SANDFIRE RESOURCES LIMITED — Investor Presentation 2011

Jun 13, 2011

DeGrussa: Building a premier Australian copper-gold mine

Global Investor Roadshow – June 2011

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Forward-Looking Statements

• This presentation has been prepared by Sandfire Resources NL. This document contains background information about Sandfire Resources NL current at the date of this presentation. The presentation is in summary form and does not purport be all inclusive or complete. Recipients should conduct their own investigations and perform their own analysis in order to satisfy themselves as to the accuracy and completeness of the information, statements and opinions contained in this presentation.

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• This presentation is for information purposes only. Neither this presentation nor the information contained in it constitutes an offer, invitation, solicitation or recommendation in relation to the purchase or sale of shares in any jurisdiction.

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• This presentation may not be distributed in any jurisdiction except in accordance with the legal requirements applicable in such jurisdiction. Recipients should inform themselves of the restrictions that apply in their own jurisdiction. A failure to do so may result in a violation of securities laws in such jurisdiction.

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• This presentation does not constitute investment advice and has been prepared without taking into account the recipient's investment objectives, financial circumstances or particular needs and the opinions and recommendations in this presentation are not intended to represent recommendations of particular investments to particular persons. Recipients should seek professional advice when deciding if an investment is appropriate. All securities transactions involve risks, which include (among others) the risk of adverse or unanticipated market, financial or political developments.

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• To the fullest extent permitted by law, Sandfire Resources NL, its officers, employees, agents and advisers do not make any representation or warranty, express or implied, as to the currency, accuracy, reliability or completeness of any information, statements, opinions, estimates, forecasts or other representations contained in this presentation. No responsibility for any errors or omissions from this presentation arising out of negligence or otherwise is accepted.

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• Certain statements made during or in connection with this presentation 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.

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Our Vision

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Corporate Summary

Issued Capital: 148.4M ordinary shares 11.9M options Cash (31 May 2011): A$83.0M Major Shareholders

Last Major Funding Current Price Market Capitalisation

A$6.60/A$7.00 (November 2010) A$7.00 ~A$1 Billion

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Discovered A ril 2009 p Maiden Mineral Resource Februar 2010 y Pre-Feasibilit Stud Ore Reserve March 2011 y y, Mine develo ment commenced A ril 2011 p p Definitive Feasibilit Stud June 2011 y y

Today Plant construction commencing shortly Project funding well advanced Key personnel recruited Long-lead items ordered and key contracts awarded

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DFS Outcomes

First Production

First Production Q1 2012 (DSO), Q3 2012 (Conc.) 10.72Mt @ 5.1% Cu, 1.7g/t Au Life-of-mine extraction from Ore (541,000t contained copper, Reserves and Mineral Resources 599,000oz contained gold) discovered to date 93% Mineral Resource to Ore Reserve conversion – contained metal 480,000t payable copper (~77,000tpa in first 3 years) Production 270,000oz payable gold (36,000oz pa in first 3years) C1 cash costs (life-of-mine) US$1.02/lb Project revenue A$4.2 billion Pre-tax project operating cash flow A$2.4 billion

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Located within 400km[2 ] Doolgunna Project, 900km NE of Perth Established WA mining district +A$90M invested to date on resource and project evaluation Indigenous access agreements signed and key approvals secured

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Early extraction of DSO Ore Reserves:

0.14Mt @ 25.6% Cu, 2.5g/t Au

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37,000t copper, 12,000oz gold (Contained) Early sulphide copper ore for plant commissioning Oxide copper resources to be stockpiled for proposed processing

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Life-of-mine extraction of 10.72Mt @ 5% Cu, 1.7g/t Au (541,000t copper, 599,000oz gold – contained) Conventional open pit mining operation (~2 years) and longterm underground mine (initial 7+ year mine life) Conventional 1.5Mtpa on-site concentrator: Crushing, milling, flotation, de-watering and filtration Metallurgical recovery 91%

15-month construction period from June 2011 Production of high-grade, high-quality copper concentrate grading 27% Cu:

