ANNUAL
REPORT 2
2
2
0
SHEFFIELD RESOURCES LIMITED
Table of Contents
CORPORATE DIRECTORY ................................................................................................................................................... 3
CHAIRMAN’S LETTER ......................................................................................................................................................... 4
REVIEW OF OPERATIONS ................................................................................................................................................... 5
ORE RESERVES AND MINERAL RESOURCES ................................................................................................................. 10
DIRECTORS’ REPORT ....................................................................................................................................................... 14
REMUNERATION REPORT (AUDITED) .............................................................................................................................. 19
AUDITOR’S INDEPENDENCE DECLARATION ................................................................................................................... 28
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME ..................................... 29
CONSOLIDATED STATEMENT OF FINANCIAL POSITION ................................................................................................. 30
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY .................................................................................................. 31
CONSOLIDATED STATEMENT OF CASH FLOWS .............................................................................................................. 32
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS ............................................................................................ 33
DIRECTORS’ DECLARATION ............................................................................................................................................. 56
INDEPENDENT AUDITOR’S REPORT................................................................................................................................ 57
ASX ADDITIONAL INFORMATION ..................................................................................................................................... 61
TENEMENT SCHEDULE .................................................................................................................................................... 63
ANNUAL REPORT 2022 2
SHEFFIELD RESOURCES LIMITED
Corporate Directory
CORPORATE DIRECTORY
Directors
Securities Exchange
Mr Bruce Griffin, Executive Chair
Australian Securities Exchange
Mr John Richards, Lead Independent Non-Executive Director
Level 40 Central Park
Mr Ian Macliver, Non-Executive Director
152-158 St Georges Terrace
Mr Gordon Cowe, Non-Executive Director
Perth WA 6000
Mrs Vanessa Kickett, Non-Executive Director
Company Secretary
Mr Mark Di Silvio
Registered Office
Level 2, 41-47 Colin Street
West Perth WA 6005
T: +61 8 6555 8777
F: +61 8 6555 8787
ASX Code: SFX
Solicitors
HWL Ebsworth Lawyers
Level 20, 240 St Georges Terrace
Perth WA 6000
Hamilton Locke Pty Ltd
Level 27, 152 – 158 St Georges Terrace
W: www.sheffieldresources.com.au
Perth WA 6000
Postal Address
PO Box 205
West Perth WA 6872
Share Register
Link Market Services
Level 12 QV1 Building
250 St Georges Terrace
Perth WA 6000
T: +61 8 9211 6670
Auditors
HLB Mann Judd (WA Partnership)
Level 4, 130 Stirling Street
Perth WA 6000
Bankers
Australia and New Zealand Banking Group Ltd (ANZ)
Level 5, 240 St Georges Terrace
Perth WA 6000
National Australia Bank Ltd (NAB)
Level 14, 100 St Georges Terrace
Perth WA 6000
Australian Business Number (ABN)
29 125 811 083
ANNUAL REPORT 2022 3
SHEFFIELD RESOURCES LIMITED
Chairman’s Letter
CHAIRMAN’S LETTER
Dear Shareholders,
The 2022 financial year saw your Company achieve a number of significant milestones for its flagship Thunderbird Mineral Sands
Project. The Bankable Feasibility Study (BFS) confirmed the value proposition for Thunderbird, project finance for Stage 1 was
secured, and construction activities continued on site. Sheffield also sold two non-core assets for cash proceeds totalling $36m,
securing sufficient cash to fund our expected equity contribution to complete the Thunderbird Mineral Sands Project.
The BFS for the Thunderbird Project confirmed the very strong value that will be created from the development of one of the
world’s largest zircon reserve. With a total after-tax NPV of $1.28 billion and an IRR of 27.5% for Stage 1 & 2 of Thunderbird,
Sheffield’s 50% share of value is estimated at $640 million, with Sheffield required to contribute an estimated $36 million in
equity to capture this value.
An expected total of $484 million in funding is required to deliver Thunderbird into first production and during the year, a $160
million facility, including a $40 million cost overrun facility, was secured from the Northern Australia Infrastructure Facility (NAIF).
