Photo by: Bloombeg
PERTH (miningweekly.com) – An updated prefeasibility study (PFS) into the Thunderbird mineral sands project, in Western Australia, has resulted in a 26% reduction in the project’s preproduction capital and an increase in the project’s expected mine life and yearly earnings before interest, taxes, depreciation and amortisation (Ebitda).
A May PFS estimated that the Thunderbird project would produce about 114 000 t/y of zircon, 439 000 t/y of ilmenite and 30 000 t/y of leucoxene, over a mine life of 32 years, and would require a capital investment of some A$367-million.
The project had been expected to generate an estimated life-of-mine revenue of A$9.5-billion and an average yearly Ebitda of A$120-million.
However, owner Sheffield Resources said on Wednesday that the updated PFS estimated that the project would require a capital investment of A$271-million, delivering yearly Ebitda of A$135-million over a 40-year mine life.
The updated PFS was based on a conventional dozer trap mineral sands mining operation, involving an initial 12-million-tonne-a-year throughput, increasing to 18-million tonnes a year, to produce an average of 100 000 t/y of zircon and 382 000 t/y of high-grade sulphate ilmenite over the life of the mine.
Based on the revised output estimates, the Thunderbird mine was expected to generate revenue of some A$11.8-billion over the life of the project.
“The PFS update has confirmed that the Thunderbird project is a strategic, high-margin, zircon-rich asset located in one of the world’s most stable mining jurisdictions,” said Sheffield MD Bruce McQuitty.
“It is a project that requires modest capital expenditure, yet generates strong earning margins over a very long mine life.”
McQuitty noted that the updated PFS had shown that Thunderbird would generate a highly marketable suite of products, as the primary zircon product was of premium quality, while the upgraded ilmenite demonstrated characteristics that were superior to other sulphate ilmenites in the market.
“While there has been strong interest in relation to Thunderbird’s products, the company has chosen not to commit to offtake agreements until after the completion of a definitive feasibility study (DFS),” he added.
Sheffield would now launch the DFS, with the aim of completing it in parallel with environmental approvals during 2016. Mine construction has been scheduled to start in 2017, followed by commissioning in 2018 and first production in 2019.