Sheffield Resources Limited · ASX:SFX
Sheffield Resources — Investor Presentation (October 2017)
28 slides from Sheffield Resources's investor presentation, Oct 25, 2017
Slide 1: Thunderbird: The Emerging Force in Mineral Sands
For personal use only Thunderbird The Emerging Force in Mineral Sands Investor Presentation October 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 For personal use only Bankable Feasibility Study. The information was
Slide 3: Corporate Snapshot
CORPORATE SNAPSHOT For personal use only ASX ISSUED SHARE SHARE PRICE MARKET CASH ENTERPRISE TOP TWENTY CODE SHARES OPTIONS (20 October 2017) CAP (UNAUDITED)1 VALUE SHAREHOLDERS SFX 182.2M 13.6M2 A$0.82 A$149M A$8.3M A$141M ~50% 12 Month Price History (AUD) $0.90 $0.80 14% Directors & Management $0.
Slide 4: World Class Project
WORLD CLASS PROJECT Low risk mining jurisdiction For personal use only • • 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 ilmeni
Slide 5: World Class, High Grade Ore Reserve
WORLD CLASS, HIGH GRADE ORE RESERVE 5.00 For personal useTiOonly Grade Fairbreeze (TROX) Namakwa (TROX) In Situ Titanium Minerals (Ilm+Lux+Rut) % 4.00 2 QMM (RIO) THUNDERBIRD (SFX) Cataby (ILU) Moma (KMR) Kwale (BSE) 3.00 Dongara (TROX) Richards Bay (RIO) Cyclone (DRX) 2.00 Sierra Rutile (ILU) Keysb
Slide 6: Our Team – Experienced and Skilled
OUR TEAM – EXPERIENCED AND SKILLED For personal use only 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 Manag
Slide 7: Funding Update
FUNDING UPDATE Sheffield has secured a US$200 million underwritten senior debt facility from Taurus Mining For personal use only Finance Fund and Taurus Mining Finance Annex Fund (“Taurus") • Includes a US$175 million term facility and US$25 million contingent instrument facility • Attractive fundin
Slide 8: Proposed EPC and Other Major Contracts
PROPOSED EPC AND OTHER MAJOR CONTRACTS • Preferred tenderer: GR Engineering Services (GNG) For personal use only • Solid experience and quality in delivery of mineral processing plants • In-house engineering skills combined with strong construction capability • Experienced management, strong safety
Slide 9: Offtake and Market Status
OFFTAKE AND MARKET STATUS Product Non Binding Binding Offtake For personal use only & Agreement Agreement Parties (% BFS Revenue Contribution) Stage 1 Stage 1 Volume Volume Sukaso, RZI, Premium Ruby 39% 36% Zircon (43%) Ceramics, Minchem Zircon Concentrate 48% In Progress RZI (19%) LTR Ilmenite 47%
Slide 10: Mineral Sands – Everyone, Everyday
MINERAL SANDS – EVERYONE, EVERYDAY For personal use only 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 5
Slide 11: Significant Zircon Supply Shortfall Predicted
SIGNIFICANT ZIRCON SUPPLY SHORTFALL PREDICTED For personal use only Declining Production Thunderbird Production • 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, Mat
Slide 12: BFS Key Highlights
BFS KEY HIGHLIGHTS1 For personal use only LOM site costs4 US$8.55/t ore mined 1. Actual results may differ from these estimates. Please refer to the assumptions, sensitivities, risk factors and cautionary statements disclosed respectively on pages 7, 9, 10 and 56 of the Company's announcement “THUND
Slide 13: VHM Grade and Deposit Thickness = Value
VHM GRADE AND DEPOSIT THICKNESS = VALUE For personal use only • Thunderbird has a continuous High Grade Zone of up to 46m thickness: the “GT Zone” • Project economics are based on GT Zone’s strong continuity and very high Valuable HM grades • Near-surface, high value areas targeted in early years of
Slide 14: Conventional Processing – High Quality Products
CONVENTIONAL PROCESSING – HIGH QUALITY PRODUCTS For personal use only • Conventional heavy mineral sands processing circuit1 • Includes an ilmenite upgrade step using a low temperature roast (“LTR”) • LTR upgrades the primary ilmenite to 56.1% TiO2 sulfate ilmenite with ability to control to higher
Slide 15: Product Volumes
PRODUCT VOLUMES For personal use only 1,400 Stage 1 Stage 2 1,200 1,124 1,134 1,025 1,000 966 336 336 878 869 2 YEAR RAMP-UP 307 773 288 000 Tonnes 800 99 96 261 259 559 581 584 99 109 84 80 226 600 95 73 71 90 415 166 170 170 81 79 68 76 400 52 53 122 49 51 58 60 567 568 518 486 441 437 200 382 280
Slide 16: Strong Revenue A$ – Flat Cost Structure
STRONG REVENUE A$ – FLAT COST STRUCTURE For personal use only 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
Slide 17: Competitive Revenue to Cost Ratio
COMPETITIVE REVENUE TO COST RATIO For personal use only 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 who
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 For personal use only • Business opportunities with focus on Aboriginal participation • Commitment to transparent Aborig
Slide 19: Timeline – Key Targets to Production
TIMELINE – KEY TARGETS TO PRODUCTION1 For personal use only 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
Slide 20: Thunderbird: A World Class Mineral Sands Project
THUNDERBIRD: A WORLD CLASS MINERAL SANDS PROJECT • 42 year mine life For personal use only • 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 equi
Slide 21: Carawine Resources Limited IPO
CARAWINE RESOURCES LIMITED IPO For personal use only Carawine Spin-out and IPO1 • Sheffield subsidiary holds gold, copper and base metal exploration assets • In specie distribution to Sheffield shareholders of one Carawine share for every nine2 Sheffield shares held • IPO to raise up to $7m Jamieson
Slide 22: Zircon - Premium Product
Appendix 1 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 – 0.1
Slide 23: LTR Ilmenite - Premium Product
Appendix 2 LTR ILMENITE - PREMIUM PRODUCT For personal use only • 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 q
Slide 24: Product Price Assumptions
Appendix 3 PRODUCT PRICE ASSUMPTIONS1 For personal use only 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 $0 Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 Mar-22 Sep-22 Premium Zircon Zircon Concentrate Hi-Ti 88 LTR Ilmenite Tit
Slide 25: Summary BFS Outputs
Appendix 4 SUMMARY BFS OUTPUTS STAGE 1 STAGE 2 LOM For personal use only Financial Year Financial Year LOM7 A$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 pre
Slide 26: Capital Expenditure
Appendix 5 CAPITAL EXPENDITURE For personal use only 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
Slide 27: Ore Reserves
Appendix 6 ORE RESERVES For personal use only 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) % % % % P
Slide 28: Mineral Resources
Appendix 7 MINERAL RESOURCES THUNDERBIRD DEPOSIT MINERAL RESOURCE1,2,7 For personal use only 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) (%) (%) (%) (%)
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