Sheffield Resources Limited · ASX:SFX
Sheffield Resources — Investor Presentation (October 2018)
36 slides from Sheffield Resources's investor presentation, Oct 19, 2018
Slide 1: Investor presentation October 2018
For personal use only Investor presentation October 2018
Slide 2: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER IMPORTANT: You must read the following before continuing. For personal use only Summary information in relation to Sheffield This presentation contains summary information about Sheffield [Resources Limited (ACN 125 811 083) (Company or Sheffield), its subsidiaries an
Slide 3: Important Notice and Disclaimer
IMPORTANT NOTICE AND DISCLAIMER Not financial product advice For personal use only This presentation, and the information provided in it, does not constitute, and is not intended to constitute, investment or financial product advice (nor tax, accounting or legal advice). This presentation should not
Slide 4: Investment Highlights
INVESTMENT HIGHLIGHTS 1. Thunderbird is a world-class mineral sands development project For personal use only • Large-scale, high grade, zircon-rich project with low operating costs, strong margins and attractive economics anticipated • Expected 42 year mine life based on current JORC Ore Reserve1 a
Slide 5: Company and Project Status
COMPANY AND PROJECT STATUS Mineral sands pricing environment has strengthened For personal use only • Zircon and TiO2 price environment has strengthened due to ongoing supply constraints and global economic growth • Material improvement in pricing relative to March 2017 Bankable Feasibility Study (“
Slide 6: Enhanced Flexibility from Proposed NAIF Debt Facilities
ENHANCED FLEXIBILITY FROM PROPOSED NAIF DEBT FACILTIES NAIF facility highlights For personal use only • NAIF is a corporate Commonwealth entity that was established under the NAIF Act 2016 to provide assistance to the states of Queensland, Western Australia and the Northern Territory for the constru
Slide 7: A Globally Significant Zircon Discovery
A GLOBALLY SIGNIFICANT ZIRCON DISCOVERY For personal use only Globally significant Zircon discoveries over the past 30 years based on published pre-production resources 20 Thunderbird, SFX Thunderbird 18 • Thunderbird is one of the most significant zircon discoveries in the last 30 years 16 Containe
Slide 8: A World Class, High Grade Ore Reserve
A WORLD CLASS, HIGH GRADE ORE RESERVE For personal use only Comparison of Thunderbird’s Ore Reserves against latest Ore Reserves for key global mineral sands deposits 5.0 TiO2 Grade % Fairbreeze (TROX) In Situ Titanium Minerals (Ilm+Lux+Rut) % Namakwa (TROX) 4.0 QMM (RIO) Cataby (ILU) THUNDERBIRD (S
Slide 9: Zircon Industry Dynamics
ZIRCON INDUSTRY DYNAMICS For personal use only A substantial supply gap is emerging… Key observations ‘000 tonnes (kt) Global Zircon Supply Outlook Demand Thunderbird ideally 2,000 positioned to help bridge the • 1.2Mtpa global market, expected to grow at 2.8% p.a. to 2026, in line with global GDP “
Slide 10: Titanium Feedstock Industry Dynamics
TITANIUM FEEDSTOCK INDUSTRY DYNAMICS For personal use only TiO2 feedstock demand and supply dynamics Key observations (‘000 TiO2 units) Demand Overall Feedstock Supply/Demand Balance to 2022 • Approximately 7.3m TiO2 units global market, expected to grow at 2.3% CAGR from 2017 to 2026, with pigment
Slide 11: LTR Ilmenite Market Opportunity
LTR ILMENITE MARKET OPPORTUNITY For personal use only Thunderbird’s LTR Ilmenite product is ideally suited as a direct input to sulfate pigment and chloride slag ‘000 TiO2 units Thunderbird LTR Ilmenite (57% TiO2) Product 8,000 Global Product Mix 20181 • Unlike most global ilmenite supply, Thunderbi
Slide 12: High Grade Continuity x Deposit Thickness = Value
