PERTH (miningweekly.com) – The share price of mineral sands developer Sheffield Resources dropped by nearly 15% on Monday after the company announced a re-think at its Thunderbird project, in Western Australia.

Sheffield told shareholders that following a strategic business review, the company has decided to pause the hunt for a strategic partner to help finance and develop the project, as well as the project financing strategy in its current form, and instead would focus on changing the scale and product mix at Thunderbird to reduce capital costs and provide a more readily financeable project.

In addition to the changes proposed for Thunderbird, Sheffield will also undertake "appropriate" corporate and organizational changes to preserve cash.

MD Bruce McFadzean said that the company was disappointed that its strategic partner process had been unable to deliver an equity funding solution within the desired timeframe, but noted that discussions were continuing with third parties that have expressed interest in project investment, and that have supported existing and alternate strategies for the development of Thunderbird.

The alternate strategies will focus on defining and achieving a funded project by assessing a range of scenarios, including a change of scale and product mix to significantly lower the capital cost structure for the project and enable a low risk entry into the mineral sands market.

“The Thunderbird mineral sands project is a world-class asset that is fully permitted, construction ready and perfectly positioned to meet the market need,” McFadzean said noting that the re-scoped project would deliver to shareholders while acknowledging an acceptable funding solution had not been secured for the project.

“We continue to engage with potential funding partners and other third parties to develop the project. We also remain open to pursuing alternate funding and project development strategies to support near-term construction of Thunderbird.

“We are very confident our plans will preserve and enhance the substantial value of Thunderbird for shareholders and, in time, allow us to develop the project as a leading global supplier.”

In addition to the changes to Thunderbird, Sheffield has also initiated a number of related personnel changes targeted at retaining the core skills necessary to deliver near-term technical and commercial outcomes for Thunderbird, while reducing the ongoing personnel costs.

Executive management and employee positions in both Perth and the Kimberley have been substantially reduced in line with the company’s proposed forward work programme, with Sheffield cutting some 60% of its current cost base.

As part of the restructuring, executive director David Archer will resign, but will continue as a nonexecutive director, with Sheffield saying it would continue to review the composition of its board into 2020.

Sheffield shares traded at a low of 16c a share on Monday, down from a high of 18.5c each.