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Bruce McQuitty, Sheffield Resources Ltd - Developments for the Thunderbird deposit

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Bruce McQuitty, Managing Director, Sheffield Resources Ltd delivered the presentation at the 2014 Mineral Sands conference. …

Bruce McQuitty, Managing Director, Sheffield Resources Ltd delivered the presentation at the 2014 Mineral Sands conference.

The Annual Australian Journal Mining's Mineral Sands Conference is the key meeting place for Australia's Mineral Sands industry.

The event gives delegates the chance to hear from industry experts as they share their perspectives on the hot topics for the mineral sands industry. For more information about the event, please visit the website: http://www.informa.com.au/mineralsandsconference

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  • 1. + SFX 14th Annual AJM Mineral Sands Conference 2014 DAMPIER MINERAL SANDS PROJECT LARGE SCALE HIGH GRADE PREMIUM PRODUCT WORLD CLASS
  • 2. +Disclaimer & Compliance Statements EXPLORATION RESULTS The information in this report that relates to Exploration Results is based on information compiled by Mr David Boyd, a Competent Person who is a Member of Australian Institute of Geoscientists (AIG). Mr Boyd is a full-time employee of Sheffield Resources Ltd and has sufficient experience that is relevant to the styles of mineralisation and types of deposit under consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Boyd consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. PREVIOUSLY REPORTED INFORMATION This report includes information that relates to Exploration Results which were prepared and first disclosed under the JORC Code 2012. The information was extracted from the Company’s previous ASX announcements as follows: n  Thunderbird Drilling Results: “THUNDERBIRD HIGH GRADE MINERALISATION EXTENDS BEYOND DEFINED RESOURCE”, 16 December 2013. This report also includes information that relates to Exploration Targets, Exploration Results and Mineral Resources which were prepared and first disclosed under the JORC Code 2004. The information has not been updated since to comply with the JORC Code 2012 on the basis that the information has not materially changed since it was last reported. The information was extracted from the Company’s previous ASX announcements as follows: n  n  n  n  n  n  n  “NEW LICENCE GRANTED OVER HIGH GRADE ZIRCON PROJECT”, 7 September 2011. “1MT CONTAINED HM INFERRED RESOURCE AT ELLENGAIL”, 25 October 2011. “WEST MINE NORTH MINERAL RESOURCE ESTIMATE EXCEEDS EXPECTATIONS”, 7 November 2011. “4.4 BILLION TONNE MAIDEN RESOURCE AT MCCALLS HMS PROJECT”, 20 February 2012. “ENEABBA PROJECT RESOURCE INVENTORY EXCEEDS 5MT HEAVY MINERAL”, 28 August 2012. “LARGE HIGH GRADE MAIDEN RESOURCE FOR THUNDERBIRD HMS DEPOSIT”, 18 December 2012. “YANDANOOKA RESOURCE UPGRADE AND METALLURGICAL RESULTS”, 30 January 2013. n  n  n  n  n  n  “RECORD DRILL INTERSECTION AT THUNDERBIRD”, 21 October 2012. “1Mt HEAVY MINERAL RESOURCE ADDED TO ENEABBA PROJECT”, 30 October 2013. “HIGH GRADE DRILLING RESULTS FROM THUNDERBIRD”, 11 November 2013. “RECORD GRADES FROM WORLD CLASS THUNDERBIRD DEPOSIT”, 25 November 2013. “WORLD CLASS STATUS OF THUNDERBIRD CONFIRMED BY METALLURGICAL TESTWORK”, 25 March 2013. “THUNDERBIRD PRODUCTS CONFIRMED AS HIGHLY MARKETABLE”, 1 August 2013 These announcements are available to view on Sheffield Resources Ltd’s website www.sheffieldresources.com.au The Company confirms that it is not aware of any new information or data that materially affects the information included in the original market announcements and, in the case of estimates of Mineral Resources, that all material assumptions and technical parameters underpinning the estimates in the relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and context in which the Competent Person’s findings are presented have not been materially modified from the original market announcement. FORWARD LOOKING AND EXPLORATION TARGET STATEMENTS Some statements in this report regarding estimates or future events are forwardlooking statements. They involve risk and uncertainties that could cause actual results to differ from estimated results. Forward-looking statements include, but are not limited to, statements concerning the Company’s exploration programme, outlook, target sizes and mineralised material estimates. They include statements preceded by words such as “anticipated”, “expected”, “target”, “scheduled”, “intends”, “potential”, “prospective” and similar expressions. The terms “Target” and “Exploration Target”, where used in this report, should not be misunderstood or misconstrued as an estimate of Mineral Resources and Reserves as defined by the JORC Code 2012, and therefore the terms have not been used in this context. Exploration Targets are conceptual in nature and it is uncertain if further exploration or feasibility study will result in the determination of a Mineral Resource or Reserve.
