Quarterly results. My name is Peter Gadsden, I'll be your moderator for the event, and I'm joined with Mr. Bruce Griffin, the Executive Chair of Sheffield Resources, and also the company CFO, Mark Di Silvio. During the webinar today, we'll lead you through around twenty minutes of presentation, that will then be followed by around twenty to twenty-five minutes of Q&A. The main thing is that we will be doing a Q&A, so just put that into the chat, and Bruce, over to you.
Great. Thanks, Peter-
Mm-hmm.
Thanks everyone for joining today. Just, I'll get straight into it. I'm assuming everyone is probably now familiar with our story in terms of what we're trying to do. Just as a reminder, Sheffield Resources is a mineral sands company focused on building a portfolio of production and development assets. Main asset is Kimberley Mineral Sands, so the Thunderbird mine in the Kimberley, and that's where we'll spend most of the time today, talking about the quarter that's just completed. I'll touch a little bit on South Atlantic, what's happening with that project in Brazil. I won't talk any more about Capital Metals, other than to note that we retain our 10% interest in Capital Metals.
To sort of get straight into the quarterly performance, just a couple of pictures for orientation. We tend to show these each time, and what we're showing on the left-hand picture there is the mine in September. We can see this is the DMU and some dozers working that block, and as you know, you see where we've sort of already mined out. Now, just note that an area like this, this is us actually using waste oversize in the pit to start building our in-pit tailings walls. So as we're going along now, we're actually starting the construction of the in-pit tailings using waste from the mine. On the right-hand side, aerial view of the process plant in September. The process plant, wet concentrator, and CUP.
In the background there is zircon stockpile at site. This is the ilmenite stockpiles, and here's a stockpile of Paramag. In terms of production for the quarter, so starting with ore mined. So we mined about 2.6 million tonnes in the quarter. Maintaining the sort of 2.5-3 million tonnes per quarter that we expect to be able to sustain, having achieved that in the first quarter in the June quarter. That's a sustainable level of mining for us now. We do get a bit of variation month-on-month, you know, depending on, you know, equipment failures, plant, and so on.
It will bounce around a little bit, but we expect to be able to maintain that two and a half to three million tonnes per quarter, certainly through the end of the current financial year. In terms of what that looks like in terms of rougher head feed, so this is the feed to the to the process plant. What you see here, similar charts to last quarter. So the the the green line is actual, the dark blue is what was the basis of design for rougher head feed, and the two dotted lines are block model and actual rougher head feed grade. So talking about just rougher head feed grade first.
Our average grade continues to track, or rougher head feed grade attracts, above what we expected from the resource block model. And that probably continues to be an artifact of some upgrading that occurs from the higher oversize. It did dip below in July, and that was because we were trialing taking some T1 ore as well. And from August on, we have been taking T1, but mainly just a high zircon load at the base. So that was the sort of one-off while we were seeing what would happen if we put more T1 ore in.
The two lines show that we continue to have this effectively while we're at close to basis of design for mine throughput, the rougher head feed continues to be about 75% of design, and that's driven by the higher oversize. I'll come back later and talk about the oversize and what we're looking to do about that. In terms of the process plant, I think similar to last quarter, the process plant has performed very well from a recovery and grade perspective. In this case, this is zircon. The green line here, the top line, is actual recovery. The dark line underneath it is basis of design, and then the two dotted lines, again, zircon.
Those are the zircon content in the concentrate. In terms of the recoveries, you can see the blue line, the dark blue line, the basis of design, slowly steps up. There are assumed increases in recovery, as assumed in the ramp up at FID. And we've continued to produce above the ramp up right through, and continue to see very good recoveries of zircon and generally higher than expected ZrO2 content in the concentrate. Sorry. Similar for ilmenite, same sort of layout of the graph in terms of recovery, what the lines are and the dotted lines.
Again, here, we see the step up in grade that was assumed as we ramped up, and we've maintained, a higher recovery of ilmenite than was assumed in the basis of the design, as well as higher TiO2 content. And the recovery, higher recoveries basically, reflect very good, process plant performance. And I'd say overall, process plant continues to outperform, is handling whatever we, put into it, and is, you know, recovering good quality of both, main concentrate products. What that sort of looks like in terms of, a cumulative, production, since we started up. So the, the dark blue or green, columns here with the BFS assumptions on a cumulative basis, and the dark brown is our actuals, in each quarter.
