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Sheffield Resources is a rapidly emerging mineral sands explorer and developer that is headquartered in Perth. Thunderbird, the company’s flagship Mineral Sands project is amongst the largest and highest grade mineral sands discoveries in the last 30 years. With this in mind, Informa Insights had the pleasure to ask the Managing Director, Bruce McQuitty a few questions related to the project. Enjoy!
2014 was a busy year for Sheffield Resources. Can you share some of the key highlights from last year’s activities?
In April 2014 we completed the Thunderbird scoping study which demonstrated a large scale, long life project with potential to deliver exceptional financial returns. This was followed by a resource update in December which substantially increased the high grade component of the deposit, setting a strong foundation for the pre-feasibility study.
Sheffield Resources’ Thunderbird is now a project in its own right, now that the pre-feasibility study is underway, what does this important development mean for Sheffield Resources and the project?
Thunderbird has become our flagship project. We are transitioning from an exploration to a development company as we take the project through the feasibility stages. The pre-feasibility study is serving to narrow the field of development options and helping us focus on the way forward.
In light of the recent developments at Sheffield Resources flagship Thunderbird Project, what initiatives have Sheffield Resources put in place to engage with local stakeholders, communities and businesses?
In March 2014 we appointed Wayne Groeneveld as Sustainability Manager to drive the permitting and stakeholder engagement for the Project. Wayne has a strong background in these areas from previous roles with RGC and Xstrata Nickel, amongst others. We are actively engaging with stakeholders and it is our intention to source labour and services locally where possible.
With higher exploration costs and increased difficulty to access funds, 2014 was a challenging time for explorers. How are Sheffield Resources approaching financing in such tough condition?
The strong investor interest we have experienced shows that there is always appetite for world class projects, even in the toughest economic times. Our $11.5 million capital raising, completed in May 2014, was heavily oversubscribed. We didn’t need to look far beyond our existing shareholders to place the stock. We pride ourselves on our low overheads and efficient use of shareholder funds. We don’t need to raise large sums to take the project through the feasibility stages.
Are there any new technologies or innovation that Sheffield Resources are utilising in discovering or developing new deposits?
Thunderbird is the first major mineral sands discovery in the Canning Basin and is, so far, unique in terms of its age and geological setting. Utilising the geological knowledge gained from the discovery and our early mover advantage, we pegged over 2,500km2 of prospective tenure on the Dampier Peninsula. Our first exploration efforts on this ground are already showing signs of success.
In your opinion, what are the biggest challenges facing the mineral sands industry when moving a project into production and how is Sheffield Resources approaching some of these challenges? Which factors (if any) have you found are unique to mineral sands and why?
I think the major challenges for aspiring new entrants to the supply side of the industry are sourcing development capital and locking in off-take. The complexity of the mineral sands industry and the relative opacity of the market tends to favour incumbents and many of these have become vertically integrated to some degree. For Sheffield, the challenge is to select the appropriate initial scale of operation so that the volume of products can be absorbed into the market and the development capital remains affordable, while maximising cash flow. Fortunately, the Thunderbird project is a very scalable, long-life project so we are designing staged expansions of production after payback of the initial development capital. One factor that I think is unique to the mineral sands industry is the length and complexity of the feedstock supply chain for TiO2 pigment manufacture. This is why many incumbents have developed SR processes or ilmenite smelters or have gone to full vertical integration. You need large, long life, high quality projects, like Thunderbird, if you are contemplating adding downstream business.
You will be sharing some of the pre-feasibility study outcomes for Thunderbird at Informa’s 15th anniversary Mineral Sands Conference in Melbourne this March, what discussions are you looking forward to having with your peers at the conference?
The mineral sands supply sector is a highly competitive space. When a project of the size and quality of Thunderbird comes on the scene it naturally generates a defensive response from peers. So I welcome the opportunity to discuss the merits of the project with those who are yet to appreciate its world class status.