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NEWS

Sheffield makes some noise
at Thunderbird

Sheffield Resources Ltd appears to be
heating up financing discussions for
its Thunderbird mineral sands project at

the right time.

The company released a BFS on the

project last month, with a funding solu-

tion that delivers at least $355 million in

new capital via debt, equity and/or a JV

agreement a work in progress.

Zircon and ilmenite – two significant

products at Thunderbird – are experienc-

ing strong prices at the moment, adding

further weight to the robust DFS pro-

duced by Sheffield.

Sheffield managing director Bruce

McFadzean said pricing guided by inde-

pendent experts such as TZMI Interna-

tional indicated ilmenite had rebounded

from lows of about $US85/t 12 months

ago to about $US200/t, while zircon is up Sheffield non-executive director Bruce McQuitty and managing director Bruce

from about $US950/t to $US1,050/t. McFadzean at Thunderbird. A BFS on the mineral sands project

Sheffield’s BFS factors in zircon prices indicated EBITDA of $5.1 billion over a 42-year mine life

of $US1,282/t, $US659/t zircon concen-

trate and $US183/t LTR ilmenite. will of course be subject to financing. cased on the international stage for the

“The ilmenite market, in my view, is too Ideally, Sheffield would like to retain first time in November and Sheffield was

hot,” McFadzean said. 100% of Thunderbird or at the least hold preparing to take the BFS on the road at

“People are trying to pick up the pro- a majority stake in the project. However, the time of print.

duction but I don’t think that they can. A the company was open to discussions on Interest from big funds in North

lot of these mines are a little bit older – various forms of ownership at asset level, America and Europe is encouraging for

those [companies] who have deposits McFadzean said. Sheffield, which plans to have project fi-

where they can increase production – but The company is entrenched in the nancing locked away this year and con-

there is still going to be a supply issue as permitting process and deep into Native struction started in Q4.

we move towards 2020 and I think that is Title and environmental work, which are “I don’t want to sound flippant about

the general consensus view. expected to be completed during this the funding side – clearly $350 million is

“The zircon price has stabilised and quarter and next. not an insignificant amount of money –

I think Iluka [Resources Ltd] reported Off-take discussions are well under but the asset is extraordinary and if you

achieving price increases last quarter way and dovetails into financing talks, look at the cash flows and payback peri-

and this quarter and the feedback we which Sheffield has engaged Azure Cap- od, there’s a lot of interest in the funding;

get, again from the independent experts, ital to assist with. there are a lot of legs and options to that

is that this will continue to increase. Our The Thunderbird project was show- funding too,” McFadzean said.

information was that it was down to “It has been all North Ameri-
can and European [interest],
$US950/t, down the bottom, our in- Thunderbird BFS metrics

formation is now that there are sales Mine life: 42 years (estimate) there are a lot of big funds that
want to be a part of a large
around the $US1,050/t mark.

“They are expecting that to continue Pre-tax NPV: $676 million project and I think when Black-
to grow as zircon stockpiles are further Rock came in with 9% of the
depleted. Stockpiles are held at the Pre-tax IRR: 25% company last year, there’s an

mines and not on the consumer side, LOM EBITDA: $5.1 billion, indicator of how a lot of the big

so I think there is a total rebalancing average $123 million per annum funds see this project.”

there. At the TZMI conference in Hong Stage one capex: $348 million At the time of print, Sheffield
Kong, the view was that zircon was go- appointed Stuart Pether as
ing to be in short supply by 2020. We Stage two: $195 million chief operating officer.

come on in 2019, so I think our timing LOM site costs: $US790/t, $US8.55/t ore mined – Mark Andrews
could be right.”
LOM production: 76,100 tpa premium zircon,
Filling the supply void of ilmenite and 68,500 tpa zircon concentrate, 387,800 tpa LTR
zircon and having an impact on the Hi- ilmenite, 20,300 tpa Hi-Ti88, 229,800 tpa titano magnetite
Ti88, and titano-magnetite markets,

AUSTRALIA’S PAYDIRT APRIL 2017 PAGE 5