This will be combined with the US$110 million facility agreed with Orion Resource Partners (Orion) following the end of the
reporting period. It is a testament to the strength of the Thunderbird Project and the efforts of our joint venture management
team at Kimberley Mineral Sands, Sheffield, YGH Australia Investment Pty Ltd (Yansteel) and our advisors that we were able to
secure the required project finance; even in the best of markets there are only a few sources of debt with appetite to provide
project finance to mineral sands projects and the Orion facility was secured during a very challenging period for financial markets,
with rising central bank interest rates resulting in a significant decline in financial activity since March 2020.
Utilising the $130.1 million contributed by our 50:50 joint venture partner Yansteel, an early works program was completed
during the 2021 dry season. This included upgrading and completion of the access road and other site preparation works to
enable the project team to take full advantage of the 2022 dry season. Construction activities commenced at the start of the
2022 dry season and continue with all critical weather dependent civil activities expected to be completed before the end of the
current 2022 dry season. A total of $76 million has been spent by Kimberley Mineral Sands advancing the project since the
formation of the joint venture in March 2021. The ability to undertake major construction activities prior to completion of the
financing activities has enabled the key milestone for the project, commencement of customer product deliveries, to be
maintained as early 2024.
Of the estimated $328 million capital expenditure to deliver Stage 1 of Thunderbird, $229 million is forecast either under a fixed
price contract or has already been incurred as at the end of June 2022. Within the estimated $484 million funding envelope
required to complete the project, a combined $73 million of contingency and cost overrun allowance is available, in addition an
estimated new equity requirement of $62 million shared by joint venture shareholders. With approximately $100 million of
expenditure exposed to cost inflation, contingency and cost overrun allowances of $73 million represents considerable capacity
to absorb any unforeseen cost increase.
The Company initiated two processes to seek potential buyers for its non-core Eneabba and McCalls projects and ultimately sold
both to Image Resources Limited in two transactions for total cash consideration of $36m.
Additionally, Sheffield welcomed Mrs Vanessa Kickett to the Board as an independent Non-Executive Director. Mrs Kickett has
extensive experience and involvement with aboriginal engagement, native title and heritage matters throughout Western
Australia and will assist in shaping the Thunderbird Mineral Sands Project and our commitment to the indigenous community in
the Kimberley region of Western Australia.
I would like to thank my fellow Directors, our management team and dedicated employees, and the management and employees
of Kimberley Mineral Sands for their efforts in achieving these key milestones this year for your Company.
With a significant amount of construction activity already completed and the financing required to complete construction from
NAIF and Orion, the next 12 months will see your Company continue construction of the Thunderbird Project funded initially from
equity proceeds, and thereafter from the proceeds of the proposed NAIF and Orion loan facilities.
In closing, I thank Sheffield’s loyal shareholders for your continued support of our Company as we look forward to an exciting
year ahead as we continue construction at Thunderbird, ahead of commencing delivery of product to customers in early calendar
2024.
Bruce Griffin
Executive Chair
ANNUAL REPORT 2022 4
SHEFFIELD RESOURCES LIMITED
Review of Operations
REVIEW OF OPERATIONS
KIMBERLEY MINERAL SANDS (KMS)
During the reporting period, through its 50% interest in Kimberley Mineral Sands Pty Ltd (KMS), Sheffield Resources Limited
(Sheffield, the Company or the Group) commenced initial construction activities at the Thunderbird Mineral Sands Project
(Thunderbird, Project or Thunderbird Project), located near Derby in the Canning Basin region of Western Australia, with the
objective of achieving targeted first production in early 2024.
Kimberley Mineral Sands Pty Ltd is a 50/50 joint venture between Sheffield and YGH Australia Investment Pty Ltd (Yansteel).
Yansteel is a wholly-owned subsidiary of Tangshan Yanshan Iron & Steel Co. Ltd, a privately owned steel manufacturer
headquartered in Hebei, China producing approximately 10mt per annum of steel products.
The following key achievements took place during the reporting period, supporting the future development of the Thunderbird
Mineral Sands Project:
•
•
•
•
•
Completed the targeted early works program and commenced construction at Thunderbird including mine access roads,
accommodation and plant site earthworks. Total investment to date by KMS is $76m.
Completed the Bankable Feasibility Study for the Thunderbird Project outlining a 36-year mine life and underlying economics
of post-tax NPV8 of $1.28B and post-tax IRR of 27.5%.
