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QUARTERLY REPORT FOR THE PERIOD ENDED 31 MARCH 2010
Sandfire Resources NL ABN 55 105 154 185
ASX Code: SFR Web Page: www.sandfire.com.au Issued Capital: Ordinary Shares 129.1M Options 10.8M Major Shareholders: POSCO 17% Institutions 19% Founders/Board 8% Directors: Karl M Simich Acting Chairman / Managing Director W. John Evans Executive Technical Director Jonghun Jong Non-Executive Director Management: Matthew Fitzgerald CFO/Company Secretary Martin Reed Project Manager
HIGHLIGHTS
DOOLGUNNA COPPER-GOLD PROJECT (Western Australia)
• Phase I JORC compliant resource calculated for the DeGrussa Project
(DeGrussa and Conductor 1 lenses only) comprising an Indicated and
Inferred Resource of 7.13Mt at 5.2% copper, 1.9g/t gold and 15g/t silver,
containing:
o 372,000t of copper, 439,000oz of gold, 3.4Moz of silver
• 94% or 6.7Mt of the Phase 1 Mineral Resource in the Indicated category
and available for conversion to Ore Reserves
• Outstanding intervals of shallow, high-grade chalcocite achieved in recent
drilling directly above the primary DeGrussa lens, highlighting the potential
for a significant zone of direct shipping material. Intercepts include:
o 27.4m of massive chalcocite (DGDD-126)
o 32.3m of massive chalcocite (DGDD-131)
o 21.7m of massive chalcocite in separate layers (DGDD-134)
o 39.9m of massive chalcocite (DGDD-140)
o 35.0m of chalcocite with minor sulphides (DGDD-148)
• Chalcocite is a copper sulphide mineral containing up to 79.8% Cu when
pure. Assay results for these and other intervals are awaited
• Three diamond rigs are currently completing an aggressive resource drill-
out of the chalcocite zone, focusing on a central 80-90m long central zone,
with a view to establishing an initial JORC resource
• Further significant intersections achieved in the Conductor 4 deposit some
60m east of the previous drilling. Hole DGDD-149 opens up the potential for
down-dip extensions of Conductor 4. Drilling is continuing:
o DGDD-149: 15.65m of massive sulphides from 589.5m and 3.3m of
massive sulphides from 631.2m
• 17km2 Mining Lease Application (MLA) lodged with the Western Australian
Department of Mines and Petroleum for the DeGrussa Project
• Scoping Study progressing with metallurgical core drilling completed and
metallurgical testwork program underway – first results expected in the
June 2010 Quarter
CORPORATE
• $67M raised through an institutional Share Placement and strongly
supported Share Purchase Plan
• Sandfire included in the S&P ASX 300 index of the Australian Securities
Exchange
• Project Manager and Chief Financial Officer appointed
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OVERVIEW
Sandfire Resources NL (ASX: SFR – “Sandfire” or “the Company”) achieved several significant milestones
during the March 2010 Quarter, including estimation of a maiden Phase 1 JORC resource for its high-
grade DeGrussa Copper-Gold Project in Western Australia containing 372,000 tonnes of copper and
439,000 ounces of gold.
The achievement of this high-quality resource – within eight months from the commencement of the
resource drill-out – represents an outstanding achievement and underpins the value of the Company
and its growth strategy to become a leading mid-tier Australian mining company. Scoping Studies for a
potential mine development at DeGrussa progressed during the Quarter, with the lodgement of a
Mining Lease Application (MLA) marking the first critical milestone towards development.
Sandfire successfully raised $67 million on the back of the Phase 1 JORC resource announcement
through a strongly supported institutional share placement and Share Purchase Plan. This puts the
Company in a very strong position to fund both pre-development activities and continue to progress a
very aggressive 2010 exploration program both at DeGrussa and within the broader Doolgunna Project.
1. DOOLGUNNA COPPER-GOLD PROJECT, WESTERN AUSTRALIA (Sandfire 100%)
The Doolgunna Project is located 900km north of Perth and approximately 150km north of Meekatharra
in the Peak Hill mineral field of Western Australia. The Project comprises a dominant 395 square
kilometre tenement package within an emerging copper-gold mineralised belt. 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.
The DeGrussa Copper-Gold Project, which was discovered in mid-2010, lies in the north-eastern portion
of the Doolgunna tenements. A Phase 1 JORC compliant Indicated and Inferred Resource of 7.13 million
tonnes grading 5.2% copper, 1.9g/t gold and 15g/t silver was completed in February 2010. A Scoping
Study is currently underway on the DeGrussa Project.
Figure 1 – DeGrussa Project: Location
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1.1 Phase I JORC Resource – DeGrussa Copper-Gold Project
As reported last Quarter, Sandfire commissioned independent mining and resource consultants Coffey
Mining Pty Ltd to undertake an initial JORC resource estimate for the DeGrussa Project, encompassing
the DeGrussa and Conductor 1 lenses only. This Phase 1 resource was completed and announced during
the Quarter (see ASX Announcement, 22 February 2010 – “Phase 1 DeGrussa Resource: 372,000 tonnes
of copper and 439,000 ounces of gold” which includes the full Coffey Mining Report).
This resource, which was estimated using a cut-off grade of 1.0% Cu, was based on the results of 82
diamond drill holes and nine Reverse Circulation (RC) drill holes using mineralisation envelopes supplied
by Sandfire’s independent consulting geologist, Diederick Speijers, of McDonald Speijers.
