SANDFIRE RESOURCES LIMITED — Investor Presentation 2012

Jun 6, 2012

A position of strength Start of copper shipments marks transition to production and cash-flow

Competent Person’s Statement

• The information in this public presentation that relates to Exploration Results and Mineral Resources is based on information compiled by Mr John Evans who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Evans is a permanent employee and Director of Sandfire Resources NL. Mr Evans 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 Evans consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.

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.

• 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.

• 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.

• 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.

• 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.

• This presentation may include forward-looking statements. Forward-looking statements are only predictions and are subject to risks, uncertainties and assumptions which are outside the control of Sandfire Resources NL. Actual values, results or events may be materially different to those expressed or implied in this presentation. Given these uncertainties, recipients are cautioned not to place reliance on forward looking statements. Any forward looking statements in this presentation speak only at the date of issue of this presentation. Subject to any continuing obligations under applicable law and the ASX Listing Rules, Sandfire Resources NL does not undertake any obligation to update or revise any information or any of the forward looking statements in this presentation or any changes in events, conditions or circumstances on which any such forward looking statement is based.

• To deliver superior returns to our owners from the premier high-grade DeGrussa VMS copper-gold mine

• To discover additional VMS deposits within the emerging Doolgunna mineral field

• To explore for, develop and mine key raw materials , in Australia and overseas

• To foster and develop long-term strategic relationships with raw materials end-users and traders

• To maintain the highest standards of safety, integrity and quality at all times

• To develop a world-class mining company

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• :

• Discovery to production less than 3 years

• :

• Delivered key project milestones on time and on budget

• Open pit operations and DSO shipments underway

• Construction and development approaching completion

• Plant commissioning : Q3 2012

• Exceptional life-of-mine grade 5+% Cu plus significant gold credits

• High-margin copper production to ramp-up by early 2013:

• ~77,000tpa copper , 36,000ozpa gold

• C1 cash costs in lowest cost quartile : ~US$1.00/lb (DFS)

• Strong operating cash flows building during 2012:

• Ability to fund exploration , shareholder returns and growth

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• Quality:

• High-grade resource: one of Australia’s stand-out greenfields discoveries

• Experienced corporate, development and operations teams

• : Strength

• High-margin production of 77ktpa copper in first three years

• $4.2 billion revenue (DFS: life-of-mine)

• $2.4 billion operating cash flow pre-tax (DFS: life-of-mine)

• Focus:

• Leverage to copper – strong demand and price outlook

• : Opportunity

• Near-mine VMS potential: $20M annual exploration spend

• Premier land-holding in emerging Bryah Basin copper belt

• Ability to target new business opportunities

• Shareholder returns :

• Strong cash flow allows a balance of shareholder return and business investment

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Source: Brook Hunt – a Wood Mackenzie Company
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Source: Brook Hunt – a Wood Mackenzie Company

• Copper demand outlook remains robust

• Supply constrained by declining global copper grades, increasing costs of production and breakeven

• Current spot copper price = US$3.45/lb vs. US$1.00/lb cash cost at DeGrussa

¹ Effective demand combines forecast market demand growth and the anticipated supply reduction from existing operations. Source: CRU, BHP Billiton Presentation May 2012

• 900km NE of Perth, established mining district

• Open pit and underground operation: +7 year life

• 100% debt funded through $390M financing facility

• Conventional 1.5Mtpa on-site concentrator

• Life-of-mine extraction: 10.72Mt @ 5% Cu, 1.7g/t Au:

• 541,000t copper, 599,000oz gold – contained

• Mining of DSO Ore Reserves (open pit) underway:

• 37,000t of copper (25.6% Cu), 12koz gold (2.5g/t)

• Production of high-grade, high-quality copper concentrate grading 27% Cu:

• 480,000t of payable copper metal

• 270,000oz of payable gold

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DeGrussa – hitting the milestones First DSO mined in February 2012

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DeGrussa – hitting the milestones Open pit well advanced with 6.5M bcm mined to date from Stage 1 and 1.2M bcm from Stage 2

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First shipment of 6,600t of DSO chalcocite grading 30% Cu

Underground: Massive Sulphide Mineralisation at C1 footwall contact

DeGrussa – hitting the milestones Process plant on schedule for commissioning late Q3 2012

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DeGrussa – hitting the milestones Concentrator crusher and ROM

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600-person accommodation village and airstrip for up to 100-seat aircraft operating

DeGrussa – hitting the milestones

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DeGrussa – hitting the milestones Concentrate sales process well underway – product in demand

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DeGrussa – development timetable
All key milestones achieved on schedule and on budget
Pre-Feasibility
Definitive Feasibility Study Achieved
Project Financing Achieved
Infrastructure Construction Achieved
Major Equipment Achieved
Concentrator Construction
Open Pit Achieved Direct Shipping Ore
Underground Achieved Massive Sulphide
Concentrator Ramp-up
Shipment
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DeGrussa – annual grade and C1 cost profile Exceptional grades underpin strong margins

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• Optimised project cash flows