Approval of a $160m loan facility from NAIF to support the development of the Thunderbird Mineral Sands Project.
Execution of material commercial agreements including a $179m fixed price engineering, procurement and construction
(EPC) contract with GR Engineering Services Limited.
Subsequent to the end of the reporting period, agreement of a non-binding term sheet with Orion Resource Partners for a
US$110m loan facility in favour of the Thunderbird Project. Alongside the NAIF loan facility, completion of the Orion loan
facility shall enable Kimberley Mineral Sands to achieve Financial Close.
Figure 1: Location of Thunderbird Mineral Sands Project
ANNUAL REPORT 2022 5
SHEFFIELD RESOURCES LIMITED
Review of Operations
Bankable Feasibility Study (KMS BFS)
During the reporting period, KMS completed a bankable feasibility study for the Thunderbird Mineral Sands Project, delivering a
pre-finance, post-tax NPV8 of $1.28B and IRR of 27.5%.
The KMS BFS removed the requirement for an Ilmenite Processing Circuit which contained the Low Temperature Roaster (LTR)
previously contemplated by the Project and further removed the Mineral Separation Plant (MSP) components contained in earlier
design. The KMS BFS flowsheet is forecast to produce three products, a Non-Magnetic Concentrate product containing zircon
and rutile, an ilmenite rich Magnetic Concentrate and a Paramagnetic Concentrate.
KMS executed an amended binding offtake agreement for 100% of the magnetic concentrate on an arm’s length basis with
approximately 80% of the KMS BFS Stage 1 revenues contracted under binding, long term offtake agreements. Construction of
a vertically integrated complex in Tangshan, China is underway by joint venture and ilmenite offtake partner Yansteel, with the
facility comprising a pre-treatment process for ilmenite feedstocks to achieve the same intended outcome as the previous LTR
design for Thunderbird, thereby avoiding duplication and a material capital investment by the joint venture.
The two stage Thunderbird development pathway sees the initial Stage 1 mining and processing feed rate forecast at 1,085 dry
tph at the Wet Concentrate Plant (WCP), with Stage 2 doubling the WCP feed rate to 2,170tph targeted during Year 5 of
operations. Stage 1 and 2 of operations is estimated to produce 1.4mtpa of zircon and ilmenite concentrates over an estimated
36 year Life of Mine.
The KMS BFS estimates an updated Ore Reserve of 754 million tonnes at 11.0% HM (refer ASX announcement “Thunderbird
Ore Reserve Update” 24 March 2022). The Ore Reserve update reflects changes in market product pricing, the flow sheet,
product mix, ore feed blending strategy and geotechnical information and mining cost data gathered from the trial mining
programs at Thunderbird.
Table 1: Key Metrics – 2022 Bankable Feasibility Study
Kimberley Mineral Sands – Bankable Feasibility Study (Key Metrics)
NPV8 post-tax
IRR post-tax
Total Funding Requirement (Stage 1)
Life of Mine EBITDA
Capex Payback (Stage 1&2; years)
Product sales (avg kt pa; all products)
Mine Life
Long Term Average FX Rate (A$/US$)
Long Term Zircon Price - FOB (TZMI)
Outcome
A$1.28B
27.5%
A$484m
A$8.1B
5.00
1,424
36 years
0.75
US$1,516
Project financing activities to support a Final Investment Decision are well advanced. The Northern Australia Infrastructure
Facility approved a $160m loan facility and following the end of the reporting period, the Company announced that Kimberley
Mineral Sands had agreed a non-binding term sheet with Orion Resource Partners for a US$110m loan facility in favour of the
Thunderbird Mineral Sands Project.
Sheffield expects the project timetable, project economics and total funding requirement, including an additional $36m of equity
from Sheffield to bring Thunderbird into production, will not materially differ from the Kimberley Mineral Sands Bankable
Feasibility Study (refer ASX announcement dated 24 March 2022). Sheffield had cash reserves of $40m as at 30 June 2022 to
fund its expected $36m equity contribution.