The Phase 1 resource is summarized in Table 1 below:
Table 1 – DeGrussa Project, Phase I JORC Mineral Resource, February 2010
Lens Resource
Category
Tonnes
(Mt)
Copper
(%)
Gold
(g/t)
Silver
(g/t)
Contained
Copper
Metal
(tonnes)
Contained
Gold
(ounces)
Contained
Silver
(ounces)
DeGrussa Indicated 1.47 7.5 2.2 21 110,000 105,000 988,000
Inferred 0.15 5.1 2.5 13 8,000 12,000 62,000
Conductor 1
Indicated 5.20 4.6 1.8 13 239,000 306,000 2,219,000
Inferred 0.31 4.7 1.6 13 15,000 16,000 126,000
TOTAL –
2 lenses
Indicated 6.68 5.2 1.9 15 350,000 410,000 3,208,000
Inferred 0.46 4.8 1.9 13 22,000 28,000 188,000
TOTAL
7.13
5.2
1.9 15
372,000 439,000 3,396,000
Note: The resource was estimated by Coffey Mining Pty Ltd and is based on 82 diamond drill holes and 9 RC drill
holes completed prior to the end of December 2009. Drilling coverage is predominantly defined on a notional 40m
by 40m drill spacing on North-South orientated cross-sections. Statistical analyses on samples and 2m composites
were completed. Variography and search neighbourhood analysis were conducted as input into grade estimation.
Copper, gold and silver estimates have been generated by Ordinary Kriging. Values have been rounded and
differences may occur.
The Phase I resource – which was achieved within eight months of the discovery drill hole – is estimated
to contain 372,000 tonnes of copper metal, 439,000 ounces of gold and 3.4 million ounces of silver
within two major overlying lenses of coherent, uniform and steeply-dipping mineralisation commencing
approximately 120 metres below surface (see Figure 1 – DeGrussa Project: 3D Geological Model).
The Phase I resource encompasses all drilling up to the end of last year due to the large volume of assay
and geological data still to be processed. Therefore, it excludes the high-grade Conductor 4 lens and
significant resource potential within a high-grade chalcocite zone that lies directly above the DeGrussa
lode. These zones are currently being drill tested (see below).
The balance of drilling information for Conductor 4, extensions to the known lenses and the chalcocite
zone will be incorporated in the Phase II resource due by mid-2010.
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Figure 1 – DeGrussa Project: 3D Geological Model and Preliminary Mine Design
The completion of the maiden JORC resource for the DeGrussa Project is a landmark event for Sandfire
which provides a strong foundation for what the Company believes will rapidly progress as a high
quality, long-life mining operation.
The standout feature is the high grade of the resource which, combined with the continuous and thick
nature of the lenses, is expected to underpin a very robust future mining operation.
Figure 2 – Preliminary Mine Design Level Plans Showing the Conductor 1 and DeGrussa Lodes
Over 90% of the maiden resource has already been classified in the JORC Indicated category, which is a
higher level of confidence. This material is available for conversion to Ore Reserves once economic
parameters are applied to the deposit.
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The maiden resource cements DeGrussa’s position as one of the most significant new mineral
discoveries in Western Australia in the past decade. The exceptional grade and metal content can be
expected to translate into a high value per tonne deposit which represents an outstanding asset for the
Company.
1.2 Exploration and Drilling Update – DeGrussa Project
Diamond drilling resumed at the DeGrussa Project on 4 January with the following key objectives:
• to in-fill high-grade portions of the resource to assist with completion of the Phase II resource
upgrade;
• to in-fill and extend the Conductor 4 deposit with a view to generating an initial JORC compliant
resource estimate; and
• to test the potential for additional mineralisation and VMS deposits in the immediate vicinity of
Conductor 1/DeGrussa.
Following completion of the Company’s capital raising during the Quarter (see Corporate Section below),
Sandfire expanded this program with the announcement of an $8 million-plus exploration initiative that
will see as many as 4-6 drilling rigs operating concurrently at Doolgunna over the next six months. The
objectives of this program are threefold:
1. Resource extension drilling within the immediate environment of the DeGrussa and Conductor 1
lenses to increase the Phase 1 JORC resource, including:
o The near-surface, high-grade chalcocite zone which lies immediately above the
DeGrussa lens. This zone was intersected by initial drilling last year which led to the
discovery of the deeper sulphide mineralisation;
o The Conductor 4 deposit, which lies approximately 200m east and stratigraphically below
the DeGrussa and Conductor 4 deposits. Previous intersections in this zone include 17.7m
@ 5.5% copper and 2g/t gold and 5.1m @ 15% copper and 3.7g/t gold.
2. A major program of deep diamond drilling in the near-mine environment, with a fence of five,
wide-spaced diamond holes of up to 2,000 metres each to be drilled targeting extensions of the
mineralisation or new lenses both along strike and down-dip of DeGrussa, Conductor 1 and
Conductor 4 lodes. These holes will provide a platform to conduct sophisticated directional down-
hole electromagnetic (DHEM) surveys targeting new sulphide lodes; and
3. Expanded regional RC and diamond drilling targeting previously defined VTEM targets within the
broader 395 square kilometre Doolgunna Project area as well as new targets defined by the
recently completed second airborne VTEM survey.
This aggressive exploration program forms part of Sandfire’s planned company-wide exploration
expenditure of $15-20 million for calendar 2010.
If required, the Company will secure additional drilling capacity over and above the four diamond drill
rigs currently on site to deliver this program and expects at different times to have a further 1-2
diamond rigs and up to two Reverse Circulation (RC) drilling rigs operating.
