Thunderbird capex rises to $463m

Mineral sands aspirant Sheffield Resources has attributed a $115 million capital cost increase at its Thunderbird project to changes in the scope of work and the infrastructure ownership model.

Sheffield said today all key development permits were in place and the project, which is located in the Kimberley, was ready for construction.

The Bruce McFadzean-led company also said its planned $US175 million debt facility with Taurus Mining Finance was progressing well.

The company has revised the capital expenditure estimate for Thunderbird to $463 million, saying that current contract negotiations have included scope changes.

“Key improvements include upgrades to throughput, utilisation, inter-plant operability and stockpile management which, collectively, materially de-risk the project,” Sheffield said in a statement to the ASX.

These changes are expected to add about $50 million to the overall cost.

Sheffield also said a transition from a build, own and operate model to infrastructure ownership would increase the capex by about $65 million.

The company said about 80 per cent of the increase would be covered by the recently announced $95 million debt facility from the federal government’s Northern Australia Infrastructure Fund (NAIF).

“The project requires $20 million of additional equity funding compared to the previous estimate,” Sheffield said.

Construction is expected to begin next year, with first production in the fourth quarter of 2020.

Managing director Mr McFadzean said the company was delighted with the progress being made on the project.

“The NAIF facilities provides us with a fantastic opportunity to capture important improvements to the bankable feasibility study,” he said.

“Firstly, we have significantly improved plant throughput and operability, while insourcing our infrastructure requirements enables a reduction to our life of mine operating costs with improved margins.

“With a mine life of 42 years, this makes Thunderbird a financially more robust project.”

Shares in Sheffield were off 7.48 per cent at 99 cents each at 2pm AEDT.