  • 3. Company Snapshot Board & Management Will Burbury SHAREHOLDER SPLIT 12 MONTH PERFORMANCE Top 20 Shareholder s 40% Share Price +9% Directors 19.3 % Market Cap +31% Executive Chairman Bruce McQuitty Managing Director David Archer Technical Director David Boyd Exploration Manager Mark Teakle Project Development Manager Share Price Chart CAPITAL STRUCTURE $0.58 Share price Shares on issue High $0.78 Employee Options (Ave. Ex Price 47.7c) Low $0.25 Market Cap Cash (Undiluted) (at 31 Dec., no debt) Enterprise Value 119.6m 5.1m $69.4m $3.4m $66.0m 3 3
  • 4. Company Snapshot PROJECTS (ALL 100% SFX) Dampier - HMS Flagship - Thunderbird Total Resource 1.37Bt @ 6.1% HM (83Mt HM)1 including 517Mt @ 10.1% HM Eneabba - HMS Strategic resource base McCalls HMS Very large chloride ilmenite deposit 1 Refer to Appendices 1 & 2 4
  • 5. Location DAMPIER MINERAL SANDS PROJECT Thunderbird §  30km north of sealed Broome - Derby Highway §  140km by road to either Broome or Derby ports §  Gas discoveries nearby §  Close to Asian markets Canning Basin §  Thunderbird first major HMS discovery in the province §  Sheffield holds over 2,000km2 www.sheffieldresources.com.au 5
  • 6. Canning Basin - New HMS Province www.sheffieldresources.com.au 6
  • 7. Exploration History THUNDERBIRD MINERAL SANDS Rio Tinto 2003 - 2009 §  Scout aircore drilling §  8 effective holes indicated high grade potential §  Tenement relinquished during GFC Sheffield 2010 - present §  Applied for E04/2083 shortly after listing on ASX in Dec 2010 §  Recognised Thunderbird and Argo targets from Rio’s open file data §  E04/2083 granted 5 Sept 2011 §  1st drilling campaign July-Oct 2012 §  Maiden Resource Dec 2012 §  2nd drilling campaign July-Oct 2013 §  Resource update imminent www.sheffieldresources.com.au §  Scoping study nearing Sheffield’s 2011 plan view interpretation of Rio Tinto’s aircore drilling results * Exploration Target assigned to Thunderbird by Sheffield in 2011 prior to 2012 drilling campaign and estimation of JORC Mineral Resource of 1.37Bt @ 6.1% HM in December 2012. 7
  • 8. 8 Key Messages THUNDERBIRD MINERAL SANDS 8
  • 9. Large Scale, High Grade THUNDERBIRD MINERAL SANDS DECEMBER 2012 RESOURCE §  Maiden Mineral Resource 1.37Bt @ 6.1% HM (Indicated & Inferred)1 §  Includes coherent high grade component of 517Mt @ 10.1% HM (Indicated & Inferred)2 §  High in-situ VHM grades2: 0.7% zircon, 0.16% rutile, 0.44% leucoxene and 2.9% ilmenite §  §  E 4km E’ Strong grade continuity Low overburden 1  2  At 2% HM cut-off. Refer to Appendices 1 & 2. At 7.5% HM cut-off. Refer to Appendices 1 & 2. 9
  • 10. World Class THUNDERBIRD MINERAL SANDS 7.00 In Situ TiO2 Mineral Grade (Rut+Lux+Ilm) % Puttalam (ILU) 6.00 Amongst the world’s largest and highest grade deposits 5.00 Toliara (WTR) Douglas (ILU) 4.00 Thunderbird High Grade Zone Kwale (BSE) 517Mt @ 10.1% HM (SFX) 3.00 Moma (KMR) Thunderbird (SFX) 1.37Bt @ 6.1% HM 2.00 Sierra Rutile Eneabba (SFX) Grand Cote (MDL) 1.00 Coburn McCalls 0.00 -0.10 (SRX) JA Resource 2008 Cyclone (ILU) (DRX) (GUN) Only deposits greater than 100Mt are shown. Bubble size proportional to contained VHM tonnes. (SFX) 0.40 0.90 In Situ Zircon Grade % 1.40 1.90 Data compiled by SFX from open file sources. Rio Tinto’s deposits excluded (unable to be sourced). 10
