Sheffield in Indian zircon deal

West Perth based Sheffield Resources has moved a step forward on its Thunderbird mineral sands project, securing an offtake deal with Indian business Ruby Ceramics to supply 6,000 tonnes of zircon annually for at least three years.

Business News estimates that is worth about $7.4 million per annum based on the latest Zircon reference price published by mineral sands producer Iluka Resources.

The contract will be pegged to the prevailing zircon market price.

It represents around 12 per cent of total production projected from stage one of the project, which will be located on the Dampier Peninsula.

Sheffield is hoping to have production under way in 2019, with environmental approvals currently under review, and the Federal Court recently hearing an appeal regarding the company’s native title agreement.

Sheffield managing director Bruce McFadzean said it was a strong endorsement of the project, which he said would have a 42-year mine life.

“This maiden binding offtake agreement is a milestone achievement for Sheffield and is an important de-risking step as we progress project development,” he said.

“We welcome this relationship with Ruby and remain steadfast in delivering our offtake and funding objectives over the coming months.

“Negotiations continue towards signing binding agreements with counterparties who have already signed non-binding memorandums of understanding in relation to the sale of premium zircon and zircon concentrate and Sheffield’s high quality low temperature roast ilmenite.”

The announcement comes a day after Brisbane-based Diatreme Resource signed a memorandum of understanding with Chinese company ENFI Engineering Corporation to undertake a bankable feasibility study at the Cyclone mineral sands project in the Eucla Basin.

That project is also zircon focused.

ENFI will be supporting Diatreme to find offtake partners and financing for the project.