Sheffield Resources (SFX) Q1 2025 TU earnings summary

Executive summary

• Achieved strong mine production of 2.6 million tonnes ore mined in the quarter, with process plant outperforming design expectations in recovery and grade for both zircon and ilmenite, and concentrate production of 154,260 tonnes.

• Ilmenite sales were strong, with regular shipments totaling 121,591 tonnes, but no zircon sales occurred in the quarter due to weak Chinese market conditions and customer inventory build-up; zircon shipments resumed in October.

• Focused on mineral sands, with main asset being the Thunderbird mine (Kimberley Mineral Sands); also progressing South Atlantic project in Brazil, with option term extended to August 2025.

• Business improvement initiative launched to address production constraints, high mining costs, and weak zircon market.

• US$14 million offtake prepayment from Yansteel post-quarter to support working capital.

Financial highlights

• Revenue was slightly exceeded by operating expenses, resulting in negative operating cash flow of $1.1 million for the quarter, mainly due to deferred zircon sales.

• Ilmenite realised sales price was US$130/t, up from US$123/t in the prior quarter.

• C1 cash costs (excluding inventory movement) were $360/t, up from $352/t; underlying C1 cash costs after inventory movement were $188/t, down from $337/t.

• Minor CapEx incurred, mainly for tailings and lease payments; interest payment was deferred.

• Cash reserves at quarter-end were $9.0 million (Sheffield) and $5.6 million (KMS, 100% basis).

Outlook and guidance

• Mine production target of 2.5–3.0 million tonnes for FY2025, with annualised mining rate expected at 10–12 million tonnes.

• Expectation of zircon shipments exceeding production in the December quarter, but subject to market conditions.

• Business improvement plan aims to increase mine capacity and reduce costs, with a detailed implementation plan targeted for Q1 2025.

• South Atlantic project resource estimate expected this quarter; PFS to continue into next year.