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Up to the time of this report, a total of approximately 160 diamond drill holes have been completed at
the DeGrussa Project, as shown in the updated drilling plan in Figure 3 below:
Figure 3 – DeGrussa Project: Diamond Drilling to 18 April 2010
Significant new assay results received since the December 2009 Quarterly Report which were
incorporated in the Phase I resource estimate (released to the ASX on 18 January 2010) are summarised
below:
Interval (down hole) Copper Gold Zinc Silver
Hole Number Lens From
(m)
To
(m)
Total
(m)
(Cu)
(%)
(Au)
(g/t)
(Zn)
(%)
(Ag)
(g/t)
DGDD-056 Conductor 1 111.0 117.3 6.3 3.5 4.0 1.2 13.0
DGDD-057 Conductor 1 238.0 243.0 5.0 5.8 1.3 8.0 1.5
DGDD-065 Conductor 1
Conductor 1
180.4
185.0
183.0
191.0
2.6
6.0
3.0
3.2
1.0
0.3
-
-
6.0
5.0
DGDD-069 DeGrussa
Conductor 1
275.5
407.5
277.6
424.0
2.1
16.5
17.8
2.2
7.5
1.8
2.0
0.8
37.0
10.0
DGDD-072 Conductor 1 135.9 153.0 17.4 5.0 2.0 0.8 13.0
DGDD-073 Conductor 1
Conductor 1
Conductor 1
255.3
266.9
294.5
257.1
290.6
296.6
1.8
23.7
2.1
2.7
5.4
5.9
1.0
1.9
0.5
-
0.8
-
6.0
13.0
12.0
DGDD-074 Conductor 1 413.0 417.8 4.8 2.7 3.1 3.2 22.0
DGDD-075 Conductor 1 319.1 345.0 25.9 4.7 2.2 1.0 15.0
DGDD-076 Conductor 1 381.6 413 31.4 4.6 2.1 1.9 13.0
DGDD-077 Conductor 1 294.6 298.0 3.4 2.2 0.4 - 6.0
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Interval (down hole) Copper Gold Zinc Silver
Hole Number Lens From
(m)
To
(m)
Total
(m)
(Cu)
(%)
(Au)
(g/t)
(Zn)
(%)
(Ag)
(g/t)
Conductor 1 328.2 350.1 21.9 6.3 0.9 0.6 13.0
DGDD-079 Conductor 1 361.0 387.0 26.0 3.8 1.4 1.2 14.0
DGDD-080 Conductor 1
Conductor 1
353.0
363.0
361.9
377.0
8.9
14.0
10.6
1.6
3.0
0.2
1.9
-
29.0
5.0
DGDD-081A Conductor 1
Conductor 1
Conductor 1
336.0
359.0
369.4
356.0
364.0
384.3
20.0
5.0
14.9
4.8
3.6
4.7
0.8
0.2
1.9
0.7
-
1.9
7.0
4.0
21.0
DGDD-083 Conductor 1
Conductor 1
Conductor 1
127.6
144.9
264.0
129.6
149.3
283.3
2.0
4.4
19.3
3.3
12.7
4.6
3.9
1.9
1.8
-
-
1.6
11.0
19.0
18.0
DGDD-084 Conductor 1 431.0 434.1 3.1 3.0 0.8 - 12.0
DGDD-085 Conductor 1 427.2 434.0 6.8 14.8 1.7 - 31.0
DGDD-086 Conductor 1
Conductor 1
378.7
396.9
387.0
424.0
8.3
27.1
7.2
2.9
0.2
1.3
-
1.8
3.0
14.0
(All intervals are downhole)
Assay results received recently and not included in the Phase I JORC resource estimate are summarized
below:
Hole Number Lens From
(m)
To
(m)
Total
(m)
(Cu)
(%)
(Au)
(g/t)
(Ag)
(g/t)
DGDD-090 Conductor 1 346.4 375.5 29.1 4.7 1.1 7.0
DGDD-093 DeGrussa
Conductor 1
306.0
386.0
311.0
397.0
5.0
11.0
10.8
2.1
1.1
2.3
16.8
16.1
DGDD-098 Conductor 1
Conductor 1
490.2
511.8
498.0
518.5
7.9
6.7
2.2
1.2
0.4
1.7
9.0
8.9
DGDD-065 Conductor 1
Conductor 1
180.4
185.0
183.0
191.0
2.6
6.0
3.0
3.2
1.0
0.3
6.0
5.0
DGDD-117 Conductor 1 376.0 397.0 21.0 13.1 2.8 29.0
DGDD-118 Conductor 1 229.0 253.0 24.0 7.7 2.7 16.8
DGDD-120 DeGrussa
Conductor 1
197.0
328.0
256.0
351.0
59.0
23.0
5.1
3.2
1.5
2.0
17.6
18.1
In addition, further significant mineralised intercepts continue to be recorded from the DeGrussa
Project, as summarized in Table 1 attached to this Quarterly Report.
One diamond drill rig is currently focusing on drilling out the Conductor 4 deposit with a view to
establishing an initial JORC compliant resource for inclusion in the Phase II resource update.
Of particular note, hole DGDD-149 recent returned two significant intercepts approximately 60 metres
east of the easternmost intersections:
• Hole DGDD-149 15.65m of massive sulphides from 589.5m
3.3m of massive sulphides from 631.2m
This hole indicates that the Conductor 4 system remains open to the east and north, despite previous
indications from down-hole electromagnetic (EM) surveys that it had limited extensions in these
directions. Drilling is continuing.
