Sheffield Resources welcomes FIRB decision on US$130 million Thunderbird investment

Sheffield Resources Ltd’s (ASX:SFX) proposed joint venture partner YGH Australia Investment Pty Ltd (Yansteel) has received a favourable Foreign Investment Review Board (FIRB) outcome for its planned $130 million investment to acquire 50% of the Thunderbird Mineral Sands Project in Western Australia. The favourable outcome from the FIRB process represents a critical milestone for the formation of a joint venture with Yansteel and ultimately for the development of Thunderbird. This FIRB decision was subject to minor and customary conditions, agreed between the parties. Both parties are targeting finalisation of a formal JV agreement over the coming weeks. After this, a final bankable feasibility study is expected to be completed ahead of concluding project finance arrangements before an expected final investment decision (FID) during 2021. Development of project Sheffield Resources’ managing director Bruce McFadzean said: “The advice from FIRB is a positive step forward for Yansteel, Sheffield and the development of the Thunderbird Mineral Sands Project. “It is a significant event for shareholders and the Kimberley community, demonstrating State and Federal government support for continued investment in the local resources sector.” Thunderbird joint venture In August 2020 Sheffield and Yansteel executed a non-binding term sheet for the formation of a 50:50 JV to own and develop the Thunderbird project and adjacent tenements on the Dampier Peninsula. Under the terms of the agreement, Yansteel will subscribe for a 50% interest in the joint venture and provide $130.1 million in project equity funding. Sheffield will fund any project equity shortfall between $130.1 million and $143 million, less project costs incurred prior to an FID. The joint venture will secure project finance and, if required, project equity in excess of $143 million will be funded 50:50 by Yansteel and Sheffield. Formation of the joint venture is subject to final regulatory approvals and with the FIRB process completing on December 15, 2020, no other regulatory approvals are required. Yansteel offtake agreement Both companies have entered into a binding life of mine take or pay offtake agreement for 100% of the LTR ilmenite from stage 1 at market price and Yansteel having a first right of refusal to purchase ilmenite from later stages. Yansteel is a wholly-owned subsidiary of Tangshan Yanshan Iron & Steel Co Ltd, a privately-owned steel manufacturer headquartered in Hebei, China, annually producing about 10 million tonnes of steel products and with annual revenues of A$6 billion.