HIGH GRADE CONTINUITY x DEPOSIT THICKNESS = VALUE Project plan view Overview For personal use only • Thunderbird contains a continuous high grade zone up to 46m thickness OPE N • Strong continuity and very high Valuable Heavy Mineral (“VHM”) grades Plan View • Near-surface high grades to be targeted
Slide 13: Conventional Processing
CONVENTIONAL PROCESSING Flowsheet producing five high grade, quality products Flowsheet summary For personal use only • Conventional HM sands processing circuit1 • Ilmenite upgrade via low temperature roast (“LTR”) • LTR upgrades to > 56% TiO2 producing premium sulphate ilmenite, and chloride slag f
Slide 14: Attractive Product Mix and Pricing Environment
ATTRACTIVE PRODUCT MIX AND PRICING ENVIRONMENT Indicative % of total LOM revenue1 Thunderbird’s key products Pricing methodology Long-Term Price Forecasts3 For personal use only Premium Zircon Premium Zircon Current Premium • Ceramic grade zircon product with > 66% ZrO2 • Pricing generally negotiate
Slide 15: Binding Off-take Substantially Complete
BINDING OFF-TAKE SUBSTANTIALLY COMPLETE Robust demand for Thunderbird offtake For personal use only • Thunderbird aims to deliver a secure, consistent supply of high quality products over its expected 42 year mine life • Thunderbird is located in a low risk jurisdiction, proximal to the largest emer
Slide 16: Indicative Mine Schedule
INDICATIVE MINE SCHEDULE For personal use only 1,400 Stage 1 Stage 2 1,200 1,127 1,086 1,000 965 955 336 324 809 828 000’ tonnes 800 287 282 776 93 94 249 240 106 227 584 96 80 81 600 560 503 91 91 65 79 68 170 166 67 73 152 76 400 52 50 47 49 59 36 548 567 485 477 200 405 420 383 122 257 281 287 33
Slide 17: Staged Approach to Project Development
STAGED APPROACH TO PROJECT DEVELOPMENT For personal use only Sheffield’s approach • Scale of ore body allows for multiple stage development leveraging shared infrastructure and operating footprint • Current execution strategy is based on two stages of development phased to seek to minimise up front
Slide 18: Thunderbird Capital Expenditure
THUNDERBIRD CAPITAL EXPENDITURE For personal use only Stage 1 Capex Update (A$m) Current Stage 1 capex estimate Additional Funding Requirements A$463m2 27 • In addition to Stage 1 capex, Sheffield will need to fund the following items 38 during the 2 year construction period: BFS Stage 1 capex estim
Slide 19: Indicative Operating Costs
INDICATIVE OPERATING COSTS Outstanding Indicative Revenue to Cost Ratio For personal use only Stage 1 Operating Costs (Steady-State)1 Stage 2 Operating Costs (Steady-State)3 Revenue Revenue (net of royalties) (net of royalties) A$1,798/t2 Operating margin = A$899/t A$1,787/t4 Operating margin = A$1,
Slide 20: A Second Quartile Producer
A SECOND QUARTILE PRODUCER For personal use only TZMI assess Thunderbird to have a competitive revenue to cost ratio 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile Thunderbird Source: TZMI Notes: 1. Cautionary Statement: Thunderbird’s cost position is as estimated by TZMI and based on the March
Slide 21: Stage Execution Strategy
STAGE 1 EXECUTION STRATEGY For personal use only Sheffield is focused on minimising execution risk and ensuring successful project delivery The project will be delivered in 3 key stages Sheffield’s delivery team 1. Early works • Sheffield’s Project Team is made up of highly credentialed technical, m
Slide 22: Stage Development & Commissioning Timeline
STAGE 1 DEVELOPMENT & COMMISSIONING TIMELINE For personal use only Engineering, construction and commissioning is expected to take approximately 2 years, followed by a period of production ramp-up 2018 2019 2020 2021 Month O N D J F M A M J J A S O N D J F M A M J J A S O N D J F M A M J J A S O N D
Slide 23: Experienced Board and Management
EXPERIENCED BOARD AND MANAGEMENT For personal use only Will Burbury Bruce McFadzean David Archer Non-Executive Chairman Managing Director Technical Director Previously Chairman of Warwick Mining engineer with over 40 years Geologist with over 30 years Resources Limited in 2009 and was experience lea
