ANNUAL REPORT 2024
Contents b Sheffield Resources Limited Annual Report 2024 2 Chair’s Letter 4 Review of Operations 14 B oard of Directors and Company Secretary 17 Ore Reserves and Mineral Resources 21 Directors’ Report 38 Auditor’s Independence Declaration 40 Consolidated Statement of Profit or Loss and Other Comprehensive Income 41 Consolidated Statement of Financial Position 42 Consolidated Statement of Changes in Equity 43 Consolidated Statement of Cash Flows 44 Notes to the Consolidated Financial Statements 72 Consolidated Entity Disclosure Statement 73 Directors’ Declaration 74 Independent Auditor’s Report 78 Shareholder Information 80 Tenement Schedule 81 Corporate Directory
Sheffield Resources is focused on the operation of the flagship Thunderbird Mineral Sands Mine, one of the world’s largest zircon-rich mineral sands deposits. 1 CONTENTS FINANCIAL STATEMENTS YEAR IN REVIEW DIRECTORS’ REPORT CORPORATE DIRECTORY SHAREHOLDER INFORMATION Sheffield Resources Limited Annual Report 2024
2 Sheffield Resources Limited Annual Report 2024 Chair’s Letter Dear Shareholders, The 2024 financial year delivered a significant achievement that very few junior resource companies are able to achieve, following the delivery of first production at the Thunderbird Mineral Sands Mine in October 2023. Transitioning to a producer is a tremendous milestone for Sheffield Resources Limited. The Thunderbird Mineral Sands Mine is a long life and outstanding world class mineral sands mine, and we look forward to further success in 2025 as production grows toward nameplate capacity. Construction activities at Thunderbird were finalised in late 2023 on time and budget. Importantly this was achieved safely with over 1 million hours of work completed during the construction phase lost time injury free; an outstanding achievement by our construction team and all contractors involved with the construction program. Pleasingly this strong safety performance has continued into operations with over 500,000 hours of work completed lost time injury free since operations commenced in October 2023. Delivery of the Thunderbird mine into production within our original $484 million funding envelope was a significant achievement, particularly given the backdrop of inflationary pressures and economic headwinds experienced globally throughout the financial year. Commissioning activities commenced in mid-2023, with waste stripping and movement ahead of planned initial mining activities. First ore production occurred in October 2023, ahead of schedule, with management and control of the processing plant transferred to the Kimberley Mineral Sands operations team by EPC contractor GR Engineering Services. The maiden shipment of Thunderbird products to customers was completed in January 2024, with the first bulk shipment departing from the Port of Broome in March 2024. Year in Review I am pleased to present to you the 2024 Annual Report for Sheffield Resources. It has been an exciting and successful year for your Company.
3 Sheffield Resources Limited Annual Report 2024 CONTENTS FINANCIAL STATEMENTS YEAR IN REVIEW DIRECTORS’ REPORT CORPORATE DIRECTORY SHAREHOLDER INFORMATION Maintaining our commitment to employ as many local people as possible and maintaining a large proportion of the permanent residential workforce and their families based in the West Kimberley is a core focus for Kimberley Mineral Sands. This approach ensures that as much economic benefit as possible is retained in the region, through increased spend and population growth which contribute both economic and social benefits. During the 2024 financial year, Kimberley Mineral Sands recruited 108 people, with a total direct workforce of 119 employees. As of 30 June 2024, 83% of the direct workforce are permanent residents of Broome, Derby and surrounding West Kimberley communities, reflecting the commitment to a locally based workforce. Kimberley Mineral Sands proudly employs a workforce comprising 30% Aboriginal employees within its direct workforce, 29% female representation, and with 95% of staff employed on a full-time basis. While our initial ramp up of mining performance during the 2024 financial year met or exceeded expectations, higher oversize content than that expected and incorporated into the Dry Mining Unit (DMU) design constrained plant feed and throughput. Mining costs were also higher than expected due to lower waste mining productivity, greater ore pre-conditioning and DMU maintenance requirements, and initial low ore mining productivity and DMU availability. However, the final quarter of the financial year saw significant DMU productivity improvements following modification. The June 2024 quarter performance of 2.5 million tonnes, with the process plant performing at or above design provides a solid platform for the September 2024 quarter onwards, with mine production expected to be sustained at 2.5 – 3.0Mt of ore mined per quarter. Looking ahead to 2025, the focus of the Thunderbird team will be upon initiatives to increase production and shipping, implement operational improvements and efficiencies and commence loan repayments at the end of the 2025 financial year. We have a common goal to ensure that strong financial management takes place as we transition into a sustainable mineral sands business generating cash flows for shareholders over several decades. In addition to our investment in Kimberley Mineral Sands, we completed a US$2.5m investment in the South Atlantic Project in Brazil and also made an investment in Capital Metals Plc, the owner of the Eastern Minerals Project in Sri Lanka. The South Atlantic funding supported a 10,000m exploration drilling program alongside a pre-feasibility study with third party consultants, Hatch. We expect that the timeframe to conclude licencing and regulatory approvals in Brazil will extend beyond timeframes previously anticipated, and funds contributed to date should be sufficient to deliver the work program well into 2025. Your company has $10m in cash commencing the 2025 financial year. With the Thunderbird mine ramping up production, we expect the next year will see your Company achieve sustained mineral sands production, consistent with design objectives. I would like to thank my fellow Directors, our employees, the Kimberley Mineral Sands team and their contractors, our joint venture partner Yansteel, along with our financiers NAIF and Orion for their efforts and support in achieving pivotal construction and operational milestones for Sheffield throughout this year. In closing, I sincerely thank Sheffield’s shareholders for your ongoing support as we look forward to growing production at Thunderbird across the forthcoming year. Bruce Griffin Executive Chair