ANNUAL REPORT 2022 6
SHEFFIELD RESOURCES LIMITED
Review of Operations
Figure 2: Forecast Timeline to FID and First Production
Figure 3: Thunderbird mine access road – culvert installation
Thunderbird Work Program Activities
Early works and construction activities were significantly advanced throughout the reporting period, focussed on mine site road
construction, village design and installation, tailings storage facility design and site civil earthworks. GR Engineering Services
Limited (GRES) and the nominated village installation contractor mobilised to site as scheduled during April 2022. Throughout
the reporting period, engineering works including mechanical, piping and structural modelling and electrical design packages
were well advanced.
ANNUAL REPORT 2022 7
SHEFFIELD RESOURCES LIMITED
Review of Operations
Following completion and award of the EPC contract with GRES during 2022 (refer ASX announcement dated 24 March 2022)
other major construction and supply contracts to support project development are nearing completion, inclusive of energy supply,
power generation and mining services agreements.
In conjunction with construction activities at Thunderbird, KMS joint venture partner Yansteel has progressed the construction
of the smelter and chloride pigment plant in China that will utilise ilmenite sourced from Thunderbird. Plant construction
commenced in late 2020 with civil works completed 2021. The plant is on track for completion of construction and
commissioning in 2022. The smelter will be commissioned using ilmenite from other sources prior to the commencement of
ilmenite offtake from Thunderbird in 2024.
Aboriginal and Community Engagement
Figure 4: Thunderbird village accommodation – under construction
The Kimberley Mineral Sands team continued community engagement and consultation processes throughout the reporting
period, providing community, government representatives and traditional owners with an update on Thunderbird activities.
Kimberley Mineral Sands is assisting traditional owner groups with the establishment of labour hire services to ultimately support
Thunderbird during operations. Community engagement activities included community and business forums across Broome and
Derby, addressing business and employment opportunities, including consultation with a number of traditional owner groups
throughout the Kimberley region. Further community engagement activities are scheduled throughout 2022.
ANNUAL REPORT 2022 8
SHEFFIELD RESOURCES LIMITED
Review of Operations
Markets
Figure 5: Kimberley Mineral Sands local community consultation - Broome
Mineral sands markets remained buoyant throughout 2022 with both zircon and titanium feedstock prices continuing to increase
as at the end of the reporting period.
Tight zircon supply and steady price increases evidenced in the previous reporting period have continued through 2022. Premium
zircon from major producers has moved from approximately US$1,350 per tonne in mid-2019 through to approximately
US$2,100 per tonne in mid-2022. Tight supply is forecast for the near to mid-term, with pricing for major producers expected to
increase to approximately US$2,300 per tonne during the second half of 2022.
The titanium feedstock market remains strong with increase in demand occurring across all products. The benchmark 50% TiO2
sulfate ilmenite price remains above US$400 per tonne in China and is expected to remain at this level during the remainder of
2022. Longer-term, high-grade pigment feedstock demand for production of chloride grade pigment is forecast to grow, and
chloride slag (produced from sulfate ilmenite) is the most likely source of new supply.
Commodity price strength throughout 2021 and into 2022 and sustained near to mid-term forecast pricing for zircon expected
to translate into higher forecast revenues during the initial years of operation provides a positive outlook for the Thunderbird
project.
Other Projects
Divestment of Eneabba & McCalls Projects (Sheffield – 100%)
Following a commercial process seeking expressions of interest to acquire its interest in the Eneabba project, Sheffield concluded
a binding and definitive agreement with Image Resources NL (Image) for the sale of its 100% owned Eneabba Project, receiving
total cash consideration of $24m (net sale proceeds after GST) during the reporting period.
Additionally, Sheffield sought expressions of interest to acquire its interest in the McCalls Project during 2022, with the Company
announcing it had concluded a $12m sale agreement with Image to acquire its 100% owned McCalls Project with the proceeds
received in March 2022 (refer ASX announcement 14 March 2022).
Proceeds from the divestment of Eneabba and McCalls Projects will be applied toward Sheffield’s $10m obligation to KMS
payable within 60 days following a Final Investment Decision for the Thunderbird Mineral Sands Project, plus any additional
shared joint venture equity contribution (currently estimated as $26m), as well as corporate purposes.