  • 11. Year of Discovery 2012 2011 2010 2009 2008 2007 2006 Cyclone (DRX) (SFX) (ILU) Thunderbird Jacinth-Ambrosia 8 2005 (WTR) (GUN) Toliara (ILU) Coburn Kwale (BSE) Douglas (ILU) (SFX) 10 2004 2003 2002 2001 2000 1999 1998 1997 1997 Puttalam McCalls (MDL) Moma 14 1996 1995 1994 1993 1992 1991 2 1990 4 Grand Cote 6 1989 1988 1987 1986 1985 1984 1983 Contained zircon (Mt) (KMR) World Class THUNDERBIRD MINERAL SANDS Large Zircon Deposits Discovered over past 30 years 12 Projects of this scale and grade only come along once a decade 0 * Thunderbird contained zircon @ 2% HM cut-off Dec 2012 11
  • 12. New Developments THUNDERBIRD MINERAL SANDS PROGRESS SINCE LAST AJM §  Metallurgical testwork §  Product marketing studies §  2nd drilling campaign §  Environmental studies §  Resource estimation nearing completion §  Scoping studies also nearing completion 12
  • 13. Metallurgy THUNDERBIRD MINERAL SANDS Excellent Results from Bulk Sample Testwork §  6 tonne bulk sample from 2012 drilling §  Processed at RJ Robbins Laboratory, Brisbane §  Mineralisation responds well to conventional processing techniques §  Slimes have low clay content – requiring low flocculant dosages §  Processing flowsheet designed for Scoping Study §  30 tonne bulk sample collected from 2013 drilling for further process refinement during PFS Part of 30 tonne Thunderbird bulk sample from 2013 drilling campaign www.sheffieldresources.com.au 6 tonne Thunderbird bulk sample processed at RJ Robbins laboratory, Brisbane 13
  • 14. Premium Products THUNDERBIRD MINERAL SANDS Highly Marketable Products as assessed by TZMI n  Premium grade zircon suitable for ceramics (largest sector of zircon market) n  Primary ilmenite suitable for sulphate pigment process or sulphate or chloride slag (broad customer base) n  Primary ilmenite has low Cr2O3 and low alkalis – ideal blending feed n  Secondary ilmenite, HiTi & rutile products suitable for welding rod market Thunderbird Zircon Thunderbird Rutile 14
  • 15. Recent Drilling THUNDERBIRD MINERAL SANDS SECOND DRILLING CAMPAIGN §  281 aircore drill holes for 18,845m §  Completed Oct 2013 §  Infill drilling aimed at improving resource classification §  Step-out drilling results mineralisation extends beyond Dec 2012 resource outline §  Record intersection 82.5m @ 7.53% HM (THAC311) 82.5m @ 7.53% HM from 24m1 1 At 2.0% HM cut-off. Refer to ASX Releases for full details. 15
  • 16. Recent Drilling THUNDERBIRD MINERAL SANDS §  Results define a thick, high grade zone at 7.5% HM cutoff §  Dimensions: 6km x 2.5km §  Intersections1 include: 19.5m @ 21.0% HM from 12m 28m @ 17.9% HM from 32m 24m @ 16.1% HM from 25.5m 32.5m @ 14.5% HM from 29m 30m @ 15.0% HM from 30m §  Scoping Study will focus on optimising this high grade zone in early production years 1 At 7.5% HM cut-off. Refer to ASX Releases for full details. 28.0m @ 17.9% HM (THAC371) 19.5m @ 21.0% HM (THAC352) 24.0m @ 16.1% HM (THAC403) 32.5m @ 14.5% HM (THAC400) 30.0m @ 15.0% HM (THAC344) 16
