Sheffield Doubles Thunderbird Measured Mineral Resource

Sheffield Doubles Thunderbird Measured Mineral Resource

Sheffield Resources (ASX:SFX) has updated the Mineral Resource for its Thunderbird Mineral Sands Project near Derby in Western Australia, with the highlight a doubling of tonnes in the Measured category. The new Mineral Resource, which was updated to include 110 infill holes drilled in the "up-dip" region of the deposit, stands at 3.23 billion tonnes grading 6.9% heavy minerals. The Measured category of the resource has increased to 220Mt at 14.5% HM.


HIGHLIGHTS

  • 100% increase in Measured category of high-grade Mineral Resource
  • Outstanding in-situ zircon grade of 1.07% in Measured Resource category (>7.5% HM cut off)
  • Coherent high grade zone of 1.05Bt @ 12.2% HM (7.5% HM cut-off)

Sheffield Resources Limited (“Sheffield”, “the Company”) (ASX:SFX) today announced an updated Mineral Resource of 3.23 billion tonnes @ 6.9% heavy minerals (HM) for its 100% owned, world-class Thunderbird Mineral Sands Project, near Derby in northern Western Australia (Figure 7).

The new Mineral Resource, which was updated to include 110 infill holes drilled in the “up-dip” region of the deposit (see ASX announcement dated 10 December 2015), includes a coherent high grade zone of 1.05Bt @12.2% HM at a 7.5%HM cut-off (Measured, Indicated and Inferred). This high grade zone contains 9.7Mt of zircon, 3.0Mt of high-titanium leucoxene and 35Mt of ilmenite.

Significantly, the Measured category of the Thunderbird Mineral Resource has been doubled to 220Mt @ 14.5% HM (at a 7.5% HM cut-off) with minimal change in the high in-situ zircon and ilmenite grades of 1.07% and 3.9% respectively (Table 1, Figure 1). The Measured component of the Mineral Resource alone places Thunderbird in the top tier of mineral sands deposits globally, including those currently in production.

The Measured Resource occurs in the near-surface portion of the deposit, which Sheffield is targeting in early production years. This area also contains the majority of the current Proved Ore Reserve (see ASX announcement dated 22 January 2016). The Bankable Feasibility Study (BFS) will employ a start-up strategy that targets mining of the shallow portion of the Measured Mineral Resource containing very high in-situ zircon and ilmenite grades to maximise revenues in early production years (Figure 2).

Sheffield’s Managing Director Bruce McFadzean said the doubling of tonnes in the highest-confidence Measured Resource category is consistent with the Company’s strategy of delivering a high-quality BFS. The BFS, which is being managed by leading engineering firm Hatch, is progressing extremely well and remains on schedule for completion by the end of 2016.

“The updated Mineral Resource provides a robust platform for comprehensive optimisation studies, mine design and detailed scheduling. In conjunction with the BFS update released last week, which outlined material improvements in metallurgical performance, it further highlights the significance of the project on a global scale.

“Thunderbird has a projected mine life of over 40 years and is one of the few Western Australian mining projects that enjoys ‘Lead Agency’ status with the Department of Mines and Petroleum. The project is commanding significant interest from both producers and consumers alike, due to its long mine life, zircon-rich mineral assemblage, high quality products, low-risk jurisdiction and exploration upside including the exciting new Night Train discovery.”

About the Thunderbird Deposit

The Thunderbird deposit is located on the Dampier Peninsula about 60km west of Derby, and 25km north of the sealed Great Northern Highway joining Derby and Broome (Figure 7).

Thunderbird is the first major mineral sands deposit to be discovered in the Canning Basin, which is rapidly emerging as an important mineral sands province. Sheffield has a strategic tenement holding in the region of over 5,795km(2).

The Thunderbird deposit has many attributes that favour large scale mining. Mineralisation occurs as a gentlydipping, thick, broad sheet-like body. A high grade zone (+7.5% HM) averaging 16m thickness is encased within a halo of lower grade (+3% HM) mineralisation averaging 42m thickness (Figure 3). In the north-east sector of the deposit, the upper part of the mineralised sequence has been eroded, leaving an extensive zone of high grade mineralisation with minimal overburden. Sheffield is prioritising this area of the deposit for early production years.

