Scoping Study determines Thunderbird a GO!

THE DRILL SERGEANT: Sheffield Resources (ASX: SFX) has received results of a Scoping Study recently completed at the company’s 100 per cent-owned Thunderbird deposit, located near Derby in northwest Western Australia.

Sheffield said the Study has determined Thunderbird to be a world-class, long life mineral sands project, which is anticipated to provide exceptional financial returns with modest capital requirements.

 

Location of Thunderbird deposit. Source: Company announcement

 

The study concluded projected and estimated production and financial parameters for the Thunderbird deposit to include:

An initial mine life of 32 years, targeting first production in 2017;

Life of mine (LOM) revenue of $10 billion;

LOM operating cash flow of $5 billion ($204 million per annum for first 10 years of production);

Average LOM annual EBITDA of $140 million ($187 million per annum for first 10 years of production);

Pre-production capital expenditure of $257 million plus $37 million of contingency, with identified opportunities that may reduce capital expenditure with capital payback in two years; and

Average annual production of 118,200 tonnes zircon, 545,000 tonnes ilmenite, and 21,700 tonnes of HiTi80 leucoxene.

The study follows an updated mineral resource for Thunderbird of 2.62 billion tonnes at 6.5 per cent heavy minerals (HM) (Measured, Indicated and Inferred) for 170 million tonnes of contained HM, including a high-grade component of 740 million tonnes at 12.1 per cent HM.

Sheffield underscored the scoping study has only incorporated Thunderbird’s Indicated and Measured Mineral Resources.

The company considers the high-grade Inferred segment of the Resources and mineralisation that remains open in several directions, which was not included in the current study, provides Thunderbird with a healthy amount of upside potential.

The company has commenced pre-feasibility studies with completion anticipated Q1 2015.

“The Scoping Study has demonstrated Thunderbird has the potential to generate consistently strong cash margins from globally significant levels of production over a 32 year mine life,” Sheffield Resources managing director Bruce McQuitty said in the company’s announcement to the Australian Securities Exchange.

“At the current modelled production rates, Thunderbird will supply approximately eight per cent and four per cent of the global zircon and ilmenite markets respectively.

“Furthermore, the large scale and favourable geometry of the deposit are conducive to significant production expansions.

“The strong LOM cash flows are supported by a 30 per cent higher cash flow in the first 10 years of operations, advantaging estimated capital payback and project financing.

“We look forward to progressing towards the development of the project, targeting initial production in 2017.”

Email: info@sheffieldresources.com.au

Website: www.sheffieldresources.com.au