Doolgunna Project - Overview

The DeGrussa Copper-Gold Project is located 900km north of Perth and approximately 150km north of the regional mining centre of Meekatharra in the Peak Hill mineral field of Western Australia.

It is located within the 100%-owned Doolgunna tenement package, which comprises six contiguous granted Exploration Licences (E52/1698, E52/1699, E52/1715, E52/2209, E52/2358 and E52/2208) plus a seventh Exploration Licence (E52/2401) and a 17 sq km Mining Lease (ML52/1046) covering a total area of 400 sq km within an emerging copper-gold mineralised belt in the Bryah Basin.

The project area lies close to a number of existing and historical gold mines and infrastructure including the Goldfields Gas Pipeline and Great Northern Highway, which transects the Doolgunna tenement package.

In April 2009, Sandfire discovered the high-grade DeGrussa VMS (volcanogenic massive sulphide) copper-gold deposit in the north-eastern part of the Doolgunna tenement package.

Since then, the Company has completed more than 200,000 metres of diamond drilling, resulting in the discovery and delineation of the DeGrussa deposit, the underlying Conductor 1 deposit, and the adjacent Conductor 4 and Conductor 5 deposits.

This has resulted in a substantial inventory of high-grade, high-quality copper-gold resources. As at March 2011, the DeGrussa JORC compliant Mineral Resource inventory comprised a Measured, Indicated and Inferred Mineral Resource of 14.33 million tonnes, grading 4.6% copper and 1.6g/t gold, containing an estimated 652,000 tonnes of copper and 742,000 ounces of gold.

A maiden Ore Reserve inventory was also announced in March 2011 comprising 8.39 million tonnes grading 5.6% Cu and 1.8g/t Au for 465,000 tonnes of copper and 485,000 ounces of gold.

The Definitive Feasibility Study, which was completed in June 2011, has indicated that DeGrussa will be an exceptionally robust and high-margin project. The Project is forecast to generate life-of-mine revenue of $4.2 billion and a pre-tax project operating cash flow of $2.4 billion over its initial 7+ year life, based on the four lenses of high-grade VMS copper-gold mineralisation discovered to date.

Mining and process plant works commenced at DeGrussa during Q2 of CY 2011, with first copper production on track for Q1 of CY 2012. A $75 million initial funding facility for DeGrussa was signed in Q3 of CY 2011, with a full $360 million funding package on track to be finalised later in the Quarter.

Sandfire is also pursuing aggressive exploration programs within the 10km priority corridor on either side of the DeGrussa project, as well as more broadly within the Company’s 400 sq km tenement holding at Doolgunna, targeting potential repeats of the DeGrussa deposits.