Sheffield signs first offtake agreement

PERTH (miningweekly.com) – Mineral sands developer Sheffield Resources on Tuesday announced its first binding offtake agreement over its Thunderbird project, in Western Australia.

Under an offtake agreement with Indian ceramics company Ruby Ceramics, Sheffield would supply 6 000 t/y of zircon from the Thunderbird project, which represented around 12% of the project’s estimated total volume during the Stage 1 operations.

The contract will span an initial three-year period, with yearly contract extensions thereafter.

“The agreement with Ruby Ceramics provides a strong endorsement of Thunderbird and the quality of premium zircon product to be generated from the project over the 42-year life-of-mine,” said Sheffield MD Bruce McFadzean.

“This maiden binding offtake agreement is a milestone achievement for Sheffield and is an important derisking step as we progress project development.”

The Stage 1 development is expected to have an 8.5-million-tonne-a-year throughput, doubling to 17-million tonnes a year in the fifth year of operations, with the investment of a further A$195-million.

Over its 42-year mine life, Thunderbird 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.

McFadzean said that Sheffield was continuing negotiations to sign further offtake agreements with parties that have already executed nonbinding memorandums of understanding. These collectively account for an estimated 70% of zircon, 45% of zircon concentrate and 45% of ilmenite products from the Stage 1 Thunderbird operation.