Sheffield Resources Ltd. — Capital/Financing Update 2016

Aug 30, 2016

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31 August 2016

Issue of Placement Shares and Options

Sheffield Resources Limited ( ASX: SFX , “Company”) is pleased to advise that subsequent to the announcement on 24 August 2016, the Company has now issued a total of 32,939,994 fully paid ordinary shares (“Placement”) at an issue price of 52 cents per share, raising approximately $17.1 million before costs.

A total of 18,163,060 shares were issued under the Company’s 15% placement capacity under ASX Listing Rule 7.1 and a total of 14,776,934 shares were issued under the Company’s additional 10% placement capacity pursuant to ASX Listing Rule 7.1A. In addition, as outlined in the announcement of 24 August 2016, the Company has also issued under ASX Listing Rule 7.1 4,000,000 options at an exercise price of 67.6 cents per option, expiring 31 August 2019 (“Options”). The Options have been issued in equal amounts to Bridge Street Capital Partners and Pulse Markets, or their respective nominees, as consideration for their ongoing role as Joint Capital Markets Advisers (“JCMAs”) to the Company.

Funds raised from the Placement will be used, together with existing cash reserves, to complete the Company’s Thunderbird mineral sands project bankable feasibility study and the Company’s exploration activities, and for general working capital.

An Appendix 3B is attached in respect of the Placement and Options.

Additional disclosure under ASX Listing Rule 3.10.5A

The Company provides the following additional information as required under ASX Listing Rule 3.10.5A in respect of the shares issued under the Company’s additional 10% placement capacity pursuant to ASX Listing Rule 7.1A:

1. The dilutive effect of the Placement on existing shareholders is as follows:

	Shares	%
Number of shares on issueprior to Placement	147,769,347	82
Dilution as a result of issue under ASX LR7.1A	14,776,934	8
Dilution as a result of issue under ASX LR7.1	18,163,060	10
Number of shares on issue followingPlacement	180,709,341	100

The shares issued under ASX Listing Rule 7.1A were issued to a new shareholder of the Company.

1. The shares issued under ASX Listing Rule 7.1A were issued to sophisticated and professional investors under the placement, as it was considered by the Board of the Company as the most efficient and effective mechanism to raise capital to fund the Thunderbird mineral sands project bankable feasibility study and the Company’s exploration activities.

2. There were no underwriting arrangements entered into as a part of the Placement.

3. The fee payable by the Company to the JCMAs in connection with the Placement comprises an aggregate cash fee of 6% of the funds raised pursuant to the Placement.

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Mr Jeremy Newman ASX Compliance Pty Limited Level 40, Central Park, 152-158 St Georges Terrace Perth WA 6000

Dear Jeremy,

Secondary Trading Notification – Notice pursuant to s708A(5)(e) of the Corporations Act 2001 (“the Act”)

RE: Placement of 32,939,994 fully paid ordinary shares (“New Shares”)

The Act restricts the on-sale of securities issued without disclosure, unless the sale is exempt under Section 708 or 708A. By the Company providing this notice, on-sale of the New Shares will fall within the exemption offered by Section 708A(5) of the Act.

The Company hereby notifies the ASX (as the operator of the prescribed financial market on which the New Shares are to be quoted) under Section 708A(5)(e) of the Act that:

• a) The Company issued the New Shares without disclosure to investors under Part 6D.2 of the Act;

• b) as at the date of this notice, the Company has complied with:

• i. the provisions of Chapter 2M of the Act as they apply to the Company; and

• ii. Section 674 of the Act; and

• c) as at the date of this notice:

• i. there is no information that has been excluded from a continuous disclosure notice in accordance with the ASX Listing Rules; and

• ii. there is no “excluded information” as defined in sections 708A(7) and (8) of the Act in relation to the Company.

If you have any further questions, please do not hesitate to contact me on 08 6555 8777.

Yours sincerely

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Mark Di Silvio CFO/Company Secretary Sheffield Resources Limited

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Appendix 3B New issue announcement

Rule 2.7, 3.10.3, 3.10.4, 3.10.5

Appendix 3B

New issue announcement, application for quotation of additional securities and agreement

Information or documents not available now must be given to ASX as soon as available. Information and documents given to ASX become ASX’s property and may be made public.

Introduced 01/07/96 Origin: Appendix 5 Amended 01/07/98, 01/09/99, 01/07/00, 30/09/01, 11/03/02, 01/01/03, 24/10/05, 01/08/12, 04/03/13

Name of entity

Sheffield Resources Limited

ABN

29 125 811 083

We (the entity) give ASX the following information.

Part 1 - All issues

You must complete the relevant sections (attach sheets if there is not enough space).

