June 24, 2024


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Sheffield Resources Starts Production

Sheffield Resources Starts Production

Sheffield Resources has emerged as a standout in the junior mining sector by accomplishing a feat that many of its peers aspire to but seldom achieve: transitioning from developer to producer.

Production and Prospects

Sheffield Resources (ASX:SFX) boasts 50% ownership of the world’s largest zircon reserve, Thunderbird, nestled in the remote Kimberley region of Western Australia. Commencing production in October 2023, ahead of schedule and within budget, the project is undergoing a ramp-up with the first shipments expected to land in the market in Q1 2024. The initiation of cash flow is on the horizon, anticipated soon after the first sales are made, positioning Sheffield Resources in a favourable spot in the current market.

Financial Vigor and Vision

The 2022 Bankable Feasibility Study underscores Thunderbird’s technical low risk and potent cash margin prospects against a backdrop of significant production levels over a projected 36-year mine life. Financial highlights include a Stage 1 NPV8 of $842 million and an expected cash generation of ~$120 million per annum to Sheffield after debt repayments. This forecasted cash inflow is pivotal, especially considering Sheffield’s dividend policy, which strikes a balance between reinvestment and shareholder returns. Post mid-FY2027, Sheffield anticipates channelling a significant proportion of its Thunderbird-derived cash flow back to shareholders via dividends or buy-backs, underlining a commitment to delivering tangible returns.


The 2022 BFS forecasts the production of the following products:

  • Non Magnetic Concentrate (“NMC” – c. 60% of revenue): Contains Zircon, titanium minerals (used predominantly to produce titanium  dioxide pigment) and monazite Approximately 40% of recoverable zircon will be premium-grade.
  • Magnetic Concentrate (“MC” – c. 30% of revenue): This product contains high-grade Ilmenite (c. 55% TiO2), but is mixed with an iron oxide mineral that can be readily removed by roasting and magnetic separation.
  • Para-Magnetic Concentrate (“PMC” c. 10% of revenue): It is a co-product containing Zircon, titanium minerals and monazite.


With respect to off-take, Sheffield has demonstrated market acumen by locking in 100% of its ilmenite (MC) production through a binding agreement with Yansteel. Furthermore, approximately 75% of the NMC (zircon product) is under binding agreements with three major customer groups. This means that nearly 80% of the Stage 1 revenue has secure off-take agreements in place for the first five years of production, providing Sheffield with a reliable and predictable cash flow as they advance into the operational phase.


In addition to Thunderbird, Sheffield Resources has set its sights on the South Atlantic Project, located in the state of Rio Grande do Sul, Brazil. This project presents a promising opportunity with an Exploration Target ranging from 500 to 720 million tonnes at 3.2 to 4.0% HM2, comprising sulfate ilmenite and zircon. Sheffield is investing up to US$2.5 million, alongside existing RGM shareholder contributions of US$3 million, to fund de-risking activities. These activities include drilling followed by a JORC Mineral Resource estimation, trial mining, completing a DFS on the current development concept.

One of the key aspects of this project is Sheffield’s option to earn up to at least 80% of the entire South Atlantic Project. This strategic move could position Sheffield Resources to become a multi-asset mineral sands producer, diversifying its portfolio and further solidifying its presence in the industry.


In the interview, Bruce Griffin discussed Sheffield Resources’ strategic foresight in managing potential inflation impacts on the Thunderbird project. Understanding the inflationary trends, Sheffield pre-emptively included a 10% buffer in their operating cost projections, effectively mitigating the immediate effects of rising costs, especially in the energy and labour sectors. This proactive measure has allowed the company to maintain their expected operating costs without significant revisions despite the inflationary pressures. Furthermore, Sheffield has prudently managed its finances to ensure a substantial contingency fund is in place. With approximately $60 million combined in contingency and cost overrun at the start of the project, Sheffield is well-equipped to address unexpected expenses that may arise, ensuring that the project remains on track without the need for additional capital injections​.

Adding another layer of fiscal foresight, Sheffield has adopted a conservative long-term foreign exchange rate assumption of 0.75 AUD/USD, providing additional protection against currency market fluctuations that could impact project costs when converting to or from international currencies​.

Key Dates Ahead

  • March Q’24 – First revenue from Thunderbird
  • July 2024 – South Atlantic Project investment decision
  • Dec Q’24 – Thunderbird hits nameplate capacity