Sheffield Resources Limited · ASX:SFX
Sheffield Resources — Mines and Money Hong Kong 2017
32 slides from Sheffield Resources's conference presentation, Apr 5, 2017
Slide 1: Thunderbird: The Emerging Force in Mineral Sands
For personal use only Thunderbird The Emerging Force in Mineral Sands Mines and Money – Hong Kong April 2017 ASX : SFX 1
Slide 2: Compliance and Disclaimer: Previously Reported Information
COMPLIANCE AND DISCLAIMER PREVIOUSLY REPORTED INFORMATION For personal use only 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
Slide 3: Compliance and Disclaimer: Cautionary Statements and Risk Factors
COMPLIANCE AND DISCLAIMER CAUTIONARY STATEMENTS AND RISK FACTORS (Continued) For personal use only 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
Slide 4: World Class Project
WORLD CLASS PROJECT For personal use only • BFS demonstrates Thunderbird to be a world class project • Large high grade Ore Reserve1 • 42 year mine life2 (estimated) • Low risk mining jurisdiction • Close to Asian markets • Simple project logistics • Potential to be a globally significant supplier o
Slide 5: Mineral Sands – Everyone, Everyday
MINERAL SANDS – EVERYONE, EVERYDAY For personal use only 2 Distinct Product Streams ZIRCON TITANIUM DIOXIDE FEEDSTOCKS • 1.1 million tonne p.a. global market • 6.5-7.0 million tonne p.a. global market (TiO2 • Over 50% is used in the ceramics industry (tiles, units) crockery, etc.) • Feedstocks inclu
Slide 6: World Class Ore Reserve
WORLD CLASS ORE RESERVE 5.00 For personal use only 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)
Slide 7: Our Team – Experienced & Skilled
OUR TEAM – EXPERIENCED & SKILLED MANAGEMENT For personal use only 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 Managin
Slide 8: Market Conditions Have Turned
MARKET CONDITIONS HAVE TURNED1 For personal use only Zircon Price: Actual, Consensus and BFS Assumption Ilmenite Price – Actual, Consensus and BFS Assumption $1,600 $250 US$/tonne BFS $1,400 $200 $1,200 US$/tonne US$/tonne $150 $1,000 $100 $800 US$/tonne BFS $50 $600 $400 $- 2014 2015 2016 2016 2017
Slide 9: BFS Key Highlights
BFS KEY HIGHLIGHTS1 For personal use only 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 “THUND
Slide 10: Product Price Assumptions
PRODUCT PRICE ASSUMPTIONS1 For personal use only $1,387 $1,400 $1,200 US$/tonne FOB, real 2017 prices $1,000 $800 $677 $600 $500 $400 $200 $183 $48 $0 Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 Mar-22 Sep-22 Premium Zircon Zircon Concentrate Hi-Ti 88 LTR Ilmenite Titano-Magnetite TZMI Primary Zircon
Slide 11: VHM Grade & Deposit Thickness = Value
VHM GRADE & DEPOSIT THICKNESS = VALUE For personal use only • Thunderbird has a continuous High Grade Zone of up to 46m thickness: the “GT Zone” • Project economics are based on GT Zone’s strong continuity and very high Valuable HM grades • Near-surface, high value areas targeted in early years of p
Slide 12: Conventional Processing
CONVENTIONAL PROCESSING • Conventional heavy mineral sands For personal use only Delivers 5 quality products processing circuit1 • Includes an ilmenite upgrade step using a low temperature roast (“LTR”) • LTR upgrades the primary ilmenite to 56.1% TiO2 sulphate ilmenite with ability to control to hi
Slide 13: Logistics – Simple & Close to Market
LOGISTICS – SIMPLE & CLOSE TO MARKET For personal use only • Products proposed to be trucked 140km from mine to ports at Derby and Broome, including 110km on major National Highway • Road haulage fleet and marine barging based in Derby • Access agreement in place for port storage, wharf and bulk han
Slide 14: Summary BFS Outputs
SUMMARY BFS OUTPUTS Financial Year Financial Year LOM7 For personal use only A$m, Real 2017 Prices 2019 – 20235 2024 – 20336 (4 years) (10 years) (42 years) Ore Mined (Mt) 32.8 173.8 680.6 Strip Ratio (W:O) 0.52 0.58 0.77 VHM Grade (%) 6.41 5.10 4.49 Revenue 854 3,875 13,560 Royalties (50) (223) (78
Slide 15: Product Volumes
PRODUCT VOLUMES Stage 1 Stage 2 For personal use only 1,400 1,200 1,124 1,134 1,025 966 1,000 336 336 878 869 307 773 000 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
Slide 16: A Strong Cash Margin Operation
A STRONG CASH MARGIN OPERATION Stage 1 Stage 2 For personal use only $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 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 $10 0.93
Slide 17: Solid Revenue to Cost Ratio