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Final assay results from a large number of drill holes are pending, including a large number of additional
mineralized intercepts as summarized in Table 1 attached. These results are expected to become
available during the June 2010 Quarter.
All of these results plus ongoing drilling data will be incorporated into the Phase II resource estimate for
release either late in the June 2010 Quarter or early in the September 2010 Quarter. Aggressive drilling
will continue until a notional cut-off point in Mid-May, to enable timely review and processing of assay
results before handing over the updated database to Coffey Mining for preparation for the Phase II JORC
resource.
1.3 Drilling Update – Chalcocite Zone
Towards the end of the March Quarter, Sandfire commenced a program of shallow diamond drilling to
test a zone of shallow, chalcocite-rich copper mineralisation located directly above the primary
DeGrussa deposit. This zone was originally intersected in RC drilling targeting oxide gold deposits which
resulted in the discovery of the deeper primary sulphide mineralisation at DeGrussa.
As reported to the ASX on 6 April, this drilling has intersected thick intervals of shallow, chalcocite-rich
copper mineralisation above the primary DeGrussa lens, highlighting the potential for a significant zone
of exceptionally high-grade, near-surface material.
The chalcocite evaluation program initially consisted of a series of vertical pre-collared diamond holes
drilled central to the line of the DeGrussa mineralisation to test the thickness of the oxide and residual
chalcocite cap of mineralisation overlying the primary chalcopyrite copper mineralisation, targeted by
Sandfire’s earlier evaluation program.
While assay results are awaited, geological logging of the core and field Niton analysis indicates that five
of the eight holes intersected thick intervals of chalcocite-rich massive sulphides overlying the primary
sulphide lode, as summarised below (see Table 2 attached for a full list of mineralised intercepts):
• Hole DGDD-126 27.4m of massive chalcocite from 89.0m
• Hole DGDD-131 32.3m of massive chalcocite from 92.7m
• Hole DGDD-133 10.0m of siliceous chalcocite from 40.0m
• Hole DGDD-134 21.8m of massive chalcocite in three separate layers from 57.3m to
100.6m
• Hole DGDD-140 39.9m of massive chalcocite from 99.9m
• Hole DGDD-148 35.0m of chalcocite with minor sulphides from 104.4m
Note: Chalcocite is a copper sulphide mineral containing up to 79.8% Cu when pure. It is formed locally
by the leaching by surface ground water of the primary chalcopyrite-rich mineralisation (chalcopyrite
contains 34.5% Cu).
Chalcocite has been intersected over a strike length of approximately 80 metres of the DeGrussa lode
and drilling is continuing to extend this and determine the width and thickness of the near-surface
mineralisation. Table 2 attached contains a full list of mineralized intercepts from this program.
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The location of the diamond drill holes targeting the chalcocite zone is shown in Figure 4 below:
Figure 4 – DeGrussa Project: Chalcocite Resource Definition Drilling Program
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Holes DGDD137 and 141, located in the south western end of the DeGrussa lode interested deep
primary chalcopyrite-rich massive sulphides below the depth of chalcocite formation. Hole DGDD 139,
located further south, did not intersect the chalcocite zone or primary DeGrussa lens but did intersect
the deeper Conductor 1 primary sulphide lode.
The near-surface, high-grade chalcocite zone lies directly above the DeGrussa lens, for which Sandfire
has reported a JORC compliant Indicated and Inferred Resource of 1.62Mt grading 7.2% copper, 2.2g/t
gold (containing 118,000 tonnes of copper metal and 117,000oz of gold).
Since the time of that announcement, a total of 17 chalcocite intersections of varying significance have
been achieved. The eastern end of this zone appears to comprise mainly chalcocite residual stringer
zones while the 80-90m thick solid central zone appears to comprise strong intersections of high-grade
chalcocite mineralisation.
Since establishing the presence of thick chalcocite intervals, Sandfire has commenced selective drilling
of inclined core holes and additional vertical holes aimed at establishing JORC compliant resources for
this higher-grade copper mineralisation.
The presence of an enriched chalcocite cap to the DeGrussa deposit, located directly above the primary
chalcopyrite sulphide lode, is considered to be a very significant and encouraging development. The
new results highlight the potential for a starter open pit operation based on extraction of a high-grade
direct shipping product before extraction of the primary underground sulphide resources commences.
1.4 Mine Development
Excellent progress was made during the Quarter with the Scoping Study for the DeGrussa Project,
including preparations for regulatory approvals, metallurgical test work and the lodgment of a Mining
Lease Application (MLA).
The Scoping Study is expected to transition seamlessly into a Pre-Feasibility Study (PFS) which will
commence by mid-CY 2010. This in turn will lead directly to a Definitive Feasibility Study commencing
later in the second half of CY 2010, which will provide a strong foundation for a potential mine
development process commencing in CY 2011.