300,000tpa (FY 2013 – 2015) 220,000tpa (FY 2016 onwards)

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480,000t of payable copper metal 270,000oz of payable gold

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Life-of-mine (LOM)
						A$ Billion
Project revenue						4.2
Royalties (5% weighted average)						(0.2)
Operating costs and sustaining capital						(1.6)
Project operating cash flow	(pre-tax)					2.4
Pre-production capital expenditure						(0.4)
Project cash flow (pre-tax)						2.0
Project NPV (8% discount rate)						1.3
Project IRR (%)						108
	2013	2014	2015	2016	2017	2018	2019
Copper price (US$/tonne)	9,136	8,004	7,110	6,576	6,367	6,163	5,879
Copper price (US$/lb)	4.15	3.63	3.23	2.98	2.89	2.80	2.67
Gold price (US$/ounce)	1,294	1,252	1,307	1,273	1,166	1,166	1,166
USD/AUD	0.91	0.87	0.84	0.82	0.81	0.81	0.81

Financial Evaluation

Revenue forecasts were based on a consensus of copper, gold price and foreign exchange forecasts from leading international broking firms, investment banks and leading independent commodity forecasters. The pricing applied in the model is presented in 30 June financial years.

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Capital Cost Breakdown

	A$M
Construction (plant, equipment and infrastructure)	267
Open pit mining to access DSO	44
Underground mine development	56
Other pre-production	17
Total pre-production capital	384

Life-of-Mine Operating Cost Estimates

	Payable Copper (US$/lb)
Mining	0.48
Processing and maintenance	0.35
Administration	0.06
Transport	0.28
Treatment and refining	0.18
By-product credits	(0.33)
Total C1 cash costs	1.02

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Box-cut excavation completed – development of Evans Decline to commence shortly Pre-strip of open pit commenced April 2011 – two years from discovery Bulk earthworks underway for plant construction +200 people on site All major long-lead time equipment ordered

Open pit, underground and EPC contracts awarded, infrastructure contracts being finalised

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Pre-Feasibility Definitive Feasibility Study Project Financing Infrastructure Construction Major Equipment Concentrator Construction Open Pit Direct Shipping Ore Underground Massive Sulphide Concentrator Ramp-up Shipment

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Strong copper prices driven by continued global demand and tight supply Market deficit forecast as supply falls short of demand

Declining mine head grades, limited new discoveries and long lead-times on new projects constraining supply General consensus that strong copper prices are expected to continue

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----- Start of picture text -----

+10,000sq km tenement position in world-class
NT mineral province
Prospective for zinc-lead-silver deposits
(McArthur River-style), manganese (Groote
Eylandt-style), iron ore and uranium
Visible oxide copper mineralisation intersected at
Tawallah 1 prospect – further exploration
planned in 2011
Iron ore mineralisation confirmed adjacent to
Western Desert Resources’ (ASX: WDR) Roper
Bar Project
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Development of DeGrussa Project underway On track to produce first copper next year: First DSO ore from open pit due Q1 2012 First underground ore expected Q3 2012 High-margin production profile – positioned to take advantage of strong copper market Regional exploration objective to establish a VMS copper-gold camp Strong and supportive major shareholders Quality project pipeline Experienced Board and Management

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DeGrussa: Building a premier Australian copper-gold mine

Global Investor Roadshow – June 2011

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Table 2: DeGrussa Copper-Gold Project – March 2011 JORC Resource Statement

Zone	Resource Category	Location	Tonnes (Mt)	Copper (%)	Gold (g/t)	Contained Copper (t)	Contained Gold (oz)	Competent Person
Gold
Laterite	Measured	Open Pit	0.14	-	1.5	-	7,000	1
Copper	Measured	Open Pit	2.17	1.1	0.5	24,000	37,000	1
Oxides	Indicated	Open Pit	1.41	1.4	0.4	20,000	19,000	1
Supergene	Indicated	Open Pit	0.25	17.6	2.6	43,000	20,000	2
Chalcocite	Inferred	Open Pit	0.19	4.4	1.2	8,000	7,000	1
Primary Massive	Indicated	O/Pit / U/Ground	7.80	5.8	2.0	456,000	502,000	1
Sulphides	Inferred	Underground	2.32	4.3	2.0	100,000	149,000	1
Total			14.33	4.6	1.6	652,000	742,000

