PERTH (miningweekly.com) – An updated bankable feasibility study (BFS) for the Thunderbird mineral sands project, in Western Australia, has significantly reduced the funding requirements.

ASX-listed Sheffield Resources on Wednesday said that the total capital requirements for the project have been reduced by A$71-million to A$392-million, with the equity funding requirement reducing by A$108-million to A$143-million and the total funding requirement reducing by A$101-million to A$478-million.

The updated BFS increased the post-tax net present value of the Stage 1 operation by 58%, to A$0.98-billion, while the internal rate of return increased from 24.9% to 30.1%.

The upated BFS increased the zircon production and project revenue from the Stage 1 operation by more than 30%, enhancing the financial metrics of the project. The low temperature roast (LTR) ilmenite circuit was also removed from the project and unroasted primary ilmenite will be sold through a seven-year binding offtake agreement, de-risking the project execution.

During the Stage 1 operation, Thunderbird is expected to produce some 55 000 t/y of premium zircon, 77 000 t/y of zircon concentrate, and 660 000 t/y of primary ilmenite.

Stage 2 of the project would see premium zircon output increase to 111 000 t/y, while zircon concentrate production would increase to 128 000 t/y and primary ilmenite production to 1.25-million tonnes a year.

Sheffield MD Bruce McFadzean said that the updated BFS confirmed Thunderbird’s status as a world-class mineral sands project at a time when consensus supported a structural supply deficit in zircon production for years to come.

“The removal of the LTR ilmenite circuit combined with a focus on increased zircon production delivers lower capital, lower construction risk and a technically stronger project, which is anticipated to generate improved and consistent financial returns over an exceptionally long mine life of 37 years.”

McFadzean noted that the recent growth in the chloride slag market and Sheffield’s strong relationship with existing ilmenite offtake partner Bengbu Zhongheng New Materials has resulted in the signing of a seven-year offtake agreement, plus a three-year extension option for all of the Stage 1 unroasted primary ilmenite, further validating Sheffield’s decision to remove the LTR ilmenite circuit.

“There has been continued strong interest in our zircon products since the Stage 1 zircon offtake agreements were executed in 2018. This was a further catalyst to re-scope Thunderbird and increase zircon production by almost 40%, most of which is now contracted with binding offtake agreements.”

McFadzean said that the completion of the updated BFS demonstrated a transformational improvement in the project economics and a significant reduction in the equity funding requirement.

Sheffield is expected to determine the optimal funding solution over the coming months, clearing the way for a final investment decision and the start of construction later this year.