Sheffield Resources and Yansteel to develop Thunderbird mineral sands project  

Location of Thunderbird mineral sands project. Map: Sheffield Resources

Sheffield Resources Limited announces that it has entered into a Non-Binding Term Sheet with Yangang (Hong Kong) Co., Ltd’s wholly owned subsidiary YGH Australia Investment Pty Ltd to form a Joint Venture to develop the Thunderbird Mineral Sands Project. Yansteel will invest A$130.1m in equity to acquire a 50% interest in the Project. Formation of the Yansteel and Sheffield Joint Venture (“Joint Venture”) is subject to final negotiation, agreement and execution of formal agreements, Foreign Investment Review Board (“FIRB”) process completion and where required, any other applicable regulatory or shareholder approval.

Yansteel will become a significant shareholder after the Board approved the of 34,259,421 fully paid ordinary shares (comprising 9.9% of the post-issue share capital) in Sheffield to Yansteel for a total consideration of approximately A$12.9m (“Share Placement”). The Share Placement is not conditional upon the completion of the Joint Venture transaction or FIRB process completion.

Yansteel and Sheffield have also executed a take or pay offtake agreement for 100% of the ilmenite produced from Stage 1 of the Project.

“The Joint Venture with Yansteel, if completed, will provide the project equity presently estimated to fund Stage 1 of the Thunderbird Project. The transaction with Yansteel also secures offtake for all of the ilmenite. We welcome Yansteel as a shareholder and look forward to working with them to develop Thunderbird. To attract such a strong partner is testimony to the quality of the Thunderbird Mineral Sands Project. This outcome achieves all of the objectives of the strategic partner process undertaken by Sheffield over the past 18 months and, if completed, will provide the means by which Sheffield shareholders can realise the underlying value of the Project”, said Bruce McFadzean Sheffield Resources’ Managing Director.

Thunderbird is expected to be a major development for the Kimberley and regional Western Australia, providing approximately 400 construction jobs and 200 Kimberley-based operational jobs for 37 years.

For Australia, Thunderbird is estimated to generate A$750m in royalties and A$2B in taxes over its project life. At a global level, the introduction of a new supplier of ilmenite and zircon, as well as Yansteel’s new downstream processing operation, will provide a new source of competitive supply into mineral sands and downstream product markets that are facing an emerging structural decline in supplies.