Doolgunna Project - Overview

The DeGrussa Copper-Gold Project is located 900km north of Perth and approximately 150km north of the 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 17km2 Mining Lease Application (MLA52/1046) covering a total area of 400km2 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 100,000 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 the delineation of a substantial inventory of high-grade, high-quality copper-gold resources. The DeGrussa JORC compliant Mineral Resource inventory currently comprises and Indicated and Inferred Resource of 10.67Mt @ 5.6% copper, 1.9g/t gold and 15g/t silver containing 600,000t of copper, 660,000oz of gold and 5.1Moz of silver.

Preliminary open pit optimisations and design have also resulted in the identification of a component of direct shipping material as part of the DeGrussa Mineral Resource inventory.

A Scoping Study is nearing completion on the DeGrussa Project, leading to a Definitive Feasibility Study commencing in the last Quarter of calendar 2010. This will pave the way for mine development activities to commence as early as the second Quarter of 2011.

Sandfire is also pursuing aggressive exploration programs within the 6km priority corridor on either side of the DeGrussa project, as well as more broadly within the Company’s 400km2 tenement holding at Doolgunna, targeting potential repeats of the DeGrussa deposits.