Sheffield Resources Limited · ASX:SFX
Sheffield Resources — Informa Mineral Sands Conference 2019
41 slides from Sheffield Resources's conference presentation, Mar 21, 2019
Slide 1: The Emerging Force in Mineral Sands
The Emerging Force in Mineral Sands 20 - 21 March 2019 Informa Mineral Sands Conference
Slide 2: Compliance and disclaimer
Compliance and disclaimer IMPORTANT: You must read the following before continuing. Summary information in relation to Sheffield This presentation contains summary information about Sheffield [Resources Limited (ACN 125 811 083) (Company or Sheffield), i ts subsidiaries and their activities which is
Slide 3: Compliance and disclaimer
Compliance and disclaimer Not financial product advice 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 be relied upon as advice to
Slide 4: Investment highlights
Investment highlights Low risk & • Located in a low risk, mining focused jurisdiction with certain key infrastructure simple already in place (roads, port, etc.) operation • Conventional heavy mineral sands processing circuit and dozer trap mining underpinning a simple operation with full Mineral Se
Slide 5: Fully permitted and construction ready
Fully permitted and construction ready Management has achieved all key milestones prior to equity funding ✓ Fully permitted and construction ready ✓ Debt financing 100% secured1 • Mining Lease granted, water permits and Federal and State • US$175m debt facility provided by Taurus environmental appro
Slide 6: A globally significant zircon discovery
A globally significant zircon discovery Only opportunity to secure a large scale greenfield zircon project, with no other significant discoveries remaining Globally significant zircon discoveries over the past 30 years based Thunderbird (SFX) on published pre-production resources1 • Thunderbird is o
Slide 7: Largest, high grade, zircon rich mineral sands projects globally
Largest, high grade, zircon rich mineral sands projects globally Comparison of Ore Reserves and grade between the key global mineral sands deposits 1,2,3 5.0 Bubble size Fairbreeze (TROX) THUNDERBIRD (SFX) represents TiO2 Grade % contained VHM within Ore 4.0 In Situ Titanium Minerals (Ilm+Lux+Rut) %
Slide 8: 8 years of Thunderbird history
8 years of Thunderbird history A greenfield project rapidly progressed by Sheffield from the grassroots exploration stage which has achieved all key milestones Milestones pre BFS release Milestones post BFS release Dec 2010: EL 2012: Maiden 2014: Resource Oct 2015: Mar 2017: BFS May 2018: Port Sep 2
Slide 9: Consensus supports substantial zircon structural supply issues
Consensus supports substantial zircon structural supply issues Thunderbird ideally positioned to help bridge the expected supply gap Significant zircon supply gap expected1 Key observations • Supply decline of 4.3% p.a. expected up to 2025 ̶ Supply is dominated by Australia and Sub-Saharan Africa –
Slide 10: High grade continuity x deposit thickness = value
High grade continuity x deposit thickness = value Project plan view Overview • Thunderbird contains a continuous high grade zone up to 46m OPEN thickness • Strong continuity and very high Valuable Heavy Mineral (“VHM”) grades Plan View • Near-surface high grades to be targeted early in the productio
Slide 11: Conventional and well tested mining techniques
Conventional and well tested mining techniques Thunderbird will use conventional and well tested dry mining techniques and equipment currently employed in existing and similar mineral sands operations globally Major mining equipment to be utilised1 LOM mining blocks1 Max utilisation Year Year Year C
Slide 12: Simple and conventional processing circuit
Simple and conventional processing circuit Flowsheet producing five high grade, high quality products Flowsheet summary • Conventional and simple heavy mineral sands processing circuit designed by Hatch and Robbins Engineering 1 • Flowsheet produces premium zircon and zircon concentrate • Ilmenite u
Slide 13: Low temperature roast (LTR) of primary ilmenite