Sandfire has continued to progress its Scoping Study to assess potential mine development options for
the DeGrussa Project and commenced the project approvals process. This includes:
• commencement of the process for obtaining key environmental and project approvals including
the appointment of environmental consultants and initial meetings with key regulators. Baseline
flora, fauna, archaeology and hydrological studies have commenced in preparation for
submissions to regulators;
• submission of a Mining Lease Application (MLA) and implementation of a process to address
Native Title and Heritage;
• completion of the first phase of mineralogical examination of the ore to support the
metallurgical testwork program. Also, a program of large-diameter metallurgical core drilling
has been completed within the resource envelope to provide some 5 tonnes of samples for
metallurgical test work. These samples have been submitted to the metallurgical test laboratory
and comminution testwork has commenced. Flotation testwork will commence in the next few
weeks, with first results expected in the June 2010 Quarter;
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• a preliminary underground mine design and schedule has been completed (see Figures 1 and 2
above). Open pit design work will commence once the current chalcocite drilling has been
completed; and
• other studies that have commenced include identification of water supply, geotechnical, gas and
power supply.
During the Quarter, Sandfire lodged an application with the Department of Mines and Petroleum of
Western Australia for a Mining Lease over the DeGrussa Copper-Gold Project.
The Mining Lease Application (MLA) process is integral to the current Scoping Study and the
advancement of the DeGrussa Project towards development as part of the Definitive Feasibility Study
due to commence in late September/early October 2010.
The area of the Mining Lease Application is approximately 17km2 and covers the known mineralisation at
DeGrussa, Conductor 1 and Conductor 4.
1.5 Regional Exploration – Emerging VMS Camp
While the principal focus of activity during the Quarter was resource drilling within the main DeGrussa
Project area, Sandfire did commence an initial program of regional diamond drill testing to progressively
test a series of VTEM targets within the host sequence of the Narracoota Volcanics, the stratigraphic
package which hosts the mineralisation at DeGrussa.
The targets tested during the Quarter were from the original package of 17 targets identified from the
first 150 square kilometre regional airborne EM surveys completed over Sandfire’s 395 square kilometre
tenement package at Doolgunna (see Figure 5 below).
The objective of Sandfire’s regional program is to test the potential for the Doolgunna Project to emerge
as a new VMS Camp with multiple deposits.
Drilling of the first VTEM target of the year was completed during the Quarter without intersecting
sulphide mineralisation. This drilling did encounter encouraging geology within the host rocks of the
Narracoota Volcanics, providing valuable geological information which will be applied across the
exploration program.
Sandfire has now received the results of a second very detailed, low-level 250km2 airborne magnetic
survey which was completed over the Doolgunna tenements last Quarter. While interpretation of these
survey data is still being completed, preliminary indications are that they will provide important new
directions in the Company’s regional exploration program.
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Figure 5 – Doolgunna Project: Geology and Initial Series of VTEM Targets
The new information is assisting Sandfire to prioritise areas within the stratigraphic sequences running
through its tenement holdings, with several exciting new targets identified. Ground EM surveys are
currently being undertaken over several priority airborne VTEM anomalies.
Programs of work have been submitted for drilling programs in up to 14 areas with drilling scheduled to
commence as clearances are obtained during the June 2010 Quarter.
Systematic drill testing of a series of VTEM targets will be progressively undertaken over the coming
months to provide a definitive test of the Doolgunna Project as a potential emerging VMS province.
The mineralisation style, chemistry and regional setting of the Conductor 1/DeGrussa Deposits are
consistent with Volcanogenic Massive Sulphide (VMS) style deposits. This type of mineralisation typically
occurs in clusters of deposits or occurrences, often with multiple centres of mineralisation across a
region or province.
Examples of major VMS deposits globally include Bathurst, Abitibi and Noranda in Canada, which
contain multiple deposits ranging in size from less than 1 million tonnes up to super-giant deposits of
over 100 million tonnes.
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1.6 Iron Ore Exploration
Sandfire has located and mapped seven separate zones of iron mineralisation within the Robinson Range
at Doolgunna. The total area of low phosphorus, hematite-goethite mineralisation is approximately
200,000 square metres contained in two moderate sized deposits and five small deposits. There are
several areas where the mineralisation extends under cover. The Doolgunna Project straddles the Great
Northern Highway and is ideally located for a small mining operation, trucking to either railheads or
export ports.
In light of the Company’s focus on the copper-gold discoveries at Doolgunna, no significant activity was
carried out on the Doolgunna iron ore prospects during the Quarter. However, the Company continues
to receive expressions of interest in the iron ore potential of its tenements from other operators in the
iron ore industry, particularly following the recent increase in iron ore prices.
2. BORROLOOLA PROJECT: NORTHERN TERRITORY (SANDFIRE 100%)
The Borroloola Project comprises a total area of 13,400 square kilometres of granted tenements and
tenements under application in the Northern Territory. The Project encloses a significant proportion of
the Batten Fault Zone, host to the giant McArthur River lead and zinc mine deposit. This deposit is the
second largest SEDEX base metal deposit in the world. The Project also covers near-coastal areas of
Cretaceous rocks considered to be highly prospective for sedimentary manganese mineralisation, similar
to the world-class Groote Eylandt manganese deposits north of the Borroloola Project in the Gulf of
Carpentaria.
2.1 Manganese Exploration
Last Quarter, Sandfire entered into an agreement with the ASX-listed mining services and contracting
company, Mineral Resources Limited (ASX: MIN), to fund the ongoing exploration and development of
its highly prospective Borroloola Manganese Project.
The agreement will see Mineral Resources – through its wholly-owned subsidiary, Process Minerals
International (PMI), which has a successful track record in the manganese industry – solely fund and
operate an exploration and development program at the Borroloola Project.
Mineral Resources/PMI will also solely fund the full cost of any mining operation (including all capital
costs) established at Borroloola as well as meeting all associated operating expenses of any manganese
operations. In return, Mineral Resources/PMI will be entitled to 70% of profits (before interest and tax)
flowing from the future sale of manganese products.
