Sheffield Resources Limited · ASX:SFX
Sheffield Resources — Mines and Money New York 2017
32 slides from Sheffield Resources's conference presentation, May 2017
Slide 1: Thunderbird: The Emerging Force in Mineral Sands
Thunderbird The Emerging Force in Mineral Sands Investor, Mines and Money – New York May 2017 ASX : SFX 1
Slide 2: Compliance and Disclaimer
COMPLIANCE AND DISCLAIMER PREVIOUSLY REPORTED INFORMATION This presentation includes information that relates to Exploration Results, Mineral Resources and Ore Reserves prepared and first disclosed under the JORC Code (2012) and a Bankable Feasibility Study. The information was extracted from Sheffi
Slide 3: Compliance and Disclaimer (Continued)
COMPLIANCE AND DISCLAIMER CAUTIONARY STATEMENTS AND RISK FACTORS (Continued) Forward-looking statements are provided as a general guide only and should not be relied on as a guarantee of future performance. Forward-looking statements may be affected by a range of variables that could cause actual re
Slide 4: Corporate Snapshot
CORPORATE SNAPSHOT ASX ISSUED SHARE SHARE PRICE MARKET CASH ENTERPRISE TOP TWENTY CODE SHARES OPTIONS (20 Apr 2017) CAP (UNAUDITED)1 VALUE SHAREHOLDERS2 SFX 181.0M 14.9M2 A$0.60 A$109M A$11.0M A$98M ~49% 12 Month Share Price… $0.90 $0.80 13% Directors $0.70 $0.60 15% $0.50 Institutional $0.40 72% $0
Slide 5: World Class Project
WORLD CLASS PROJECT • BFS demonstrates Thunderbird to be a world class project • Large high grade Ore Reserve1 • 42 year mine life2 • Low risk mining jurisdiction • Closer to Asian markets than other supply • Simple project logistics • Potential to be a globally significant supplier of zircon and il
Slide 6: Mineral Sands – Everyone, Everyday
MINERAL SANDS – EVERYONE, EVERYDAY 2 Distinct Product Streams ZIRCON TITANIUM FEEDSTOCKS BFS 62% Revenue BFS 35% Revenue • 1.1 million tonne p.a. global market • 6.5-7.0 million tonne p.a. global market (TiO2 units) • Over 50% is used in the ceramics industry (tiles, crockery, etc.) • Feedstocks inc
Slide 7: World Class, High Grade Ore Reserve
WORLD CLASS, HIGH GRADE ORE RESERVE 5.00 TiO2 Grade Fairbreeze (TROX) In Situ Titanium Minerals (Ilm+Lux+Rut) % Namakwa (TROX) 4.00 QMM (RIO) Cataby (ILU) THUNDERBIRD (SFX) Kwale (BSE) Moma (KMR) 3.00 Dongara (TROX) Richards Bay (RIO) Cyclone (DRX) 2.00 Sierra Rutile (ILU) Keysbrook (MZI) Cooljarloo
Slide 8: Our Team – Experienced and Skilled
OUR TEAM – EXPERIENCED AND SKILLED MANAGEMENT Bruce McFadzean – Managing Director Mining engineer with over 35 years experience leading the financing, development and operation of mines in Australia and overseas, including roles with BHP Billiton and Rio Tinto. Previously Managing Director of Catalp
Slide 9: Market Conditions Have Turned
MARKET CONDITIONS HAVE TURNED1 Zircon Price - Actual, Forecast1 and BFS Assumption Ilmenite Price - Actual, Forecast1 and BFS Assumption $1,600 $250 US$/tonne BFS $1,400 $200 $1,200 US$/tonne US$/tonne $150 $1,000 $100 $800 $600 $50 US$/tonne BFS $400 $- 2014 2015 2016 2016 2017 2017 2018 2019 2020
Slide 10: BFS Key Highlights
BFS KEY HIGHLIGHTS1 LOM site costs4 US$8.55/t ore mined 1. Actual results may differ from these estimates. Please refer to the assumptions, sensitivities, risk factors and cautionary statements disclosed respectively on pages 7, 9, 10 and 56 of the Company's announcement “THUNDERBIRD BFS DELIVERS OU
Slide 11: Product Price Assumptions
PRODUCT PRICE ASSUMPTIONS1 TZMI long term pricing $1,387 $1,400 $1,200 US$/tonne FOB, real 2017 prices $1,000 $800 $677 $600 $500 $400 $200 $183 $48 $0 Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 Mar-22 Sep-22 Premium Zircon Zircon Concentrate Hi-Ti 88 LTR Ilmenite Titano-Magnetite TZMI Primary Zircon