4 Sheffield Resources Limited Annual Report 2024 Kimberley Mineral Sands (KMS) During the reporting period, through its 50% interest in Kimberley Mineral Sands Pty Ltd (KMS), Sheffield Resources Limited (Sheffield, the Company or the Group) completed construction of the Thunderbird Mineral Sands Mine (Thunderbird) in the Kimberley region of Western Australia, bringing into operation a significant long life asset for the region. KMS is a 50/50 joint venture between Sheffield and YGH Australia Investment Pty Ltd (Yansteel). Yansteel is a wholly-owned subsidiary of Tangshan Yanshan Iron & Steel Co. Ltd, a privately owned steel manufacturer headquartered in Hebei, China producing approximately 10mt per annum of steel products. Thunderbird is one of the largest and highest-grade zircon mineral sands deposits in the world and contains valuable minerals including ilmenite, zircon and leucoxene, which are extracted and exported as concentrates via the Port of Broome to global offtake partners. Construction activities at Thunderbird were completed during 2023, ahead of schedule and within budget. Given the backdrop of inflationary pressures and economic headwinds globally experienced throughout the period of construction, delivery of Thunderbird into production within the original $484 million funding envelope was a tremendous achievement. With Thunderbird construction complete, KMS has moved to transition from a developer to a mineral sands producer. Commissioning activities commenced in mid-2023, with waste stripping and movement ahead of planned initial mining activities. First ore production occurred in October 2023, ahead of schedule, with management and control of the processing plant transferred to the KMS team by EPC contractor GR Engineering Services. The maiden shipment of Thunderbird products to customers was completed in January 2024, with the first bulk shipment departing Broome in March 2024. Health and Safety A safe working environment and culture for all employees and contractors is paramount within the KMS operating environment. Reflecting the commitment to fostering a robust safety culture during the transition from construction to operations, one restricted work injury was recorded during the 2024 financial year, with no lost time injuries occurring. The construction phase of Thunderbird was completed with over a million hours worked lost time injury free and over 500,000 hours have been worked injury free since operations commenced in October 2023. Review of Operations Figure 1: Thunderbird Process Plant
5 Sheffield Resources Limited Annual Report 2024 CONTENTS FINANCIAL STATEMENTS YEAR IN REVIEW DIRECTORS’ REPORT CORPORATE DIRECTORY SHAREHOLDER INFORMATION Figure 2: Groundwater monitoring being carried out by an Environmental Advisor KMS safety performance metrics for the Thunderbird mine is outlined below: Environmental, Social and Governance (ESG) KMS actively manages heritage, conservation, environmental and rehabilitation activities for the protection of the natural environment and the improvement of relevant biodiversity across the lifecycle of the business. Furthermore, KMS actively supports the pursuit of the United Nations Sustainable Development Goals (SDGs). This includes adherence to climate reporting mandates for KMS from 1 July 2025. KMS upholds stringent control measures on-site to safeguard the workplace environment and preserve the natural landscape. Compliance commitments include tracking and reporting the volume of waste managed, greenhouse gas (GHG) emissions and aquifer and groundwater abstraction. Active planning and effort is made to minimise the environmental footprint and promote recycling, reuse, and circularity practices wherever possible. Sheffield recognises the growing pressure and competition for environmental resources such as land, water and air, which are amplified by the effects of climate change. KMS operates Thunderbird with a clear understanding that the performance and management of these environmental impacts are critical to all operations in the mining sector. There were no environmental non-compliance or incidents during the year. KMS has moved to investigate further risk mitigation in terms of currently permitted tailings disposal and reducing any detrimental environmental deposition into the environment. 544,660 Operations Hours Worked 1 Restricted Work Injury Restricted Work Injury Frequency Rate Zero Lost Time Injuries 1.83
6 Sheffield Resources Limited Annual Report 2024 KMS is committed to supporting local and Aboriginal businesses. A permanent Kimberley based residential workforce, contracting with local businesses, including contracts awarded to Traditional Owners and other Aboriginal owned businesses all form part of the KMS operating environment. Key contracts including waste mining, tailings storage facility construction and maintenance, road maintenance and staff transport have been awarded to local and Aboriginal owned businesses. KMS proudly supported a number of community and local business events during the year, including local careers expos, the Derby Boab Festival, the Kimberley Economic Forum, the Broome Chamber of Commerce and Industry’s Women’s Leadership amongst other forums. Throughout the financial year, KMS has continued to strengthen relationships with the Joombarnburu and Walalakoo Aboriginal Corporations, representing Traditional Owners. This has included engagement following the discovery of Aboriginal cultural artefacts in the mine area which led to a partial suspension of Thunderbird’s Section 18 approval under the Aboriginal Heritage Act 1972. The matter is currently before the Minister for Aboriginal Affairs for consideration. Review of Operations During the 2024 financial year, KMS recruited 108 people, with a total direct workforce of 119 employees. As at 30 June 2024, 83% of the direct workforce are permanent residents of Broome, Derby and surrounding West Kimberley communities, reflecting the commitment to a locally based workforce. KMS is proud to have 30% Aboriginal employment within its direct workforce, 29% female representation, and with 95% of staff employed on a full-time basis. Female Male
7 Sheffield Resources Limited Annual Report 2024 CONTENTS FINANCIAL STATEMENTS YEAR IN REVIEW DIRECTORS’ REPORT CORPORATE DIRECTORY SHAREHOLDER INFORMATION Figure 3: Thunderbird Process Plant Thunderbird Operational and Financial Performance The construction phase of Thunderbird was completed on time and on budget. Following the successful first ore feed through the Dry Mining Unit (DMU) and Process Plant during the commissioning phase in October 2023, an initial shipment of packaged product was exported ahead of schedule in January 2024, followed by inaugural bulk exports of both ilmenite and zircon concentrate from the Port of Broome in March 2024. Mining operations commenced in mid-2023 with the first ore delivered to the plant in October 2023. Mining production totalled 4.3 million tonnes during the financial year, with 1.5 million bcm of waste stripping completed during the year. While initial ramp up of mining performance during the 2024 financial year met or exceeded expectations, higher oversize content than that expected and incorporated into the DMU design constrained plant feed and throughput. Mining