ASX CODE: SFR SFRCA OFFICE AT: CORRESPONDENCE: 1 VENTNOR AVENUE T: +61 8 9226 5833 PO BOX 1495 WEST PERTH 6005 F: +61 8 9226 5844 WEST PERTH 6872 WESTERN AUSTRALIA E: [email protected] WESTERN AUSTRALIA www.sandfire.com.au ABN 55 105 154 185 DRILLING UPDATE FOR BORROLOOLA AND YANNARIE HIGHLIGHTS 23 November 2006 • Holes A, B and C at Borroloola completed. Chalcopyrite mineralisation intersected in all three holes indicating a possible strike length of >1.5km for this system. • Drilling underway at Yannarie. Holes F and G completed. . SANDFIRE RESOURCES NL Drilling update for Borroloola and Yannarie ABN 55 105 154 185 Page 2 BORROLOOLA (Sandfire 100%) (fig. 1, 2) As at 23rd November, drill holes A (BRCD008), B (BRCD009) and C (BRCD011) have been completed (fig.1). The fourth drill hole D (BRCD010) is in progress at 145m. This hole is planned to go to 500m. The current drilling program is testing geophysical targets (specifically induced polarisation - IP). Based on the IP response, the anticipated sulphide content of the target zone is between 1 and 3%. If all of the sulphide mineralisation was chalcopyrite, this would give copper grades in the range 0.3 and 1%. The completion of hole C brings to four the number of drill holes both piercing the structure and intersecting chalcopyrite mineralisation. The strike length of the mineralised structure as defined by drilling is now inferred to be approximately 1.5km. The structure as it is presently known from mapping extends from the Four Archers fault to the Lorella fault, a distance of approximately 7km. To date the western 1.5km has been investigated on a preliminary basis at wide drill spacings. The Company has granted tenure to the western 3km of the structure. The grant of the Company’s tenement application covering remaining 4km of the structure to the east is pending (fig.2). Assays for the pre-collars for BRCD008, 9 and 10 and incomplete intervals for the diamond sections of BRCD008 and 9 have been received. Most of the diamond drill sections of these 2 holes (BRCD008 & 9) have yet to be sampled or assayed. No material from hole BRCD011 has yet been sampled or assayed. The pre-collars have been sampled as 4m composites and the diamond core where sampled was generally in intervals of 1m. Drill hole BRCD008 was completed at 373m. The hole intersected disseminated pyrite and chalcopyrite mineralisation in several zones between 232 and 297m (being 65 meters in all). Fifteen intervals (aggregating about 15 meters) within this zone have been assayed with the best result being 1m grading 0.1% copper between 235.5 and 236.5. Additional samples have been collected for analysis with present indications being that the copper grades will be less than 1.0%. Drill hole BRCD009 was completed at 337m. The hole intersected disseminated and veinlet pyrite and chalcopyrite mineralisation between 160 and 166m with a second zone occurring at 175m. Several other zones of chalcopyrite mineralisation occur below 175m. Seven intervals from the section between 160 to 166m have been analysed with the best result being 0.4% copper from 161.9 to 162.5m. Additional samples have been selected from this hole and it is anticipated the results to date will be indicative of the copper content of these samples. Drill hole BRCD011 was completed at 430m. Pyrite and chalcopyrite mineralisation was intersected in the interval 300 to 315m. Minor chalcopyrite mineralisation was encountered below 315m. No material from this hole has yet been sampled or assayed. SANDFIRE RESOURCES NL Drilling update for Borroloola and Yannarie ABN 55 105 154 185 Page 3 A second batch of