PERTH (miningweekly.com) – Mineral sands developer Sheffield Resources has amended three zircon/zircon concentrate offtake agreements with Kimberley Mineral Sands (KMS) over its Thunderbird project, in Western Australia.

The amended agreements combined account for the sale of 170 000 t/y of zircon concentrate from the Thunderbird project, representing some 75% of the total zircon concentrate from the Stage 1 development.

The key terms of the three amended agreements include a minimum volume of 170 000 t/y of zircon over a five-year initial period, take-or-pay provisions for the minimum contracted volumes with pricing to be linked to zircon, titanium and other saleable product content of the concentrate.

Sheffield said on Tuesday that combined with the life-of-mine ilmenite offtake agreement executed with Yansteel, KMS has secured offtake contracts for some 80% of the revenue from the Stage 1 operation, fulfilling the offtake requirements for the Thunderbird project financing facilities.   

“Sheffield is pleased with the support shown by existing zircon customers for the Thunderbird project. KMS has approximately 75% of its zircon concentrate for Stage 1 under binding agreements with three respected and well-established zircon concentrate processing groups,” said Sheffield executive chairperson Bruce Griffin.

“KMS is seeing strong demand for the Thunderbird zircon concentrate product and they are engaged with additional counterparties seeking offtake agreements for the 50 000 t of remaining uncontracted zircon from Stage 1.

“With sufficient offtake in place to satisfy the expected project financing requirements, KMS expects to contract the remaining zircon concentrate offtake contracts throughout the period up to the completion of construction at Thunderbird.”

A 2017 bankable feasibility study estimated that the Stage 1 development would require a capital investment of A$324-million based on an initial 8.5-million-tonne-a-year throughput, doubling to 17-million tonnes a year in year five of the operations.

The Stage 1 operation is expected to produce 51 500 t/y of premium zircon, 49 100 t/y of zircon concentrate and 264 500 t/y of ilmenite.