Low temperature roast ("LTR") of primary ilmenite LTR enables the upgrade of Thunderbird's primary ilmenite to >56% TiO 2 which makes it suitable for chloride slag and sulfate pigment processes Overview of LTR Effect of reduction roast on contained ilmenite and hematite • Thunderbird's primary ilmen
Slide 14: LTR Ilmenite market opportunity
LTR Ilmenite market opportunity Thunderbird’s LTR Ilmenite is an ideal feedstock for both sulfate pigment and chloride slag production Growth expected in Global Chloride Pigment Production • Chloride slag based pigment capacity is increasing globally whilst sulfate based capacity remains static as a
Slide 15: Premium quality products
Premium quality products Production of high quality zircon and ilmenite products • Thunderbird produces high quality finished products comprising: % BFS revenue ̶ Premium zircon, zircon concentrate, LTR ilmenite, Hi-Ti 88 and titano–magnetite over LOM1 • The premium zircon product has high ZrO2 (> 6
Slide 16: 77% of Stage 1 revenue secured under binding offtake agreements
77% of Stage 1 revenue secured under binding offtake agreements Robust demand for Thunderbird offtake with Stage 2 offtake 100% available • Robust demand for Thunderbird offtake underpinned by: Stage 1 offtake summary ̶ High quality zircon and LTR ilmenite products ̶ Long term supply over a 42 year
Slide 17: Indicative mine schedule
Indicative mine schedule LOM plan to deliver 145ktpa zircon and 388ktpa LTR ilmenite on average over a 42 year mine life Stage 1 Stage 2 1,200 1,127 1,086 1,000 965 955 336 324 809 828 287 282 776 800 93 94 Product (kt) 240 249 106 227 584 96 80 81 600 560 503 91 91 65 79 68 170 73 166 67 152 76 400
Slide 18: Projected operating costs
Projected operating costs Leading Revenue to Cost Ratio Stage 1 Operating Costs (FY21 – FY24 Steady-State)1 Stage 2 Operating Costs (FY25+ Steady-State)3 Revenue Revenue (net of royalties) (net of royalties) A$233m2 A$417m4 Operating margin = A$117m Operating margin = A$236m Revenue to Cost Ratio 2:
Slide 19: Stage 1 execution strategy
Stage 1 execution strategy GRES will deliver the process plant and associated infrastructure on a fixed price, turnkey basis 1 2 3 Owners Works (A$97m) EPC Design and Engineering Construction (A$366m) • Sheffield to manage various contracts via a combination of • To be undertaken by GR Engineering S
Slide 20: Summary of GRES EPC contract (A$366m)
Summary of GRES EPC contract (A$366m) GRES will deliver the process plant and associated infrastructure on a fixed price, turnkey basis. All completion risk sits with GRES, including detailed quality assurances EPC Contract Overview Wet Concentrator Design and Layout • On 12 November 2018, Sheffield
Slide 21: Summary of Owners Works Strategy (A$97m)
Summary of Owners Works Strategy (A$97m) Outside of the EPC contract with GRES, the remaining A$97m of Stage 1 capex will be delivered by Sheffield in the form of further EPC contracts or managed directly by Sheffield Further EPC Tenders Specification Cost Estimate (A$m) Basis of Estimate • Almost 5
Slide 22: Revised stage 1 capital expenditure
Revised stage 1 capital expenditure c. 80% of the revised Stage 1 upfront capex is subject to a fixed price EPC contract with GRES Bridge From BFS Stage 1 Upfront Capex to Revised Funding Requirement (A$m) • Original BFS Stage 1 upfront capex of A$348m, with Sheffield Includes capex contingencies of
Slide 23: Senior debt financing summary
Senior debt financing summary US$175m Taurus facility A$95m NAIF loan facilities • Lender: Taurus Mining Finance Fund and Taurus Mining Finance Annex Fund • Lender: State of Western Australia, under back-to-back loan from • Syndicated facility agreement executed Northern Australia Infrastructure Fun
Slide 24: Debt principal repayment profile
Debt principal repayment profile Scheduled Debt Principal Repayment Profile (A$m)1,2 175 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 3 3 3 4 3 4 3 4 4 5 5 6 4 10 4 4 4 4 4 4 0 2 2 FY20 FY21 FY22 F
Slide 25: Stage 1 development & commissioning timeline
Stage 1 development & commissioning timeline The proposed timetable takes into account all foreseeable seasonal events, such as the wet season. Early works have already commenced Month 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 Early Works Comp
Slide 26: Social licence to operate (SLTO)
