Sheffield Resources Limited · ASX:SFX
Sheffield Resources — Joint Pilbara Kimberley Forum 2019
38 slides from Sheffield Resources's conference presentation, Jun 11, 2019
Slide 1: The Emerging Force in Mineral Sands
The Emerging Force in Mineral Sands June 2019 Joint Pilbara Kimberley Forum
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), its subsidiaries and their activities which is c
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 already in place (roads, port, etc.) simple • Conventional heavy mineral sands processing circuit and dozer trap mining underpinning a simple operation with full Mineral operation 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: 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 11: 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 12: 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 13: BFS update targets reduced capital and improved economics
BFS update targets reduced capital and improved economics BFS update targets deferral of the LTR Ilmenite circuit, capital reduction and increased zircon production De-risking of 2017 BFS Target deferral of the LTR • Since completion of the BFS in March 2017, multiple de-risking • Current BFS envisa
Slide 14: Premium quality products
Premium quality products Production of high quality zircon and ilmenite products • Thunderbird produces high quality finished products comprising: % BFS revenue over LOM1 ̶ Premium zircon, zircon concentrate, LTR ilmenite, Hi-Ti 88 and titano–magnetite • The premium zircon product has high ZrO2 (> 6
Slide 15: 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 16: 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 17: 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 18: 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 • To be undertaken by GR Engineering Services (“GRES”
Slide 19: 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 20: 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 21: BFS (revised) stage 1 capital expenditure
BFS (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 opting to invest a furthe
Slide 22: 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 23: 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 24: 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 25: Thunderbird Energy Needs
Thunderbird Energy Needs Thunderbird is a conventional mineral sands project built in two stages with a mine life of 42 years Thunderbird Energy Needs • Conventional and simple heavy mineral sands processing circuit including: • Mining Unit Plant (MUP) • Wet Concentrate Plant (WCP) • Concentrate Upg
Slide 26: Thunderbird Power Plant – Outsource vs Insource
Thunderbird Power Plant – Outsource vs Insource NAIF debt allows Sheffield to own infrastructure and reduce operating costs Outsource • The Thunderbird Bankable Feasibility Study ("BFS"), March 2017, contemplated the provision of on-site power generation, gas storage facilities and accommodation vil
Slide 27: Fuel Supply Solution
Fuel Supply Solution Long term LNG Supply Agreement underpins Thunderbird energy needs • Sheffield has secured a 15-year agreement with Woodside Energy Limited (Woodside) and Energy Developments Pty Ltd (EDL) for the supply and delivery of liquified natural gas (LNG) to the Thunderbird. • LNG will b
Slide 28: Creating value from regional supply sources
Creating value from regional supply sources Focus on region supply, local people and local businesses • Reliable, efficient, clean: The advantage of using LNG at Thunderbird include providing a low cost, low emission fuel source. • Value creation: the LNG arrangement will enable Sheffield to capture
Slide 29: 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 30: 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 31: Summary
Summary • Thunderbird is a large high grade deposit with a 42 year mine life • Thunderbird is the largest undeveloped zircon deposit in the world • The project is fully permitted and shovel ready • Multiple exploration discoveries confirms a new zircon rich province • Consensus supports a significan
Slide 32: Appendix A
Appendix A Other information 32
Slide 33: 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 Mining engineer with over 40 years Geologist with over 30 years Resources Limited in 2009 and was experience leading the financing, ex
Slide 34: 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 Price (AUD) $1.40 $1.20 $1.00 $0.80 $0.60 $0.40 $0.20 $0.00 Jun-17 Sep-17 Dec-17 Mar-18 Jun-18 Sep-18 Dec-18 Mar-19 Jun-19 Capitalisation Maj
Slide 35: 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 Source: TZMI Notes: 1. Cautionary Statement: Thunderbird’s cost position is as estimated by TZMI and based on the March 2017 Thunderbird BFS,
Slide 36: 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 37: Mineral resources
Mineral resources THUNDERBIRD DEPOSIT MINERAL RESOURCE1,2,7 Valuable HM Grade (In-situ)4 Mineral Resource Material Tonnes In-situ HM Tonnes HM Grade3 Slimes Osize Cut-off (HM%) Zircon HiTi Leuc Leuc Ilmenite Category (millions) (millions) (%) (%) (%) (%) (%) (%) (%) Measured 510 45 8.9 0.71 0.20 0.1
Slide 38: Mineral resources
Mineral resources Night Train Mineral Resources: Valuable Heavy Mineral in-situ grade1 Valuable Heavy Mineral Grade (In-situ)2,3 HiTi Mineral Leucoxene & Resource Cut off Ore Tonnes HM Grade Zircon Rutile Leucoxene Ilmenite Slimes Oversize Category (HM%) (Mt) (%) (%) (%) (%) (%) (%) (%) Inferred 1.2
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