Basically, we continue to be ahead on ore mined, so we did start early, but we are. Generally speaking, the way to think about it is in Q2, we achieved more or less the quarterly production we'd expected in Q3 and Q4. So we continue to be ahead of where we thought we would be on throughput. You know, so overall, ore tons of ore mined continue to be ahead of FID. The oversize is obviously what reduces the amount of rougher head feed that's available in the process plant. Now, I said earlier I'd make a comment on this.
I think, previous quarter, we talked about the fact that we were doing test work, sampling, and drilling to understand what we think is coming next, and test work to understand where the oversize, you know, whether the oversize is mineralized, whether we're losing undersize in our current process. And I think what we've identified out of that is with the current mining method and input processing, there are some minor improvements that we could implement, some of which are already being implemented, and to trial. That may make some difference to oversize, but that fundamentally, we don't believe that we're going to make a large difference to that 75% number just from operating tweaks or minor modifications.
I'll talk about it again a little bit later as we talk about our overall plan for business improvement. But looking at therefore how do we best increase mine capacity to offset the ore mining, our mining capacity to offset the oversize, so we can achieve or achieve keeping the process plant full of rougher head feed. In terms of concentrate production, as you saw on the earlier graphs, we have continued to have that very good performance of recovery to both concentrates. While we have 75% of the ore, we continue to have the over recovery, which is giving us something like 85% of the products we would have expected. We are offsetting the oversize partly through higher recoveries of concentrates.
Through year to date, we've produced more or less the amount of concentrate we would have expected by the end of Q3. In terms of sales, this is ilmenite sales cumulatively. No shipments in the first quarter of this year because we were not yet ready to load bulk at Broome. We started loading in April and continued through to the September quarter. We are making regular shipments, typically two, sometimes one zircon shipment, depending a bit on stock levels. Effectively, for the two quarters since we've started shipping, we have been shipping at a higher rate than assumed in the BFS. We have been sort of eating into the backlog from the first quarter and continue to ship ilmenite regularly to our partner Yansteel.
Yeah, the biggest disappointment in this quarter was this zircon sales volume, and no zircon sales in the quarter. So Q1 and Q2, we sold more or less in line with what we had expected to sell in the BFS. Unfortunately, in the September quarter, we made no shipments of zircon. It was a combination of things, first being the weak market conditions in China, and I think you know, it's probably worth expanding on that point a little bit. I think there was a lot of commentary, particularly prior to the recent stimulus in China, you know, around things like iron ore and so on, that you know, we're seeing a lot of general economic weakness in China, and that certainly has been no different for the mineral sands space, particularly zircon.
Zircon is exposed to the property sector, and the ceramic demand, in particular, has been very weak in China. So, that sort of backdrop, very weak market, is something that is definitely we're seeing and, or KMS is seeing as they're trying to sell zircon. You know, it's encouraging to see stimulus measures from the government, and probably as much as anything else, the fact that the senior leadership in China now seems to recognize that they have to do more. That said, we haven't, you know, the stimulus has just occurred. You know, it's too early to tell what the impact on the real economy would be, and, commodities like these industrial minerals, the impact tends to be lagged.
So, to the extent it has a positive impact, it's probably, you know, maybe late Q1, but probably more like quarter two of 2025 before you would expect to see a big impact in terms of demand for these commodities. Given that weak market environment, our customers who had taken reasonably large volumes in June had a lot of inventory. They were processing that, given the weak environment, and still processing were cautious about holding more inventory. So, basically, you know, were looking to delay shipments.
We did see a pickup in interest and some discussions about making shipments in September, but ultimately, we weren't able to arrange the first shipment until early October, when we did load 600 tons, so very early in October. I'm not going to provide updates on specific shipments. However, you know, current expectation is based on, you know, indications from the customers we had, that we expect to be able to or expect them to take shipments exceeding our production in the quarter. But, you know, given the market backdrop, that's something that we, you know, ultimately, we will have to see how that develops through the quarter.
