Sandfire Resources : Mineral Resource Estimate for Old Highway Gold Deposit

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ASX Release

ASX:SFR

15 December 2021

Maiden Mineral Resource Estimate

for Old Highway Gold Deposit

Highlights

• Maiden Mineral Resource estimate completed for the Old Highway gold deposit, located approximately 20km WSW of Sandfire's DeGrussa Copper-Gold Mine in Western Australia:

• 1. Indicated Mineral Resource of 2.8Mt @ 2.5g/t Au for 223,000oz of contained gold.
• Studies underway to evaluate potential development options including producing gold through modification of the existing DeGrussa processing infrastructure - on-track for delivery in the March 2022 Quarter.
• Drilling is continuing at Old Highway with a ~9,100m (24-hole) diamond drill program underway focused on extending the high-grade mineralisation in the 'Central Deeps' section of the Old Highway deposit.

1. Eight holes (~3,200m) completed to date, the majority of which have intersected quartz veins in the expected position down-dip from the known mineralisation - assays awaited.

1. The deepest holes will test ~200m below known mineralisation.

Sandfire Resources Limited (Sandfire, the Company or the Group) is pleased to announce a maiden Mineral Resource Estimate for the Old Highway Deposit, located 20km west-south-west of the Company's 100%-owned DeGrussa Copper-Gold Mine in Western Australia.

The Indicated Mineral Resource comprises 2.8 million tonnes grading 2.5g/t gold for 223,000 ounces of contained gold.

Table 1: December 2021 Indicated Mineral Resource Estimate for Old Highway deposit

Note:

Tonnes and grade have been rounded to one decimal figure, ounces have been rounded to nearest thousandth Columns may not total exactly due to rounding differences.

Study work is currently underway to assess the potential development options for the Old Highway gold deposit. As part of the study Sandfire has completed preliminary design and costing for the addition of a gold recovery circuit to the existing DeGrussa copper concentrator. Study work is continuing and is expected to be completed in the March Quarter of 2022.

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10 km

20 km

Figure 1: Regional Location Plan of the Old Highway Deposit, DeGrussa and Monty Copper Mines.

Drilling is continuing at Old Highway with a ~9,100m (24-hole) diamond drill program commenced, focused on extending the high-grade mineralisation in the central section of the Old Highway deposit

• an area known as 'Central Deeps' - which remains open along strike and down dip. The deepest holes from this program will test ~200m below the currently defined extent of the mineralisation.

Figure 2: Old Highway Deposit long section showing completed drilling, 0.3g/t Au mineralisation models, proposed open pit

and underground development (Local grid).

Eight holes (~3,200m) of this program have been completed to date, the majority of which have intersected quartz veins in the expected position down-dip of the known mineralisation. Assay results for these holes are awaited.

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Figure 3: Old Highway Deposit Central Deeps long section showing completed and planned drilling, 0.3g/t Au

mineralisation models, proposed open pit and underground development (Local grid).

Project Development Studies

Sandfire has completed a number of study elements to support the completion of the MRE and assess potential development options for the Old Highway deposit, including:

• Preliminary open pit and underground design work in progress, including geotechnical and hydrology studies.
• Metallurgical testwork including variability work on the different ore lithologies has been completed. The ore is free milling with overall very high gold recoveries exceeding 90% at moderate grind size of 106 microns and low reagent consumptions.
• Preliminary design and costing for the addition of a gold recovery plant to the existing DeGrussa copper concentrator. This would involve the addition of gravity, CIL and gold recovery circuits. The existing concentrator crushing and grinding circuits could be re-used with only minor modification required.
• All baseline environmental work at Old Highway has been completed and documentation for the various approvals is in progress.
• Ore haulage options for the transport of ore from Old Highway to DeGrussa have been investigated and preliminary costs for the options established.
• Various CIL tailings storage options including use of the existing DeGrussa TSF and in-pit deposition into the DeGrussa pit have been investigated.

Mining Leases M52/1080 and M52/1081 have been granted for the Old Highway project area.

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General Overview of Location and Geology

The Old Highway Prospect is situated approximately 20km west-southwest of Sandfire's DeGrussa Copper-Gold Mine. It lies 900km north-east of Perth and 150km north of Meekatharra in the Peak Hill Mineral Field. Access is via the Great Northern Highway and a series of exploration tracks that link the prospect area to the 'Old Highway'.

Figure 4: Map of the regional geology and the location of the Old Highway Deposit. Grid is shown in MGA94 Zone 50.