  • 17. Recent Drilling THUNDERBIRD MINERAL SANDS §  Thick, high grade mineralisation displaying strong continuity 17
  • 18. Environmental & Groundwater Studies THUNDERBIRD MINERAL SANDS §  Level 1 studies completed 2012 §  Level 2 Flora and Fauna surveys nearing completion §  Environmental consultants ecologia have extensive experience in district §  Desktop groundwater studies completed 2013 §  Site groundwater studies to be undertaken during PFS 2014 18
  • 19. Dampier Timeline Scoping Study Resource Update Drilling Completed DFS Development Prefeasibility 2013 2014 Q1 2014 Q2 2014 Q3 2014 Q4 2015 2016 Permitting & Approvals Regional Exploration 19
  • 20. Conclusion §  Thunderbird - a World Class HMS deposit §  Once in a decade discovery §  High quality zircon & ilmenite products §  Resource update & scoping study Q1 2014 §  Moving to PFS in 2014 www.sheffieldresources.com.au 20
  • 21. Thank you Questions? For further information please contact: Sheffield Resources Ltd Level 1, 57 Havelock Street West Perth WA 6005 Ph +61 (8) 6424 8440 info@sheffieldresources.com.au www.sheffieldresources.com.au
  • 22. Appendices 22
  • 23. Appendix 1: Resource Inventory Sheffield’s contained Valuable HM (VHM)* Resource Inventory at 30 October 2013 Deposit Resource Category Zircon (‘000t) Rutile (‘000t) Leuc. (‘000t) Ilmenite (‘000t) Total VHM (‘000t) Thunderbird Indicated 1,483 344 924 6,256 9,007 Thunderbird Inferred 4,270 990 2,661 18,007 25,927 Yandanooka Measured 13 2 3 87 105 Yandanooka Indicated 240 81 83 1,439 1,843 Yandanooka Inferred 4 1 2 23 29 Durack Indicated 144 29 52 703 928 Durack Inferred 26 5 13 121 164 Drummond Crossing Indicated 143 101 37 542 823 Drummond Crossing Inferred 7 5 1 28 41 Ellengail Inferred 92 90 19 658 859 West Mine North Measured 18 33 42 200 293 West Mine North Indicated 71 87 46 506 709 McCalls Inferred 3,491 1,063 2,576 42,911 50,041 Total Measured 31 35 45 287 398 Total Indicated 2,081 641 1,141 9,446 13,310 Total Inferred 7,889 2,154 5,272 61,746 77,062 Total All 10,001 2,830 6,458 71,479 90,770 The contained VHM tonnages in the above table are derived from Mineral Resource Estimates for the Yandanooka, Ellengail , West Mine North, McCalls, Durack deposits (estimated using a 0.9% HM cut-off), the Drummond Crossing deposit (estimated using a 1.1% HM cut-off) and the Thunderbird deposit (estimated using a 2% HM cut-off) . These Mineral Resources have previously been fully reported in ASX releases by Sheffield on 25 October 2011, 7 November 2011, 20 February 2012, 28 August 2012, 18 December 2012, 30 January 2013 and 30 October 2013. Appendix 2 summarises the estimated tonnes and grades for these deposits. * Valuable Heavy Minerals are classified as zircon, rutile, leucoxene and ilmenite. 23