But the current expectation is that we would expect to see shipments above our planned production for the December quarter. Given some of those challenges, one of the things that KMS has been particularly focused on is adding customers. You may recall we have three core customers for zircon concentrate, who signed contracts as part of the preconditions for financing. We've been seeking to add additional customers to try and spread the volume around. The challenge there has been that the requirements for customers to have what's called an end user statement before they can contract to receive zircon concentrate because it contains over 500 parts per million of uranium and thorium. You need an end user statement.
Those have always been in place. We've had them for our existing customers, but as we were trying to add additional customers this year, the information requirements were expanded by the department in Australia that manages that, asking for more information about further into the value chain in terms of tracking where the product is going. You know, effectively working with the customer, potential customers to get that data, get that information, share it with the authorities, get it signed off and so on, has meant that it's taken much longer to get EUSs in place than is previously the case. We have got some new customers approved, and we're working on trial shipments to some of those customers.
So some have taken containerized shipments previously, but trial commercial, trial bulk shipments is what we're looking at next for new customers. So to get them enough material to be able to, you know, do a meaningful trial on it before committing to larger volumes. Overall, the impact of that quarter from a cash flow perspective, so if we think about it, we had a good, you know, we would say a good production quarter. A good sales quarter for ilmenite, disappointing for zircon. So, you know, we had, you know, revenue still slightly exceeded by OpEx for the quarter, so negative operating cash flow. We have minor amounts of CapEx, particularly associated with tailings, some lease payments and so on. The interest payment was deferred, so this doesn't include the interest payment.
KMS did use up cash during the quarter, largely driven by the inability or the lack of zircon sales. And so, post the end of the quarter, KMS put in place a prepayment, or Yansteel put in place a prepayment to KMS, for about $14 million. That's a short dated prepayment. It covers shipments over a... You know, think of it in terms of a couple of quarters. It's not permanent capital, and it's really been put in place to enable KMS to manage short-term working capital, so manage timing issues associated with the deferral of zircon sales, et cetera.
I was very pleased to see the support of Yansteel, both as a customer, taking regular shipments of ilmenite, but also as our partner, stepping up and offering a prepayment facility to help manage working capital requirements. It's probably worth noting the amount of inventory we had at the end of the quarter. So 50,000 tons of zircon and 75,000 tons of ilmenite concentrate is a significant, you know, value that we obviously will hope to realize as we catch up sales over the coming quarters. Given all of that situation, we have launched a business improvement initiative at Thunderbird, alongside KMS management, who obviously will be leading this.
The context, I guess, is the way I think about this is we sort of have three big negatives in the business or headwinds that we have to deal with. The first is the lower rougher head feed due to oversize, which is ultimately constraining our production at present. Costs and particularly mining costs are higher than expected at FID. And to think about that, mining is our single largest cost, and it's also the cost that was where we've seen the biggest delta from what we've assumed at FID. So obviously, a big focus on mining costs. And then the weakness in the zircon market has put pressure on the business.
The big positive we have as a process plant is working very well, and we certainly can-- If we can produce ore, we can produce products from it. Certainly, we continue to be very happy with the process plant performance. The idea behind the business improvement initiative is to sort of focus on, really on those key areas. The first one, cost reduction, so across the board, but with a particular focus on mining, given its, as I say, its relative large size and our cost base and the variation from what we expected.
We are working on steps to increase mine production and fill the process plant, and that's a combination of maximizing production from what we've already got installed, the current fleet and dry mining unit, et cetera. We are working on potentially boosting throughput and so on in the short term just with different operating practices, et cetera. And then in parallel with we'll undertake a review of the mining method and the input processing. And I think the way I think about this is, you know, given the oversize and the higher costs we've seen, is just doing more of the same, the best option?
So yes, we could add more dozer dry mining unit capacity, but I think we now need to go back and revisit after a year of operation, you know, things like overburden mining. We have seen harder mining conditions, certainly in parts than we expected, and you know, whether the current overburden mining method is the most efficient. You know, is the dozer and the current DMU the best way to mine this kind of ore? So I think we're going to ask that question so that if we are ultimately going to add additional mining and input processing capacity, we think about what's going to work best, not just what we've already done.
