Ann: Investor Presentation, page-3

Matthew Hope, Senior Resources Analyst at Ord Minnett, initiated coverage on SFX (and ILU) in November 2024. His price target at the time was 8cps and he expressed grave concerns about Sheffield's ability to retain its ownership of its stake in KMS and therefore The Thunderbird Project.

His targets have progressively increased to 11cps, then 16cps, then 19 cps now 20 cps with a valuation of 28cps. He appears to be writing his reports consistently months behind the actual progress at Thunderbird.

On a positive note though, his targets are consistently increasing.

In his latest report following the March quarterly he also had the following to say:

A sandsational quarter

• Sheffield Resource’s (ASX: SFX) MarQ-25 result was its best to-date recording A$32mn of operational cashflows. This was expected as SFX had pre-released its record zircon sales of 82kt earlier in Apr-25. Importantly, SFX has outlined a plan to reduce high unit costs by ramping up mining from 12 to 16mtpa using its existing dozer fleet. This brute force approach will fill the latent capacity of its wet concentrator caused by a high proportion of oversize in the mined ore.
• We model this approach adding ~A$15mn p.q. opex but also reducing unit cost of production by about ~A$80/t. This adds A$3 – 5mn p.q. of FCF in our model. Our NAV increases from 19cps to 28cps.

Thunderbird production to increase by 50-55%

• SFX plans to steadily ramp-up to 16mtpa by SepQ-26. At these levels, it expects the wet concentrator plant will be operating at nameplate levels (1085tph) albeit with perhaps 10% higher production due to recoveries and rougher head feed grades outperforming design. We model zircon and ilmenite concentrate production of 220-240ktpa and 900-950ktpa respectively, a 50-55% increase on current levels.

Minimal capex expected to facilitate ramp-up

• SFX expects minimal capex will be needed to implement the ramp-up and believes its existing dozer fleet can support 16mtpa. It has been trialling higher feed rates and is confident the DMU can sustain required throughput. A new waste mining contractor will arrive at site in May to begin drill and blast to facilitate faster mining rates.

Improved cash flow profile may facilitate a restructure

• Thunderbird’s amortisation profile on its debt facilities was sculpted at a time when the outlook for mineral sands prices was rosier, costs had not escalated, and oversize was not an issue. We envisage that the improved cashflow profile under the 16mtpa case may provide KMS with additional leverage to seek a restructure from lenders.