The PFS results confirm Thunderbird will deliver strong cash margins over a n initial mine life of 3 2 years. As previously announced, the PFS will be updated in H2 2015 to include positive infill drilling results yet to be incorporated and to focus on reduc ing costs and increas ing margins.
Sheffield’s Managing Director Bruce McQuitty said: " This PFS has confirmed t hat Thunderbird will deliver strong financial returns over a very long mine life.
" One of the aspects that sets Thunderbird apart from other mineral sands projects globally is the substantial projected annual production of zircon . The project is highly lev eraged to the zircon price and with few major new zircon projects in the global development pipeline, Sheffield is well placed to meet future demand.
"Thunderbird is located in a stable jurisdiction, has an export solution and is well placed to take advan tage of expected product supply gaps that are aligned with the initial planned production profile."
KEY OUTCOMES
The PFS confirms the technical viability, long life and robust economics of the Thunderbird proje ct and strengthens the case for development. The PFS has been completed to a +/ – 25% confidence level (p rocess engineering – 12%+25%).
At a planned mining rate of 18Mtpa ( 2,430tph ) after ramp – up , average annualised production over a 32 – year mine life is es timated to be 114,000 t of zircon , 439,000 t of Ilmenite, and 30,000t of HiTi 84 leucoxene .
At assumed pricing of US$1,37 5 /t for zircon, US $15 5 /t for ilmenite and US $5 8 0/t for HiTi84 over the life of the mine, and an exchange rate of $US0.78, the project is a nticipated to generate average operating cash flows of $ 134 million per annum. The life – of – mine (LOM) revenue is forecast to be $ 9.5 billion and C1 cash costs over the life of mine are $ 5.2 bill ion, giving a LOM revenue – to – cost ratio of 1.82:1 and average annual EBITDA of $120 million .
The first 10 years of scheduled mining incorporates higher grade mineralisation with less overburden , resulting in higher cash margins. The revenue – to – cost ratio for the first 10 years is 2.03:1 , while the annual EBITDA for that period averages $ 148 m illion .
A robust mine – to – port logistics chain has been identified, with Sheffield granted preferred proponent status for a bulk handling facility and product storage area at Derby port .
Pre – production capital costs total $ 394 m i llion , including $26.2 million contingency , with a payback period of only 3.6 years. The capex total includes a full mineral separation plant at the mine site .
Potential remains for a staged approach to expansion of the project which will be explored further, however the PFS considers a single stage project as a solid foundation that generates strong cash margins over a very long mine life a n d prov id es for an effective and efficient use of capital.
