Sheffield Resources Limited · ASX:SFX
Sheffield Resources — Non-Deal Roadshow (July 2018)
29 slides from Sheffield Resources's roadshow presentation, Jul 16, 2018
Slide 1: Investor Roadshow Sydney & Melbourne
For personal use only INVESTOR ROADSHOW Sydney & Melbourne Date: July 2018 Presenter: Bruce McFadzean/David Archer
Slide 2: Disclaimer
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: For personal use only “MAIDEN BINDING ILMENITE OFFTAKE AGREEMENT” 21 June 2018 “EPA RE
Slide 3: Corporate Snapshot
CORPORATE SNAPSHOT ASX ISSUED SHARE RIGHTS SHARE PRICE MARKET CASH ENTERPRISE TOP 20 SHARE For personal use only CODE SHARES & OPTIONS (12 June 2018) CAP (UNAUDITED)1 VALUE HOLDERS SFX 229.0M 15.4M2 A$0.74 A$170M A$23M A$147M ~52% $200 11Maiden SFX: 30 Month Market Capitalisation Growth TiO2 offtake
Slide 4: Our Team – Experienced and Skilled
OUR TEAM – EXPERIENCED AND SKILLED BOARD For personal use only Will Burbury Non-Executive Chairman Bruce McFadzean Managing Director David Archer Technical Director Bruce McQuitty Non-Executive Director MANAGEMENT Bruce McFadzean – Managing Director Jim Netterfield – Project Manager Mining engineer
Slide 5: World Class Project: Thunderbird
WORLD CLASS PROJECT For personal use only THUNDERBIRD • Located in northern Western Australia • Low risk mining jurisdiction • Excellent infrastructure • Large scale, high grade and low cost project • 42 year mine life1 • High grade, premium quality, zircon and TiO2 products • Exciting exploration u
Slide 6: 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 Keysbrook (
Slide 7: Globally Significant Zircon Discovery
GLOBALLY SIGNIFICANT ZIRCON DISCOVERY • Thunderbird is the most significant zircon discovery in the last 30 years For personal use only • Large zircon rich deposits are not discovered often • The industry needs significant new deposits to replace maturing supply • Increasing timelines between discov
Slide 8: Zircon - Significant Supply Shortfall Predicted
ZIRCON - SIGNIFICANT SUPPLY SHORTFALL PREDICTED Zircon – 62% of BFS Revenue For personal use only • Without new projects, global zircon supply is expected to decline significantly • Demand growth forecast at a normal rate of 2.8% per annum to 2026 • Supply decline forecast at a rapid rate of 4.7% pe
Slide 9: Significant Growth in Chloride Slag Predicted
SIGNIFICANT GROWTH IN CHLORIDE SLAG PREDICTED Titanium Feedstocks – 29% of BFS Revenue Thunderbird LTR Ilmenite For personal use only Large Market Opportunity 8000 • Chloride supply expected to grow faster Stage 1 Stage 2 Market Market than sulphate 7000 • Chloride slag is set to show strong future
Slide 10: Offtake Complete
OFFTAKE COMPLETE • Thunderbird will deliver a secure supply of high quality products over a 42 year mine life For personal use only • Sourced from a low risk jurisdiction proximal to the largest emerging market • Binding offtake meets condition precedent contemplated for debt financing Binding Agree
Slide 11: High Grade Continuity x Deposit Thickness = Value
HIGH GRADE CONTINUITY x DEPOSIT THICKNESS = VALUE • Thunderbird has a continuous high For personal use only grade Zone of up to 46m thickness OPEN • Economics based on strong continuity and very high VHM Plan View grades • Near-surface, high value areas targeted in early production • HG Zone remains
Slide 12: Conventional Processing: Plant Design and Layout
CONVENTIONAL PROCESSING Final Thunderbird Plant Design and Layout For personal use only • GR Engineering Services (ASX:GNG) – experienced preferred tenderer • Involved in Thunderbird since 2015 • Early Works Agreement and Key Term Sheet signed • Proposed fixed price, lump sum EPC contract • New 7.5
Slide 13: Conventional Processing: Flowsheet
