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Sheffield Resources escapes loan pain with $18m raising to pursue Thunderbird plans

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Stuart McKinnonThe West Australian
Sheffield is exploring options for a project equity partner for its $478 million Thunderbird project.
Camera IconSheffield is exploring options for a project equity partner for its $478 million Thunderbird project. Credit: Sheffield Resources

Shares in Sheffield Resources have tumbled after the aspiring mineral sands miner raised $18 million in a placement at a deeply discounted 39¢.

The cash raised will allow the Bruce McFadzean-led company to withdraw from an 18-month, high-interest, $US10 million bridging loan facility it entered into with Taurus Funds Management in June and provides breathing room for it to pursue a funding partner for its flagship Thunderbird project in the Kimberley.

Sheffield had just $2.7 million in the kitty at the end of June with $2.4 million in cash outflows expected this quarter.

The raising price represents a 20 per cent discount to the company’s last traded price on October 5 of 49¢.

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The raising will be supported by Sheffield directors who will subscribe for a combined $93,000 worth of new shares.

Sheffield is exploring options for a project equity partner that could help fill a $143 million equity gap that still exists for its $478 million Thunderbird project.

The company has already secured buyers for 100 per cent of the zircon and ilmenite produced by stage one of Thunderbird, which lies between Broome and Derby.

Bridge Street Capital Partners and Blue Ocean Equities are acting as joint lead managers of the placement.

RBC Capital Markets analyst Paul Hissey said the funding requirements for Thunderbird remained the final item prior to commencement of construction and is likely the key catalyst and focus for investors.

“We remain constructive on the Thunderbird mineral sands project, given it is fully permitted and is well positioned in a market where we expect to see fundamental tightening over the medium term,” he said.

“Recent under-investment in the mineral sands space coupled with increasing demand for zircon and titanium dioxide products should support an improving price profile.”

Sheffield shares were off 6¢, or 12 per cent, to 43¢ at 11.50am.

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