Along the way, I'm sure we're already seeing it, identifying, you know, I'd call them operational changes and minor modifications. They will be implemented as they're identified and so on. So we are looking for near-term improvement opportunities as well. In terms of the bigger picture, an overarching plan. The overarching objective here, as you say, is to fill the process plant. So, you know, we are targeting to have a implementation plan in place for what that looks like, in terms of, you know, if we're adding mine capacity, what should it look like, and so on, in place, in the first quarter of calendar year 2025.
And, you know, and that should provide a clear basis on what we expect to achieve in terms of production, cost, et cetera, going forward. And I didn't have any... I did say at the start I'd have some comments on on South Atlantic. I didn't actually have any slides on South Atlantic in here. Just before we close off, just, you know, drilling program completed in the in the September quarter across the two main ore bodies at Retiro and Bujaru. Resource is being prepared at the moment. We expect to have a resource on those ore bodies in the current quarter. And then the PFS will continue into next year.
We need the resource in order to you know complete mine plan and really think about the optimal process configuration or project configuration. So that will take us into the new year. Approvals are continuing. IBAMA continues to review the project for approval of the Installation License, and that's another key milestone. Noting that during the quarter, we did renegotiate the option agreement to extend it into August next year to allow those activities to complete before we need to exercise that option. And I'll stop there, take questions.
Good. Thank you, Bruce. Look, we'll move on to the Q&A section now. Just as a reminder, we will be trying to get through all of them, but so long as they don't actually interfere with the ASX requirements or the listing regulations. So, Bruce, just to start off with, obviously, I think as always, people do like to ask your opinion on China. You gave a bit of one there.
Yeah.
And obviously, being quite early with the stimulus, I was wondering if we could go into a bit, a little bit further. Have you seen any indication from that stimulus that it could have a positive impact on the housing market or construction market? And what are you sort of hearing from customers in terms of their views on the market over there?
Yeah, look, I think it is very early. I'm going to be at the TZMI conference in a couple of weeks, and we'll be meeting with all of the customers then, so that will be a good time to understand sort of their views on it. But what I would say is that, if you look at the elements of the stimulus and some of the commentary around it, there's a component of this package which is about effectively supporting governments. I think it might even be some state-owned enterprises, to buy up vacant properties and turn them into social housing. And also releasing funds to ensure that housing that was under construction but incomplete, that people have paid for, gets finished.
Both of those are probably broadly positive for, well, titanium dioxide pigment and zircon, in the sense that those commodities, ceramics and paint, tend to get consumed when the property's occupied. So if we actually see completions, that would be broadly positive. I think, if you pass some of the commentary, it's quite clear that the intention of this stimulus with respect to the housing market, is to try and arrest the fall in house prices, to put a floor under that so as to support consumer confidence. There is no indication that the intention is to restart large-scale house construction, because effectively they're not looking to reflate the bubble. There was too much housing built.
So I think there's sort of elements of positivity for these sectors because of the specific benefit of completions. We should see that benefit. I think the benefit that we'd ultimately be looking for would be, you know, resuming or consumer confidence coming back, leading to, you know, consumption and therefore, you know, purchasing of, you know, actually people going out and buying things and so on, so that the goods that contain zircon and titanium dioxide are being consumed, and so on. And people... I guess, one other factor to consider is that, you know, traditionally, these sectors have had a lot of ceramics for tiles, but particularly paint. Recoat market's been important.
If people live in their houses for extended periods of times, they tend to redecorate them. I think that's something we're starting to see more of in China. I think for those who track the statistics, we have seen secondary sales pop up, so sales of property in the secondary market, and you know, typically when people buy a new property to live in, or buy an existing property to live in, they refurbish it, and so on, so we may start to see the emergence of a more substantial refurbishment market in China as well, but like I say, I think with the stimulus, it takes a while to flow through, so you know, it is too early to tell whether it'll...
What will actually happen in terms of real, you know, real economic impact?
Okay, good. And I know you're obviously, you're in perfect mode, Bruce. You've been there for a few weeks, obviously, with the team, working on this new initiative. One of those areas was costs. We do have a question, I believe, from Chris Baker. Obviously, he's noted that costs are down around three million on the previous quarter. What opportunities are there to take out more costs of the business?
