Sheffield Resources (SFX) Q2 2024 TU earnings summary

Executive summary

• Thunderbird mine production ramped up ahead of schedule, reaching 2.5Mt ore mined in the June quarter, with process plant performance at or above design for product quality and recovery.

• Process plant throughput and recoveries for zircon and ilmenite have exceeded design expectations, supporting higher concentrate production.

• Quarterly product shipments totaled 177,558 tonnes, including 27,930 tonnes of zircon concentrate, with the first ilmenite shipment to Yansteel completed.

• June quarter marked by significant shipping activity, with over 90,000 tons shipped, leading to higher revenue recognition in the following quarter due to payment terms.

• Company expects to transition to operating cash flow positive from the September quarter as ramp-up effects subside.

Financial highlights

• Q2 total ore mined reached 2.5 million tons, one quarter ahead of BFS schedule.

• Net cash position at end of June was approximately AUD 15.4 million, following a AUD 15 million equity injection to support working capital.

• June quarter operating costs came in just over AUD 55 million, at the lower end of guidance.

• C1 cash costs improved to $337/t produced, down from $423/t in the previous quarter.

• Realised sales prices: ilmenite at US$123/t, zircon at US$649/t, with average realised price A$311/t.

Outlook and guidance

• September quarter expected to reflect steady-state operations, with receipts and shipments more closely aligned.

• Sustained positive operating cash flow anticipated from September 2024 quarter onwards.

• Thunderbird mine expected to sustain 2.5–3.0Mt ore mined per quarter, annualising at 10–12Mt per annum from September 2024.

• Cost-saving initiatives and performance improvement projects underway, with further reductions targeted.

• South Atlantic Project PFS and Mineral Resource estimate completion targeted for September quarter.