costs were also higher than expected due to lower waste mining productivity, greater ore pre-conditioning and DMU maintenance requirements, and initial low ore mining productivity and DMU availability. However, the final quarter of the financial year saw significant DMU productivity improvements following modification. The June 2024 quarter performance of 2.5 million tonnes, with the process plant performing at or above design provides a solid platform for the September 2024 quarter onwards, with mine production expected to be sustained at 2.5 – 3.0Mt of ore mined per quarter. Total tonnes produced was 301,075 tonnes at a Rougher head Feed (RHF) grade of 22.9%. The lower than planned mine productivity was partially offset by the higher Wet Concentrator Plant recoveries. Product sales revenue at Thunderbird for the financial year was $72.0 million for a total 193,418 dry metric tonnes sold. The Company has multiple zircon concentrate offtake agreements with overseas partners. The agreements represent approximately 75% of planned zircon concentrate production. The remaining 25% of planned zircon concentrate production will be sold under a similar pricing mechanism as the contracted sales. KMS also has a binding life of mine offtake agreement for all ilmenite concentrate with its joint venture partner Yansteel. Under this agreement, the price KMS receives
8 Sheffield Resources Limited Annual Report 2024 per TiO2 % for its ilmenite concentrate is fixed for the first five years of the contract (expected average price of US$123/t over the 5 year fixed period), based on a sliding scale of TiO2 content less penalties depending on the level of SiO2 and moisture. Leucoxene concentrate remains uncontracted at this point in time, with KMS intending to sell this material on a spot basis subject to prevailing market conditions. Review of Operations Global sulfate ilmenite prices remained consistent at approximately $300 per tonne FOB throughout the 2024 financial year, well above long term forecasts. Sulfate ilmenite prices are expected to soften slightly during 2024 below $300 per tonne, partially influenced by pricing decline of other titanium feedstocks. High-grade pigment feedstock demand for production of chloride grade pigment is forecast to grow over the long term, and chloride slag (produced from sulfate ilmenite) is the most likely source of new supply. The trend towards China importing and processing concentrates to supply zircon and titanium feedstocks continued throughout 2024 and is expected to continue into the future. KMS Outlook Looking ahead to the 2025 financial year, the focus for KMS and Thunderbird will be in the following areas: – initiatives to increase production and shipping, implement operational improvements and efficiencies at Thunderbird, and commence scheduled loan repayments toward the end of the 2025 financial year; – delivering value to shareholders and both economic and social benefits to our Traditional Owners and the West Kimberley through disciplined financial management, operational efficiency, and continued investment in our people, infrastructure and local community; and – strong financial management transitioning into a sustainable business generating cash flows for shareholders. Markets New zircon supply entering the market over the past year, including Thunderbird, resulted in global premium zircon prices moving below $2,000 per tonne throughout the second half of the 2024 financial year. A strong rebound in Chinese zircon demand was evidenced during early 2024 and softened by the end of the financial year, as new property sales and construction starts and completions remain softer than recent years. Beyond 2026, the medium term market outlook for zircon continues to indicate an emerging supply deficit as mature operators representing >50% of the market forecast flat or declining production and some large mines close before the end of the decade. Table 1: Key Production Metrics 2024 FINANCIAL YEAR: KEY PRODUCTION METRICS Wet Concentrator - Rougher Head Feed (000’tonnes) 2,019 Wet Concentrator - Rougher Head Feed (HM Grade %) 22.9 Recovery (Rougher Head Feed to Final Concentrate): TiO2 to Ilmenite (%) 57 Recovery (Rougher Head Feed to Final Concentrate): ZrO2 to Zircon (%) 64 Recovery (Rougher Head Feed to Final Concentrate): CeO2 to Leucoxene (%) 12 Production – Ilmenite (tonnes) 220,245 Production – Zircon (tonnes) 59,741 Production – Leucoxene (tonnes) 21,089 Sales – Ilmenite (tonnes) 149,628 Sales – Zircon (tonnes) 43,790
9 Sheffield Resources Limited Annual Report 2024 CONTENTS FINANCIAL STATEMENTS YEAR IN REVIEW DIRECTORS’ REPORT CORPORATE DIRECTORY SHAREHOLDER INFORMATION KMS Environmental Regulation KMS is subject to various environmental regulations in respect to its exploration, development and production activities. In the course of its normal mining and exploration activities, KMS adheres to all environmental regulations imposed upon it by the relevant regulatory authorities, particularly those regulations relating to ground disturbance and the protection of rare and endangered flora and fauna. KMS Greenhouse Gas and Energy Data Reporting Requirements KMS have considered compliance with the National Greenhouse and Energy Reporting Act 2007 (Cth) which requires entities to report annual greenhouse gas emissions and energy use in Australia. For the measurement period, KMS has assessed that there are no current reporting requirements but may be required to do so in the future. External Factors and Risks Affecting the Company’s Results Sheffield operates in an uncertain economic environment, but these uncertainties are minimised through the application of a rigorous risk management framework and clearly defined risk appetite, defined by the Board. Consequently, the Board and management monitor these uncertainties and, where possible, mitigate the associated risk of adverse outcomes. The following external factors are all capable of having a material adverse effect on the Sheffield business and may affect the prospects of business units, including the Thunderbird mine, for future financial years. Exposure to Economic, Environment and Social Risks Sheffield has material exposure to economic, environmental and social risks, including changes in community expectations, and environmental, social and governance legislation (including, for example, those matters related to climate change). At the Thunderbird mine, reasonable steps are taken via the employment of suitably qualified personnel to assist with the management of its exposure to these risks. During the operation of the Thunderbird mine, KMS must comply and remain compliant with its Mining License conditions and Australian Mining Codes in order to retain prospecting and mining rights. Any failure to satisfy these requirements could jeopardise any prospecting or mining rights held and impede the ability to acquire, develop or maintain any additional prospecting and mining rights, all of which could have a material adverse