The Old Highway deposit occurs in the Bryah Group, an early-Proterozoic supercrustal sequence. The Byrah Group unconformably overlies the Yerrida Group, an early-Proterozoic supracrustal sequence that unconformabably overlies the Archean basement.

The Archean basement comprises the Yilgarn Craton, the Marymia Inlier and the Yarlaweelor Gneiss complex. The Padbury Group, an early to mid-Proterozoic sequence unconformably overlies the Bryah Group.

Ore vein mineralogy consists primarily of quartz, carbonate (likely to be ankerite or a ferroan dolomite), albite and pyrite. Trace (<1%) chalcopyrite, galena, haematite, native gold, bornite, chalcocite and goethite are also observed. Pyrite occurs as isolated grains within the veins but more typically in the selvages of the veins, where the wall rock (gangue minerals / rocks) dominates the rock mass (pyrite ranges from <1% to 10% of the selvage material). Native gold is noted to occur as both free grains on the margins of the pyrite grains (up to ~2mm observed in hand specimen) or as small inclusions within the pyrite (~2 µm). Likewise, chalcopyrite occurs as ragged grains on the edges of pyrite or as inclusions within the pyrite.

Goethite, malachite, copper hydroxide/oxy-hydroxide and/or chalcocite occur in weathered samples. Copper-bearing minerals have only been encountered in limited areas of the deposit and are interpreted to be a function of the weathering of the trace primary chalcopyrite.

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Weathering within the transition zones (saprolite, saprock and joint weathered fresh rock) results in the development of goethite, bornite, malachite and/or chalcocite on the edges of the pyrite and chalcopyrite grains.

Gangue mineralogy is dominated by the host siliciclastic rock sequence and the weathering products therein and consists of muscovite, chlorite, leucoxene, rutile, quartz, plagioclase (albite), zircon and magnetite. Visual observations suggest the presence of hydrous aluminium phyllosilicates (such as smectite, kaolinite), goethite, haematite and quartz in the saprolite and saprock profiles. However, no petrology has been completed on saprolite samples at the current stage of the project.

Previous Work related to Resource Estimation and Future Work

The Old Highway Resource Estimate included a total of 94,167 metres of RC drilling and ten diamond holes for a total of 3,974 metres completed between May 2020 and April 2021. In addition, 12 diamond holes were drilled for geotechnical and specific gravity, totalling approximately 1,903 metres.

Further Resource definition drilling is now underway in the central area of the Old Highway Prospect to further delineate mineralisation at depth. This program comprises 11 Priority-1 and 13 Priority-2 holes on a 50m x 100m spacing for a total of 11,680m. The Priority-1 holes drilled to date have intersected the Cow Hole Bore Member sediments consisting of siltstones, wackes, arenites and minor conglomerates. Most of the holes intersected intervals of quartz-carbonate veining, some of which contain course-grained cubic pyrite and are associated with sericite alteration selvages. Some visible gold was also noticed, with assays still pending. It is envisaged that all Priority-1 drilling will be completed by the end of the calendar year.

25 RC holes on a 50m x 50m Resource definition pattern were completed for a total of ~2,408m to close out the central and eastern sections of the deposit. Several holes intercepted mineralisation with sericite, disseminated cubic pyrite and quartz veins. The RC program is now complete, with assays pending.

Old Highway Mineral Resource Methodology

Mineralisation domains were interpreted using a 0.3g/t Au cut-off grade. The grade estimation technique applied to these mineralisation domains was ordinary kriging. Mineralisation domains were estimated individually, using hard boundaries.

Regolith and fresh rock profile models were generated allowing the segregation of areas of different density. Density was assigned to the Resource model based on regolith and fresh rock values.

Old Highway Mineral Resource

The December 2021 Indicated Mineral Resource Estimate for Old Highway deposit is reported on a block cut-off basis. The "Central Pit Area" is reported based on a 0.6g/t and 2.0g/t Au cut-off grade for open pit (box cut) and underground respectively. Areas outside the "Central Pit Area" are reported based on a 0.6g/t Au cut-off grade, constrained within an AUD$2,500/oz Au price optimised pit shell and Mineable Stope Optimiser (MSO) generated stope shapes at a 2.0g/t Au cut-off grade.

The Old Highway Mineral Resource is reported as 2.8Mt at 2.5g/t Au for 223Koz Au. Details are presented in Table 2 below.