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A Premier Australian
Copper Producer
March 2014 Quarterly Report Presentation
Webcast – Karl Simich, Managing Director & CEO 17 April 2014
Access this presentation at: http://www.brrmedia.com/event/122782 / http://www.sandfire.com.au
S a n d f I r e R e s o u r c e s - A P r e m I e r A u s t r a l I a n C o p p e r P r o d u c e r
Important Information and Disclaimer 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 to 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. 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
• 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 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 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.
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Agenda
• Highlights
• Safety
• Mining
• Processing
• Sales
• Operating Costs
• Exploration
• Summary
March 2014 Quarterly Report Presentation
3
March 2014 Quarterly Highlights Record production; increased Mineral Resource; financing completion test met
Production and Operations
• March Qtr: 18,098t copper and 10,035oz gold produced; C1 cash cost of US$1.08/lb
• 1.5Mtpa underground mining rate maintained; development of C1 and C4/5 declines on schedule
• Copper recoveries of 91%; further recovery optimisation initiatives underway
• 50,036t of copper and 24,605oz gold produced for FY2014 to date: June Qtr results expected to be in-
line with March Qtr
Exploration
• Increased high grade Mineral Resource: +29,000t Cu and 41,000oz Au (net of mining depletion)
• Resource definition of eastern portion of Conductor 4 underway
• Drilling targeting Conductor 5 and Conductor 1 extensions planned for 2H CY2014
• Technical programs progressing as part of new regional farm-in joint ventures with Ventnor
Resources (Thaduna/Green Dragon) and Talisman Mining (Springfield)
Corporate and Financial
• Key financing completion test satisfied as part of original $380M facility
• Debt facility repayment: facility balance reduced to $190M following scheduled $40M repayment
• $90M cash and $16M receivables at 31 March 2014
• Acquisition of 37% interest in TSX-V listed WCB Resources: Tier-1 porphyry opportunity
4
Safety Continued sound safety performance
• Continued decline in Total Recordable Injury Frequency Rate
(TRIFR) to 13.0 at Quarter-end (vs. 13.5 at December Quarter-
end)
• Additional focus on prevention of lacerations, strain and sprain
injuries
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TRIFR
0
2
4
6
8
10
12
14
16
18
20
Jul '13 Aug '13 Sep '13 Oct '13 Nov '13 Dec '13 Jan '14 Feb '14 Mar '14
Mining Overview 1.5Mtpa underground mining rate maintained; mine development continuing on schedule
UNDERGROUND
• Four stopes on-line during the Quarter with four large
stopes commencing in March-April 2014
• Underground mining rate of 1.5Mtpa maintained with
381,439t of underground sulphide ore mined for the
Quarter
• Paste plant performance continues to improve
• C4/5 Decline development resumed following
successful realignment: no schedule or capital impacts
• Progressed development of C1 (369m) and C4/C5
(384m) declines from Evans Decline junction
• Total underground development progressed to +19km
6
Processing Copper recoveries increased and improving further; strong concentrate production
MILL THROUGHPUT
• 379,018t milled at average head feed grade of 5.3% Cu
• Nameplate 1.5Mtpa throughput maintained
RECOVERY
• Copper recovery of 91% achieved treating underground ore
• Gold recovery 53% on target
• Recovery increase due to improved operational stability with
advanced process control system
• Further recovery improvement initiatives underway targeting
~92% copper recovery
CONCENTRATE & METAL PRODUCTION
• 74,213t of concentrate produced
• 18,098t of contained copper produced: in line with guidance
7
Sales Copper and gold sales
• Quarterly sales of 20,867 tonnes
of copper and 10,842 ounces of
gold
• Nine shipments completed for
the Quarter including delayed
shipment from December 2013
• Port Hedland and Geraldton Ports
both operating well
• 5,000+ tonnes concentrate
holding at site and at port at
Quarter end
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Quarterly Unit Operating Costs C1 and total production costs
Unit costs – DeGrussa Mine Q3 FY2014
(US$/lb) Commentary
Mining (net of development) 0.51
Unit costs reduced in line with record copper and
gold production
1H FY 2014 was impacted by restricted open pit
recovery and lower ore grades; C1 of US$1.30/lb
2H FY 2014 solely underground ore from
higher grade stopes and higher recovery;
driving production higher and costs lower
below the guided US$1.15/lb full year target level
Processing 0.33
Business services 0.13
Transport, treatment and refining 0.50
C1 cost (pre-by product credit) 1.47
By-product credit (gold) (0.39)
C1 cost 1.08