CONVENTIONAL PROCESSING Flowsheet Producing High Grade Products Conventional heavy mineral sands For personal use only • 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 ch
Slide 14: BFS Product Volumes
BFS PRODUCT VOLUMES Stage 1 Stage 2 For personal use only 1,400 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
Slide 15: Strong Revenue A$M – Flat Cost Structure (BFS)
STRONG REVENUE A$M – FLAT COST STRUCTURE (BFS) 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 FY2
Slide 16: 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 Electricity 80% cost • Thunderbird represented adjacent to first quartile producers, several of Natural Gas who
Slide 17: Sheffield Community Investment
SHEFFIELD COMMUNITY INVESTMENT Our Pledge to the Kimberley Community For personal use only • Local Content Employment– 280 DIDO Jobs • Intergenerational Employment over 42 year mine life • 40% Aboriginal Employment by year 8 of operation • Aboriginal Training Fund • Aboriginal Business Content - $5m
Slide 18: Timeline – Key Targets to Production
TIMELINE – KEY TARGETS TO PRODUCTION1 4 5 For personal use only Early Works Q4 2017 CONSTRUCTION2 Commenced pre-works, 2018 - 2020 7 camp, site preparation Construction commences2 progress engineering FINAL PRODUCTS Q4 2018 until commissioning in late 2019 and procurement 2020 1 Progressive ramp-up
Slide 19: Debt Structure - US$200M Underwritten Senior Debt
DEBT STRUCTURE - US$200M UNDERWRITTEN SENIOR DEBT For personal use only • 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
Slide 20: Thunderbird Is a World Class Mineral Sands Project
THUNDERBIRD IS A WORLD CLASS MINERAL SANDS PROJECT For personal use only • 42 year mine life • 100% owned • Outstanding economics • World’s best mining jurisdiction • US$200m debt mandated on attractive terms • Binding zircon offtake complete, TiO2 50% complete • Engaging with potential strategic eq
Slide 21: Exploration Targeting Large Zircon Rich Deposits
Appendix 1 EXPLORATION TARGETING LARGE ZIRCON RICH DEPOSITS • Strategy to grow a globally significant Resource and Reserve base For personal use only • Focus on zircon rich deposits with premium zircon products • Target Tier 1 stable mining jurisdiction Thunderbird Sheffield regional expands drillin
Slide 22: Mineral Sands – Everyone, Everyday
Appendix 2 MINERAL SANDS – EVERYONE, EVERYDAY For personal use only Two Distinct Product Streams ZIRCON - BFS 62% Revenue TITANIUM FEEDSTOCKS - BFS 29% 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, • Gl
Slide 23: Zircon - Premium Product
Appendix 3 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 100% complete • 100% of Stage 1 premium zircon and zircon concentrate under binding contracts • Stage 2 premium zircon and z
Slide 24: LTR Ilmenite - Premium Product
Appendix 4 LTR ILMENITE - PREMIUM PRODUCT • Exceptional Grade For personal use only • 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 l
Slide 25: BFS Product Price Assumptions
Appendix 5 BFS 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 $0 Mar-19 Sep-19 Mar-20 Sep-20 Mar-21 Sep-21 Mar-22 Sep-22 Premium Zircon Zircon Concentrate Hi-Ti 88 LTR Ilmenite
Slide 26: Summary BFS Outputs
Appendix 6 SUMMARY BFS OUTPUTS STAGE 1 STAGE 2 LOM For personal use only Financial Year Financial Year LOM7 A$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 27: Capital Expenditure
Appendix 7 CAPITAL EXPENDITURE For personal use only Description US$M A$M Stage 2 200 186 funded by Processing – Stage 1 180 cash flow and Plant Area Civils & Process Water Systems 19.0 25.3 152 debt 160 Wet Concentrator Plant 43.5 58.0 140 Concentrate Upgrade Plant 25.7 34.3 122 Zircon Processing P
Slide 28: Ore Reserves
Appendix 8 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 29: Mineral Resources
Appendix 9 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) (%) (%) (%) (%)