Sheffield Resources Limited · ASX:SFX
Sheffield Resources — TZMI Conference 2017
27 slides from Sheffield Resources's conference presentation, Nov 14, 2017
Slide 1: Thunderbird: The Emerging Force in Mineral Sands
Thunderbird The Emerging Force in Mineral Sands TZMI Presentation November 2017 ASX : SFX
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: Corporate Snapshot
CORPORATE SNAPSHOT ASX ISSUED SHARE SHARE PRICE MARKET CASH ENTERPRISE TOP TWENTY CODE SHARES OPTIONS (8 November 2017) CAP (UNAUDITED)1 VALUE SHAREHOLDERS SFX 225.4M 13.2M2 A$0.75 A$169M A$33M A$136 ~52% 12 Month Price History (AUD) $0.90 12% Directors & $0.80 Management $0.70 60% 28% Institutional
Slide 4: World Class Project
WORLD CLASS PROJECT • Low risk mining jurisdiction • Robust, high grade and consistent Ore Reserve1 • 42 year mine life2 • Closer to Asian markets than other supply • Simple and low cost project logistics • High quality zircon and ilmenite products • Favorable zircon and ilmenite market • Superior f
Slide 5: World Class, High Grade Ore Reserve
WORLD CLASS, HIGH GRADE ORE RESERVE 5.00 TiO2 Grade Fairbreeze (TROX) Namakwa (TROX) In Situ Titanium Minerals (Ilm+Lux+Rut) % 4.00 QMM (RIO) THUNDERBIRD (SFX) Cataby (ILU) Moma (KMR) Kwale (BSE) 3.00 Dongara (TROX) Richards Bay (RIO) Cyclone (DRX) 2.00 Sierra Rutile (ILU) Keysbrook (MZI) Cooljarloo
Slide 6: 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 7: Funding Update
FUNDING UPDATE Sheffield has secured a US$200 million underwritten senior debt facility from Taurus Mining Finance Fund and Taurus Mining Finance Annex Fund (“Taurus") • Includes a US$175 million term facility and US$25 million contingent instrument facility • Attractive funding terms: o Average cos
Slide 8: Proposed EPC and Other Major Contracts
PROPOSED EPC AND OTHER MAJOR CONTRACTS • Preferred tenderer: GR Engineering Services (GNG) • Solid experience and quality in delivery of mineral processing plants • In-house engineering skills combined with strong construction capability • Experienced management, strong safety culture and well estab
Slide 9: Offtake and Market Status
OFFTAKE AND MARKET STATUS Product Non Binding Binding Offtake & Agreement Agreement Parties (% BFS Revenue Contribution) Stage 1 Stage 1 Volume Volume Sukaso, RZI, Premium Ruby 31% 44% Zircon (43%) Ceramics, Minchem Zircon Concentrate 48% In Progress RZI (19%) LTR Ilmenite 47% In Progress CHTi (29%)
Slide 10: Mineral Sands – Everyone, Everyday
MINERAL SANDS – EVERYONE, EVERYDAY Two Distinct Product Streams ZIRCON TITANIUM FEEDSTOCKS BFS 62% Revenue BFS 35% Revenue • 1.1 million tonne global p.a. • 6.5-7.0 million tonne p.a. global market (TiO2 units) • >50% is used in the ceramics industry (tiles, • Global ilmenite 52-58% TiO2, rutile 95-
Slide 11: Significant Zircon Supply Shortfall Predicted
SIGNIFICANT ZIRCON SUPPLY SHORTFALL PREDICTED Declining Production Thunderbird Production >25% • Without new projects, global zircon supply is expected to decline significantly over the coming years, 2017-2025 • Key drivers include; o Closure of existing mines (North Stradbroke, Mataraca, Iluka Murr
Slide 12: BFS Key Highlights
BFS KEY HIGHLIGHTS1 LOM site costs4 US$8.55/t ore mined 1. Actual results may differ from these estimates. Please refer to the assumptions, sensitivities, risk factors and cautionary statements disclosed respectively on pages 7, 9, 10 and 56 of the Company's announcement “THUNDERBIRD BFS DELIVERS OU
Slide 13: VHM Grade and Deposit Thickness = Value
VHM GRADE AND DEPOSIT THICKNESS = VALUE • Thunderbird has a continuous High Grade Zone of up to 46m thickness: the “GT Zone” • Project economics are based on GT Zone’s strong continuity and very high Valuable HM grades • Near-surface, high value areas targeted in early years of production • GT Zone
Slide 14: Conventional Processing – High Quality Products