Slide 12: VHM Grade and Deposit Thickness = Value
VHM GRADE AND DEPOSIT THICKNESS = VALUE • Thunderbird has a continuous High Grade Zone of up to 46m thickness: the “GT Zone” • Project economics are based on GT Zone’s strong continuity and very high Valuable HM grades • Near-surface, high value areas targeted in early years of production • GT Zone
Slide 13: Conventional Processing
CONVENTIONAL PROCESSING • Conventional heavy mineral sands Delivers 5 quality products processing circuit1 • Includes an ilmenite upgrade step using a low temperature roast (“LTR”) • LTR upgrades the primary ilmenite to 56.1% TiO2 sulfate ilmenite with ability to control to higher grades • LTR ilmen
Slide 14: Logistics – Simple and Close to Market
LOGISTICS – SIMPLE AND CLOSE TO MARKET • Products proposed to be trucked 140km from mine to ports at Derby and Broome, including 110km on major National Highway • Road haulage fleet and marine barging based in Derby • Access agreement in place for port storage, wharf and bulk handling facility at De
Slide 15: A Project for the Community
A PROJECT FOR THE COMMUNITY • Lead Agency status demonstrates State and Regional project support • Approximately 140 direct full time local jobs • Business opportunities with focus on Aboriginal participation • Commitment to transparent Aboriginal employment, business and training • Overwhelming com
Slide 16: Summary BFS Outputs
SUMMARY BFS OUTPUTS STAGE 1 STAGE 2 LOM Financial Year Financial Year LOM7 A$m, Real 2017 Prices 2019 – 20235 2024 – 20336 (4 years) (10 years) (42 years) Ore Mined (Mt) 32.8 173.8 680.6 Low LOM strip ratio supports Strip Ratio (W:O) 0.52 0.58 0.77 consistent and predictable LOM cost structure VHM G
Slide 17: Product Volumes
PRODUCT VOLUMES Stage 1 Stage 2 1,400 1,200 1,124 1,134 1,025 966 1,000 336 336 878 869 2 YEAR RAMP-UP 307 773 000 Tonnes 800 288 99 96 261 259 581 584 109 84 226 559 99 80 600 95 73 71 90 415 170 170 81 79 68 166 76 400 52 53 122 49 51 58 60 567 568 518 486 441 437 200 382 280 286 286 205 0 Year 1
Slide 18: Strong Revenue A$ – Flat Cost Structure
STRONG REVENUE A$ – FLAT COST STRUCTURE 550 Revenue Royalties Capex Opex Working capital Pre-tax cash flow 500 450 Robust annual cashflow 400 350 300 250 200 150 100 50 - (50) (100) (150) (200) (250) Flat LOM cost structure (300) FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY28 FY29 FY30 FY31
Slide 19: Competitive Revenue to Cost Ratio
COMPETITIVE REVENUE TO COST RATIO • Anticipated high margin producer • Thunderbird represented adjacent to first quartile producers, several of whom are vertically integrated with beneficiation plants • Independently derived margin curve 1. 4 Year production period following Stage 1 ramp-up (Year 3
Slide 20: Project NPV Sensitivities A$ (+/-10%)
PROJECT NPV SENSITIVITIES A$ (+/-10%) Product prices, recoveries and ore grade are key sensitivity drivers Base Case: NPV A$675.6m All Product Prices (in AUD) 418 933 Plant Recoveries – All Products 440 902 Ore VHM Grade 446 902 Product Price - Premium Zircon & Zircon Concentrate 517 835 Recoveries
Slide 21: Stage 1 Annual Operating Expenditure
STAGE 1 ANNUAL OPERATING EXPENDITURE 2% Mining 7% Labour 5% 21% Electricity 78% OF COSTS 8% Natural Gas Transport & Logistics 11% 12% Consumables Maintenance 17% Site G&A (excluding labour) 17% Sustaining Capital • Costs dominated by mining, labour, power, gas and logistics (78%) • Mining, power, lo
Slide 22: Capital Expenditure
