Notes to the Consolidated Financial Statements for the year ended 30 June 2023 21. Commitments Kimberley Mineral Sands Pty Ltd Joint Venture YGH Australia Investment Pty Ltd (Yansteel) entered into a 50:50 joint venture with Sheffield to own and develop the Thunderbird project in 2021. The ownership of the high-grade mineral sands Thunderbird project was previously held by Sheffield through its 100% owned subsidiary Kimberley Mineral Sands Pty Ltd (KMS) prior to the formation of the joint venture. The project is located in north-west Western Australia. As per the terms of the agreement, Yansteel subscribed for a 50% interest in KMS and provided $130.1 million in project equity funding. KMS became jointly owned by Sheffield and Yansteel as at 12 March 2021 following completion of the joint venture transaction. Since that date, Sheffield’s interest in KMS is accounted for using the equity method in the consolidated financial statements. Please refer to Note 8 for additional information. KMS reported exploration commitments of $1.72m for 2023 (2022: $1.53m). KMS also has the following capital commitments relating to Thunderbird Operations Pty Ltd: – $0.4m annual support payment; and – $1.0m payable within 20 days of the commencement of production of the Thunderbird project. KMS has no contingent liabilities as at 30 June 2023 (2022: nil). These liabilities relate to contractual payments due to pending successful project construction and testing activities for the Thunderbird project. South Atlantic Project On 28 February 2023, Sheffield executed a binding investment agreement (RGM Option Agreement) with Mineração Santa Elina Indústria e Comércio S/A. and Kromus Xi Fundo De Investimento Em Participações, owners of Rio Grande Mineração S/A (RGM). Sheffield was to provide US$2.5m to fund project related activities over an 18-month period and earn an option to acquire up to 20% of RGM with the payment of a further US$12.5m (US$15.0m in total) to acquire a 20% interest. Should Sheffield elect to exercise the option, subject to various conditions being satisfied, including project financing being obtained and all funds required for project construction being secured, Sheffield may exercise a further option to increase its interest in RGM up to 80%. Please refer to ASX announcement on 28 February 2023 for further details. An initial part contribution of US$1.0m (A$1.5m equivalent) was remitted to RGM during the year. 22. Contingent liabilities The Group has no other contingent liabilities as at 30 June 2023 (2022: nil). 23. Events subsequent to reporting period There has been no additional matter or circumstance that has arisen after balance date that has significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of affairs of the Group in future financial periods. 58 Sheffield Resources Limited Annual Report 2023
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