schedule with the Evans Decline currently advanced 1,300m from the portal a nd other development in sulphide ore. Co n struction of the 1.5Mtpa flotation plant is also on schedule a n d budget, with all major equipment on site.

Mr Simich said the next key milestone for the Company would be the completio n of sales agreements for the high-quality copper sulphide co n centrate to be produced by the Project fro m the 1.5Mtpa plant to be commissioned later in the year.

“Discussions for concentrate sale agreements are well advanced with stron g interest shown both by existing and new customers and at t ractive offers received to secure long-term o ff-take arrangements for our high-grade, clean concentrate,” he added.

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-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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