CAPITAL EXPENDITURE Description US$M A$M Stage 2 funded by 200 186 Processing – Stage 1 cash flow and debt 180 Plant Area Civils & Process Water Systems 19.0 25.3 160 152 Wet Concentrator Plant 43.5 58.0 140 Concentrate Upgrade Plant 25.7 34.3 122 120 Zircon Processing Plant 59.2 78.9 EPC 100 Ilmeni
Slide 23: Offtake and Market Status
OFFTAKE AND MARKET STATUS • Three non-binding MOUs signed with European and Asian consumers for approximately 40% of Stage 1 premium zircon with further offtake being negotiated • The Thunderbird project is one of the few large mineral sands projects globally located in a low risk jurisdiction • Thu
Slide 24: Financing
FINANCING • Sheffield will require a funding solution that delivers at least A$355 million1 in new capital via debt, equity and/or JV options • Since the PFS, the Company has received interest from international financial and strategic investors, off-takers and lenders regarding participation in the
Slide 25: Timeline – Key Targets to Production
TIMELINE – KEY TARGETS TO PRODUCTION1 EPC 1 2017 Complete negotiations 3 and award contracts PRE-WORKS 5 7 Q3/Q4 2017 BFS Commence pre-works, CONSTRUCTION2 FINAL PRODUCTS camp, site preparation 2017 - 2019 2019 Q1 2017 for construction team Construction commences2 Progressive ramp-up of Publish stud
Slide 26: A World Class Mineral Sands Project
A WORLD CLASS MINERAL SANDS PROJECT • 42 year mine life • 100% owned • World’s best mining jurisdiction • Permitting finalised Q3 2017 • Pre-tax NPV10 of A$676 million, IRR of 25% • Stage 1 capex of US$261m, A$348m, • EBITDA of US$3.8, A$5.1 billion over LOM, average A$123 million per annum • Global
Slide 27: Zircon - Premium Product
Appendix 1 ZIRCON - PREMIUM PRODUCT • Ceramic Grade Zircon • > 66% ZrO2 • Low Fe2O3 • Low TiO2 • Very Low Al2O3 • Moderate U+Th • Good Opacity • Off-take Discussions in Progress Composition (%) Premium Zircon Typical1 ZrO2+HfO2 % 66.2 – 66.6 Raw Ilmenite 66.30 TiO2 % 0.09 – 0.18 0.14 Fe2O3 % 0.06 –
Slide 28: LTR Ilmenite - Premium Product
Appendix 2 LTR ILMENITE - PREMIUM PRODUCT • Exceptional Grade Global Ilmenite Comparison FeO:Fe2O3 Ratio • 56 – 58% TiO2 3.0 2.5 • Outstanding FeO:Fe2O3 2.0 • Low Fe2O3 (<13%) 1.5 • Low Levels of Cr2O3 1.0 • High Acid Solubility 0.5 • Good reactivity rate 0.0 • Market Leading quality Thunderbird Pre
Slide 29: Summary BFS Metrics
Appendix 3 SUMMARY BFS METRICS Thunderbird Project Assumed Product Prices Thunderbird Project Estimated Production Outputs Financial Financial Financial Financial Average Product Average Production Year Year LOM5 Year Year LOM5 Prices (US$)2 per annum 2019 – 2023 2024 – 20334 3 2019 – 2023 2024 – 20
Slide 30: A Strong Cash Margin Operation - $/t
Appendix 4 A STRONG CASH MARGIN OPERATION - $/T Stage 1 Stage 2 $30 26.96 27.10 29.22 25.84 24.38 $25 22.55 22.93 20.48 20.84 19.85 18.98 $A per tonne mined $20 MARGIN 15.50 14.74 14.24 14.15 $15 1.80 1.99 1.69 1.72 11.73 11.32 10.65 10.30 10.67 10.92 1.85 2.35 2.23 2.38 10.18 1.03 0.99 1.01 $10 0.9
Slide 31: Ore Reserves
Appendix 5 ORE RESERVES THUNDERBIRD DEPOSIT ORE RESERVES1,4 Valuable Heavy Mineral (VHM) in-situ grade In-situ HM Valuable HM Grade (In-situ)2 Ore Reserve Ore Tonnes HM Grade Slimes Osize Tonnes Zircon HiTi Leuc Leuc Ilmenite Category (millions) (%) (%) (%) (millions) % % % % Proved 235.8 31.4 13.3
Slide 32: Mineral Resources
Appendix 6 MINERAL RESOURCES THUNDERBIRD DEPOSIT MINERAL RESOURCE1,2,7 Mineral Material In-situ HM Valuable HM Grade (In-situ)4 Cut-off HM Grade3 Slimes Osize Resource Tonnes Tonnes Zircon HiTi Leuc Leuc Ilmenite (HM%) (%) (%) (%) Category (millions) (millions) (%) (%) (%) (%) Measured 510 45 8.9 0.