effect on the Sheffield and KMS business, results of operations, financial condition, cash flows and/or prospects. Risks related to mining operational activities Thunderbird’s operations comprise mining and development with a primary focus on the development of high-grade deposits within the mineral sands sector. Operations generally involve a high degree of risk and are subject to all the hazards and risks normally encountered in the mining and development of mineral deposits. These include unstable ground conditions, adverse weather conditions, flooding and other conditions involved in the drilling and removal of material, any of which could result in damage to, or destruction of, mines and other producing facilities, damage to life or property, environmental damage and possible legal liability. Although adequate precautions to minimize risks are, and will continue to be, taken, Thunderbird’s operations are subject to risks which may result in environmental pollution and possible liability. Figure 4: Environmental monitoring and rehabilitation activities
10 Sheffield Resources Limited Annual Report 2024 Review of Operations Thunderbird is an established mining operation with continuing development. Expenditures made or further drilling results are no guarantee for further developments or discoveries of profitable commercial mining operations. Lack of availability of drilling rigs could cause increased project expenditures and/or project delays. Heavy mineral operational development of Thunderbird involves significant risks to develop metallurgical processes and to construct mining and processing facilities. Although adequate precautions to minimize risks are, and will continue to be, taken, Thunderbird is subject to risks which may result in delays or potential performance below expectations. Sheffield, through its interests, may be affected by various factors, including failure to locate or identify mineral deposits, failure to achieve predicted grades in exploration and mining, operational and technical difficulties encountered in mining, insufficient or unreliable infrastructure such as power, water and transport, difficulties in commissioning and operating plant and equipment, mechanical failure or plant breakdown, unanticipated metallurgical problems which may affect extraction costs, adverse weather conditions, industrial and environmental accidents, industrial disputes and unexpected shortages or increases in the costs of consumables, spare parts, plant and equipment. In the event that any of these potential risks occur, Sheffield’s operational and financial performance may be adversely affected. Processing Risks Processing of ore takes place at the Thunderbird mine site and the processing is subject to interruption risk, equipment failure, ore variability, labour risk and other risks associated with mineral extraction and processing. The outcome of this has the potential to materially affect Sheffield results and profitability. Access to Export Infrastructure KMS exports products through the Port of Broome, which is not owned or operated by KMS, and experiences significantly higher activity in the dry season as cruise ships and livestock vessels increase their berthing frequency. This port has limited capacity and is not always available for timely export of available inventory, which affects timing of operating cash inflows. Oversize Material A significantly higher percentage of oversize material (>12mm) is rejected at the DMU than was initially modelled and predicted. A consequence of the increased oversize material is a potential displacement of heavy-mineralbearing sand and potential increased operating cost per tonne of ore produced or potential decrease in Ore Reserves. Any expected impact is currently unknown and under review. Exploration Risk The exploration for and development of mineral deposits involves significant risks which even careful evaluation, experience and knowledge may not eliminate. While the discovery of minerals may result in substantial rewards, few properties which are explored are ultimately developed into producing mines. Major expense may be incurred to locate and establish mineral reserves, to develop metallurgical processes and to construct mining and processing facilities at a particular site. It is not possible to ensure that the exploration or development programs planned by Sheffield will result in a profitable commercial mining operation. Figure 5: Thunderbird Yarning Circle ‘Birr Wunju Nganka’
Figure 6: Mining operations at Thunderbird 11 Sheffield Resources Limited Annual Report 2024 CONTENTS FINANCIAL STATEMENTS YEAR IN REVIEW DIRECTORS’ REPORT CORPORATE DIRECTORY SHAREHOLDER INFORMATION Whether a mineral deposit will be commercially viable depends on a number of factors, some of which are: the particular attributes of the deposit, such as size, grade and proximity to infrastructure, commodity prices which are highly cyclical, government regulations, including regulations relating to prices, taxes, royalties, land tenure, land use, importing and exporting of minerals and environmental protection. The exact effect of these factors cannot be accurately predicted, but the combination of these factors may result in Sheffield not receiving an adequate return on invested capital. If any adverse event relating to exploration, mining and/ or development should occur, then it could have a material adverse effect on the Sheffield business, financial condition, results of operations, cash flows and/or prospects. Risk of Inaccurate Estimates There is considerable uncertainty inherent in estimating the size and value of Mineral Resources and Ore Reserves. The techniques are subjective and an inexact process where the estimation of the accumulation of Mineral Resources and Ore Reserves cannot be accurately measured. To evaluate the recoverable mineral volumes, a number of geological, geophysical, technical and production data must be evaluated. The evaluation conducted in relation to the mineral sands operations may later prove to be inaccurate, and there is a real risk that estimated Mineral Resources and Ore Reserves may be adjusted downward. For example, mineral sands mined may be of a different quality, tonnage or strip ratio from the estimates. Mineral Resource estimates are necessarily imprecise and depend to some extent upon interpretations, which may ultimately prove to be inaccurate and require adjustment. Adjustment to the estimates of Mineral Resources and Ore Reserves could affect development and mining plans, which could have a materially adverse effect on the Sheffield business, financial condition, results of operations, cash flows and/or prospects. Risk of Uninsured Losses Sheffield is exposed to a number of risks and hazards generally, including adverse environmental conditions, industrial accidents, unusual or unexpected geological conditions, contamination, changes in the regulatory environment and natural phenomena such as inclement weather conditions or floods.