Look, I mean, first on the three million, I think we would sort of see it as, you know, you can have a few timing effects and things like that. So what I would say is, I think we've got costs stabilized. I think we're not seeing. You know, we, we've got a good grip on where current costs are. There is definitely an opportunity to for cost savings in the mining area. Previously, we flagged up when we do go in-pit tailings, that will be a cost reduction. So I think we are, you know, the project is there to look for material soft cost savings. It's pretty hard to quantify that until you do the work.
So at this stage, you know, we're certainly looking for you know for decent cost savings. But until we do the work and know what they are, I'm not going to put a number on it.
Okay. All right, good stuff. One of the questions from in the chat is, "Are the existing zircon concentrate offtake agreements take or pay for the specific volume over a specific period, or are they complete discretion of the customer?" And this is, I guess, more-
Mm
... more focused on the zircon rather than the-
Yeah
... the ilmenite.
Yeah, so the ilmenite is take or pay as well, but I'll talk about the zircon in particular. They are take or pay. The three core custom contracts are take or pay. They are five-year take or pay contracts. They have an annual volume commitment in them. So, you know, the timing of specific shipments within a year is basically subject to agreement between, you know, supplier and consumers. So, it's not like... They don't have a, you know, must take X per month or even through the year. So obviously you try and balance out as much as you can. We're also a new operation, and it's worth recognising that, you know, it's, it...
Yeah, until they have a good feel of exactly what we're going to, what we were going to deliver volumetrically. So there's a bit of a settle-in period while you know, while you work out what the volumes are and the timing in which they will take them. You know, it's very, very clear that at some point if you you know, to. You know, you need to be reasonable in those discussions as well. You know, making people take product that they really can't use at the moment, in the short term is counterproductive.
Yeah.
You know, you work with the customer, but there isn't a monthly or quarterly quantity. It is an annual offtake commitment.
Okay. The question actually from myself, part of that improvement initiative that you're working on. You were talking about different mining methods there, and even the overburden. How much can you talk about that currently, or is that something more for the next quarter? Are you thinking of using explosives? Are you thinking of changing? What sort of things are you thinking of changing potentially?
Well, look, I think you put everything goes on the table. I mean, you know, we have encountered, you know, some large and quite thick areas of the Melligo Sandstone and the overburden. And then, you know, the obvious question comes, if you see large expansions of rock, is, you know, is drill and blast a better option for that? We don't know the answer to that sort of question. I think the point is we want to study it, you know, do the work and then make those sorts of decisions. I think, you know, you consider the full range of options, I think not just carrying on doing what we're doing. Yeah, as always, that's the base case, but, you know, is there an alternative?
Is there, is there a better mining method? I think firstly for the overburden, and that's really about getting productivity. So, you know, we want... Yeah, overburden is all about making it as cost-effective, as efficient as possible, because you're effectively, you know, you're not moving money when you're moving overburden. When it comes to the ore mining, I think, you know, given the oversize and so on, and, you know, we're working the ore body with dozers and, you know, the DMU, you know, we have to think about, you know, are there better ways to precondition the ore before mining it? You know, is there alternative mining methods? You know, do you modify the DMU to put different processing?
You know, like we've talked about it previously, you know, could you put a scrubber on or something like that? And I think the bottom line is all options are on the table. What I would say is there are a lot of good ideas within that initiative, and what we need to do is do the work to work out which ones, you know, basically which option will give us the best, you know, the best overall. You know, we're looking at how do we increase production and reduce cost? So we want to lower our unit cost, as much as we can.
Okay. Look, got an interesting question here from someone called Luke Matthews. Look, essentially, I won't run through the whole thing, it's quite a long question, but the gist of it is obviously zircon concentrate prices are currently lower than what we were forecasting in the BFS. So, however-
Hmm
If you look at zircon premium or premium zircon, if you look at companies like Iluka or whoever, they're all reporting pretty strong quarters at the moment. What's the discrepancy there between the two different prices of the concentrate and the premium? Why does premium seem to be overperforming and concentrate underperforming?