ANNUAL REPORT 2022 9
SHEFFIELD RESOURCES LIMITED
Ore Reserves and Mineral Resources
ORE RESERVES AND MINERAL RESOURCES
Sheffield announced an updated Ore Reserve totalling 754 million tonnes @ 11.0% HM for the Thunderbird deposit, in the
Kimberley Region of Western Australia, on 24 March 2022. The Ore Reserve estimate is based on the July 2016 Thunderbird
Mineral Resource estimate, announced to the ASX on 5 July 2016. Measured and Indicated Mineral Resources were converted
to Proved and Probable Ore Reserves respectively, subject to mine design, modifying factors and economic evaluation.
Ore Reserve for Dampier Project as at 30 June 2022 (Sheffield interest – 50%)
Dampier Project Ore Reserve 1,2,3,4
Deposit
Ore
Reserve
Category
Material
(Million
Tonnes)
In-situ HM
(Million
Tonnes)7
Thunderbird
Proved
Probable
Total
239
514
754
31
52
83
Deposit
Ore
Reserve
Category
Material
(Million
Tonnes)
In-situ HM
(Million
Tonnes)7
Thunderbird
Proved
Probable
Total
239
514
754
31
52
83
Total
HM
Grade
(%)
12.9
10.1
11.0
Total
HM
Grade
(%)
12.9
10.1
11.0
Valuable HM Grade (In-situ)5
Zircon
(%)
0.96
0.79
0.84
HiTi
Leuc
(%)
0.29
0.26
0.27
Leuc
(%)
Ilmenite
(%)
Slimes
(%)
Oversize
(%)
0.28
0.27
0.27
3.4
2.9
3.1
16
15
15
14
11
12
HM Assemblage6
Zircon
(%)
7.5
7.8
7.7
HiTi
Leuc
(%)
2.2
2.6
2.4
Leuc
(%)
Ilmenite
(%)
Slimes
(%)
Oversize
(%)
2.2
2.6
2.5
27
28
28
16
15
15
14
11
12
Note 1: The Ore Reserve estimate was prepared by Entech Pty Ltd and first disclosed under the JORC Code (2012), refer to ASX
announcement 24 March 2022 for further details. Ore Reserve is reported to a design overburden surface with appropriate consideration of
modifying factors, costs, mineral assemblage, process recoveries and product pricing.
Note 2: Ore Reserve is a sub-set of Mineral Resource.
Note 3: HM is within the 38µm to 1mm size fraction and reported as a percentage of the total material, slimes is the -38µm fraction and
oversize is the +1mm fraction.
Note 4: Tonnes and grades have been rounded to reflect the relative accuracy and confidence level of the estimate, thus the sum of columns
may not equal.
Note 5: The in-situ assemblage grade is determined by multiplying the percentage of HM by the percentage of each valuable heavy mineral
within the heavy mineral assemblage at the Resource block model scale.
Note 6: Mineral assemblage as a percentage of HM Grade, it is derived by dividing the in-situ grade by the HM grade.
Note 7: The contained in-situ tonnes derived from HM and material tonnes from information in the Mineral Resource tables.
The Ore Reserve estimate was prepared by Entech Pty Ltd, an experienced and prominent mining engineering consultancy with
appropriate mineral sands experience in accordance with the JORC Code (2012 Edition). The Ore Reserve is estimated using all
available geological and relevant drill hole and assay data, including mineralogical sampling and test work on mineral recoveries
and final product qualities.
The Company is not aware of any new information or data that materially affects the information included in the Ore Reserve
estimate and confirms that all material assumptions and technical parameters underpinning the estimate continue to apply and
have not materially changed.
