SANDFIRE RESOURCES LIMITED — Investor Presentation 2016

Nov 27, 2016

28 November 2016

► Net debt-free

Opportunity Redefined

• Growing free cash flow

• Strong organic growth pipeline

Important Information and Disclaimer

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Forward-Looking Statements and Competent Person’s Statement

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.

• Competent Person’s Statement – Mineral Resources

• The information in this report that relates to Mineral Resources is based on information compiled by Mr Ekow Taylor who is a Member of The Australasian Institute of Mining and Metallurgy. Mr. Taylor is a permanent employee of Sandfire Resources and has sufficient experience that is relevant to the style of mineralization and type of deposit under consideration and to the activity which he is undertaking to qualify as Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Taylor 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 Mr Neil Hastings who is a Member of The Australasian Institute of Mining and Metallurgy. Mr Hastings is a permanent employee of Sandfire Resources NL and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Hastings 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 – Exploration Results

• The information in this report that relates to Exploration Results is based on information compiled by Mr. Shannan Bamforth who is a Member of The Australasian Institute of Mining and Metallurgy. Mr. Bamforth is a permanent employee of Sandfire Resources and has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Bamforth 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 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 Mineral Resource inventory and it is uncertain if further exploration will result in the determination of additional JORC compliant Mineral Resources.

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Our Core Values

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Operations, Corporate and Financial Exploration Business Development Sustainability

Operations, Corporate and Financial

• Fourth successive year of consistent, safe and profitable production

• Record full-year production for FY2016 of 68,202t Cu, 37,612oz Au, C1 US$0.95/lb

• Strong performance from both the underground mine and processing plant

• Annual net profit after tax of $46.4M on revenue of $497.2M

• Annual fully-franked dividend payout of 11.0cps

• Outstanding balance of finance facility reduced to $50M

• FY2017 outlook: 65-68kt Cu, 35-40koz Au at C1 of US$0.95-1.05/lb

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DeGrussa Mine (WA) – Consistent, Reliable, Low-Cost

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• Milling rates maintained at 1.6Mtpa and recoveries targeted at ~92% (LOM)

• Decline development completed to LOM design : mine development now focused on level development

267,063t Cu 151,570oz Au

• Record full-year production for FY2016 of 68,202t Cu, 37,612oz Au, C1 US$0.95/lb

• Strong, consistent outlook : FY2017 guidance 65-68,000t Cu, 35-40,000oz Au, C1 US$0.95-1.05/lb

The amount of metal-inconcentrate produced at DeGrussa over the past four financial years

PRODUCTION OVERVIEW – Key Figures

	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017 (guidance)
Copper (Cu)	64,017t	67,690t	67,154t	68,202t	65-68kt
Production
Gold (Au)	42,679oz	33,893oz	37,386oz	37,612oz	35-40koz
C1 Cash Operating Costs (US$/lb)	1.24	1.18	1.09	0.95	0.95-1.05

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Robust Underground Mine – All Lenses Now On Stream

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DeGrussa Underground Mine	Tonnes (Mt)	Copper (%)	Gold (g/t)	Contained Copper (t)	Contained Gold (oz)
Mine Plan	8.1	4.4	1.7	357,000	443,000
Ore Reserve	8.0	4.4	1.7	353,000	441,000
Mineral Resource	7.8	5.7	2.1	443,000	536,000

• Mining rate set to continue at 1.6Mtpa

► Production now sourced from all four lenses (DeGrussa, C1, C4, C5)

► Blending of ore feed allows process optimisation

• 40km of mine development completed

• C4 and C5 declines completed to LOM

As at 31 December 2015. Includes underground stockpiles.

Refer ASX Announcement “DeGrussa Mine Plan, Mineral Resource and Ore Reserve Update”, 14 April 2016

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Strong Financial Performance, Disciplined Capital Management

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• Consistent financial performance despite subdued commodity price environment

• Revenues to date of more than $2 billion

• ~$1 billion to date in operating cash flows

• Repaid $330M or 87% of our original $380M debt facility

• Net cash positive at 30 June 2016

FINANCIAL OVERVIEW:	FY 2013	FY 2014	FY 2015	FY2016
Revenue	$507.3M	$525.7M	$548.6M	$497.2M
Operating Cash-flow*	$272.4M	$249.5M	$250.1M	$166.5M
Net Profit After Tax	$88.0M	$78.2M	$69.0M	$46.4M
Earnings Per Share (basic) Cash and Deposits	57.48c $77M	50.22c $58M	44.18c $107M	30.54c $66M
Debt	$285M	$160M	$120M	$50M
Dividends	N/A	10c (final, unfranked)	13c (10c franked)	11c(100% franked)

*Prior to exploration expenditure

• $53M dividends to date

• Substantial ~$30M p.a. exploration budget

• No equity raisings since 2010

• Strong capital management: issued capital has only increased by 5% from 149.4M shares in 2011 to 157.7M shares currently

RAPIDLY REDUCING DEBT:

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($16M)
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2016 – Increasing Value in a Challenging Environment

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SANDFIRE RESOURCES NL (ASX:SFR)

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Market Capitalisation
at $6.15
~$970M
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ASX Stock
Issued
Market Dividends
Capital
Index
S&P 157.7M 11c
200 Shares FY16
Cash and
Debt Share Price
Deposits
$54.4M $50.0M $6.15
30 Sep 2016 30 Sep 2016 25 Nov 2016
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The Emerging Opportunity in Copper

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Chinese demand has remained strong and is picking up….

