LS-Nikko Copper Inc, a major Korean-owned copper smelting firm, has announced it will buy 12.5 per cent shares in Sandfire Resources NL, Australian minerals exploration firm, through a share placement worth $93.9 million.

With the deal pushing through, LS-Nikko Copper will be the third biggest stockholder of Sandfire, right behind POSCO, also of Korea, and OZ Minerals Ltd., an Australian copper mining firm.

Under a contract that involves sales deals for future manufacture, Sandfire will be issuing 18.7 million shares worth $5.02 each share to LS-Nikko Copper.

Sandfire announced on Friday: "The funds will be used to underpin an unprecedented exploration program at the DeGrussa copper-gold project in Western Australia.

"The significant cash injection will also provide cornerstone funding for development of the DeGrussa project, while the relationship with LS-Nikko - together with Sandfire's existing strategic alliance with POSCO - will underpin the potential for Sandfire to secure project finance on highly favourable terms.

"The agreement concludes a two-month process which also encompasses sales arrangements covering 45 per cent of Sandfire's future base metal production at fair market prices."

Sandfire shares closed trading up by 10 cents, an increase of 2.04 per cent, at $5 this Friday.