Sheffield Resources is advancing its flagship Thunderbird joint venture project in WA.
The project is one of the world’s largest, undeveloped zircon-rich mineral sands deposits and is currently being developed in the Canning Basin, midway between Broome and Derby in the northwest of the State.
Construction is expected to kick off in the 2021 dry season with site investigation, design and tendering works taking place just before.
Trial mining took place at the end of last year with the excavation of a 30m-deep pit and the program confirming the dozer push ore mining method as the most viable option.
This will be a globally significant zircon producer with estimated production of 132,000tpa for the first 4 years from start-up, ramping up through stage 2 development to 238,000tpa from the fifth year of production.
The deposit itself is one of the largest, highest grade mineral sands discoveries in the last 30 years.
It is expected to supply 6% of the world’s zircon and about 3% of the world’s ilmenite when it reaches full production.
The ilmenite will be one of the highest-grade sulphate ilmenites globally (56% TiO2) with specifications well suited to the sulphate pigment market and for high grade (89.8% TiO2) slag manufacture.
A pre-feasibility study was completed in October 2015, followed by a bankable feasibility study in March 2017, with both studies demonstrating an economically robust, zircon-rich project with a 40-plus year mine life.
Thunderbird has a mineral resource of 3.23bt @ 6.9% HM, including 18.6mt of zircon, 5.9 mt of high-titanium leucoxene, 6.5mt of leucoxene and 61.7mt of ilmenite.
Sheffield managing director Bruce McFadzean said the company recently signed an agreement with Hong-Kong based minerals company Yansteel to “go forward in partnership to develop Thunderbird together”.
“We started discussions with Yansteel in April last year and we went through several steps in that process – initial discussion, negotiations,” he said.
“In August we announced a non-binding term sheet, where Yansteel did a dollar placement into Sheffield for 9.99% of the company at 130% premium.
“We also signed a life-of-mine offtake for the titanium side, or the ilmenite part, of the business.
“In December we obtained our third approval from the Foreign Investment Review Board, supporting Yansteel in buying that 50% of the project for a total of $143m.”
The Yansteel equity filled a funding gap for Sheffield Resources and is expected to be sufficient for Phase 1 of the project.
It covers a total contribution of $130.1m in equity to acquire a 50% interest in the project and an additional payment of $12.9m for 9.9% of Sheffield, with shares issued at a 131% premium.
“You can’t get finance in this sector without having offtakes for all your materials so to have Yansteel, a consumer, as a strategic investor for us is a fantastic outcome – they’ll take 100% of all the ilmenite we produce at Thunderbird,” Mr McFadzean said.
Construction and Production
Calling the Thunderbird project “a big mine”, Sheffield Resources says construction will take about 18-20 months, commencing the dry season in 2021, with production in the latter half of 2023.
“The Thunderbird mineral sands project was discovered about 10 years ago and sits exactly halfway between Broome and Derby, about 50km inland on a station,” Mr McFadzean said.
“The last five years have been spent getting the necessary permits and process approvals for the project to commence.”
Products will be shipped out of Broome and Derby with the project’s robust mine-to-port logistics chain.
“It’s a huge stimulus to the local community, about 250 local people will be employed from Broome and Derby, which is significant bonus for the local communities,” Mr McFadzean said.
“We have excellent relationships with the local community, we employ the local community and we have a very strong commitment to Aboriginal employment and business.”
Sheffield’s exploration strategy for new zircon rich discoveries within its large northern Canning Basin tenement package is to target additional large, high-value, zircon rich deposits suitable for downstream processing at the Thunderbird dry mineral separation plant (MSP).
The zircon and titanium industries have outperformed subdued 2020 forecasts and supply for both are expected to tighten in the first half of 2021.
A global supply gap for zircon is forecast from 2021/2022 and new ilmenite supply is required to meet rising pigment and chloride slag demand.
“Mineral sands fit into daily life and daily consumption,” Mr MacFadzean said.
“Titanium goes into titanium plants to create titanium dioxide, which then goes into paint, sunblock, toothpaste and common daily products, while zircon goes into items such as tiles and cups.”
Global zircon demand between 2014-2016 averaged around 1.1mtpa with this demand expected to increase in the coming years to closer to 1.2-1.3mtpa.
Global titanium dioxide (TiO2) demand was estimated at approximately 6.4mt in 2010 with predictions it could grow to more than 8mtpa by 2025.
About Sheffield Resources
Sheffield Resources is a mineral sands focused explorer and developer with headquarters in Perth, WA and a market capitalisation of about $133m.
Sheffield has assembled a globally significant portfolio of 100%-owned mineral sands projects. It also owns the Eneabba and McCalls mineral sands projects located in the established North Perth Basin mineral sands province in WA’s Midwest region.
In the last few years Sheffield sold two iron projects and a potash project. In December 2017, it created a new, independent company Carawine Resources Ltd to progress its non-mineral sands exploration assets.
On January 6 this year, a joint venture was signed between Sheffield Resources and Yansteel Australia to become strategic partners on the Thunderbird mineral sands project.
Yansteel is a wholly-owned subsidiary of Tangshan Yanshan Iron & Steel Co., Ltd, a privately-owned steel manufacturer headquartered in Hebei, China, producing about 10mtpa of steel products with annual revenues of about $6bn.
Construction of a 500ktpa integrated titanium dioxide processing facility including a titanium slag smelter has commenced by the company. This complex will consume the low temperature roast (LTR) ilmenite offtake from Stage 1 of the Thunderbird mineral sands project.
It will be one of the highest-grade sulphate ilmenites in the global market at 56.1% TiO2, also suitable for producing high quality TiO2 slag (89% TiO2) and pig iron.
The LTR ilmenite also has low levels of alkalis and chromium making it a highly attractive feedstock.