12 Sheffield Resources Limited Annual Report 2024 Review of Operations Such occurrences could have a material adverse effect on the Sheffield business, operating result or financial condition. At Thunderbird, KMS holds comprehensive property and equipment insurance, as well as business interruption insurance to protect against certain risks in such amounts as it considers reasonable. Insurance may not cover all the potential risks associated with the Company’s operations. Contractual Risks The ability to efficiently conduct Sheffield business in several respects depends upon third party product and service providers and contracts. Accordingly, in some circumstances, contractual arrangements have been entered into by KMS. As in any contractual relationship, the ability for KMS to ultimately receive benefits from these contracts is dependent upon the relevant third party complying with its contractual obligations. To the extent that such third parties default in their obligations, it may be necessary for KMS to enforce its rights under any of the contracts and pursue legal action. Such legal action may be costly, and no guarantee can be given by KMS or Sheffield that a legal remedy will ultimately be granted on appropriate terms. Additionally, some existing contractual arrangements that have been entered into by Sheffield and its subsidiaries may be subject to the consent of third parties being obtained to enable controlled entities to carry on all of its planned business and other activities and to obtain full contractual benefits. No assurance can be given that any such required consent will be forthcoming. Failure by Sheffield to obtain such consent may result in Sheffield not being able to carry on all of its planned business and other activities or proceed with its rights under any of the relevant contracts requiring such consent. Commodity Prices The prices that KMS obtains for its products are a key driver of business performance, and fluctuations in these markets affects its results, including cash flows and shareholder returns. 2024 financial year operating cash flows were sourced from the sale of materials from Thunderbird. Each of these commodities are priced contractually or by external markets and, as Sheffield or KMS are not a price maker with respect to the materials available for sale, it is susceptible to adverse price movements. Interest Rates Interest rate movements affect both returns on funds on deposit as well as the cost of borrowings. Interest rate risk may be hedged in certain circumstances, however, no interest rate hedging occurred during the past year. Currency Exchange Rates The functional currency of KMS and Sheffield is Australian Dollars (AUD). KMS cash inflows are in United States dollars (USD), which is the currency of denominated material sales and inflows may therefore be subject to fluctuations in the exchange rate with respect to sales or ad hoc expenditures in currencies that are not AUD. Both KMS and Sheffield did not enter into any currency exchange hedging during the past year.
13 Sheffield Resources Limited Annual Report 2024 CONTENTS FINANCIAL STATEMENTS YEAR IN REVIEW DIRECTORS’ REPORT CORPORATE DIRECTORY SHAREHOLDER INFORMATION SOUTH ATLANTIC PROJECT In early 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, current owners of Rio Grande Mineração S/A (RGM), providing Sheffield with an option to acquire a 20% interest in RGM, the 100% owner of the South Atlantic Project in Brazil, via an initial option contribution of US$2.5m, with further staged payments totalling US$12.5m based upon the achievement of key milestones. Subject to various other conditions being satisfied, Sheffield may increase its interest in RGM up to 80% (refer ASX announcement dated 28 February 2023 for further details). The South Atlantic Project is located within the Rio Grande do Sul Coastal Plain, a region located in the southernmost state of Brazil, Rio Grande do Sul, along the coast of the Atlantic Ocean. All tenements are held by RGM. As at the end of the financial year, Sheffield had contributed a total of US$2.5m, with funding applied toward a 10,000m exploration drilling program which is scheduled to be completed during 2024, and funding also applied toward the commencement of a pre-feasibility study by third party consultancy, Hatch. In September 2024, the parties agreed to amend the terms of the RGM Option Agreement, with the initial option period extended by a further 12 months through to August 2025 and providing Sheffield with the opportunity to contribute a further investment of US$1.5m to fund project related activities. Including the US$2.5m contributed to the end of 30 June 2024, the total contribution of US$4m to the end of August 2025 grants Sheffield the option to acquire an interest of up to 20% in RGM, which may be exercised via the further investment totaling US$11m (US$15.0m in total). Sheffield expects that the timeframe to conclude licencing and regulatory approvals processes for the South Atlantic Project will extend beyond timeframes previously anticipated, with any material contribution by the Company to acquire a 20% interest in RGM likely to be deployed over an extended time period. Sheffield will continue to provide stakeholders with relevant updates to the proposed RGM work program going forward. CAPITAL METALS PLC During the 2024 financial year, Sheffield announced it has entered into a share subscription agreement with Capital Metals Plc (AIM: CMET), the owner of the Eastern Minerals Project in Sri Lanka, with Sheffield acquiring a 10% interest in CMET. Please refer to ASX announcement dated 18 March 2024 for further details. Sheffield looks forward to CMET advancing the future development of the Eastern Minerals Project in Sri Lanka. Figure 7: South Atlantic Project – prospects, including Retiro and Bujuru Exploration Targets