• Several investment banks now predicting that copper may be the next commodity to stage a price recovery

• UBS estimates that there has been an ongoing

• improvement in China’s real demand for copper driven by grid and property investment

• The strength of China’s property market is now flowing into fit-out demand, which should be sustained into 2017

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….as the supply surge abates and is absorbed….

• The ~4.5% increase in supply in 2016 has mostly come from major expansions in Peru, which are now nearing full ramp-up

• Supply growth is now forecast at just 0.3% y/y in 2017

• Lack of investment in supply is likely to be a key price driver in 2017

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Operations, Corporate
and Financial
Exploration and Growth
Pipeline
Business Development
Sustainability
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An Outstanding Track Record of Growth through Exploration

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As at 23 November 2016:
DeGrussa C4 and C5 Discovery
DeGrussa / C1 Discovery
First diamond hole DGDD-001 Monty JV Discovery
intersects 53.2m at 17.3% Cu, 2.5g/t Au Discovery hole
and 25.1m at 3.4% Cu and 1.6g/t Au
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Five high-grade, high-value VMS lenses discovered to date

• DeGrussa discovery: a game-changer which drove Sandfire’s share price from ~6c to ~$8

• Underpinned creation of significant ~$1 billion mid-tier copper producer

• Sparked a pegging rush and renewed interest in junior exploration sector post-GFC – established a new VMS copper-gold province in Western Australia

• New ultra-high-grade VMS discovery at Monty (Jun 15): provided price support amidst volatile and challenging market conditions

• Organically-driven growth strategy continues to deliver

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Exploration – It’s in our DNA

• Underpinned by strong ongoing cash-flows, Sandfire has invested up to $30M a year in exploration for the past five years:

• $20M at DeGrussa-Doolgunna (Western Australia) – FY2017

• $8M on our exploration initiative on Australia’s Eastern Seaboard – FY2017

• Focusing on belts with the potential to deliver Tier-1 assets

• Considered, diligent and technically driven approach

• An accomplished geoscientific team:

• Cutting-edge technologies

• Innovative thinking and creative approach

• Access to world-class consulting expertise

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$8M Exploration Budget
$20M Exploration Budget
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Doolgunna VMS Province – Exploration Overview

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• Greater Doolgunna region: 4,180km[2] including 65km strike length of prospective VMS lithologies

• Recent farm-in deal with Enterprise Metals (ASX: ENT) to earn up to 75% interest in tenements to the south

• New ground acquisitions and joint ventures

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• A dominant 4,180 square kilometre exploration footprint in a world-class VMS province

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Development Pipeline – Monty Deposit

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10km
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• Sandfire is Manager of the Springfield JV – interests Sandfire 70% / Talisman 30%

• Ultra-high grade VMS deposit discovered mid-2015

• Maiden JORC 2012 Indicated and Inferred Mineral Resource estimate – 1.05Mt at 9.4% Cu, 1.6g/t Au: *

  • 99,000t of copper, 55,000oz gold

  • 99% Indicated category, available for conversion to Ore Reserves

• One of the highest grade VMS deposits discovered anywhere in the world in the past three decades

• Confirms the potential for the overall Doolgunna VMS field to host multiple centres of mineralisation

• Refer ASX Announcement “DeGrussa Mine Plan, Mineral Resource and Ore Reserve Update”, 14 April 2016

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Development Pipeline – Monty Deposit

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• 16.42km[2 ] Mining Lease Application lodged

• High-level studies completed

• Preferred box-cut location selected

• Feasibility Study well advanced – $3.9M (100%) budget:

• Metallurgical testwork for comminution and flotation

• Geotechnical and structural geology studies well advanced

• Mine design engineering commenced

• Proposed haul road route under investigation

• DeGrussa and Monty integration

• Base case to model DeGrussa and Monty at total of 1.6Mtpa mining rate

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Maiden Monty Mineral Resource

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Springfield Joint Venture – Unlocking the Next Discovery Opportunity

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• Monty box-cut and decline geotechnical drilling

• Diamond drilling to test the areas down-dip and down-plunge of Monty, including Monty Deeps

• Systematic aircore and RC drilling, including at Monty NE, South Monty, Southern Volcanics, Homer East

• DHEM surveys of all RC and diamond drill-holes

• Orientation Induced Polarisation (IP) geophysical survey over Monty deposit

• Structural model development

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Doolgunna Exploration – 100%-owned Ground

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• Ongoing diamond drilling in near-mine environment focused on C5 East prospect – lithologies and alteration consistent with proximity to VHMS mineralisation

• Diamond and RC drilling to test geochemical anomalies in Airstrip South, Camp and Homestead prospects

• Updated geological model through Homestead and Red Bore prospect in progress

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Australian Regional Exploration Projects

