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 compared 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 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 reported that a development review of the Thunderbird project has identified a small range of development strategies.

Sheffield announced a rethink of the project in February this year, pausing the search for a strategic partner to help finance and develop the project to focus on changing the scale and product mix to reduce capital costs and provide a more readily financeable project.

The small range of development strategies includes a zircon-rich product stream in conjunction with alternate ilmenite streams.

Sheffield is now progressing the selection of a production pathway that will result in lower initial capital expenditure requirements and maximise investment returns, compared with the original plans for Thunderbird.

The next phase of the development review will involve engagement with key stakeholders and potential funding partners to road-test the potential development pathways before determining a preferred project scope for development, the company has said.

Sheffield has noted that all major components of the development strategy remain consistent with the previously completed feasibility studies, with Sheffield expecting that only a modest amount of future work will be required to secure the selected development strategy to a bankable feasibility study level.

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 are continuing with third parties that have expressed interest in project investment, and 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 mixes to significantly lower the capital cost structure of 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 in the remainder of 2020.

Key Contracts and Suppliers
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.