14 Sheffield Resources Limited Annual Report 2024 Ian Macliver Non-Executive Director BCom Appointed 1 August 2019 Experience Ian Macliver is the Chairman Grange Capital Partners. Prior to establishing Grange, he held positions in various listed and corporate advisory companies. His experience covers all areas of corporate activity including capital raisings, acquisitions, divestments, takeovers, business and strategic planning, debt and equity reconstructions. Mr Macliver was previously the Non-Executive Chair of MMA Offshore Limited, and is Alternate Director of Wright Prospecting Pty Ltd. Responsibilities Member of the Board Chair of the Audit & Risk Committee Member of the Remuneration & Nomination Committee Interest in shares, options and rights 107,142 ordinary shares Other current directorships Wright Prospecting Pty Ltd (appointed Alternate Director December 2022) Past directorships last 3 years Western Areas Limited (resigned June 2022) MMA Offshore Limited (resigned 24 July 2024) John Richards Lead Independent Director B. Econ (Hons) Appointed 1 August 2019 (Previously Non-Executive Chair, appointed Lead Independent Director 13 April 2021) Experience Mr Richards is an economist with more than 35 years’ experience in the resources industry; holding various positions within mining companies, investment banks and private equity groups. He has been involved in a wide range of mining M&A transaction in multiple jurisdictions. Mr Richards is an Independent NonExecutive Director; holding previous positions at Normandy Mining Ltd, Standard Bank, Buka Minerals and Global Natural Resource Investments; he is a Non-Executive Chair of Sandfire Resources Limited. Responsibilities Member of the Board Chair of the Remuneration & Nomination Committee Member of the Audit & Risk Committee Interest in shares, options and rights 400,000 ordinary shares Other current directorships Sandfire Resources Limited (appointed 1 January 2021) Past directorships last 3 years Northern Star Resources Limited (resigned 31 July 2024) Bruce Griffin Executive Chair B.Ch.Eng, B.A.Econ, MBA Appointed 10 June 2020 (Previously Commercial Director, appointed Executive Chair 13 April 2021) Experience Mr Griffin most recently held the position of Senior Vice President Strategic Development of Lomon Billions Group, the world’s third largest producer of high-quality titanium dioxide pigments. Bruce previously held executive management positions in several resource companies, including acting as the Chief Executive Officer and a director of TZ Minerals International Pty. Ltd. (TZMI), the leading independent consultant on the global mineral sands industry, Chief Executive Officer and a director of World Titanium Resources Ltd, a development stage titanium project in Africa and as Vice President Titanium for BHP Billiton. Responsibilities Member of the Board Interest in shares, options and rights 2,149,601 ordinary shares 629,120 options Other current directorships CVW CleanTech Inc. (since 2019) Mawson Gold Limited (appointed 13 February 2023) Savannah Resources Plc (appointed 12 September 2023) Capital Metals Plc (appointed 2 April 2024) Past directorships last 3 years None Board of Directors and Company Secretary The Directors and Company Secretary of the Company during and until the date of this report are:
15 Sheffield Resources Limited Annual Report 2024 CONTENTS FINANCIAL STATEMENTS YEAR IN REVIEW DIRECTORS’ REPORT CORPORATE DIRECTORY SHAREHOLDER INFORMATION Mark Di Silvio Company Secretary B.Bus, CPA, MBA, GAICD Appointed 15 February 2016 Experience Mark Di Silvio is a CPA and MBA qualified finance professional with over 30 years’ resources industry experience. Mr Di Silvio’s professional career includes operations and project development experience both in Australia and overseas, including senior finance roles with Woodside Petroleum Limited in Australia and Africa prior to joining Central Petroleum Limited and Centamin Plc as CFO. Mr Di Silvio has significant commercial and financial management experience including project financing, commercial agreement structuring and product offtake agreements. Vanessa Kickett Non-Executive Director Appointed 1 January 2022 Experience Vanessa Kickett has extensive experience and involvement with Aboriginal engagement, native title and heritage matters throughout Western Australia. A member of the Whadjuk Noongar community, Mrs Kickett is currently Deputy Chief Executive Officer of the South West Aboriginal Land and Sea Council, responsible for the recent implementation and operation of the South West (Western Australia) native title settlement. Mrs Kickett has also held a variety of roles in the public sector, leading the development of heritage and native title policy and frameworks on behalf of Water Corporation in Western Australia. Responsibilities Member of the Board Member of the Remuneration & Nomination Committee Interest in shares, options and rights 480,000 options Other current directorships None Past directorships last 3 years None Gordon Cowe Non-Executive Director BSc (Hons) Mechanical Engineering, GAICD Appointed 12 March 2021 Experience Gordon Cowe is a qualified mechanical engineer with over 30 years’ experience, Mr Cowe has had significant involvement in leading business start-up, planning and delivery of multiple complex projects including Mining & Mineral Processing, Oil & Gas and Resources based infrastructure projects globally. He has enjoyed an extensive career with leading contractors (including Bechtel and Worley Parsons) and project owners on a wide range of projects. Responsibilities Member of the Board Member of the Audit & Risk Committee Interest in shares, options and rights 480,000 options Other current directorships None Past directorships last 3 years None
16 Sheffield Resources Limited Annual Report 2024
