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
A work programme has started to ensure the completion of a BFS on the revised scope of the Thunderbird project to assure a final investment decision is reached ahead of the 2021 dry season.

The revised BFS will allow for the completion of project financing, following the formation of a joint venture (JV) with Yansteel.

A full-scale trial mining programme is planned for the fourth quarter of this year to confirm the mining plant design and contract costs and collect a bulk ore sample, while site investigation, design and tendering work is also scheduled for the fourth quarter.

The early work is expected to cost about A$2.9-million to complete, and will be funded from the Yansteel placement proceeds. The work programme will be reimbursable from the JV and will reduce Sheffield’s requirement to fund any JV equity shortfall to between A$130.1-million and A$143-million.

Sheffield and Yansteel struck a JV agreement in August, under which Yansteel would 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.

Sheffield and Yansteel have submitted the Foreign Investment Review Board application for the JV, and have progressed to drafting definitive documentation for the transaction, targeting an execution at the end of October this year. 

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.