Slide 24: Sheffield Community Investment
SHEFFIELD COMMUNITY INVESTMENT For personal use only Our Pledge to the Kimberley Community Our Current Social Licence to Operate • Local Content Employment – 280 local jobs • Active Group Training Program with Aboriginal participants transferring to permanent employment • Intergenerational Employmen
Slide 25: Exploration and Mineral Resource Growth
EXPLORATION AND MINERAL RESOURCE GROWTH For personal use only Exploration Strategy & Progress • Targeting large zircon rich deposits in low risk mining jurisdictions • Large Australian tenement holding in multiple provinces with growing Mineral Resource base • Exceptional recent drilling results1 co
Slide 26: Appendix A: Other information
For personal use only Appendix A Other information 26
Slide 27: Royalty Regime and Fiscal Arrangements
ROYALTY REGIME AND FISCAL ARRANGEMENTS For personal use only Royalties1 • Royalty (Years 1 to 4, starting on first sale) = 0.5% of • WA State govt. royalty = 5% of Total Sales Revenue Total Sales Revenue on FOB basis or equivalent State government Taurus3 • Royalty (Years 5 onwards for a period of t
Slide 28: Senior Debt Financing Summary
SENIOR DEBT FINANCING SUMMARY For personal use only US$175m Taurus facility A$95m NAIF loan facilities • Lender: Taurus Mining Finance Fund and Taurus Mining Finance Annex Fund • Lender: State of Western Australia, under back-to-back loan from Northern Australia • Syndicated facility agreement which
Slide 29: Debt Principal Repayment Profile
DEBT PRINCIPAL REPAYMENT PROFILE For personal use only Scheduled Debt Principal Repayment Profile (A$m)1,2,3 175 3 150 Taurus Tranche A (US$75m) Taurus Tranche B (US$100m) 125 NAIF Tranche C (A$30m) NAIF InfraCo Facility (A$65m) 100 133 75 50 3 3 25 41 4 27 23 10 3 3 3 3 4 3 4 4 0 2 4 4 4 4 4 4 2 4
Slide 30: Sheffield Snapshot
SHEFFIELD SNAPSHOT For personal use only Sheffield is focused on development of the large scale, high quality Thunderbird mineral sands project Last twelve months share price performance $1.30 Successful delivery of key project milestones has driven $1.10 long term share price appreciation $0.90 $0.
Slide 31: Appendix B: Product details
For personal use only Appendix B Product details 31
Slide 32: Premium Zircon
PREMIUM ZIRCON1 For personal use only Product overview Thunderbird’s Premium Zircon product • Ceramic Grade Zircon: > 66% ZrO2 • Low levels of impurities • Good Opacity • No iron staining • Low levels of impurities • Good whiteness - important • Low Fe2O3 for making a good opacifier • Low TiO2 • Ver
Slide 33: LTR Ilmenite
LTR ILMENITE1 Product overview Global ilmenite comparison: FeO: Fe2O3 ratio For personal use only • Exceptional Grade: 56–58% TiO2 • Suitable for chloride slag production • Premium feedstock for sulfate pigment Highly reactive ilmenite production Suited to Chinese market • High acid solubility • Goo
Slide 34: Appendix C: Reserves and resources
For personal use only Appendix C Reserves and resources 34
Slide 35: Ore Reserves
ORE RESERVES For personal use only THUNDERBIRD DEPOSIT ORE RESERVES1,4 Valuable Heavy Mineral (VHM) in-situ grade Valuable HM Grade (In-situ)2 Ore Reserve Ore Tonnes In-situ HM Tonnes HM Grade Slimes Osize Category (millions) (millions) (%) Zircon HiTi Leuc Leuc Ilmenite (%) (%) % % % % Proved 235.8
Slide 36: Mineral Resources
MINERAL RESOURCES THUNDERBIRD DEPOSIT MINERAL RESOURCE1,2,7 For personal use only Valuable HM Grade (In-situ)4 Material Tonnes In-situ HM Tonnes HM Grade3 Slimes Osize Cut-off (HM%) Mineral Resource Category Zircon HiTi Leuc Leuc Ilmenite (millions) (millions) (%) (%) (%) (%) (%) (%) (%) Measured 51
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