CONTENTS FINANCIAL STATEMENTS YEAR IN REVIEW DIRECTORS’ REPORT CORPORATE DIRECTORY SHAREHOLDER INFORMATION Ore Reserve for Dampier Project held by Kimberley Mineral Sands Pty Ltd as at 30 June 2024 (Sheffield interest – 50%) Dampier Project Ore Reserve1,2 Valuable HM Grade (In-situ) Deposit Ore Reserve Category Ore Tonnes (millions) HM Grade (%) Zircon (%) HiTi Leuc (%) Leuc (%) Ilmenite (%) Oversize (%) Slimes (%) Thunderbird Proved 235 12.9 0.95 0.29 0.28 3.4 13 16 Probable 515 10.1 0.78 0.26 0.27 2.9 11 15 Total 750 11.0 0.84 0.27 0.27 3.0 11 15 Mineral Assemblage Deposit Ore Reserve Category Ore Tonnes (millions) HM Grade (%) Zircon (%) HiTi Leuc (%) Leuc (%) Ilmenite (%) Oversize (%) Slimes (%) Thunderbird Proved 235 12.9 7.4 2.2 2.2 27 13 16 Probable 515 10.1 7.8 2.6 2.6 28 11 15 Total 750 11.0 7.7 2.4 2.5 28 11 15 Ore Reserve for Dampier Project held by Kimberley Mineral Sands Pty Ltd as at 30 June 2023 (Sheffield interest – 50%) Dampier Project Ore Reserve1,2 Valuable HM Grade (In-situ) Deposit Ore Reserve Category Ore Tonnes (millions) HM Grade (%) Zircon (%) HiTi Leuc (%) Leuc (%) Ilmenite (%) Oversize (%) Slimes (%) Thunderbird Proved 239 12.9 0.96 0.29 0.28 3.4 14 16 Probable 514 10.1 0.79 0.26 0.27 2.9 11 15 Total 754 11.0 0.84 0.27 0.27 3.1 12 15 Mineral Assemblage Deposit Ore Reserve Category Ore Tonnes (millions) HM Grade (%) Zircon (%) HiTi Leuc (%) Leuc (%) Ilmenite (%) Oversize (%) Slimes (%) Thunderbird Proved 239 12.9 7.5 2.2 2.2 27 14 16 Probable 514 10.1 7.8 2.6 2.6 28 11 15 Total 754 11.0 7.7 2.4 2.5 28 12 15 The 30 June 2024 estimates have been rounded to 5Mt for ore tonnes, 0.1% for HM and 2 significant figures for oversize, slimes, zircon, HiTi, leucoxene and ilmenite. Valuable Mineral Assemblage is expressed both as % in ore and % in HM. Ore Reserves are reported as material within pit designs but limited to below a top-of-ore surface generated from consideration of the optimisation value modelling, discard strategy and current geological domain interpretation. Note 1: Tonnages and grades are rounded to reflect the relative uncertainty of the estimate, thus the sum of columns may not equal. Note 2: HM is within the 38µm to 1mm size fraction and reported as a percentage of the total material, slimes is the -38µm fraction and oversize is the +1mm fraction. The Ore Reserve estimate was prepared by Entech Pty Ltd, an experienced and prominent mining engineering consultancy with appropriate mineral sands experience in accordance with the JORC Code (2012 Edition). The Ore Reserve is estimated using all available geological and relevant drill hole and assay data, including mineralogical sampling and test work on mineral recoveries and final product qualities. Measured and Indicated Mineral Resources were converted to Proved and Probable Ore Reserves respectively, subject to mine design, modifying factors and economic evaluation. The Company is not aware of any new information or data that materially affects the information included in the Ore Reserve estimate. Ore Reserves and Mineral Resources 17 Sheffield Resources Limited Annual Report 2024
Changes to Ore Reserves between 30 June 2023 to 30 June 2024 Movements between 2023 and 2024 Ore Reserve estimates are due to mining depletion within the 2024 financial year. Mineral Resources for Dampier Project held by Kimberley Mineral Sands Pty Ltd as at 30 June 2024 (Sheffield interest – 50%) The Mineral Resource at Thunderbird was previously estimated and reported in accordance with the guidelines of the JORC Code (2012) in September 2023 at 3.23 billion tonnes at 6.9% total heavy mineral (HM) for 223 Mt of contained HM. The Mineral Resource estimate has been updated to include data from the 2023 grade control drilling, has been depleted for mining to 30 June 2024, and excludes areas sterilised due to Aboriginal Heritage Protection considerations. Mining is at an early stage and reconciliation studies are on-going. The Thunderbird Mineral Resource estimate at 30 June 2024 is 3.01 billion tonnes at 6.9% total HM for 207 Mt of contained HM. The Night Train Mineral Resource estimate was previously reported above a cut-off grade of 1.2% total HM (130 Mt at 3.3% total HM for 4 Mt of contained HM). Following review by Entech Pty Ltd, the Mineral Resource estimate at Night Train has been reported using a cut-off grade of 2% total HM (50 Mt at 5.9% total HM for 3 Mt of contained HM) at to reflect reasonable prospects of eventual economic extraction. The Mineral Resources of Kimberley Mineral Sands are detailed below: Dampier Project Mineral Resources1,2,3,4,5,6,7 Mineral Assemblage Deposit (cut-off) Mineral Resource Category Cut-off (THM%) Material Tonnes (millions) HM Grade (%) Zircon (%) HiTi Leuc6 (%) Leuc (%) Ilmenite (%) Slimes (%) Oversize (%) Thunderbird4,7 Measured 3.0 490 8.9 8.0 2.3 2.2 27 11 18 Indicated 3.0 2,040 6.6 8.3 2.7 3.0 28 8 15 Inferred 3.0 480 6.2 8.1 2.7 3.2 27 7 14 Total 3.0 3,010 6.9 8.2 2.6 2.9 28 9 16 Night Train Inferred 2.0 50 5.9 14 5.6 49 18 2 10 Total 2.0 50 5.9 14 5.6 49 18 2 10 All Dampier (various) Measured 3.0 490 8.9 8.0 2.3 2.2 27 12 18 Indicated 3.0 2,040 6.6 8.4 2.7 3.1 28 9 16 Inferred Various 530 6.1 8.6 2.9 7.4 27 7 14 Total Various 3,060 6.9 8.3 2.7 3.5 27 9 16 Note 1: Night Train: The Mineral Resources estimate was prepared by Optiro Pty Ltd (now Snowden Optiro) and first disclosed under the JORC Code (2012). Thunderbird: The Mineral Resource estimate was prepared by Optiro Pty Ltd (now Snowden Optiro) and first disclosed under the JORC Code (2012). The Dampier Project Mineral Resources are reported inclusive of (not additional to) Ore Reserves. Note 2: HM is within the 38µm to 1mm size fraction and reported as a percentage of the total material, slimes is the -38µm fraction and oversize is the +1mm fraction. Note 3: Tonnes and grades have been rounded to reflect the relative accuracy and confidence level of the estimate, thus the sum of columns may not equal. Note 4: Thunderbird: Estimates of Mineral Assemblage are presented as percentages of the Heavy Mineral (HM) component of the deposit, as determined by magnetic separation, QEMSCANTM and XRF. Magnetic fractions were analysed by QEMSCANTM for mineral determination as follows: Ilmenite: 40-70% TiO2 >90% Liberation; Leucoxene: 70-94% TiO2 >90% Liberation; High Titanium Leucoxene (HiTi Leucoxene): >94% TiO2 >90% Liberation; and Zircon: 66.7% ZrO2+HfO2 >90% Liberation. The non-magnetic fraction was submitted for XRF analysis and minerals determined as follows: Zircon: ZrO2+HfO2/0.667 and High Titanium Leucoxene (HiTi Leucoxene): TiO2/0.94. Note 5: Night Train: Estimates of Mineral Assemblage are presented as percentages of the Heavy Mineral (HM) component of the deposit, as determined