samples was delivered to the laboratory in mid November. Sampling of the core from the completed holes is continuing and samples are being delivered to the laboratory progressively. Based on the results to date, the correlation between the IP response and the mineralisation is high so there is a reasonable expectation that hole D will also intersect sulphide mineralisation. The Company is now considering drilling hole E. The scheduling of this drilling will depend on the completion date of hole D. On the basis of the success of the programme, the Company is planning its 2007 programme which will include additional ground geophysical surveys following the structure to the east and further drilling YANNARIE (Sandfire 100%) (fig. 3,4,5) Drilling at Yannarie is underway. Holes F and G have been completed with hole C in progress. The main targets at Yannarie are conceptual iron oxide copper gold (IOCG) type targets in the Coria and Two Peaks areas. Examples of IOCG type mineralisation are Ernest Henry and Osborne located in NW Queensland. IOCG type deposits are generally characterised by high levels of iron oxides (hematite/magnetite), base and precious metals and an association with rare earth elements and uranium. The Coria and Two Peaks magnetic anomalies were located from an airborne geophysical survey (fig.5). The causative bodies have been modeled at around 200m vertical depth (ie. do not outcrop) and are characterized by large magnetic susceptibilities indicating significant (>10%) concentrations of magnetite. The combination of the tectonic setting and the range of anomalous elements over the top of the magnetic features fits the IOCG model. A possible five holes (A, B, D, H and E) will drilled at Two Peaks and three holes (C, F and G) will be drilled at Coria (fig.3,4). The holes and their targets are: A – Two Peaks IOCG target; B – Two Peaks IOCG target; C – Coria IOCG target; D – Two Peaks U anomaly: E – Copper Prospect (Two Peaks); F – Coria U anomaly; G – Coria base metal zone: H – Two Peaks U anomaly (same site as B). The Coria uranium and base metal targets are adjacent to the IOCG target and will be tested with RC drilling. The Two Peaks uranium and copper targets are similarly adjacent SANDFIRE RESOURCES NL Drilling update for Borroloola and Yannarie ABN 55 105 154 185 Page 4 to the Two Peaks IOCG target and will be tested with RC drilling. The drill holes testing the Coria and Two Peaks IOCG targets will be diamond drill holes. Two other magnetic features within the project but separate from the above targets have also been identified for follow up depending on the results from the current program. G Steemson Director 23rd November 2006 The information in this report that relates to Exploration Results is based on information compiled by Greg Steemson who is a Fellow of the Australasian Institute of Mining and Metallurgy. Greg Steemson 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 for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Greg Steemson consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Corporate Information Directors and Executive Management P S Thomas: Non-Exec Chairman G H Steemson: Managing Director G Hutton: Executive Director M Smartt: Company Secretary Issued Capital As at the date of this report the issued capital of the Company is comprised of: • 63,263,626 fp shares • 11,460,652 contributing shares with $0.15 to pay, no call before 3/3/07 • 2.6m 31/12/08 $0.25 opts • 0.725m 30/9/08 $0.20 opts • 6.9m 30/6/07 $0.60 opts • 3 m 30/9/11 $0.50 opts Substantial Shareholders Faustus Nominees Pty Ltd 9.15% Evolution Master Fund 6.72% Resource