Sheffield Resources Limited · ASX:SFX
Sheffield Resources — Ruidow Zircon and TiO2 Conference 2018
27 slides from Sheffield Resources's conference presentation, May 24, 2018
Slide 1: Thunderbird a World Class Mineral Sands Project
Thunderbird a World Class Mineral Sands Project Filling the supply gap Ruidow Zircon and TiO2 Conference 22 - 24 May 2018 – Ningbo, China ASX:SFX
Slide 2: Compliance and Disclaimer
COMPLIANCE AND DISCLAIMER PREVIOUSLY REPORTED INFORMATION This presentation includes information extracted from Sheffield Resources Limited's ACN 125 811 083 ("the Company" or "Sheffield") previous ASX announcements, as follows: “ADDITIONAL BINDING OFFTAKE SIGNED” 1 February 2018 “EPA RECOMMENDS APP
Slide 3: Corporate Snapshot
CORPORATE SNAPSHOT ASX ISSUED SHARE RIGHTS SHARE PRICE MARKET CASH ENTERPRISE TOP TWENTY CODE SHARES & OPTIONS (11 May 2018) CAP (UNAUDITED)1 VALUE SHAREHOLDERS SFX 229.0M 15.4M2 A$0.90 A$206M A$25M A$181M ~52% SFX: 12 Month Trading History Institutional $1.00 2.50 26% $0.80 2.00 Directors & 62% Man
Slide 4: World Class Project
WORLD CLASS PROJECT • 42 year mine life1 • Australia – a low risk mining jurisdiction • High grade, premium quality zircon and TiO2 products • Exploration upside Discover Develop Operate 1. Subject to permitting, offtake and financing 4
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 Keysbrook (MZI) (ILU) 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: Debt Structure - US$200M Underwritten Senior Debt
DEBT STRUCTURE - US$200M UNDERWRITTEN SENIOR DEBT • Finance provider - Taurus Mining Finance Fund and Taurus Mining Finance Annex Fund (“Taurus") • Attractive funding terms: o Average cost of funds of ~7.6% across several tranches and the CI Facility1 o A revenue royalty of 0.5% (years 1 - 4) and 0.
Slide 8: Proposed Plant Design
PROPOSED PLANT DESIGN Thunderbird Plant Design and Layout • GRES (ASX:GNG) - Sound experience and quality in delivery of mineral processing plants • Involved in Thunderbird since 2015 • Early Works Agreement and Key Term Sheet signed • Proposed fixed price, lump sum EPC contract • New 7.5 million to
Slide 9: Offtake and Market Status
OFFTAKE AND MARKET STATUS Product Non Binding Binding Offtake Parties & Agreement Agreement (% BFS Revenue ) Stage 1 Volume Stage 1 Volume Sukaso, Ruby Ceramics, RZI, Qingyuan Premium Zircon (43%) 100% Jinsheng, Minchem, CFM, Others Zircon Concentrate (19%) 100% Hainan Wensheng, RZI LTR Ilmenite (29
Slide 10: Zircon - Premium Product
ZIRCON - PREMIUM PRODUCT • Ceramic Grade Zircon • > 66% ZrO2 • Low Fe2O3 • Low TiO2 • Very Low Al2O3 • Moderate U+Th • Good Opacity • Off-take 100% complete • 100% of Stage 1 premium zircon and zircon concentrate under binding contracts • Stage 2 premium zircon and zircon concentrate production unal
Slide 11: LTR Ilmenite - Premium Product
LTR ILMENITE - PREMIUM PRODUCT • Exceptional Grade • 56 – 58% TiO2 • Outstanding FeO:Fe2O3 ratio Highly reactive ilmenite • Low Fe2O3 (<13%) Suited to Chinese market • Low Levels of Cr2O3 • High Acid Solubility • Good reactivity rate • Market Leading quality • Very low CaO and MgO • Suitable for chl
Slide 12: 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 13: BFS Key Highlights
BFS KEY HIGHLIGHTS1 LOM site costs4 US$8.55/t ore mined 1. Actual results may differ from these estimates. Please refer to the assumptions, sensitivities, risk factors and cautionary statements disclosed respectively on pages 7, 9, 10 and 56 of the Company's announcement “THUNDERBIRD BFS DELIVERS OU
Slide 14: VHM Grade and Deposit Thickness = Value
VHM GRADE AND DEPOSIT THICKNESS = VALUE PLAN VIEW • Thunderbird has a continuous High Grade Zone of up to 46m thickness • economics are based on strong continuity and very high VHM grades • Near-surface, high value areas targeted in early years of production • HG Zone remains open: ongoing expansion
Slide 15: Conventional Processing – High Quality Products
CONVENTIONAL PROCESSING – HIGH QUALITY PRODUCTS FLOWSHEET Conventional heavy mineral sands processing circuit1 Includes an ilmenite upgrade step using a low temperature roast (“LTR”) LTR upgrades to >56% TiO2 producing premium sulphate ilmenite, also suitable for chloride slag production LTR ilmenit
Slide 16: Product Volumes
PRODUCT VOLUMES 1,400 Stage 1 Stage 2 1,200 1,124 1,134 1,025 1,000 966 336 336 878 869 2 YEAR RAMP-UP 307 800 288 773 000 Tonnes 99 96 261 259 584 84 559 581 99 109 80 226 600 95 73 71 90 68 415 166 170 170 81 79 76 400 52 53 122 49 51 58 60 567 568 518 486 441 437 200 382 280 286 286 205 0 Year 1
Slide 17: Strong Revenue A$ – 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 18: 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 19: A Project for the Community
A PROJECT FOR THE COMMUNITY • Lead Agency status demonstrates State and Regional importance • ~300 construction jobs, then up to 280 direct full time local jobs for 42 years • Business opportunities with focus on Aboriginal participation • Commitment to transparent Aboriginal employment, business an
Slide 20: Timeline – Key Targets to Production
TIMELINE – KEY TARGETS TO PRODUCTION1 4 5 PRE-WORKS CONSTRUCTION2 Q4 2017 2018 - 2019 Commence pre-works, Construction commences2 7 camp, site preparation Q3 2018 until commissioning in late 2019 commence engineering FINAL PRODUCTS and procurement 2019 - 2020 1 Progressive ramp-up of production EPC
Slide 21: Thunderbird: A World Class Mineral Sands Project
THUNDERBIRD: A WORLD CLASS MINERAL SANDS PROJECT • 42 year mine life • 100% owned • Outstanding economics • World’s best mining jurisdiction • US$200m debt mandated on attractive terms • Binding offtake zircon complete, TiO2 advanced • Strategic equity partner being sort • Targeting initial producti
Slide 22: Mineral Sands – Everyone, Everyday
Appendix 1 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,
Slide 23: BFS Product Price Assumptions
Appendix 2 BFS 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 $0 Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 Mar-22 Sep-22 Premium Zircon Zircon Concentrate Hi-Ti 88 LTR Ilmenite Titano-Magnetite TZMI
Slide 24: Summary BFS Outputs
Appendix 3 SUMMARY BFS OUTPUTS STAGE 1 STAGE 2 LOM Financial Year Financial Year LOM7 A$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 4 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 Ilm
Slide 26: 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 27: Mineral Resources
Appendix 6 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.
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