1 +Class of+securities issued or to be issued 2 Number of+securities issued or to be issued (if known) or maximum number which may be issued 3 Principal terms of the+securities (e.g. if options, exercise price and expiry date; if partly paid +securities, the amount outstanding and due dates for payment; if +convertible securities, the conversion price and dates for conversion)	1. Fully Paid Ordinary Shares 2. Unlisted Options
	1. 32,939,994 2. 4,000,000
	1. Fully Paid Ordinary Shares 2. The Unlisted Options each have an exercise price of 67.6 cents per option and are exercisable on or before 31/8/2019.

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

4 Do the+securities rank equally in all respects from the+issue date with an existing+class of quoted +securities? If the additional+securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 5 Issue price or consideration 6 Purpose of the issue (If issued as consideration for the acquisition of assets, clearly identify those assets) 6a Is the entity an+eligible entity that has obtained security holder approval under rule 7.1A? If Yes, complete sections 6b – 6h in relation to the+securities the subject of this Appendix 3B, and comply with section 6i 6b The date the security holder resolution under rule 7.1A was passed 6c Number of+securities issued without security holder approval under rule 7.1	1. Yes 2. No. The Unlisted Options do not entitle the holder to participate in dividends or new issues of securities. However, the Unlisted Options will be adjusted in the event of a reconstruction of capital. Shares issued on exercise of Unlisted Options shall rank equally in all respects with the existing Fully Paid Ordinary Shares on issue.
	1. $0.52 per share 2. Nil cash consideration
	1. Issued to sophisticated and professional investors pursuant to a placement announced on 24 August 2016, the proceeds of which will be used to complete the bankable feasibility study at the Thunderbird mineral sands project, exploration activities and for working capital purposes. 2. Issued to brokers in satisfaction of a 12 month contractual engagement
	Yes
	27 November 2015
	18,163,060 Fully Paid Ordinary Shares 4,000,000 Unlisted Options

• See chapter 19 for defined terms.

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Appendix 3B Page 4

Appendix 3B New issue announcement

6d Number of+securities issued with security holder approval under rule 7.1A 6e Number of+securities issued with security holder approval under rule 7.3, or another specific security holder approval (specify date of meeting) 6f Number of+securities issued under an exception in rule 7.2 6g If+securities issued under rule 7.1A, was issue price at least 75% of 15 day VWAP as calculated under rule 7.1A.3? Include the +issue date and both values. Include the source of the VWAP calculation. 6h If+securities were issued under rule 7.1A for non-cash consideration, state date on which valuation of consideration was released to ASX Market Announcements 6i Calculate the entity’s remaining issue capacity under rule 7.1 and rule 7.1A – complete Annexure 1 and release to ASX Market Announcements 7 +Issue dates Note: The issue date may be prescribed by ASX (refer to the definition of issue date in rule 19.12). For example, the issue date for a pro rata entitlement issue must comply with the applicable timetable in Appendix 7A. Cross reference: item 33 of Appendix 3B. 8 Number and +class of all +securities quoted on ASX (_including_the +securities in section 2 if applicable)	14,776,934	14,776,934
	Nil
	Nil
	Yes 31 August 2016 15 day VWAP: $0.673 75% of 15 day VWAP: $0.5048 Source: Bloomberg
	N/A
	See Annexure
	31/08/2016
	Number	+Class
	180,709,341	Fully paid ordinary shares

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

9 Number and +class of all +securities not quoted on ASX (_including_the +securities in section 2 if applicable)	Number	+Class
	1,200,000 500,000 1,400,000 1,600,000 3,700,000 118,428 4,000,000	Unlisted options ($0.65, 01/04/2017) Unlisted options ($0.66, 26/09/2018) Unlisted options ($0.87, 19/03/2019) Unlisted options ($1.16, 19/03/2021) Unlisted Performance options ($0.001, 08/02/2020) Unlisted Remuneration options ($0.001, 08/02/2020) Unlisted options ($0.676, 31/08/2019)

10 Dividend policy (in the case of a trust, distribution policy) on the increased capital (interests)

N/A

Part 2 - Pro rata issue

art 2 - Pro rata issue
11 Is security holder approval required? 12 Is the issue renounceable or non- renounceable? 13 Ratio in which the+securities will be offered 14 +Class of+securities to which the offer relates	N/A
	N/A
	N/A
	N/A

