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
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