SOLID REVENUE TO COST RATIO For personal use only • Anticipated high margin producer • Thunderbird represented adjacent to first quartile producers, several of whom are vertically integrated with beneficiation plants 1. 4 Year production period following Stage 1 ramp-up (Year 3 to Year 7 of operatio
Slide 18: Project NPV Sensitivities A$ (+/-10%)
PROJECT NPV SENSITIVITIES A$ (+/-10%) Product prices, recoveries and ore grade are key sensitivity drivers For personal use only Base Case: NPV A$675.6m All Product Prices (in AUD) 418 933 Plant Recoveries – All Products 440 902 Ore VHM Grade 446 902 Product Price - Premium Zircon & Zircon Concentra
Slide 19: Annual Operating Expenditure
STAGE 1 ANNUAL OPERATING EXPENDITURE For personal use only A$m p.a. (average) Mining 2% Mining Labour Labour $17.1 12% $22.8 21% Reagents Electricity 7% Natural Gas Natural Gas $11.1 5% Consumables Electricity $5.8 $16.8 11% Maintenance Maintenance 8% Site G&A (excluding General and $17.1 labour) $9
Slide 20: Capital Expenditure
CAPITAL EXPENDITURE For personal use only Description US$M A$M Processing 200 186 Plant Area Civils & Process Water Systems 19.0 25.3 180 Wet Concentrator Plant 43.5 58.0 160 152 Concentrate Upgrade Plant 25.7 34.3 140 122 Zircon Processing Plant 59.2 78.9 120 Ilmenite Processing Plant 22.7 30.2 100
Slide 21: A Project for the Community
A PROJECT FOR THE COMMUNITY • Lead Agency status promotes State and regional project support For personal use only • Approximately 140 direct full time jobs from the local community with all employees living locally • Significant business opportunities with a key focus on Aboriginal participation •
Slide 22: Offtake and Market Status
OFFTAKE AND MARKET STATUS • The Thunderbird project is one of the few large mineral sands projects globally located in For personal use only a low risk jurisdiction • Thunderbird designed to deliver high quality zircon and ilmenite products, with the ability to displace lower quality products in the
Slide 23: Financing
FINANCING • To achieve the forecast outcomes in the BFS, Sheffield will require a funding solution that For personal use only delivers at least A$355 million1 in new capital via debt, equity and/or JV options • Since the PFS, the Company has received interest from international financial and strateg
Slide 24: Timeline – Key Targets to Production
TIMELINE – KEY TARGETS TO PRODUCTION1 EPC For personal use only 2017 Complete negotiations and award contracts PRE-WORKS Q3/Q4 2017 BFS Commence pre-works, CONSTRUCTION2 FINAL PRODUCTS camp, site preparation 2017 - 2019 2019 Q1 2017 for construction team Construction commences2 Progressive ramp-up o
Slide 25: A World Class Mineral Sands Project
A WORLD CLASS MINERAL SANDS PROJECT For personal use only • BFS confirms Thunderbird as a world class mineral sands project • Long mine life estimate of 42 years, offering leverage to multiple pricing cycles • 100% owned and located in one of the world’s best mining jurisdictions • Pre-tax NPV10 of
Slide 26: Appendices
For personal use only APPENDICES 26
Slide 27: Summary BFS Metrics
SUMMARY BFS METRICS Thunderbird Project Assumed Product Prices Thunderbird Project Estimated Production Outputs For personal use only Financial Financial Financial Financial Average Product Average Production Year Year LOM5 Year Year LOM5 Prices (US$)2 per annum 2019 – 2023 2024 – 20334 3 2019 – 202
Slide 28: Corporate Snapshot
CORPORATE SNAPSHOT ASX ISSUED SHARE SHARE PRICE MARKET CASH ENTERPRISE TOP TWENTY For personal use only CODE SHARES OPTIONS (1 Apr 2017) CAP (UNAUDITED)1 VALUE SHAREHOLDERS2 SFX 181.0M 14.9M2 A$0.485 A$88M A$11.7M A$76M ~49% 12 Month Share Price $0.90 $0.80 $0.70 13% $0.60 $0.50 15% $0.40 $0.30 72%
Slide 29: Zircon - Premium Product
ZIRCON - PREMIUM PRODUCT For personal use only • 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 Fe2O
Slide 30: LTR Ilmenite - Premium Product
LTR ILMENITE - PREMIUM PRODUCT • Exceptional Grade For personal use only 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 Thun
Slide 31: Ore Reserves
ORE RESERVES THUNDERBIRD DEPOSIT ORE RESERVES1,4 For personal use only 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
Slide 32: Mineral Resources
MINERAL RESOURCES THUNDERBIRD DEPOSIT MINERAL RESOURCE1,2,7 Valuable HM Grade (In-situ)4 For personal use only Mineral Material In-situ HM Cut-off HM Grade3 Slimes Osize Resource Tonnes Tonnes Zircon HiTi Leuc Leuc Ilmenite (HM%) (%) (%) (%) Category (millions) (millions) (%) (%) (%) (%) Measured 51