by magnetic separation, QEMSCANTM and XRF for one of 12 composite samples. Magnetic fractions were analysed by QEMSCANTM for mineral determination as follows: Ilmenite: 40-70% TiO2 >90% Liberation; Leucoxene: 70-90% TiO2 >90% Liberation; High Titanium Leucoxene (HiTi Leucoxene) and Rutile 90% TiO2 >90% Liberation, and Zircon: 66.7% ZrO2+HfO2 >90% Liberation. The non-magnetic fraction was submitted for XRF analysis and minerals determined as follows: Zircon: ZrO2+HfO2/0.667 and High Titanium Leucoxene (HiTi Leucoxene): TiO2/0.94. HM assemblage determination- was by the QEMSCANTM process for 11 of 12 composite samples which uses observed mass and chemistry to classify particles according to their average chemistry, and then report mineral abundance by dominant % mass in particle. For the TiO2 minerals the following breakpoints were used to distinguish between Ilmenite 40% to 70% TiO2, Leucoxene 70% to 90% TiO2, High Titanium Leucoxene and Rutile > 90%, Screening of the heavy mineral was not required. Note 6: HiTi Leucoxene and Rutile (%) combined for Night Train at a >90% TiO2 (as one assemblage sample utilised=> 90% rutile and HiTi Leucoxene), HiTi Leucoxene for Thunderbird > 94% TiO2 Note 7: Mineral Resources at Thunderbird are depleted for mining to 30 June 2024. Ore Reserves and Mineral Resources continued 18 Sheffield Resources Limited Annual Report 2024
CONTENTS FINANCIAL STATEMENTS YEAR IN REVIEW DIRECTORS’ REPORT CORPORATE DIRECTORY SHAREHOLDER INFORMATION Changes to Mineral Resources between 30 June 2023 and 30 June 2024 Both the 2023 and 2024 Mineral Resources were prepared by Snowden Optiro, or their predecessors. The change between the 2023 and 2024 Mineral Resource Estimates includes data from the 2023 grade control drilling, has been depleted for mining to 30 June 2024, and excludes areas sterilised due to Aboriginal Heritage Protection considerations. Governance and Internal Controls Mineral Resource and Ore Reserve are compiled by qualified Kimberley Mineral Sands personnel and/or independent consultants following industry standard methodology and techniques. The underlying data, methodology, techniques and assumptions on which estimates are prepared are subject to internal peer review by senior Company personnel, as is JORC compliance. Where deemed necessary or appropriate, estimates are reviewed by independent consultants. Competent Persons named by the Company are members of the Australasian Institute of Mining and Metallurgy and/or the Australian Institute of Geoscientists and qualify as Competent Persons as defined in the JORC Code 2012. Competent Persons and Compliance Statements The Company’s Ore Reserves and Mineral Resources Statement is based on information first reported in previous ASX announcements by the Company. These announcements are listed below and are available to view on Sheffield’s website www.sheffieldresources.com.au. Mineral Resources and Ore Reserves reported for the Dampier Project are prepared and disclosed under the JORC Code 2012. The Company confirms that it is not aware of any new information or data that materially affects the information included in the relevant original market announcements and that all material assumptions and technical parameters underpinning the estimates in the relevant original market announcement continue to apply and have not materially changed. The information in this report that relates to the estimation of the Ore Reserve is based on information compiled by Mr Per Scrimshaw, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Scrimshaw is employed by Entech Pty Ltd and has sufficient experience that is relevant to the style of mineralisation and type 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 Scrimshaw consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. The information in this report that relates to the estimation of the Mineral Resources is based on information compiled by Mrs Christine Standing, a Competent Person who is a Member of the Australian Institute of Geoscientists (AIG) and the Australasian Institute of Mining and Metallurgy (AusIMM). Mrs Standing is a full-time employee of Optiro Pty Ltd (Snowden Optiro) and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which she is undertaking 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’. Mrs Standing consents to the inclusion in this report of the matters based on her information in the form and context in which it appears. The Competent Persons for reporting of Mineral Resources and Ore Reserves in the relevant original market announcements are listed below. The Company confirms that the form and context in which the Competent Persons’ findings are presented have not been materially modified from the relevant original market announcement. Supporting Information Required Under ASX listing Rules, Chapter 5 The supporting information below is required, under Chapter 5 of the ASX Listing Rules, to be included in market announcements reporting estimates of Mineral Resources and Ore Reserves. Previously Reported Information This report includes information that relates to Exploration Results, Mineral Resources and Ore Reserves prepared and first disclosed under the JORC Code 2012 and a Bankable Feasibility Study. The information was extracted from the Company’s previous ASX announcements as follows: – Mineral Resource and Ore Reserve Statement: “MINERAL RESOURCE AND ORE RESERVE STATEMENT” 24 September 2019 – Thunderbird Ore Reserve Update: “THUNDERBIRD ORE RESERVE UPDATE” 24 March 2022 – Thunderbird BFS Update: “THUNDERBIRD BFS, FINANCING AND PROJECT UPDATE”, 24 March 2022 – Night Train Inferred Resource and Mineral Assemblage results “HIGH GRADE MAIDEN MINERAL RESOURCE AT NIGHT TRAIN” 31 January 2019 – Thunderbird Mineral Resource: “SHEFFIELD DOUBLES MEASURED MINERAL RESOURCE AT THUNDERBIRD” 5 July 2016 – Thunderbird drilling: “EXCEPTIONALLY HIGH GRADES FROM INFILL DRILLING AT THUNDERBIRD MINERAL SANDS PROJECT” 9 February 2015 These announcements are available to view on Sheffield’s website at www.sheffieldresources.com.au. 19 Sheffield Resources Limited Annual Report 2024
RkJQdWJsaXNoZXIy MjE2NDg3