The Northern Australia Infrastructure Facility (NAIF) is backing the Thunderbird mineral sands project, in the Kimberley region of Western Australia, through a A$95-million loan, ASX-listed Sheffield Resources announced on Wednesday.
The NAIF loan comprises a A$30-million project development facility and a A$65-million infrastructure development facility. It also negates the previously announced $25-million contingent instrument facility by Taurus Mining Finance Fund.
The new facilities would not reduce total funding requirements, but it provided a pathway for Sheffield to own the asset infrastructure and provides for lower operating costs than provided for in the bankable feasibility study (BFS), Sheffield MD Bruce McFadzean said on Wednesday.
The NAIF loan will enable Sheffield to construct on-site liquefied natural gas power generation and storage facilities at Thunderbird, in addition to enabling the upgrading of mine site roads, in-sourcing of mine site accommodation, and facilitating the construction and revitalisation of ship loading and logistics assets within the Port of Derby.
The March 2017 BFS contemplated on-site power generation and accommodation facilities by third parties on an outsourced build-own-operate basis, inclusive of capital recovery charges payable to third-party service providers.
“The NAIF’s approval of a concessional loan on the terms and tenor defined in the term sheets is a significant milestone for Thunderbird and will underpin many hundred of jobs in the Kimberley region over several decades,” McFadzean said.
The NAIF facilities are subject to definitive written agreements being entered into between the company and the state of Western Australia as lender and customary conditions precedent to drawdown, including Western Australia’s approval for NAIF funds to be provided to the company.
Over its 42-year mine life, Thunderbird is expected to deliver 76 100 t/y of premium zircon, 68 500 t/y of zircon concentrate, 387 800 t/y of ilmenite and 229 800 t/y of titano-magnetite. Thunderbird will be developed in two stages, with Stage 1 estimated to cost A$271-million to deliver an initial 8.5-million-tonne-a-year operation, doubling to 17-million tonnes a year in the fifth year of operation, for an additional cost of A$195-million.
The company was recently granted environmental approval by the Western Australian government.