Yeah. So there's quite a lot to unpack there, but let me start. Now, some of these things I've talked about before, but if you look at the market overall, first worth noting that premium, you know, we're selling in China. If you look at a market like China, very little premium zircon gets shipped into China from outside. A lot of the zircon in China today is produced from concentrates, and a lot of standard and near premium produced from that. So what you find is that there tends to be a, you know, probably the market for premium in China is tighter than the market for standard grades. I think overall, I would say that the...
You know, people will quote a particular price as being the global. I mean, TZMI, I know well how they do it. You've got a global premium price. That price is different in different markets. The China price can be higher and, at the top of the market, it's lower in weaker times. So definitely, premium is lower in China. There's a spread to standard, so there's a bit of that sort of thing going on, so you can't necessarily correlate one premium price. You know, premium price doesn't always map nicely onto what standard is in a particular market, for example.
The other two elements before I talk about specifically about zircon quality, but I think I highlighted this previously. Monazite prices are much, much lower than they were at the time those were set, and there is a monazite credit in there, so we are getting less for the monazite than we would have done previously. Previously highlighted, the TiO2 content is lower. So we talked about that earlier in the year. Part of the lower price is because of lower monazite price and lower TiO2 content. Then the last element, and again, we've spoken about this previously, our material, the quality, the recoveries. So customers have to learn how to process a new concentrate. This is from a, you know, call it an inland body. It's a very old deposit.
It doesn't behave exactly the same way as... or no two concentrates behave the same way. So the recoveries and average quality that customers are getting from our product at the moment is lower than we would've or was assumed would've been by this stage in terms of achieving sort of what the potential could be if you could figure out exactly how to process it properly. Part of that is acid treatment. Ideally, this product, these concentrates, would have an acid wash prior to processing. It would improve product quality and separability. So it's a combination of all of those things. So yes, there is a weaker zircon price, but we've also got lower monazite price, less TiO2, and and we are getting a bigger discount, let's say, because of recovery and quality at the moment.
... Okay. Another question by the same person. Given the substantial change to fundable project economics since BFS, is the implementation plan also contemplating a far more significant change to operations by bringing forward elements of stage two, such as increasing the WCP feed rate? If so, is there scope for such a plan to be debt-funded?
Look, it's less about stage two. We've talked about it. I mean, stage two comprised two main elements. One was increasing the mine capacity. It was actually a doubling of mine capacity and a 50% increase in process plant. I think clearly one of the things we're going to do is bring forward, talked about it, we, you know, to compensate for oversize, we will need to mine more. That means we probably will need to. I don't think we'll achieve that just with pushing the current equipment harder, so we're likely to look to increase mine capacity. That's exactly what that entails in terms of cost, et cetera, is part of the study. Although it's worth noting that a lot of that mining sort of gear can be done on a BOO-type basis.
So it's not necessarily the case that we have to buy all of that equipment. There wouldn't, at this stage, be a view that we would be expanding the process plant. You know, the market isn't weak. We don't need to tip additional capital in. I think what we'll be looking to do is to make sure that we fully utilize the process plant we've got. You know, we've got good recoveries in there. If we were running at full capacity, a full feed capacity, we would expect to be getting more than original design concentrate, because we've got the over-recovery. We would expect that we can maintain some of that over-recovery if we achieve full feed. So that's the near term. It's not going to be a...
You know, it might be a one point X. It's a mixture of some of the elements of stage two, but certainly don't anticipate bringing forward a expansion of the process plant.
Okay, um-
In terms of funding, until you know what it is, it's too early to think about how we would fund that.
Okay, but you did say that obviously, that most of the-
Yeah
... equipment really wouldn't need funding because it-
Yeah. Yeah, correct. If it's mostly in the mine, it's not necessarily the case that that is a, you know. The funding requirements, it's not like building a process plant, which is a lot of capital. So I think at this stage, we don't, you know, we don't anticipate that necessarily being a large capital investment. But again, we won't know until we know what that solution is. And as part of that is, you know, how do you- how is that paid for? And as I say, in mining, you expect an element of that to be to not have to necessarily buy the equipment you need in the mine.
Yeah. Okay. Another question from Chris Baker: Is the 75,000 of ilmenite a typical inventory level?
