Sheffield's Thunderbird to cost $394m

Sheffield Resources says its promising Thunderbird mineral sands project near Derby will cost $394 million to develop.

The company released the results of a pre-feasibility study on Thunderbird, which projected a life-of-mine revenue of $9.5 billion and operating cash flow of $4.3 billion.

The mine will have an initial life of 32 years.

At a planned mining rate of 18 million tonnes per annum, the project is forecast to produce 114,000 tonnes of zircon at $US1,375/t, 439,000t of ilmenite at $US155/t, and 30,000t of leucoxene at $US580/t each year, with commissioning targeted in 2018.

“This pre-feasibility study has confirmed that Thunderbird will deliver strong financial returns over a very long mine life,” Sheffield managing director Bruce McQuitty said.

“The project is highly leveraged to the zircon price and with few major new zircon projects in the global development pipeline, Sheffield is well placed to meet future demand.”

Pre-production capital costs will total $394 million, with a payback period of only 3.6 years. The capex total includes a full mineral separation plant at the mine site.

The company also flagged a potential approach to expanding the project, which it says will be explored further.

Sheffield shares closed 1.4 per cent lower to 69 cents.