Essentially, under the agreement Sandfire will receive 30% of the profit (before interest and tax) from all
manganese operations undertaken by Mineral Resources/PMI and importantly at no risk or cost to
Sandfire. The deal also provides for full accommodation of Sandfire’s agreement with Korean steel
maker POSCO, under which POSCO is entitled to buy 30% of all manganese produced from any
operation. POSCO is Sandfire’s largest shareholder with a stake of 17.5%.
2.2 Base Metal Exploration
Sandfire’s original exploration objective at Borroloola was the discovery of high grade, large tonnage
SEDEX-style zinc, lead and silver mineral deposits within the McArthur Basin and in close proximity to
the Emu Fault Zone (EFZ) that is the eastern boundary of the Batten Fault Zone.
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This deposit type and geological setting is similar to that of the giant McArthur Mine (HYC Deposit) that
is located west of the EFZ and south of Sandfire’s Borroloola Project. Sandfire’s 13,400 square kilometre
Project encompasses a 100 km length of the EFZ that has been sparsely tested for repetitions of the
SEDEX style base metal mineralisation.
Sandfire’s regional program to date, including extensive airborne electromagnetic surveys has resulted
in the definition of two key target areas for drilling in 2010. The easternmost target lies directly within
the EFZ while the western target area includes a very strong EM conductor. Preparations are currently
underway to drill both of these target areas in the July-October 2010 period.
2.3 Iron Ore Exploration In light of the Company’s focus on the Doolgunna Project, no significant activity was carried out at
Borroloola during the Quarter.
However, exploration activities for iron ore in this region are gathering momentum with the recent
acquisition of the nearby Roper River Iron Ore Project (North Australian Iron Ore) by ASX-listed Batavia
Mining Limited and continued progress on the large-scale iron ore project being explored and developed
by a joint venture of Itochu and ASX-listed Western Desert Resources Limited.
3. URANDY PROJECT: Western Australia (Sandfire 100%)
The Urandy Project is located in the West Pilbara region some 80 km southeast of the coastal town of
Onslow. The property is prospective for gold and basemetals, hosted in the Paleoproterozoic Ashburton
Formation.
No field work was carried out on the Urandy Project during the Quarter.
4. YANNARIE PROJECT: Western Australia (Sandfire 100%)
The Yannarie Project is located 250 km northeast of Carnarvon on the west coast of Western Australia.
Field reconnaissance work was carried out on the Yannarie Project during the Quarter, checking the
surface geology of the previously identified prominent magnetic bullseye anomaly.
5. CORPORATE
5.1 $67 million Equity Raising
During the Quarter, Sandfire launched an equity raising comprising a fully underwritten institutional
share placement to raise approximately $51.6 million and a non-underwritten Share Purchase Plan
(“SPP”) capped at $15 million. Goldman Sachs JB Were were sole lead manager and sole bookrunner
and Bell Potter was co-lead manager to the institutional share placement.
The share placement was completed on 26 February, raising $42.5 million through the issue of 13.3
million shares to institutional and sophisticated investors at a price of $3.20. In addition, Sandfire
conducted a conditional placement comprising 2.8 million shares at $3.20 per share to Sandfire’s largest
shareholder, Posco Australia, to raise $9.1 million.
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Following the Placement, Sandfire offered eligible shareholders the opportunity to participate in a non-
underwritten SPP. The SPP provided eligible shareholders the opportunity, without incurring brokerage
or other transaction costs, to subscribe for up to $15,000 of new Sandfire ordinary shares.
The SPP was completed on 16 February 2010, raising $15 million at $3.20 per share. The SPP was
strongly supported by eligible shareholders, with applications totaling $22 million received. As a result,
applications were scaled back on a pro rata basis. The funds raised through the share placement and SPP
will be used to:
• Complete a Feasibility Study, approvals and other pre-development activities for a copper-gold
mine at the DeGrussa Project, part of its 100%-owned Doolgunna Project in Western Australia;
• Continue an aggressive exploration at Doolgunna and other regional exploration targets within
this emerging copper-gold mineralised province; and
• Progress exploration across its high quality portfolio of base metal and gold projects in the
Northern Territory and Western Australia.
5.2 New Appointments
During the Quarter, Sandfire appointed senior Australian mining executive Mr Martin Reed to the newly
created position of Project Manager, to lead the development of the DeGrussa Project.
Mr Reed is a qualified Mining Engineer with over 30 years experience across a range of commodities and
sizes of operations including most recently as Chief Operating Officer for a number of metals companies
including St Barbara Limited (2009 and 2004-07) and Windimurra Vanadium Limited (2008). In 2007, Mr
Reed was also General Manager Development & Operations for Paladin Energy Ltd during the final
ramp-up phase of its Langer Heinrich Uranium Mine in Namibia.
Prior to these appointments, Mr Reed held a number of senior executive positions in the mining
industry including roles where he was responsible for the planning and development of several large
mining operations in remote locations.
The Company also appointed highly experienced resource executive Mr Matthew Fitzgerald as Chief
Financial Officer and Company Secretary. Mr Fitzgerald is a Chartered Accountant who commenced his
career in the Assurance & Advisory Division of KPMG before joining ASX-listed diamond producer
Kimberley Diamond Company NL in 2003 as Chief Financial Officer and Director, a position he held until
June 2008.
