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
Sheffield Resources has signed a nonbinding termsheet with Yansteel to form a joint venture (JV) at its Thunderbird project.

Under the terms of the agreement, Yansteel will invest A$130.1-million to acquire a 50% stake in the project, with the transaction subject to the execution of formal agreements, as well as regulatory and shareholder approval.

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

“The JV with Yansteel, if completed, will provide the project equity presently estimated to fund Stage 1 of the Thunderbird project. The transaction with Yansteel also secures offtake for all the ilmenite,” Sheffield MD Bruce McFadzean has said.

In addition, the Sheffield board has also approved the issue of more than 34.25-million shares, comprising 9.9% of the post-issue capital of Sheffield to Yansteel for an investment valued of A$12.9-million.

The share placement is not conditional on the JV transaction, or Foreign Investment Review Board process completion.

Yansteel has said that it shares the same commitment as Sheffield to protecting the environment and creating employment and business opportunities for local and indigenous communities to benefit from the project development.

The JV parties have agreed that the development concept for the Stage 1 project will be a 10.4-million-tonne-a-year mine and process plant producing 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 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.