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 completed on the project in July 2019 confirmed Thunderbird’s status as a world-class mineral sands project and demonstrated a lower-risk, technically stronger project with robust financial metrics.

The BFS update 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 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, consequently elevating Thunderbird into the top tier of global zircon producers.

The BFS update followed 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 was removed and the project was forecast to export unroasted primary ilmenite.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The July 2020 BFS update 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 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 Australian Foreign Investment Review Board (FIRB) has approved a proposed A$130-million joint venture (JV) agreement over the Thunderbird mineral sands project, with no objections.

Sheffield Resources signed a nonbinding termsheet in August with Yansteel to form a JV at its Thunderbird project, under which Yansteel will invest A$130.1-million to acquire a 50% stake in the project.

The companies have also executed a take-or-pay offtake agreement for all the ilmenite produced at the Stage 1 project.

Sheffield and Yansteel are targeting finalising the formal JV agreements over the coming weeks, after which a bankable feasibility study will be completed ahead of concluding project financing arrangements, before taking a final investment decision on the project in 2021.

The JV parties have agreed that the development concept for the Stage 1 project will be a 10.4-million-tonnes-a-year mine, and a process plant producing a zircon-rich nonmagnetic concentrate and ilmenite. The parties will agree on the final project scope, complete a bankable feasibility study and secure project financing.

The A$130.1-million project equity investment, along with the A$12.9-million funding under the share placement, combined with existing project financing, is expected to deliver a fully funded project. 

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

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