Development Company 7.06% Shareholder Enquiries Matters related to shares held, change of address, tax file numbers and the like should be directed to the Company’s Registry: Security Transfer Registrars Pty Ltd Phone – 08 9315 2333 Investors interested in receiving copies of ASX announcements can register such interest on the Company’s website www.sandfire.com.au. 550000 mE 8230000 mN 8235000 mN 550000 mE 8240000 mN 8245000 mN 555000 mE 560000 mE 555000 mE 560000 mE 565000 mE 570000 mE 565000 mE 570000 mE 575000 mE 8240000 mN 575000 mE 8230000 mN 8235000 mN FOUR ARCHERS FAULT LORELLA FAULT ROSIE FAULT COPPERMINE CREEK FAULT EL24996 EL24946 EL10121 EL25328 EL25592 MLN624 EL24349 Borroloola Project Gordon's Prospect Regional Geology 4 Sandfire Resources NL Projection: Longitude / Latitude (NAD 83) 2 kilometres Scale: 1:100000 Drawing: Author: SFR Office: 1 Date:23/11/2006 Scale: 1:100000 0 Fig. 2 Serviced Road Legend 2004 Drillhole 2006 Drillhole Tenement EL10121 2006 IP Survey 2004 IP Survey Track Fault - accurate 0 5 3 9 2 5 3 9 4 0 4 9 0 8 5 4 2 0 0 1 4 1 2 0 5 4 0 6 0 5 4 2 2 5 5 4 0 6 0 0 4 2 0 5 4 0 0 2 5 4 0 0 5 3 5 0 0 4 0 5 4 0 0 5 6 0 9 3 5 5 3 9 0 0 5 9 5 3 2 0 3 9 4 0 0 5 3 9 6 0 8 9 3 5 0 4 9 3 5 342000mN 341500mN 341500mN 343000mN 342000mN 342500mN 342500mN 343000mN 7397000mRL 7397500mRL 7398000mRL 340500mN 340000mN 340000mN 340500mN 7397500mRL 7396500mRL 341000mN 341000mN 7398000mRL 7397000mRL 7396500mRL E 0801374 E 0801409 C F G Yannarie Project Coria Prospect Geochemical Sampling & Proposed Drilling on TMI Contours SAND FI R E RESOURCES 1 km Fig 3 Magnetic high Rockchip Soil sample Anomalous multi-element geochemical results Proposed drillhole Dirt track Legend C 5 3 8 4 0 8 5 3 2 0 8 4 0 6 0 3 5 8 3 3 5 9 0 0 8 0 6 3 5 3 9 0 0 5 8 3 5 0 0 9 0 5 3 9 0 0 6 8 3 5 0 5 5 3 8 4 3 5 2 8 0 3 8 0 0 0 8 5 3 8 0 0 5 3 8 6 0 8 9 5 3 3 5 9 0 0 0 0 5 3 9 0 2 5 3 9 0 8 5 3 6 0 5 5 3 8 2 0 5 0 4 7 3 7 6 0 3 5 7 8 0 5 0 5 4 2 0 0 5 4 0 4 3 8 8 5 5 0 8 3 9 2 0 0 5 3 3 5 0 8 8 9 5 3 5 5 3 8 8 0 5 3 9 4 0 2 3 9 0 6 5 3 9 0 0 8 9 3 5 9 5 3 0 0 0 0 9 3 5 3 8 6 0 3 5 0 6 8 5 0 6 8 3 5 5 8 0 4 3 0 4 8 3 5 0 5 4 0 0 5 4 0 0 0 0 0 9 3 5 6 0 5 3 9 0 5 4 0 0 0 0 5 3 1 8 3 5 0 0 0 0 3 9 0 0 5 4 5 3 8 8 0 0 5 4 5 3 8 2 0 1 6 0 4 4 1 4 1 2 0 5 5 3 8 4 0 8 5 3 4 0 2 0 4 5 0 8 9 3 5 4 0 2 0 5 8 0 3 2 0 5 5 3 8 8 0 9 4 5 3 9 0 5 3 9 2 0 0 5 3 9 2 4 0 5 3 9 4 0 5 0 3 9 6 0 5 3 9 6 5 4 0 0 0 5 3 9 0 5 5 3 8 3 5 5 3 8 8 0 6 0 3 5 5 3 9 2 0 4 5 0 9 8 0 6 0 5 3 7 8 0 7 3 5 8 6 0 3 5 375000mN 375000mN 7370000mRL 7370000mRL 370000mN 370000mN E 0901111 A B D E Fig 4 Magnetic high Rockchip Soil sample Anomalous Cu/U geochemical results Anomalous Cu geochemical results Proposed drillhole Dirt track Legend B Yannarie Project 2 Peaks Prospect Geochemical Sampling & Proposed Drilling on TMI Contours SAND FI R E RESOURCES 1 km 2 Peaks North Copper Prospect E08/1374 E09/1111 E08/1409 Copper Prospect 2 Peaks Mt Tucker Coria Winning Hill 390000 mE 7340000 mN 7400000 mN 7410000 mN 7420000 mN 7350000 mN 7360000 mN 7370000 mN 7380000 mN 7390000 mN 7430000 mN 380000 mE 390000 mE 360000 mE 370000 mE 380000 mE 7330000 mN 360000 mE 350000 mE 370000 mE 340000 mE 350000 mE 320000 mE 330000 mE 340000 mE 7430000 mN 7400000 mN 7410000 mN 7420000 mN 7350000 mN 7360000 mN 7370000 mN 7380000 mN 7390000 mN 320000 mE 330000 mE 7340000 mN 7330000 mN Sandfire Resources NL Yannarie Project Total Magnetic Intensity Prospects Location Map Projection: MGA Zone 50 (GDA 94) 2.5 5 kilometres 10 Scale: 1:400000 Drawing: Author: SFR Office: 0 Date:23/11/2006 Scale: 1:400000 Fig. 5.
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