Typical?
Yeah.
No, no. We would, well, I mean, typical. I think we would anticipate. Well, it's more than typical. You know, you would have just before a ship goes out, you probably have, you know, 60,000 tonnes, after a vessel, 30. You know, that would be the sort of range you would normally operate in. You know, it's these are lumpy shipments, so there's, you know, you're typically going to look to hold a, you know, have one vessel and the vessel ready to load, and then you load, and then build again. So I would say sort of a normal stock level is probably going to average out in the sort of 45 or 50,000 tonnes-
Okay
... of ilmenite concentrate.
Perfect. You recently undertook a drill program to firm up-
Mm-hmm
... reserves and resources and also the met behavior. Has that been completed, and were there any conclusions from that work?
The drilling is completed. We don't have all of the results yet, so that work is not complete yet, so yeah.
Okay.
There's not much more to say about that at the moment.
All right. Will you be releasing any of those results in the next quarter or anything like that?
Well, I mean, when we know what the results are, we determine the requirement to release them. It depends whether the outcomes are material or not.
Mm.
You know, one of the things there is working out, you know, potentially is reoptimization of the mining plan and so on. So I think all of that probably will get wrapped into this, you know, what's the forward plan look like based on the initiatives we identify out of the business improvement review and, you know, if we have a updated views on the- on where we should go in the, in the ore body. What I would say, however, is we don't see, you know, generally speaking, the, you know. What we do see is we learn a lot about the closer spacing, so we have a better understanding of the lithology and so on in front of us, which is helpful from a mine planning perspective.
You know, that's what we've observed so far, but, you know, we don't actually have the detailed drill results to be able to sort of comment about what's, you know, what update to reserve and resource.
Okay, but it might tie in actually with the last question, but in terms of the oversize material, have you assayed any of that, and how does it compare to the material feed in the separation plant?
Yeah, so we've sampled the oversize streams in the mine and at the process plant. And we understand, you know, there's an extent, there is some mineral in there, working out, but not. I guess what I'd say is that we haven't identified that we could make a quick change to recover all of the oversize. Effectively, there is some potentially finer material there, and we've got some, as I say, some of those minor initiatives are looking at are there modifications we can make to the approach to the way we operate the mine, the dry mining unit, so on, to increase the recoveries.
But at this stage, we think that's going to be marginal. So there's no indication that we're losing large proportion of valuable heavy mineral in the oversize.
Okay. Another question that's come through is actually more in relation to the Paramag concentrate.
Mm-hmm.
Just there hasn't been much commentary on that.
Yes
... product.
Yeah.
Maybe you could just give us a bit of an idea as to.
Yeah
How that shapes within the business.
Yeah, so the way to think about that is, it's an intermediate con. It's sort of a bit of this and a bit of that. It's got monazite in it. It has some lower quality zircon, almost by definition, because it's more magnetic, and a bit of TiO2 in it. The original idea, in a stronger monazite market, that would be quite a compelling product. In the current market, it doesn't have the same value, and it would generally go into the same process plants or types of process plants that would take our zircon cons.
So given the value delta, we're focusing on selling Zircon concentrate and making sure we sell that, rather than potentially displacing it with Paramag, recognizing that with weaker Monazite pricing, Paramag is not such an attractive product. So we've got that stockpile there, and we've stopped producing Paramag at the moment, because until we see a clear market for it. So it's something that we see as an opportunistic product. You know, we're not gonna displace Zircon sales to make Paramag sales. And in this market, the relative value is such that, you know, there's certainly not... You know, it's not a product we expect to be selling much of in the very short term.
Okay. All right. Good. In terms of the lead time when we were talking about new equipment and sort of for the mining side of the business, could you talk a little bit about what the lead time would be and
Yeah
... things like that?
Well, I mean, until you know what it is, it's, it's-
Yeah
... it's hard to say. You know, if it's yellow gear, you know, generally relatively short. You know, if you're looking at a major, like, a different input processing equipment, that could be a bit longer, and that will be part of the consideration, you know. Part of the consideration is, you know, are there interim solutions if the permanent solution has a longer lead time? We just don't know at the moment.