Note: Refer to the Competent Person’s Statements – Mineral Resources

1. Competent Person for these zones of resource was Diederik Speijers of McDonald Spielers

2. Competent Person for these zones of resource was David Slater of Coffey Mining

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Table 1: DeGrussa Copper-Gold Project – March 2011 Ore Reserve Statement

Deposit	Reserve Category	Mining Method	Tonnes (Mt)	Copper (%)	Gold (g/t)	Contained Copper (t)	Contained Gold (oz)
DeGrussa	Probable	Open Pit - DSO	0.14	25.6	2.5	37,000	12,000
DeGrussa/C1/ Chalcocite	Probable	Open Pit	0.23	6.1	2.4	14,000	17,000
DeGrussa	Probable	Underground	1.50	6.6	1.9	99,000	90,000
Conductor 1	Probable	Underground	5.76	4.9	1.8	283,000	337,000
Conductor 4	Probable	Underground	0.76	4.4	1.2	33,000	30,000
Total	Probable		8.39	5.6	1.80	465,000	485,000

Note 1: An open pit cut-off grade of 8.5% Cu is applied on the Chalcocite to provide a targeted 26% Cu direct sale product (Achieved 25.6% Cu after dilution). All other material within the defined deposit boundaries has been included in the reporting of Ore Reserves with any sub-economic grade material being treated as internal dilutents. These Ore Reserves include an overall assumption of 2.5% mining dilution at nil grade for all grade categories along with an assumed 2.5% mining loss of ore tonnes when mined. Calculations rounded to the nearest 10,000 tonnes; 0.1% Cu grade, 0.1 g/t Au grade; 1,000 tonnes Cu metal and 1,000 ounces Au metal. Errors of rounding may occur. These Ore Reserves occur within an open pit design containing 26Mt of total material, resulting in a waste to ore strip ratio of 70:1.

Note 2: Underground mining recovery factor of 95% applied to diluted stoping blocks, with cut-off grade of 1.5% Cu and minimum stope size of 2,000t. Calculations rounded to the nearest 1,000t, 0.1%, 0.1g/t and 1,000 ounces; errors of rounding may occur; assumes commodity prices of US$7,673/t for copper and US$1,300/oz for gold with a USD/AUD exchange rate of $0.86; assumes 91% metallurgical recovery rate. Note: Refer to the Competent Person’s Statement – Ore Reserves at the end of this release.

Resource zones still to be converted to Ore Reserve status:

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Open pit oxide copper resources of 3.58Mt @ 1.2% Cu and 0.5g/t Au (44kt contained copper, 56koz contained gold)

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2.32Mt of Inferred Massive Sulphide resources @ 4.3% Cu, 2.0g/t Au (100kt contained copper, 149koz contained gold)

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Competent Person’s Statement – Mineral Resources

• The information in this report that relates to Mineral Resources (except the Indicated Resource of Supergene Chalcocite) is based on information compiled by Diederik Speijers who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Speijers is a permanent employee of McDonald Speijers and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Speijers consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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Competent Person’s Statement – Mineral Resources

• The information in this report that relates to the Indicated Resource of Supergene Chalcocite is based on information compiled by David Slater who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Slater is a permanent employee of Coffey Mining and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Slater consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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Competent Person’s Statement – Ore Reserves

• The information in this report that relates to Ore Reserves is based on information compiled by Shane McLeay of Entech Pty Ltd, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr McLeay has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr McLeay consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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Competent Person’s Statement – Open Pit Ore Reserves

• The information in this report that relates to Open Pit Ore Reserves is based on information compiled by Quinton de Klerk of Cube Consulting, who is a Member of the Australasian Institute of Mining and Metallurgy. Mr de Klerk has sufficient experience which is relevant to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr de Klerk consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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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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