Royalties 0.19
Production cost 1.27
Depreciation and amortisation 0.62
Total production cost 1.89
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Exploration Update Near-mine exploration delivering results; new regional exploration joint ventures
• Increased high grade Mineral Resource: +29,000t Cu
and 41,000oz Au (net of mining depletion)
• 35,935 m of RAB, RC and diamond drilling completed
• Underground drilling continuing:
• Resource delineation of eastern portion of Conductor 4
• Underground drilling planned in 2H 2014:
• Down-plunge extensions of Conductor 1
• Extensions of Conductor 5
• Co-funded deep diamond drilling confirms extensions of
prospective VMS horizon
• Technical work progressing as part of new regional
exploration joint ventures secured with Ventnor
Resources and Talisman Mining
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Near-Mine Exploration: the Next Steps Underground diamond drilling continuing throughout 2014 targeting resource additions and repeats
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Near-Mine Exploration: the Next Steps Underground diamond drilling continuing throughout 2014 targeting resource additions and repeats
2175 C4 DDD
2200 C4 DDD
• Down-plunge
extensions of
Conductor 4 drilled out
from 2200 C4 diamond
drill drive and being
incorporated in 2014
Mineral Resource
update
• Resource definition of
eastern portion of
Conductor 4
commencing from 2175
C4 diamond drill drive
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CONDUCTOR 4
Near-Mine Exploration: the Next Steps Underground diamond drilling continuing throughout 2014 targeting resource additions and repeats
13
• Conductor 5 resource
definition drilling
program
• Conductor 5 exploration
drilling program
• Drilling to commence in
2H CY2014 when
Conductor 5 drill drive is
complete
CONDUCTOR 5
Sandfire – Dominant Position in an Emerging VMS Province Consolidating a strong position in Western Australia’s emerging Bryah Basin VMS copper-gold province
• Only operating base metals processing plant in the region (1.5Mtpa DeGrussa Concentrator)
• Outstanding organic growth potential – extensive 65km strike length of prospective VMS horizon
• Recently expanded strategic footprint via Talisman and Ventnor Joint Ventures
14 14
Investment in WCB Resources Opportunity to participate in a potential Tier-1 porphyry copper-gold discovery on Misima Island
• Low-cost, low-risk opportunity in a Tier-1 porphyry copper-gold play via $5.9M placement in WCB Resources (TSX-V:
WCB)
• Key asset: 70% interest in Misima Project alongside Pan Pacific Copper (PPC) – a joint venture between JX Nippon
15
Mining & Metals Corporation
and Mitsui Mining &
Smelting Company
• Project located on an
offshore island with strong
history of mining and
development (+4Moz
Misima mine previously
owned by Placer Dome)
within one of the richest,
high-grade copper-gold
porphyry belts in the world
Investment in WCB Resources Near-mine exploration delivering results; new regional exploration joint ventures concluded
• Principal target is the Misima Porphyry on Mt
Sisa, located on edge of historical gold deposit
• Major copper-in-soils anomaly extending over
1.1km by 0.9km
• Corresponds to strong magnetic anomaly with
skarn mineralisation
• Interpreted to be major porphyry intrusive centre
• No deeper drilling despite strong linkage between
large gold mines and underlying copper-gold
deposits in PNG, Indonesia and Philippines
• Additional exploration and development potential
at Misima gold mine (+1.6Moz remaining
resources)
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ONE OF THE MOST ATTRACTIVE PROJECTS IN THE WORLD FOR A MAJOR COPPER DISCOVERY: DRILL-READY WITH DRILLING PLANNED IN
THE COMING MONTHS
Summary and Outlook
• Record quarterly production and cost performance:
• 18,098t copper, 10,035oz gold production at C1 cost of US$1.08/lb
• Financing completion test met
• Strong outlook for second half of FY 2014:
• FY2014 to date: 50,036t Cu, 24,605oz gold
• June Qtr results expected to be in line with March Qtr
• Strong operating cash flow:
• $40M repayment reduces finance facility to $190M
• Strong ongoing exploration commitment
• Technical programs progressing under new exploration JV’s: drilling
imminent
• New Tier-1 porphyry copper-gold opportunity secured
Record production quarter; strong outlook for 2H FY2014
A premier Australian copper producer
17
Contact Details:
Sandfire Resources NL Registered Office and Principal Place of Business
Level 1, 31 Ventnor AvenueWest Perth,
Western Australia 6005
T +61 8 6430 3800
F +61 8 6430 3849
www.sandfire.com.au
Access this presentation at: http://www.brrmedia.com/event/122782 / http://www.sandfire.com.au
S a n d f I r e R e s o u r c e s - A P r e m I e r A u s t r a l I a n C o p p e r P r o d u c e r
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