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

15 +Record date to determine entitlements 16 Will holdings on different registers (or subregisters) be aggregated for calculating entitlements? 17 Policy for deciding entitlements in relation to fractions 18 Names of countries in which the entity has security holders who will not be sent new offer documents Note: Security holders must be told how their entitlements are to be dealt with. Cross reference: rule 7.7. 19 Closing date for receipt of acceptances or renunciations 20 Names of any underwriters 21 Amount of any underwriting fee or commission 22 Names of any brokers to the issue 23 Fee or commission payable to the broker to the issue 24 Amount of any handling fee payable to brokers who lodge acceptances or renunciations on behalf of security holders 25 If the issue is contingent on security holders’ approval, the date of the meeting 26 Date entitlement and acceptance form and offer documents will be sent to persons entitled	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

27 If the entity has issued options, and the terms entitle option holders to participate on exercise, the date on which notices will be sent to option holders 28 Date rights trading will begin (if applicable) 29 Date rights trading will end (if applicable) 30 How do security holders sell their entitlements_in full_through a broker? 31 How do security holders sell_part_ of their entitlements through a broker and accept for the balance? 32 How do security holders dispose of their entitlements (except by sale through a broker)? 33 +Issue date	N/A
	N/A
	N/A
	N/A
	N/A
	N/A
	N/A

Part 3 - Quotation of securities

You need only complete this section if you are applying for quotation of securities

• 34 Type of[+] securities ( tick one )

• (a) +Securities described in Part 1

• (b)[All other ][+][securities ]

Example: restricted securities at the end of the escrowed period, partly paid securities that become fully paid, employee incentive share securities when restriction ends, securities issued on expiry or conversion of convertible securities

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Entities that have ticked box 34(a)

Additional securities forming a new class of securities

Tick to indicate you are providing the information or documents

35 If the[+] securities are[+] equity securities, the names of the 20 largest holders of the additional[+] securities, and the number and percentage of additional[+] securities held by those holders

36 If the[+] securities are[+] equity securities, a distribution schedule of the additional +securities setting out the number of holders in the categories 1 - 1,000 1,001 - 5,000 5,001 - 10,000 10,001 - 100,000 100,001 and over

• 37 A copy of any trust deed for the additional[+] securities

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Entities that have ticked box 34(b)

38 Number of[+] securities for which +quotation is sought 39 +Class of +securities for which quotation is sought 40 Do the[+] securities rank equally in all respects from the[+] issue date with an existing[+] class of quoted +securities? If the additional[+] securities do not rank equally, please state:  the date from which they do  the extent to which they participate for the next dividend, (in the case of a trust, distribution) or interest payment  the extent to which they do not rank equally, other than in relation to the next dividend, distribution or interest payment 41 Reason for request for quotation now Example: In the case of restricted securities, end of restriction period (if issued upon conversion of another[+] security, clearly identify that other[+] security)

Number +Class 42 Number and +class of all +securities quoted on ASX ( including the[+] securities in clause 38)

• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Quotation agreement

1 +Quotation of our additional +securities is in ASX’s absolute discretion. ASX may quote the +securities on any conditions it decides.

• 2 We warrant the following to ASX.

• The issue of the +securities to be quoted complies with the law and is not for an illegal purpose.

• There is no reason why those +securities should not be granted +quotation.

• An offer of the +securities for sale within 12 months after their issue will not require disclosure under section 707(3) or section 1012C(6) of the Corporations Act.

  • Note: An entity may need to obtain appropriate warranties from subscribers for the securities in order to be able to give this warranty

• Section 724 or section 1016E of the Corporations Act does not apply to any applications received by us in relation to any +securities to be quoted and that no-one has any right to return any +securities to be quoted under sections 737, 738 or 1016F of the Corporations Act at the time that we request that the +securities be quoted.

• If we are a trust, we warrant that no person has the right to return the +securities to be quoted under section 1019B of the Corporations Act at the time that we request that the +securities be quoted.

• 3 We will indemnify ASX to the fullest extent permitted by law in respect of any claim, action or expense arising from or connected with any breach of the warranties in this agreement.

• 4 We give ASX the information and documents required by this form. If any information or document is not available now, we will give it to ASX before +quotation of the +securities begins. We acknowledge that ASX is relying on the information and documents. We warrant that they are (will be) true and complete.

