Sheffield Resources Limited (ASX: SFX) and joint venture partner, YGH Australia Investment Pty Ltd (Yansteel), have made a Final Investment Decision (FID) to construct and develop the Thunderbird Mineral Sands Project in northern Western Australia.
Sheffield confirms that joint venture operator Kimberley Mineral Sands (KMS) has reached financial close on the combined A$315m senior loan facilities provided by the Northern Australia Infrastructure Facility (NAIF) and OMRF (Th) LLC, a related entity of the Orion Mineral Royalty Fund (Orion), completing the project financing requirements for the Thunderbird Mineral Sands Project.
“We are delighted to make the final investment decision on this outstanding, world class mineral sands project. With first production from Thunderbird on track for Q1 2024, Thunderbird is fully funded and set to deliver A$695m in NPV to Sheffield’s shareholders over its 36 year life,” Sheffield Resources Executive Chair, Bruce Griffin said.
“I would like to thank the KMS team for their efforts, and acknowledge the support of Yansteel our 50% partner in KMS, to achieve this important milestone.”
Thunderbird is now fully funded through to first production which remains on track for Q1 2024, enabling the delivery of strong cashflows and benefits to all stakeholders across the projected 36 year mine life.
Project funding of A$484m has included the full and final satisfaction of attributable project equity contributions totalling A$169m from joint venture partners Sheffield & Yansteel, in addition to the A$315m senior loan facilities provided by NAIF and Orion.
The total attributable project equity of $169m is funded from a combination of A$111m in historical Yansteel equity funding, A$24m in new equity from Yansteel and A$34m of new equity from Sheffield. The Sheffield new equity of A$34m includes the A$10m due 60 days post FID in accordance with the KMS Joint Venture agreement. Sheffield has contributed the A$34m from its cash reserves and has $6m in cash as of 4 October 2022.
Development of Thunderbird commenced in mid-2021 utilising equity proceeds provided by Yansteel following inception of the 50/50 Kimberley Mineral Sands joint venture.
With Thunderbird construction now more than 40% complete, the project remains on track for first production in Q1 2024, enabling the delivery of strong cashflows and benefits to all stakeholders across the projected 36 year mine life.
The direct capital expenditure for Stage 1 of Thunderbird at FID is A$379m including contingency, an increase of A$16m from the March 2022 Bankable Feasibility Study.
The total funding of A$484m is unchanged from the March 2022 BFS and includes remaining contingency of A$24m at 31 August 2022 and a A$40m cost overrun facility.
At FID the Stage 1 & 2 NPV (pre-finance, post tax, 8% discount rate) of A$1.39B and post-tax IRR of 26.6% are similar to the A$1.28B and 27.5% in the March 2022 BFS with the changes largely driven by updated commodity price forecasts.
Sheffield’s 50% share of the project generates an annual average EBITDA of A$121m and estimated NPV of A$695m.
For further information please visit: https://www.sheffieldresources.com.au
