Sheffield Resources has amended three offtake agreements for its Thunderbird project in north-western Australia, accounting for 75 per cent of the project’s stage one output.
The offtake agreements have locked in three Chinese-based zircon concentrate processors for a total 170,000 tonnes per year for five years.
Other key terms – assuming a final investment decision is made this year – included take-or-pay provisions, pricing for various saleable products, shipping schedules and product specifications.
Thunderbird became a 50/50 joint venture (JV) between Sheffield Resources and Yansteel last March, as the latter paid $130 million for its share of the project.
The JV formally became known as Kimberley Mineral Sands (KMS).
Sheffield executive chairman Bruce Griffin said the outcomes were ideal for all involved.
“Sheffield is pleased with the support shown by existing zircon customers for the Thunderbird project. KMS has approximately 75 per cent of its zircon concentrate for stage one under binding agreements with three respected and well-established zircon concentrate processing groups,” he said.
Griffin had no concerns about selling off the remainder of the Thunderbird product, as the high-quality deposit was likely to attract buyers in good time.
“KMS are seeing strong demand for the Thunderbird zircon concentrate product and they are engaged with additional counterparties seeking offtake agreements for the approximately 50,000 tonnes of remaining uncontracted zircon concentrate from stage one,” Griffin said.
“With sufficient offtake in place to satisfy the expected project-financing requirements, KMS expects to contract the remaining zircon concentrate offtake contracts throughout the period up to the completion of construction at Thunderbird.”
The Thunderbird project will involve a 10.4 million tonnes a year mine and process plant as it hosts one of the largest and highest-grade mineral sands discoveries of the century.
A 2017 feasibility study of the project confirmed it to be a world-class prospect with a lifespan of 42 years producing zircon and ilmenite.
Its lifespan was based off the project’s 3.23 billion tonne mineral resource.