• Higher grades + lower C1 costs in first three years = increased cash flow

• Oxide copper resources in open pit being stockpiled for later processing:

  • 44,000t of contained copper

  • 56,000oz of contained gold

• Positive results from metallurgical testwork

• further testwork continuing

• Objective is to convert oxide resources to Ore Reserves for inclusion in revenue stream

• Potential for additional copper production and revenue in early years of operations

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• Organic growth – exploration success:

• Extensive bank of information now accumulated within prospective DeGrussa mine corridor

• Prospective corridor extended to +30km, providing outstanding exploration potential

• Regional exploration across Australian portfolio

• Joint Venture opportunities

• Farm-in at Kennedy Highway Project (Qld)

• Other opportunities being assessed

• Acquisitions

• Highly experienced Business Development team in place

• Assessing opportunities globally

DeGrussa Mineral Field – regional exploration Premier 400 sq km land-holding in emerging copper province: first-mover advantage

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+ 30km strike length prospective for VMS mineralisation

• 30km long, 1.2km wide prospective corridor which can be explored to +2km vertical depth

• Of this, only 1.2km strike length has been intensively explored to 600m vertical depth

• Minimal drilling has been conducted below 50m depth outside of the central mine corridor campaign

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• Most significant VMS deposits occur in clusters that define major mining camps – major source of global copper, zinc, lead production, e.g.

• Bathurst (New Brunswick) – 229.8Mt @ 0.46% Cu, 7.66% Zn, 3.01% Pb, 91g/t Ag, 0.46g/t Au (camp discovered 1952)

• Kidd Creek (Abitibi, Ontario) – 149.3Mt @ 2.89% Cu, 6.36% Zn, 0.22% Pb, 92g/t Ag, 0.05g/t Au (deposit discovered 1963)

• Flin Flon (Manitoba) – 154 Mt contained over 27 deposits, primarily copper, zinc and gold (camp discovered 1922)

• Golden Grove (WA) – 65Mt @ 2% Cu, 3.5% Zn, 35g/t Ag, 0.7g/t Au (discovered 1971)

• DeGrussa (WA) – 14.33Mt @ 4.5% Cu, 1.6g/t Au (deposit discovered 2009)

• No one finds a big VMS – they get big

• Classic host sequence of intra-volcanic sediments

• Typical seafloor alteration with regionally extensive litho-geochemical signature

• Classic VMS sulphide textures, including remnant chimney structures, breccias, replacement textures and laminar bedded sulphides

• Sulphide mound structures with abrupt margins from sulphides to barren country rock

• Metal ratios and zonation representative of VMS deposits

• Strong VMS-style structural artefacts

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Volcanic District	No. of Deposits	Million Tonnes Ore	Million Tonnes Metal	Area of District (km²)
Hokuroku, Japan	18	90	6.2	720
Bathurst No1, Canada	12	180	15.1	880
Bathurst No2, Canada	15	98	5.8	1150
Flin Flon, Canada	10	65	4.3	560
Snow Lake, Canada	10	19	1.4	840
Noranda, Canada	20	204	4.7	1550
Matagami, Canada	8	34	3.0	230
Manitouwadge, Canada	4	56	30	-
Average of all Data	12	94	5.4

• D. F. Sangster from the Geological Survey of Canada conducted a study on eight precedent VMS districts ¹ :

• in Canada and Japan. His findings include

• The VMS districts studied contain between 4 and 20 deposits, with an average of 12 deposits

• The average total base metal content per district is 5.4 million tonnes

• In order of size, the largest deposit in each district contains, on average, 65% of the total metal and the second largest about 13%

¹ D. F. Sangster, Quantitative Characteristics of Volcanogenic Massive Sulphide Deposits, Geological Survey of Canada (Ottawa) (1980)

• Open pit production underway

• Overall project development nearing completion

• Concentrator commissioning in Q3 2012

• High-margin production profile

• Exceptional cash flow

• Exploration to establish a VMS copper-gold camp

• Strong and supportive major shareholders

• Quality project pipeline + ability to secure new quality projects

• Experienced Board and Management

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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.

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.

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.

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.

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.

A position of strength Start of copper shipments marks transition to production and cash-flow

• Issued capital: 151.1M ordinary shares , 9.7M options

• Market capitalisation: ~ $1.1 billion (at $7.50/share)

• Key project: DeGrussa (Doolgunna)

• Strategic partner: POSCO

• Product customers: POSCO MRI , Yunnan Copper ,

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OZ Minerals 19.8%
Posco 15.8%
Institutions 22.8%
Founders/Board 8.0%
Others 33.6%
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Board Derek La Ferla Non-executive Chairman Karl Simich Managing Director / CEO W. John Evans Executive Technical Director Soocheol Shin Non-executive Director Robert Scott Non-executive Director Management Matt Fitzgerald Chief Financial Officer Martin Reed Project Manager – DeGrussa Rob Klug Commercial Manager

Life-of-mine (LOM)
	$ 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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Table 1: 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 2: 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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