W JOHN EVANS
TECHNICAL DIRECTOR
AUSIMM Competent Person
22 April 2010 Competent Person’s Statement The information in this public report that relates to Exploration Results and Mineral Resources is based on information compiled by Mr John Evans who is a Fellow of the Australasian Institute of Mining and Metallurgy. Mr Evans is a permanent employee and Director of Sandfire Resources NL. Mr Evans has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code of Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr Evans consents to the inclusion in the report of the matters based on his information in the form and context in which it appears.
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For further information, please contact:
Karl Simich – Managing Director
John Evans – Technical Director
Office: +61 8 6430 3800
Nicholas Read – Read Corporate:
Mobile: +61 419 929 046 (Nicholas Read)
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Table 1 Summary of All Mineralized Intercepts Recorded to Date for Diamond Core Drilling, Doolgunna
Project – Assay Results Awaited
Hole Number Purpose Deposit Interval (down hole)
Type From (m) To (m) Total (m)
DGDD087 Infill Conductor 1 247.9 248.2 0.3 Massive sulphides
248.8 248.9 0.1 Massive sulphides
DGDD043A Exploration Conductor 4 633.7 633.9 0.3 Massive sulphides
634.4 640.4 6.1 Massive sulphides
DGDD035A Exploration Conductor 4 647.0 664.6 17.6 Massive sulphides
DGDD081A Infill Conductor 1
337.0 350.7 13.7 Massive sulphides
362.1 362.5 0.4 Massive sulphides
369.4 370.3 0.9 Massive sulphides
371.9 384.3 12.4 Massive sulphides
DGDD088 Infill Conductor 1 132.0 134.4 2.4 Massive sulphides
DGDD089 Infill Conductor 1
199.5 202.5 3.0 Massive sulphides
203.2 203.8 0.6 Massive sulphides
209.9 213.7 3.8 Massive sulphides
DGDD090 Infill Conductor 1
346.7 375.5 28.8 Massive sulphides
379.7 380.1 0.4 Massive sulphides
382.4 387.9 5.5 Massive sulphides
DGDD092 Infill Conductor 1 139.5 140.7 1.3 Massive sulphides
DGDD091 Infill Conductor 1 476.7 477.3 0.6 Massive sulphides
484.5 487.1 2.6 Massive sulphides
DGDD093 Infill
DeGrussa 303.6 310.0 6.4 Massive sulphides
375.0 376.0 0.9 Massive sulphides
Conductor 1 376.6 378.8 2.2 Massive sulphides
387.3 397.1 9.8 Massive sulphides
412.9 413.1 0.3 Massive sulphides
413.2 413.7 0.5 Massive sulphides
DGDD098 Infill Conductor 1 490.1 500.6 10.5 Massive sulphides
511.7 518.2 6.5 Massive sulphides
DGDD099 Infill Conductor 1 467.8 468.0 0.2 Massive sulphides
468.4 473.5 5.0 Massive sulphides
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DGDD100 Infill Conductor 1 448.8 456.7 7.9 Massive sulphides
DGDD102 Infill Conductor 1 388.2 416.4 28.2 Massive sulphides
DGDD103 Infill Conductor 1 345.7 350.6 4.9 Massive sulphides
DGDD105 Infill Conductor 1 279.4 280.6 1.2 Massive sulphides
Conductor 1 320.1 321.5 1.4 Massive sulphides
DGDD106 Infill Conductor 1 279.0 279.8 0.8 Massive sulphides
DGDD107 Infill
DeGrussa 121.6 150.0 28.4 Oxidised Massive
Sulphide
DeGrussa 152.8 219.1 66.3 Massive sulphides
Conductor 1 300.5 305.7 5.2 Massive sulphides
Conductor 1 311.0 332.0 21.0 Massive sulphides
DGDD108 Infill Conductor 1 220.2 226.7 6.5 Massive sulphides
227.9 233.3 5.4 Massive sulphides
DGDD109 Infill
DeGrussa 205.3 207.3 2.1 Massive sulphides
210.9 226.3 15.4 Massive sulphides
Conductor 1
279.8 281.7 1.9 Massive sulphides
285.3 306.3 21.0 Massive sulphides
313.6 318.1 4.6 Massive sulphides
DGDD111 Infill Conductor 1
428.7 433.1 4.4 Massive sulphides
435.9 437.9 2.0 Massive sulphides
439.3 441.2 1.9 Massive sulphides
DGDD112 Infill Conductor 1 430.7 432.8 2.1 Massive sulphides
451.9 453.6 1.7 Massive sulphides
DGDD114 Exploration Conductor 4 641.5 641.6 0.1 Sulphides
DGDD115 Exploration Conductor 4 594.0 597.4 3.4 Massive sulphides
DGDD116 Infill
DeGrussa 258.8 293.5 34.7 Massive sulphides
Conductor 1 397.5 401.2 3.7 Massive sulphides
407.4 409.0 1.6 Massive sulphides
DGDD117 Metallurgy Conductor 1 357.6 396.8 39.1 Massive sulphides
DGDD118
Metallurgy Conductor 1 229.0 253.0 24.0 Massive sulphides
DGDD119 Infill Conductor 1
259.5 264.7 5.2 Massive sulphides
282.1 296.9 14.8 Massive sulphides