Sign here: (Company secretary)

Date: 31 August 2016

Print name: Mark Di Silvio

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• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Appendix 3B – Annexure 1

Calculation of placement capacity under rule 7.1 and rule 7.1A for eligible entities

Introduced 01/08/12 Amended 04/03/13

Part 1

Rule 7.1 – Issues exceeding 15% of capital

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

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Insert number of fully paid [+] ordinary 134,430,747
securities on issue 12 months before the
+ issue date or date of agreement to issue
Add the following: - 430,000
- 242,500
• Number of fully paid [+] ordinary
- 1,015,929
securities issued in that 12 month
- 184,222
period under an exception in rule 7.2 - 92,111
- 78,952
• Number of fully paid [+] ordinary - 10,913,886 (approved 5/2/2016)
securities issued in that 12 month - 381,000 (approved 5/2/2016)
period with shareholder approval
• Number of partly paid [+] ordinary Nil
securities that became fully paid in that
12 month period
Note:
• Include only ordinary securities here –
other classes of equity securities
cannot be added
• Include here (if applicable) the
securities the subject of the Appendix
3B to which this form is annexed
• It may be useful to set out issues of
securities on different dates as
separate line items
Subtract the number of fully paid Nil
+ ordinary securities cancelled during that
12 month period
“A” 147,769,347
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• See chapter 19 for defined terms.

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Appendix 3B New issue announcement

Step 2: Calculate 15% of “A”

Step 2: Calculate 15% of “A”
“B”	0.15
	[Note: this value cannot be changed]
Multiply“A” by 0.15	22,165,402
Step 3: Calculate “C”, the amount	of placement capacity under rule
7.1 that has already been used
Insertnumber of+equity securities issued	18,163,060 (fully paid ordinary shares)
or agreed to be issued in that 12 month period_not counting_those issued:	4,000,000 (unlisted options)
• Under an exception in rule 7.2
• Under rule 7.1A
• With security holder approval under
rule 7.1 or rule 7.4
Note:
• This applies to equity securities, unless
specifically excluded – not just ordinary
securities
• Include here (if applicable) the
securities the subject of the Appendix
3B to which this form is annexed
• It may be useful to set out issues of
securities on different dates as
separate line items

• This applies to equity securities, unless specifically excluded – not just ordinary securities

• • Include here (if applicable) the securities the subject of the Appendix 3B to which this form is annexed

• • It may be useful to set out issues of securities on different dates as separate line items

• “C” 22,163,060

Step 4: Subtract “C” from [“A” x “B”] to calculate remaining placement capacity under rule 7.1

placement capacity under rule 7.1
“A” x 0.15	22,165,402
Note: number must be same as shown in
Step 2
Subtract“C”	22,163,060
Note: number must be same as shown in
Step 3
Total[“A” x 0.15] – “C”	2,342
	[Note: this is the remaining placement
	capacity under rule 7.1]

• See chapter 19 for defined terms.

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Appendix 3B Page 13

Appendix 3B New issue announcement

Part 2

Rule 7.1A – Additional placement capacity for eligible entities

Step 1: Calculate “A”, the base figure from which the placement capacity is calculated

“A” 147,769,347 Note: number must be same as shown in Step 1 of Part 1

Step 2: Calculate 10% of “A”

art 2	art 2
Rule 7.1A – Additional placement capacity for eligible entities
Step 1: Calculate “A”, the base figure from which the placement capacity is calculated
“A” Note: number must be same as shown in Step 1 of Part 1	147,769,347
Step 2: Calculate 10% of “A”
“D”	0.10 Note: this value cannot be changed
Multiply“A” by 0.10	14,776,934
Step 3: Calculate “E”, the amount of placement capacity under rule 7.1A that has already been used
Insertnumber of+equity securities issued or agreed to be issued in that 12 month period under rule 7.1A Notes: • This applies to equity securities – not just ordinary securities • Include here – if applicable – the securities the subject of the Appendix 3B to which this form is annexed • Do not include equity securities issued under rule 7.1 (they must be dealt with in Part 1), or for which specific security holder approval has been obtained • It may be useful to set out issues of securities on different dates as separate line items	14,776,934 (fully paid ordinary shares)
“E”	14,776,934

that has already been used	that has already been used
Insertnumber of+equity securities issued		14,776,934 (fully paid ordinary shares)
or	agreed to be issued in that 12 month
period under rule 7.1A
Notes:
•	This applies to equity securities – not just
	ordinary securities
•	Include here – if applicable – the securities the
	subject of the Appendix 3B to which this form is
	annexed
•	Do not include equity securities issued under
	rule 7.1 (they must be dealt with in Part 1), or for
	which specific security holder approval has been
	obtained
•	It may be useful to set out issues of securities on
	different dates as separate line items
“E”		14,776,934

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A

Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A	Step 4: Subtract “E” from [“A” x “D”] to calculate remaining placement capacity under rule 7.1A
“A” x 0.10 Note: number must be same as shown in Step 2	14,776,934
Subtract“E” Note: number must be same as shown in Step 3	14,776,934
Total[“A” x 0.10] – “E”	0 Note: this is the remaining placement capacity under rule 7.1A

• See chapter 19 for defined terms.

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Appendix 3B Page 14