ANNUAL REPORT 2022 10
SHEFFIELD RESOURCES LIMITED
Ore Reserves and Mineral Resources
Mineral Resources for Dampier Project as at 30 June 2022 (Sheffield interest – 50%)
Dampier Project Mineral Resources 1,2,3
Deposit
(cut-off)
Mineral
Resource
Category
Cut-off
(Total
HM%)
Material
(Million
Tonnes)
In-situ
HM
(Million
Tonnes)7
Total
HM
Grade
(%)
HM Assemblage
Zircon
(%)
HiTi
Leuc6
(%)
Leuc
(%)
Ilmenite
(%)
Slimes
(%)
Oversize
(%)
Thunderbird4
(low-grade)
Night Train5
(low-grade)
All Dampier
(low-grade)
Thunderbird4
(high-grade)
Night Train5,6
(high-grade)
All Dampier
(high-grade)
Measured
Indicated
Inferred
Total
Inferred
Total
Measured
Indicated
3.0
3.0
3.0
3.0
1.2
1.2
3.0
3.0
510
2,120
600
3,230
130
130
510
2,120
Inferred
Various
730
Total
Various
3,360
Measured
Indicated
Inferred
Total
Inferred
Total
Measured
Indicated
7.5
7.5
7.5
7.5
2.0
2.0
7.5
7.5
Inferred
Various
220
640
180
1,050
127
50
50
220
640
230
3.0
3.0
32
76
23
Total
Various
1,090
130
45
140
38
223
4.2
4.2
45
140
42
227
32
76
20
8.9
6.6
6.3
6.9
3.3
3.3
8.9
6.6
5.8
6.8
14.5
11.8
10.8
12.2
5.9
5.9
14.5
11.8
9.7
11.9
8.0
8.4
8.4
8.3
14
14
8.0
8.4
8.9
8.4
7.4
7.6
8.0
7.6
14
14
7.4
7.6
8.8
7.8
2.3
2.7
2.6
2.6
5.4
5.4
2.3
2.7
2.9
2.7
2.1
2.4
2.5
2.3
5.6
5.6
2.1
2.4
2.9
2.4
2.2
3.1
3.2
2.9
46
46
2.2
3.1
7.5
3.7
1.9
2.1
2.4
2.1
49
49
1.9
2.1
8.6
3.2
27
28
28
28
22
22
27
28
27
28
27
28
28
27
18
18
27
28
27
27
18
16
15
16
8.7
8.7
18
16
13
15
16
14
13
15
10.2
10.2
16
14
12
14
12
9
8
9
2.2
2.2
12
9
7.2
8.7
15
11
9
11
2.2
2.2
15
11
7.2
11
Note 1: Night Train: The Mineral Resources estimate was prepared by Optiro Pty Ltd and first disclosed under the JORC Code (2012) refer
to ASX announcement 31 January 2019 for further details. The Mineral Resource reported above 1.2% HM cut-off is inclusive of (not
additional to) the Mineral Resource reported above 2.0% HM cut-off. Thunderbird: The Mineral Resource estimate was prepared by Optiro
Pty Ltd and first disclosed under the JORC Code (2012) refer to ASX announcement 5 July 2016 fur further details including Table 1. The
Dampier Project Mineral Resources are reported inclusive of (not additional to) Ore Reserves. Thunderbird: The Mineral Resource reported
above 3.0% HM cut-off is inclusive of (not additional to) the Mineral Resource reported above 7.5% HM cut-off.
Note 2: HM is within the 38µm to 1mm size fraction and reported as a percentage of the total material, slimes is the -38µm fraction and
oversize is the +1mm fraction.
Note 3: Tonnes and grades have been rounded to reflect the relative accuracy and confidence level of the estimate, thus the sum of columns
may not equal.
Note 4: Thunderbird: Estimates of Mineral Assemblage are presented as percentages of the Heavy Mineral (HM) component of the deposit,
as determined by magnetic separation, QEMSCANTM and XRF. Magnetic fractions were analysed by QEMSCANTM for mineral determination
as follows: Ilmenite: 40-70% TiO2 >90% Liberation; Leucoxene: 70-94% TiO2 >90% Liberation; High Titanium Leucoxene (HiTi Leucoxene):
>94% TiO2 >90% Liberation; and Zircon: 66.7% ZrO2+HfO2 >90% Liberation. The non-magnetic fraction was submitted for XRF analysis and
minerals determined as follows: Zircon: ZrO2+HfO2/0.667 and High Titanium Leucoxene (HiTi Leucoxene): TiO2/0.94.