300.9 303.8 2.9 Massive sulphides
305.7 307.9 2.2 Massive sulphides
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DGDD120 Metallurgy
DeGrussa 198.3 255.6 57.3 Massive sulphides
Conductor 1
326.3 327.3 1.1 Massive sulphides
328.1 333.4 5.3 Massive sulphides
335.1 350.5 15.4 Massive sulphides
DGDD121 Infill
DeGrussa 211.7 264.3 52.6 Massive sulphides
Conductor 1
353.0 354.5 1.4 Massive sulphides
356.3 362.0 5.7 Massive sulphides
366.2 372.1 5.9 Massive sulphides
DGDD122 Infill Conductor 1
415.1 417.0 1.9 Massive sulphides
418.0 422.1 4.1 Massive sulphides
427.9 430.0 2.1 Massive sulphides
433.6 436.4 2.8 Massive sulphides
DGDD043B Exploration Conductor 4 650.2 654.1 3.9 Massive sulphides
DGDD123 Infill Conductor 1 352.6 413.1 60.5 Massive sulphides
DGDD124 Infill Conductor 1 343.2 345.5 2.3 Massive sulphides
356.2 385.6 29.4 Massive sulphides
DGDD125 Exploration Conductor 4 562.0 569.0 7.0 Massive sulphides
573.0 574.2 1.2 Massive sulphides
DGDD127 Exploration Conductor 1 59.0 61.8 2.8 Sulphides
DGDD129 Exploration Conductor 4 544.0 559.0 14.9 Massive sulphides
562.1 564.8 2.7 Massive sulphides
DGDD128 Exploration Conductor 1 98.0 99.0 1.0 Sulphides
103.5 109.0 5.5 Sulphides
DGDD132 Exploration Conductor 1 154.6 154.9 0.3 Massive sulphides
DGDD134 Exploration DeGrussa 101.5 130.5 29.1 Massive sulphides
131.1 132.3 1.2 Massive sulphides
DGDD135 Exploration Conductor 4 554.6 556.4 1.8 Massive sulphides
562.1 576.5 14.4 Massive sulphides
DGDD136 Exploration Conductor 1 91.7 94.9 3.1 Sulphides
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Table 2 Summary of Principal Chalcocite Intercepts for the DeGrussa Chalcocite Cap
Assessment
Hole
Number
Hole Details
(degrees,
direction)
Massive Chalcocite
Comment From (m) To (m) Total (m)
DGDD107 60, North 121.50 153.20 31.7 Massive chalcocite
DGDD126 Vertical
89.00 116.40 27.40 Massive chalcocite
133.00 146.40 13.40 Chalcocite and sulphides
DGDD131 Vertical
92.70 125.00 32.30 Massive chalcocite
125.00 141.10 16.10 Chalcocite in clays
DGDD133 Vertical 40.00 50.00 10.00 Siliceous Chalcocite
DGDD134 Vertical
57.30 67.10 9.80 Massive chalcocite
70.90 77.40 6.50 Massive chalcocite
95.20 100.60 5.40 Massive chalcocite
DGDD140 Vertical 99.85 139.83 39.98 Massive chalcocite
DGDD141 70, bearing
350 degrees 148.12 148.73 0.61 Chalcocite and sulphides
DGDD144 60, South
84.40 89.00 4.60 Massive chalcocite
90.70 91.00 0.30 Massive chalcocite
102.90 104.20 1.30 Massive chalcocite with minor
sulphides
DGDD145 60, South
110.00 115.00 5.00 Chalcocite with minor sulphides
117.40 119.70 2.30 Massive sulphides with minor
chalcocite
DGDD148 60, South
East 104.40 139.40 35.00 Chalcocite with minor sulphides
DGDD154 Vertical 106.80 109.40 2.60 Chalcocite, pyrite and chalcopyrite
DGDD156 Vertical
71.70 90.27 18.57 Massive chalcocite (>50%)
115.00 118.35 3.35 Massive chalcocite and chalcopyrite
(50:50, 100%)
DGDD158 Vertical
97.50 109.55 12.05 Massive chalcocite and pyrite
109.55 137.60 28.05 Clay, pyrite, chalcocite
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SCHEDULE OF MINING TENEMENTS 31 MARCH 2010
PROJECT TENEMENT NOTES
AREA (Graticule Blocks) Date of Grant
Borroloola MLN624 16.18ha 4/08/1971
EL24401 413 3/06/2005
EL25501 37 Application
EL25591 8 13/07/2007
EL26299 52 Application
EL26555 312 11/09/2008
EL26587 25 11/09/2008
EL26599 326 Application
EL26908 2 8/05/2009
EL26909 1 9/06/2009
EL26953 42 12/06/2009
SEL 26831 402 9/06/2009
SEL 26833 380 9/06/2009
SEL 26835 413 9/06/2009
SEL 26836 500 9/06/2009
SEL 26837 473 9/06/2009
SEL 26938 437 9/06/2009
SEL 26939 393 9/06/2009
Doolgunna E52/1698 7 1/08/2005
E52/1699 54 1/08/2005
E52/1715 54 22/06/2005
E52/2208 1 5/01/2009
E52/2209 1 5/01/2009
E52/2358 1 6/04/2009
E52/2401 1 7/07/2009
L52/120 129,254ha Application
M52/1046 1,791ha Application
Mt Anderson E04/1828 Granted 140 28/01/2010
E04/1829 Granted 187 25/03/2010
Mt Boggola E08/1433 15 11/10/2005
Sandfire E04/1344 35 20/10/2003
E04/1425 Surrendered
E04/1449 18 13/04/2005
E04/1451 17 13/04/2005
Urandy E08/1462 7 26/07/2005
E08/1463 6 26/07/2005
Yannarie E09/1111 18 22/06/2005
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