  • 24. Appendix 2: HMS Mineral Resource1 Inventory 30 Oct 2013 Project Deposit Resource Category Cut-off (% HM) Material (Mt)* Bulk Density HM % Slimes %3 Osize % DAMPIER Thunderbird Indicated 2.0 299 2.1 7.2 19 14 21.5 6.9 Thunderbird Inferred 2.0 1,075 2.1 5.8 17 16 61.9 Total Dampier All 2.0 1,374 2.1 6.1 17 15 83.4 Measured 0.9 2.9 2.0 4.1 15 14 ENEABBA Yandanooka Yandanooka In-situ HM Zircon2 Rutile2 (Mt)* % % Leuc.2 % Ilmenite2 % 1.6 4.3 29 6.9 1.6 4.3 29 6.9 1.6 4.3 29 0.12 10.6 1.9 2.2 72 Indicated 0.9 90.1 2.0 2.3 16 15 2.09 11.5 3.9 3.9 69 Yandanooka Inferred 0.9 2.8 2.0 1.2 18 21 0.03 11.2 3.9 4.6 68 Yandanooka Total 0.9 95.9 2.0 2.3 16 15 2.24 11.4 3.8 3.9 69 Durack Indicated 0.9 50.3 2.0 2.0 15 21 1.02 14 2.8 5.1 69 Durack Inferred 0.9 15 1.9 1.2 14 17 0.18 14 2.5 7.2 66 Durack Drummond Crossing Drummond Crossing Drummond Crossing Total 0.9 65.3 2.0 1.8 15 20 1.20 14 2.8 5.6 68 Indicated 1.1 48.7 2.0 2.1 16 9 1.02 14 10 3.6 53 Inferred 1.1 3.5 2.0 1.5 16 8 0.05 13 10 2.8 55 Total 1.1 52.2 2.0 2.1 16 9 1.07 14 10 3.5 53 Ellengail Inferred 0.9 46.45 2.0 2.2 15.6 2.1 1.04 8.9 8.7 1.9 63.5 Ellengail Total 0.9 46.45 2.0 2.2 15.6 2.1 1.04 8.9 8.7 1.9 63.5 West Mine North Measured 0.9 6.47 2.0 5.6 14.8 1.2 0.36 4.9 9.1 11.6 54.9 West Mine North Indicated 0.9 36.11 1.9 2.3 13.1 2.8 0.84 8.4 10.3 5.4 60.0 West Mine North Total 0.9 42.58 1.9 2.8 13.4 2.5 1.21 7.9 10.1 6.4 59.2 Total Measured 0.9 9.4 2.0 5.2 15 5 0.48 6.7 6.8 8.7 60 Total Indicated var. 225.3 2.0 2.2 15 13 4.98 12.1 6.0 4.4 64 Total Inferred var. 67.7 2.0 1.9 15 6 1.30 10.3 7.2 3.2 64 Total Eneabba All var. 302 2.0 2.2 15 11 6.76 11.6 6.3 4.2 64 Inferred 0.9 4,431 2.3 1.2 26.5 1.4 53 6.6 2.0 4.9 80.8 All 0.9 4,431 2.3 1.2 26.5 1.4 53 6.6 2.0 4.9 80.8 MCCALLS McCalls Total McCalls *Tonnes have been rounded to reflect the relative uncertainty of the estimate. 1 This estimate is classified and reported in a manner compliant with the JORC code and guidelines (JORC, 2004). 2 The Mineral Assemblage is represented as the percentage of the Heavy Mineral (HM) component of the deposit, as determined by QEMSCAN. TiO 2 minerals defined according to the following ranges: Dampier: Rutile >95% TiO 2 ; Leucoxene 70-95% TiO 2 ; Ilmenite 40-70% TiO 2 , Eneabba & McCalls: Rutile >95% TiO 2 ; Leucoxene 85-95% TiO 2 ; Ilmenite <55-85% TiO 2 . 3 West Mine North, Drummond Crossing and McCalls deposits are reported below 35% slimes cut-off. 24
  • 25. Appendix 3: Thunderbird Product Specifications Primary Zircon Specifications ZrO2 % Fe2O3 % TiO2% Al2O3% P2O5% 66.2 0.05 0.09 0.10 0.14 Primary Ilmenite Specifications TiO2 % FeO % Fe2O3 % 50.1 8.0 36.4 SiO2 % Al2O3% 1.6 0.3 Cr2O3 % ZrO2 % 0.05 0.00 25
  • 26. Appendix 4: Other Mineral Sands Projects ENEABBA §  Total Mineral Resources: 302Mt @ 2.2% HM (6.76Mt HM)1 §  Comprising 5 deposits, each with over 1Mt contained HM §  Established mining district §  Adjacent to Tronox’s Dongara project §  Considerable exploration upside – 4 new dunal HM targets §  Dual deposits have minimal overburden and have a high value assemblage (e.g. Drummond Crossing 14% zircon, 10% rutile) 1  Refer to Appendices 1 & 2. 26
  • 27. Appendix 4: Other Mineral Sands Projects MCCALLS §  Global scale chloride ilmenite deposit §  Mineral Resource 4.4Bt @ 1.2% HM (53Mt HM)1 §  Mineral assemblage includes: 80.8% ilmenite at 66% TiO2 §  Evaluating as a potential dredge project §  2012 drilling results highlight central area as having higher grade, lower slimes and greater thickness §  Awaiting new QEMSCAN mineral assemblage results §  Resource update scheduled mid-2014 1  Refer to Appendices 1 & 2. 27