Zircon Market Weakness Forces Sheffield to Withhold December Sales Guidance

Operational Milestones at Thunderbird

Sheffield Resources has reported a standout quarter at its 50%-owned Thunderbird Mineral Sands Mine, with concentrate production reaching a record 249,145 metric tonnes; 24% higher than the previous best quarter. This achievement was supported by a 6% increase in ore mined to 3.0 million tonnes, reflecting ongoing improvements in mining productivity and processing efficiency. The mine is progressing towards its target annual mining rate of 16 million tonnes, underpinning Sheffield’s strategy to ramp up production by early 2027.

Operational metrics show consistent process plant performance exceeding design expectations, with strong recoveries of titanium dioxide (TiO2) and zirconium dioxide (ZrO2). These technical gains have contributed to lower cash costs per tonne, which fell significantly to A$201, down from A$302 in the previous quarter, driven by higher output and reduced shipping expenses.

Market Challenges Temper Sales Outlook

Despite operational success, Sheffield faces headwinds in the zircon concentrate market, particularly in China where demand has softened following national holidays. Zircon shipments for the quarter totaled 38,946 tonnes, falling short of guidance, and the average realized price declined to US$524 per tonne. This market softness has led Sheffield to withhold sales guidance for the December quarter, signaling uncertainty in near-term revenue streams.

Ilmenite concentrate sales, conducted under a fixed-price offtake agreement with joint venture partner Yansteel, remained steady with 177,974 tonnes shipped. However, realized prices were slightly below contract assumptions due to lower TiO2 content in the concentrate.

Financial Position and Debt Restructuring

Sheffield ended the quarter with cash reserves of approximately A$5.2 million. Operating cash flow was positive at A$9 million, aided by prepayments totaling A$13 million from zircon concentrate customers, which have helped ease short-term working capital pressures. Meanwhile, negotiations continue with senior secured lenders Orion Resources Partners and the Northern Australia Infrastructure Facility to restructure debt repayments in line with revised mine plans and market conditions. The outcome of these discussions remains uncertain but is critical for the company’s financial flexibility.

Portfolio Expansion and Strategic Options

Beyond Thunderbird, Sheffield is advancing its portfolio with an extended option agreement to acquire an initial 20% interest in the South Atlantic Mineral Sands Project in Brazil, with potential to increase to 80%. The option term has been extended to February 2027, allowing more time for due diligence and project approvals. Sheffield also maintains a 10% stake in Capital Metals Plc, which is developing the Taprobane Minerals Project in Sri Lanka, reflecting a broader strategy to diversify mineral sands assets globally.

Sheffield’s Executive Chair, Bruce Griffin, emphasized the team’s commitment to achieving full production at Thunderbird by the first quarter of fiscal 2027, while acknowledging the current zircon market challenges that are impacting sales volumes and outlook.