BFS estimates A$271m capital cost for Thunderbird phase one development

PERTH (miningweekly.com) – The bankable feasibility study (BFS) on the Thunderbird mineral sands project, in Western Australia, has increased projected capital requirements from the A$271-million estimated in the prefeasibility study (PFS), to A$348-million.

The BFS was based on an initial 8.5-million-tonne-a-year throughput, doubling to 17-million tonnes a year in year five, with the addition of a second mining unit and processing stream. The Stage 2 expansion will require a further A$195-million in capital.

Over its 42-year mine life, the project is expected to deliver some 76 100 t/y of premium zircon, 68 500 t/y of zircon concentrate, 387 800 t/y of ilmenite and 229 800 t/y of titano-magnetite.

The study projected earnings before interest, taxes, depreciation and amortisation of A$5.1-billion, a pre-tax net present value of A$676-million and an internal rate of return at 25%.

The BFS parameters compared with the 2015 PFS, which contemplated an initial 12-million-tonne-a-year throughput, increasing to 18-million tonnes a year, to produce an average of 100 000 t/y of zircon and 382 000 t/y of high-grade sulphate ilmenite over the 40-year mine life.

Sheffield MD Bruce McFadzean on Friday said the outcome of the BFS was an outstanding result, which highlighted Thunderbird’s status as a world-class mineral sands project.

“The study findings show Thunderbird is a technically low-risk project and is anticipated to generate significant and consistent financial returns over an exceptionally long mine life of 42 years.”

McFadzean said the completion of the BFS cleared the way for the delivery of the next major milestone, which was offtake agreements, permitting and project financing ahead of the targeted construction start in the second half of 2017.

“Offtake discussions are progressing with leading global ilmenite and zircon consumers. There has been strong interest in our high-quality suite of products. In conjunction with our corporate advisers Azure Capital, we are engaging with both project finance providers and potential strategic partners to arrive at an optimal funding solution.”