CONVENTIONAL PROCESSING – HIGH QUALITY PRODUCTS • Conventional heavy mineral sands processing circuit1 • Includes an ilmenite upgrade step using a low temperature roast (“LTR”) • LTR upgrades the primary ilmenite to 56.1% TiO2 sulfate ilmenite with ability to control to higher grades • LTR ilmenite
Slide 15: Product Volumes – A Significant Global Producer
PRODUCT VOLUMES – A SIGNIFICANT GLOBAL PRODUCER 1,400 Stage 1 Stage 2 1,200 1,124 1,134 1,025 1,000 966 336 336 878 869 2 YEAR RAMP-UP 307 773 288 000 Tonnes 800 99 96 261 259 559 581 584 99 109 84 80 226 600 95 73 71 90 415 166 170 170 81 79 68 76 400 52 53 122 49 51 58 60 567 568 518 486 441 437 2
Slide 16: Strong Revenue A$ – Flat Cost Structure
STRONG REVENUE A$ – FLAT COST STRUCTURE 550 Revenue Royalties Capex Opex Working capital Pre-tax cash flow 500 450 Robust annual cash flow 4%5% 400 350 29% 43% 300 250 200 19% 150 100 50 - (50) (100) (150) (200) (250) Flat LOM cost structure (300) FY18 FY19 FY20 FY21 FY22 FY23 FY24 FY25 FY26 FY27 FY
Slide 17: Competitive Revenue to Cost Ratio
COMPETITIVE REVENUE TO COST RATIO 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile 2% Thunderbird 7% 5% 21% 8% 11% 12% 17% 17% Mining Labour • High margin producer 80% cost Electricity • Thunderbird represented adjacent to first quartile producers, several of Natural Gas whom are vertically integ
Slide 18: A Project for the Community
A PROJECT FOR THE COMMUNITY • Lead Agency status demonstrates State and Regional importance • ~300 construction jobs, then up to 220 - 280 direct full time local jobs for 42 years • Business opportunities with focus on Aboriginal participation • Commitment to transparent Aboriginal employment, busin
Slide 19: Timeline – Key Targets to Production
TIMELINE – KEY TARGETS TO PRODUCTION1 4 1 PRE-WORKS 5 7 Q4 2017 EPC Commence pre-works, CONSTRUCTION2 FINAL PRODUCTS Early Q4 2017 camp, site preparation 2018 - 2019 2019 - 2020 Complete negotiations commence engineering Construction commences2 Progressive ramp-up of and award contracts and procurem
Slide 20: Thunderbird: A World Class Mineral Sands Project
THUNDERBIRD: A WORLD CLASS MINERAL SANDS PROJECT • 42 year mine life • 100% owned • World’s best mining jurisdiction • Pre-tax NPV10 of A$676 million, IRR of 25% • EPC term sheet complete • Debt mandated on attractive terms • Binding offtake progressing rapidly • Strategic equity discussions next pr
Slide 21: 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 – 0.20 0.14 Fe2O3 % 0.06 –
Slide 22: LTR Ilmenite - Premium Product
Appendix 2 LTR ILMENITE - PREMIUM PRODUCT • Exceptional Grade Global Ilmenite Comparison FeO:Fe2O3 • 56 – 58% TiO2 Ratio • Outstanding FeO:Fe2O3 3.0 • Low Fe2O3 (<13%) 2.5 • Low Levels of Cr2O3 2.0 1.5 • High Acid Solubility 1.0 • Good reactivity rate 0.5 0.0 • Market Leading quality FeO:Fe2O3 Thund
Slide 23: Product Price Assumptions
Appendix 3 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 $0 Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 Mar-22 Sep-22 Premium Zircon Zircon Concentrate Hi-Ti 88 LTR Ilmenite Titano-Magnetite TZMI Pri
Slide 24: Summary BFS Outputs
Appendix 4 SUMMARY BFS OUTPUTS STAGE 1 STAGE 2 LOM Financial Year Financial Year LOM7 A$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 stru
Slide 25: Capital Expenditure
Appendix 5 CAPITAL EXPENDITURE Description US$M A$M Stage 2 Processing– Stage 1 200 186 funded by Plant Area Civils & Process Water Systems 19.0 25.3 180 cash flow and Wet Concentrator Plant 43.5 58.0 152 debt 160 Concentrate Upgrade Plant 25.7 34.3 140 Zircon Processing Plant 59.2 78.9 EPC 122 Ilme
Slide 26: Ore Reserves
Appendix 6 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 27: Mineral Resources
Appendix 7 MINERAL RESOURCES THUNDERBIRD DEPOSIT MINERAL RESOURCE1,2,7 Mineral Material In-situ HM Valuable HM Grade (In-situ)4 HM Grade3 Slimes Osize Cut-off (HM%) Resource Tonnes Tonnes Zircon HiTi Leuc Leuc Ilmenite (%) (%) (%) Category (millions) (millions) (%) (%) (%) (%) Measured 510 45 8.9 0.