Social licence to operate (SLTO) Sheffield has actively worked with stakeholders to create and maintain a robust SLTO • Central to Sheffield’s strategy in the Kimberley region is its social licence to operate ("SLTO") ̶ Built over eight years and based on formal and informal community relations prac
Slide 27: Significant regional exploration upside
Significant regional exploration upside Strategic value of the Dampier Project demonstrated through multiple discoveries made along a 160km long trend • Exploration has delineated 14 zones of significant mineralisation along Dampier Project – Regional Plan1 a 160km long highly mineralised trend whic
Slide 28: Night Train deposit
Night Train deposit Night Train confirmed as a major new mineral sands deposit • Maiden high grade Mineral Resource outlined at Night Train with high in-situ zircon grades and high mineral assemblage value • Located just 20km south of the Thunderbird deposit and 2km from the recently constructed Thu
Slide 29: Summary
Summary • Thunderbird is the largest undeveloped zircon deposit in the world • The project is fully permitted and shovel ready • Thunderbird is a large high grade deposit with a 42 year mine life • Multiple exploration discoveries confirms a new zircon rich province • Consensus supports a significan
Slide 30: Appendix A
Appendix A Other information 30
Slide 31: Experienced board and management
EXPERIENCED BOARD AND MANAGEMENT Will Burbury Bruce McFadzean David Archer Non-Executive Chairman Managing Director Technical Director Previously Chairman of Warwick Resources Mining engineer with over 40 years Geologist with over 30 years Limited in 2009 and was formerly a experience leading the fi
Slide 32: Sheffield snapshot
SHEFFIELD SNAPSHOT Sheffield is focused on development of the large scale, high quality Thunderbird mineral sands project Last 2 years share price performance $1.40 Price (AUD) $1.20 $1.0 $0.80 $0.60 $0.40 Mar-17 Apr-17 May-17 Jul-17 Aug-17 Sep-17 Nov-17 Dec-17 Jan-18 Mar-18 Apr-18 Jun-18 Jul-18 Aug
Slide 33: A second quartile producer
A SECOND QUARTILE PRODUCER TZMI assess Thunderbird to have a competitive revenue to cost ratio 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile Thunderbird 33 33 Source: TZMI Notes: 1. Cautionary Statement: Thunderbird’s cost position is as estimated by TZMI and based on the March 2017 Thunderbir
Slide 34: Royalty regime and fiscal arrangements
ROYALTY REGIME AND FISCAL ARRANGEMENTS Royalties1 • Royalty (Years 1 to 4, starting on first sale) = 0.5% of Total Sales Revenue on FOB basis or equivalent State • WA State govt. royalty = 5% Taurus3 • Royalty (Years 5 onwards for a period of to 22.5 government of Total Sales Revenue years) = 0.75%
Slide 35: Enhanced flexibility from proposed NAIF debt facilities
ENHANCED FLEXIBILITY FROM PROPOSED NAIF DEBT FACILTIES NAIF facility highlights • 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 construction of infrastructur
Slide 36: Appendix B
Appendix B Product details 36
Slide 37: Premium zircon
PREMIUM ZIRCON1 Product overview Thunderbird’s Premium Zircon product • Ceramic Grade Zircon: > 66% ZrO2 • Low levels of • Good Opacity impurities • Low levels of impurities • No iron staining • Low Fe2O3 • Good whiteness - important for making • Low TiO2 a good opacifier • Very Low Al2O3 • Moderate
Slide 38: LTR ilmenite
LTR ILMENITE1 Product overview Global ilmenite comparison: FeO: Fe2O3 ratio • Exceptional Grade: 56–58% TiO2 • Suitable for chloride slag production • Premium feedstock for sulfate Highly reactive pigment production ilmenite • High acid solubility Suited to Chinese • Good reactivity rate market • Lo
Slide 39: Appendix C
Appendix C Reserves and resources 39
Slide 40: Ore reserves
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 1.00 0.29 0
Slide 41: Mineral resources
MINERAL RESOURCES THUNDERBIRD DEPOSIT MINERAL RESOURCE1,2,7 Mineral Resource Material Tonnes In-situ HM Tonnes HM Grade3 Valuable HM Grade (In-situ)4 Slimes Osize Cut-off (HM%) Zircon HiTi Leuc Leuc Ilmenite Category (millions) (millions) (%) (%) (%) (%) (%) (%) (%) Measured 510 45 8.9 0.71 0.20 0.1
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