The shallower half of the deposit has high in-situ valuable heavy mineral (VHM) grades, with the overall mineralised package thickening down-dip (Figures 3 to 5). The continuity of mineralisation is exceptional, with high VHM grades defining very large, coherent bodies as shown by zircon (+0.9%) and titanium mineralisation (+3.0%) in figures 4 to 6.

A maiden Ore Reserve for Thunderbird, based on the July 2015 Mineral Resource and calculated in conjunction with the October 2015 Pre-Feasibility Study (PFS), was announced in January this year comprising 683Mt @ 11.3% HM (total Proved and Probable Reserves). The PFS supported a 40-year mine life for the Project with a life-of-mine strip ratio (waste:ore) of 0.67:1 (see ASX announcements dated 22 January, 2016 and 14 October, 2015).

Mineral Resource

This updated Mineral Resource incorporates results from 670 drill holes for a total 37,076 metres drilled by Sheffield between 2012 and 2015, including 110 new infill holes drilled during 2015 (refer to ASX release dated 10 December 2015). The resource in this announcement supercedes previously announced Mineral Resources for Thunderbird.

At a 3% HM cut-off, the Resource covers an area which is 8km long and between 3km and 6.5km wide and remains open in most directions. The mineralisation occurs as a thick, broad sheet-like body striking northwest, extending from surface to a maximum depth of 136m. The average depth to the top of main body of mineralisation is 24m and the average mineralised thickness is 42m (Figures 3-5). The deposit is flat-lying along the north-eastern flank, but the dip steepens to 4 degrees along the south-western flank. Around 31% of the total resource area occurs within 6m of surface.

At a 7.5% HM cut-off the Resource covers an area approximately 8km long by 2.5km to 6.5km wide, and remains open to the north and south. This higher grade mineralisation is enclosed within the 3% cut-off Resource envelope, and has a north-south long axis orientation which is oblique to the regional strike. The high grade mineralisation extends from surface to a maximum modelled depth of 124m. The average Figure 7: Location of the Thunderbird Mineral Sands Project ASX AND MEDIA RELEASE 5 JULY 2016 Page 6 depth to the top of the high-grade mineralisation is 35m and the average mineralised thickness is 16m (Figures 3-5). Approximately 28% of the >7.5% resource area is within 15m of surface.

The Resource includes the results of 759 samples which were analysed to determine the HM assemblage, representing 63% of the metres drilled within mineralisation. The analytical method used a combination of screening, magnetic separation, QEMSCAN and XRF. The method was developed following mineralogical trials guided by bulk sample metallurgical test work.

At a 3% HM cut-off, the HM assemblage of the total Resource comprises 8.3% zircon, 2.6% high-titanium leucoxene, 2.9% leucoxene and 28% ilmenite for a total VHM component of 42%. Process test work has shown that these valuable heavy minerals can be recovered using standard mineral sands processing techniques.

Further information relating to the Mineral Resource is included in Appendix 1 and 2 of this announcement.

Geology

The Thunderbird deposit is hosted by deeply weathered Cretaceous-aged stratigraphic units. Its areal extent, thickness, grainsize, excellent grade and geological continuity are thought to indicate an off-shore, sub-wave base depositional environment.

The deposit is hosted by fine to very fine well-sorted compacted sand, highly weathered sandstone and minor discontinuous iron-cemented bands. The full mineralised unit is over 90m thick, very rich in heavy minerals (up to 40% HM), and contains a continuous high grade zone (>7.5% HM). The high grade zone is up to 46m thick (average 16m), occurs over an area about 8km x 4.5km, strikes approximately northsouth, follows the dip of the host sequence and is open along strike.

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1 Data is sourced from Appendix 2, and also presented in Tables 2 & 3 (below). Refer to Appendix 1 for further information.
2 The in-situ grade is determined by multiplying the percentage of HM by the percentage of each valuable heavy mineral within the heavy mineral assemblage at the resource block model scale.
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.

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