Name of the Project
Thunderbird mineral sands project.

Location
The project is located near Derby, in Western Australia.

Project Owner/s
Sheffield Resources.

Project Description
A bankable feasibility study (BFS) update has confirmed Thunderbird’s status as a world-class mineral sands project and has demonstrated a lower-risk, technically stronger project with robust financial metrics.

The BFS update has set out to materially improve project financial metrics by rescoping the project to reduce capital expenditure, increase zircon production to meet strong global demand as the structural supply deficit widens, and supply primary ilmenite to the high-growth chloride slag market.

The mining and processing rate has increased by 38%, from 785 dry tonnes an hour to 1 085 dry tonnes an hour at the wet concentrate plant (WCP), targeting average zircon production of 202 000 t/y over the 37-year life-of-mine. This compares with zircon production of 145 000 t/y over a 42-year mine life in the 2017 BFS, elevating Thunderbird into the top tier of global zircon producers.

The BFS update follows a similar project development strategy described in the 2017 BFS using a conventional dozer trap mineral sands mining and processing operation, but with an increase in the Stage 1 mining rate from 8.5-million tonnes a year (single mining unit) to 10.4-million tonnes a year (single mining unit).

The duplication of a second mining unit and process stream in Year 5 takes the total mining rate to 20.8-million tonnes a year, up from 17-million tonnes a year in the 2017 BFS. The low-temperature roast ilmenite circuit has been removed and the project is forecast to export unroasted primary ilmenite.

Potential Job Creation
Not stated.

All-in Sustaining Costs/All-in Costs
Not stated.

Net Present Value/Internal Rate of Return
The BFS update has estimated a pretax net present value (NPV), at a 10% discount rate, of A$1.13-billion and an internal rate of return of 30.1%, compared with an NPV of A$676-million and an internal rate of return of 24.9% in the 2017 BFS.

Capital Expenditure
Project capital has decreased from A$463-million in the 2017 BFS to A$392-million in the BFS update.

Planned Start/End Date
Not stated.

Latest Developments
The share price of Sheffield Resources dropped by nearly 15% on February 17 after the company announced a rethink at its Thunderbird project.

Sheffield told shareholders that following a strategic business review, the company had 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. It would instead 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 organisational changes to preserve cash.

MD Bruce McFadzean has said that the company was disappointed that its strategic partner process had been unable to deliver an equity funding solution within the desired timeframe. He has 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 allow for a low risk entry into the mineral sands market.

Sheffield has also initiated several 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 Perth and Kimberley have been substantially reduced in line with the company’s proposed forward work programme, with Sheffield cutting about 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 will continue to review the composition of its board into 2020.

Key Contracts and Suppliers
GR Engineering (design and construction of the mineral processing plant, as well as the supporting infrastructure).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Sheffield Resources, tel +61 8 6555 8777, fax +61 8 6555 8787 or email info@sheffieldresources.com.au.