ASX Announcement

17 December 2015

DOOLGUNNA PROJECT - MONTY UPDATE

Highlights

• Joint Venture (JV) commences with Talisman Mining Limited (ASX:TLM) following Sandfire reaching $15M far -in threshold to earn a 70% interest in the Springfield Project

m

a

M

 First Cash Call for JV funding dispatched (70% Sandfire and 30% T lisman)



Drilling is continuing to define the extents of the mineralisation at

drilling of the known mineralisation envelope ongoing

onty with in-fill

d

 Drilling of the Homer tren at Springfield has commenced

Sandfire Resources NL (ASX: SFR; "Sandfire") is pleased to provide an update on Monty copper- gold discovery located 10km east of the DeGrussa Copper-Gold Mine on the Springfield Project, part of its farm-in with Talisman Mining Limited (ASX: TLM; "Talisman") (see Figures 1 and 2).

Drilling update

Diamond drilling has continued at Monty with drilling increasing to four rigs on double shift. Since

the last Monty exploration update approximately 8,000m of drilling have

been completed. This

drilling has focused on resource definition within the lower zone. This has been aimed at defining the edge and continuity of the mineralisation via an infill program.

Drilling will continue over coming months on a targeted 40m x 40m pattern with the results to be used to calculate a maiden Mineral Resource estimate for Monty in the new year.

Recent drilling results are substantiating initial interpretations that were bas initial exploration holes. See Figure 2 for the updated Monty long section.

e

d on the wide-spaced

d

Exploration drilling at Springfiel

outside of Monty is also continuing, subject to the RC rig being

released from drilling pre-collars for the Mineral Resource definition program.

Drilling of the Homer trend at Springfield has commenced with an initial RC drill hole to test for the stratigraphic horizon along strike from previous drilling that intersected interpreted exhalite material

(TLDD0001 and TLDD0003).

interpretations.

Further drilling programs will be driven

by initial results and

Farm-In/Joint Venture Agreement

Sandfire advises that it has reached the $15 million expenditure threshold (project to date) which marks the end of its sole-funding stage at Springfield and commencement of the joint venture with Talisman. Sandfire now owns 70 per cent of the project (subject to independent audit). The first

$10 million of this expenditure has been confirmed by Talisman, and Talisman has transferred to Sandfire it's first 51 interest in the project corresponding to that $10 million.

w

With the earn-in conditions no

met, Sandfire will fund 70 per cent of all future expenditure at

Springfield, with Talisman funding the remaining 30 per cent under the terms of the JV.

The unincorporated Springfield Joint Venture has been formed with Sandfire being the initial Manager in accordance with the Farm-In and Joint Venture Agreement entered into on 20 December 2013. The Joint Venture has held its first meeting to determine the Springfield exploration program and budget for the next three months and has made its first cash call to the JV partners. An expenditure budget of $7.5 million has been set for the three month period commencing 1 December 2015.

Sandfire and Talisman are in negotiations to replace the existing Farm-In and Joint Venture Agreement with a more detailed agreement now that the $15 million has been spent and the joint venture formed. The existing agreement is legally binding and governs the relationship between the parties until a more detailed agreement is reached.

ENDS

For further information contact:

Sandfire Resources NL

Karl Simich - Managing Director/CEO

Office: +61 8 6430 3800

Read Corporate

Mobile: +61 419 929 046 (Nicholas Read)

Mobile: +61 421 619 084 (Paul Armstrong)

Figure 1: Monty Prospect showing drill-hole collar locations and interpreted schematic geology

Figure 2: Vertical Longitudinal Projection and initial interpretation of the Monty Prospect showing drill-hole piercepoints at the top of the primary intercept shown in bold. All intercepts are down-hole widths. A significant intersection is defined here as any intersection ≥ 3m estimated true width that has a grade of ≥ 2.0 % Cu, inclusive of non-mineralised material. To determine whether intersections that are 2.0% Cu, with the non-mineralised material included, then the intersection is considered significant. New intersections (not previously reported) are highlighted in yellow.

Figure 3: Interpretive cross-section of the Monty mineralisation (Lower Zone)

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 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 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.

Forward-Looking Statements

Certain statements made during or in connection with this statement contain or comprise certain forward-looking statements regarding Sandfire's Mineral Resources and Reserves, exploration operations, project development operations, production rates, life of mine, projected cash flow, capital expenditure, operating costs and other economic performance and financial condition as well as general market outlook. Although Sandfire believes that the expectations reflected in such forward-looking statements are reasonable, such expectations are only predictions and are subject to inherent risks and uncertainties which could cause actual values, results, performance or achievements to differ materially from those expressed, implied or projected in any forward looking statements and no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward-looking statements as a result of, among other factors, changes in economic and market conditions, delays or changes in project development, success of business and operating initiatives, changes in the regulatory environment and other government actions, fluctuations in metals prices and exchange rates and business and operational risk management. Except for statutory liability which cannot be excluded, each of Sandfire, its officers, employees and advisors expressly disclaim any responsibility for the accuracy or completeness of the material contained in this statement and excludes all liability whatsoever (including in negligence) for any loss or damage which may be suffered by any person as a consequence of any information in this statement or any error or omission. Sandfire undertakes no obligation to update publicly or release any revisions to these forward-looking statements to reflect events or circumstances after today's date or to reflect the occurrence of unanticipated events other than required by the Corporations Act and ASX Listing Rules. Accordingly you should not place undue reliance on any forward looking statement.