18/10/2017 - 13:15

Sheffield appoints GR, sources funds for Thunderbird

18/10/2017 - 13:15

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Sheffield Resources has mandated finance group Taurus to arrange a $US200 million ($A255 million) debt facility for development of its Thunderbird mineral sands project, and also named GR Engineering Services as its preferred contractor.

Sheffield appoints GR, sources funds for Thunderbird
Bruce McFadzean says the $US200 million commitment represents a strong and positive endorsement of the Thunderbird project. Photo: Attila Csaszar

Sheffield Resources has mandated finance group Taurus to arrange a $US200 million ($A255 million) debt facility for development of its Thunderbird mineral sands project, and also named GR Engineering Services as its preferred contractor.

Perth-based Sheffield said Taurus had agreed to arrange and underwrite the $US200 million facility, which comprises a $US175 million term loan, a $US25 million contingent instrument, and a $US10 million unsecured equity bridge facility.

Approval of the facility is subject to Taurus completing due diligence, which is expected to be signed off by the end of the first quarter of 2018.

“Taurus shares our positive outlook on the mineral sands industry and has a strong understanding of the sector having managed successful mineral sands investments in the past,” Sheffield managing director Bruce McFadzean said.

“The facility provides Sheffield with US$200 million in underwritten funding, without equity dilution, with a reasonable cost structure and a seven-year tenor.

“Undoubtedly, this commitment represents a strong and positive endorsement of the Thunderbird project’s outstanding financial metrics as one of the largest new, long life mineral sands projects in the world.

“Sheffield is now strongly positioned to advance Thunderbird towards development.”

The funds will be advanced in two tranches with different interest rates.

Tranche A will be based on the USD inter-bank rate (LIBOR), which is currently at about 1.4 per cent, plus a margin of 4.5 per cent.

Tranche B will be at 8.5 per cent per annum.

Sheffield also announced today it had appointed Perth-based GR Engineering Services as its preferred contractor for the mineral processing facilities and associated infrastructure at Thunderbird, which has a development cost of $348 million.

The value of GR’s engineering, procurement and construction contract is yet to be disclosed.

The contractor has also agreed to begin providing early works on the site immediately, with the scope of that work to include early engineering and long lead procurement for Thunderbird.

GR managing director Geoff Jones said the EPC contract was subject to Sheffield obtaining the necessary project funding.

“This represents a significant award for GR Engineering and demonstrates our proven expertise in the process engineering design and construction of mineral sands projects,” he said.

Mr McFadzean said Sheffield was proud to be associated with GR.

“GR has demonstrated that it has the technical and operational capabilities to successfully deliver the project and Sheffield looks forward to working with GR Engineering to deliver this outcome,” he said.

Azure Capital acted as financial adviser to Sheffield.

GR shares were 0.4 per cent higher to $1.29 each, while Sheffield shares were 1.2 per cent higher to 83 cents each, at 1pm.

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