I mean, it's the same way I can't comment on the cost because until you know what the options are, it's very, very hard to say how long it's gonna take or you know what it will cost and how it might be funded. I think we are definitely looking at you know the objective is to make a material difference on production and cost within the current financial year. Whether the full long-term solution is fully implemented within the financial year or not is gonna depend on what that is and lead times and things like that. So I think that we should have a lot more clarity on all of that when we have the forward plan in the first quarter of calendar year 2025.
Okay. Just a question as well come through on the Yansteel on the prepayment.
Yeah.
I was wondering if you could dive into that a little bit more. Has that money all, so is that all coming through all in one go? Is it spread over a certain time period?
That... Yeah.
Yeah.
That particular, you know, essentially the way the facility works is it's a prepayment amount for a certain amount of ilmenite that would expect to be delivered over the, you know, coming quarter or two. And it's paid all at once upfront and then unwound from shipments over those subsequent, over the sort of subsequent shipments, basically.
Okay.
So it's a renewable facility. It's something that, you know, it's there to manage. It's there to help the Kimberley Mineral Sands manage sort of working capital, timing-type considerations. That's what it's there for. It allows to manage. For example, the reason for utilizing it in early October, clearly with the lack of zircon sales in the September quarter, you know, and anticipating selling zircon in the December quarter, then using the prepayment as a way of bridging that gap while we wait for the zircon sales to come through.
Okay. Okay, good. And obviously, you've obviously got quite a decent stockpile there of ilmenite already anyway, so that can sort of service that.
Correct.
Yeah. Okay. Good. Look, just on South Atlantic, I know you touched on it, but maybe you just give us a little. It's not the main priority at the moment, obviously, but work had already been done. When can we expect to resource, PFS and any advancements on that?
Oh, I thought I'd cover it. Yeah, resource, we're expecting the resource on Retiro and Bujaru this quarter. The drilling's done, the results, the drill results for Retiro have been received. We haven't got all of them for Bujaru yet, so the modeling work is underway for the resource, so we expect that to be completed this quarter. PFS will continue into next year because of the delay. We had the delays in drilling because of weather pushing into the resource. Can't really do the PFS without the resource.
That work has been, you know, sort of happening in the background, and we extended the option so that, you know, we certainly expect to use the time available to us to make sure we understand, you know, the project, you know, how to optimize it and, you know, what that project could deliver before we exercise the option.
Okay. Another question comes through. I'm not sure how much you'll be able to talk to this, Bruce, just given regulatory requirements, but is it from TZMI or anyone? Do you know roughly where the current zircon concentrate pricing is or any thoughts on where it's going?
Yeah, I can't talk to our current zircon concentrate pricing, you know, beyond what we said in the quarterly, which is we do expect it to be softer than what we achieved in the June quarter. We're two quarters on. In those interim quarters, there has been reported by others, for example, Iluka, that their prices had come off, and they expect prices to be lower, and I think they said $40 or $50 a ton of, for zircon in the fourth quarter. So, what I do know is the prices are gonna be lower than they were in the June quarter.
Good. All right, well, look, we'll wrap this up. We're coming to the hour mark. Any final thoughts at all or anything, any final thoughts that you'd like to share, Bruce?
No. Look, I think, you know, given the whole. Yeah, I think with the forward plan, you know, I don't think people shouldn't be fixated on that as a capital project. That's a business improvement initiative. We need to understand what we're gonna do. And you know, some of those things are changes in modes of operating, et cetera, aren't necessarily. You know, it's not building a new mine, it's not building a new process plant. It's adding mine capacity and potentially modifying or looking at alternative input processing to improve the recovery. So you know, people should think of it as a business improvement initiative, not a mine development initiative. And certainly not a new process plant, additional process plant capacity.
Good. Okay. Well, look, thank you very much for your time, Bruce, and thank you to everyone who's taking the time to actually come and join and ask some questions as well.
Yeah.
I'm sure we'll... if there are any other questions or anything, please reach out to the team. As you can see, the info@sheffieldresources.com is on the screen there. So I'm sure if you reach out, the team will be able to get in touch.
Great. Thanks, Peter, and thanks everyone for listening in.
Thank you.