Name of the Project
Thunderbird mineral sands project.

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

Project Owner/s
Kimberley Mineral Sands (KMS), a joint venture (JV) between Sheffield Resources and Yansteel.

In March 2021, Sheffield Resources concluded the JV transaction with Yansteel over the Thunderbird project. The companies signed a nonbinding term sheet in 2020 to form a JV, under which Yansteel will invest A$130.1-million to acquire a 50% stake in the mineral sands project.

With lender agreement in support of the transaction, and Sheffield’s receipt of Yansteel’s A$130-million investment to acquire a 50% interest in the JV vehicle, the project is now jointly owned by both companies.

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% in the updated BFS, 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 (LoM). 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
Sheffield Resources has amended three zircon/zircon concentrate offtake agreements with KMS over its Thunderbird project.

The amended agreements combined account for the sale of 170 000 t/y of zircon concentrate from the project, representing about 75% of the total zircon concentrate from the Stage 1 development.

The key terms of the three amended agreements include a minimum volume of 170 000 t/y of zircon over a five-year initial period, and take-or-pay provisions for the minimum contracted volumes, with pricing to be linked to zircon, titanium and other saleable product content of the concentrate.

Sheffield has said that, combined with the LoM ilmenite offtake agreement executed with Yansteel, KMS has secured offtake contracts for about 80% of the revenue from the Stage 1 operation, fulfilling the offtake requirements for the Thunderbird project financing facilities.   

“With sufficient offtake in place to satisfy the expected project financing requirements, KMS expects to contract the remaining zircon concentrate offtake contracts throughout the period up to the completion of construction at Thunderbird, ” Sheffield executive chairperson Bruce Griffin has said.

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.