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Targeting world-class discoveries in Australia’s premier exploration provinces

EXPLORATION:

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Northern Territory

• Active drilling by JV partners in Borroloola tenements

EXPLORATION:

Queensland Base Metals

• 2,400km² in Mt Isa-Cloncurry province

• 100km strike length with potential for Broken Hill/Cannington-style and IOCG mineralisation

• Key targets include 100% owned Breena Plains, Cannington West and Black Rock projects

EXPLORATION:

NSW Base Metals

• 2,100km² in Lachlan Fold Belt

• Outstanding potential for porphyry mineralisation

• Drill programme at high priority 100% owned Temora Project

• Number of priority gold and base metal targets

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Operations, Corporate and Financial

Exploration and Growth Pipeline

Business Development

Sustainability

Investment in Tintina Resources – Black Butte Copper Project

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• 61% stake in copper development company Tintina Resources (TSX-V: TAU) – ~$24M invested to date

• Developing the Black Butte Copper Project, central Montana, USA

• Advanced, high quality copper project in stable jurisdiction:

• NI 43-101 Measured and Indicated Resources of 15.7Mt grading 3.4% Cu for 533,600t of contained copper

• NI 43-101 Inferred Resources of 2.3Mt grading 2.8% Cu for 63,500t of contained copper

• One of the top-10 undeveloped copper projects worldwide by grade

• Outstanding near-mine and district-wide exploration potential

• Development studies underway

• Application for Mine Operating Permit (MOP) for Johnny Lee copper deposit lodged with Montana Department of Environmental Quality (DEQ)

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Operations, Corporate and Financial Exploration and Growth Pipeline Business Development Sustainability

2016 Safety – Our Priority

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Improved safety performance

• Increased focus on risk management and assurance processes implemented

• Board oversight and governance enhanced

• Ongoing initiatives have included further development of safety systems, improved safety leadership and enhancement of safety culture

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TRIFR
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Jul '13 Aug '13 Sep '13 Oct '13 Nov '13 Dec '13 Jan '14 Feb '14 Mar '14 Apr '14 May '14 Jun '14 Sep'14 Dec'14 Mar'15 Jun'15 Sep'15 Dec'15 Mar'16 June'16 Sep'16
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2016 Sustainability Report

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The DeGrussa Solar Power Project – Fully Operational

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► 10.6MW solar power farm at DeGrussa now fully operational

► Fully integrated with existing 19MW diesel-fired power station

► $40M project financed, developed and operated by international consortium

► Establishes DeGrussa as potential world-leading reference site for use of renewables

► One of the largest integrated off-grid solar power systems in the global mining industry

► Expected reduction in CO2 emissions by 12,000 tonnes per year

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Awards

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Summary – Positioned for Growth and Success

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• Consistent low-cost production

• Strong balance sheet – net cash position

• Growing free cash-flows

• Committed to organic growth via exploration

• Unlocking the potential at Doolgunna

• Developing a growth pipeline for the future

Sandfire is a high-margin, low-cost Australian copper-gold producer, ideally positioned for its next chapter of growth.

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28 November 2016 Annual General Meeting Opportunity Redefined

Mineral Resource, Ore Reserve and Mine Plan

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Table 1 – December 2015 Comparison of the Underground Mine Plan, Mineral Resource and Ore Reserve

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DeGrussa Underground Mine	Tonnes (Mt)	**Copper (%) **	Gold (g/t)	Contained Copper (t)	Contained Gold (oz)	Contained Gold (oz)
Mine Plan	8.1	4.4	1.7	357,000		443,000
Ore Reserve	8.0	4.4	1.7	353,000		441,000
Mineral Resource	7.8	5.7	2.1	443,000		536,000
DeGrussa Underground Mine by Orebody	Tonnes (Mt)	Stockpiles (Mt)	DG (Mt)	C1 (Mt) C4	(Mt)	C5 (Mt)
Mine Plan	8.1	0.1	0.9	3.1	2.2	1.8
Ore Reserve	8.0	0.1	0.9	3.0	2.2	1.8
Mineral Resource	7.8	0.1	0.9	3.0	2.1	1.7

Table 2 – December 2015 Mineral Resource

DeGrussa Mineral Resource	Tonnes (Mt)	**Copper (%) **	Gold (g/t)	Contained Copper **(t) **	Contained Gold (oz)
Underground Mine	7.8	5.7	2.1	443,000	536,000
Stockpiles (Open Cut)	2.9	1.2	1.0	35,000	89,000
December 2015 – Total	10.7	4.5	1.8	478,000	625,000

Table 3 – December 2015 Ore Reserve

DeGrussa Mine Ore Reserve	Tonnes (Mt)	Copper (%)	Gold (g/t)	Contained Copper (t)	Contained Gold (oz)
Underground Mine	8.0	4.4	1.7	353,000	441,000
Stockpiles (Open Cut)	2.8	1.2	1.0	35,000	84,000
December 2015 – Total	10.8	3.6	1.5	388,000	525,000

Refer ASX Announcement “DeGrussa Mine Plan, Mineral Resource and Ore Reserve Update”, 14 April 2016

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