Note 5: Night Train: Estimates of Mineral Assemblage are presented as percentages of the Heavy Mineral (HM) component of the deposit, as
determined by magnetic separation, QEMSCANTM and XRF for one of 12 composite samples. Magnetic fractions were analysed by QEMSCANTM
for mineral determination as follows: Ilmenite: 40-70% TiO2 >90% Liberation; Leucoxene: 70-90% TiO2 >90% Liberation; High Titanium
Leucoxene (HiTi Leucoxene) and Rutile 90% TiO2 >90% Liberation, and Zircon: 66.7% ZrO2+HfO2 >90% Liberation. The non-magnetic fraction
was submitted for XRF analysis and minerals determined as follows: Zircon: ZrO2+HfO2/0.667 and High Titanium Leucoxene (HiTi
Leucoxene): TiO2/0.94. HM assemblage determination- was by the QEMSCANTM process for 11 of 12 composite samples which uses observed
mass and chemistry to classify particles according to their average chemistry, and then report mineral abundance by dominant % mass in
particle. For the TiO2 minerals the following breakpoints were used to distinguish between Ilmenite 40% to 70% TiO2, Leucoxene 70% to 90%
TiO2, High Titanium Leucoxene and Rutile > 90%, Screening of the heavy mineral was not required.
Note 6: HiTi Leucoxene and Rutile (%) combined for Night Train at a >90% TiO2 (as one assemblage sample utilised=> 90% rutile and HiTi
Leucoxene), HiTi Leucoxene for Thunderbird > 94% TiO2.
Note 7: The contained in-situ tonnes for the valuable heavy minerals were derived from information from the Mineral Resource tables. The
in-situ assemblage grade is determined by multiplying the percentage of HM by the percentage of each valuable heavy mineral within the
heavy mineral assemblage at the Resource block model scale.
ANNUAL REPORT 2022 11
SHEFFIELD RESOURCES LIMITED
Ore Reserves and Mineral Resources
GOVERNANCE AND INTERNAL CONTROLS
Mineral Resource and Ore Reserve are compiled by qualified Sheffield personnel and / or independent consultants following
industry standard methodology and techniques. The underlying data, methodology, techniques and assumptions on which
estimates are prepared are subject to internal peer review by senior Company personnel, as is JORC compliance. Where deemed
necessary or appropriate, estimates are reviewed by independent consultants. Competent Persons named by the Company are
members of the Australasian Institute of Mining and Metallurgy and / or the Australian Institute of Geoscientists and qualify as
Competent Persons as defined in the JORC Code 2012.
COMPETENT PERSONS AND COMPLIANCE STATEMENTS
The information in this report that relates to Exploration Results is based on information compiled by Mr Seb Gray, a Competent
Person who is a Member of Australian Institute of Geoscientists (AIG). Mr Gray is a consultant to Sheffield Resources Ltd and
has sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity
being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’. Mr Gray consents to the inclusion in the report of the matters based
on his information in the form and context in which it appears.
The Company’s Ore Reserves and Mineral Resources Statement is based on information first reported in previous ASX
announcements by the Company. These announcements are listed below and are available to view on Sheffield’s website
www.sheffieldresources.com.au. Mineral Resources and Ore Reserves reported for the Dampier Project and Mineral Resources
reported for the Eneabba and McCalls Projects, are prepared and disclosed under the JORC Code 2012. The Company confirms
that it is not aware of any new information or data that materially affects the information included in the relevant original market
announcements and that all material assumptions and technical parameters underpinning the estimates in the relevant original
market announcement continue to apply and have not materially changed.
The information in this report that relates to the estimation of the Ore Reserve is based on information compiled by Mr Per
Scrimshaw, a Competent Person who is a Member of the Australasian Institute of Mining and Metallurgy. Mr Scrimshaw is
employed by Entech Pty Ltd and has sufficient experience that is relevant to the style of mineralisation and type of deposit under
consideration and to the activity being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the
‘Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves’. Mr Scrimshaw consents to the
inclusion in the report of the matters based on his information in the form and context in which it appears.
The information in this report that relates to the estimation of the Mineral Resources is based on information compiled by Mrs
Christine Standing, a Competent Person who is a Member of the Australian Institute of Geoscientists (AIG) and the Australasian
Institute of Mining and Metallurgy (AusIMM). Mrs Standing is a full-time employee of Optiro Pty Ltd and has sufficient experience
which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which she is undertaking
to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of Exploration Results,
Mineral Resources and Ore Reserves’. Mrs Standing consents to the inclusion in this report of the matters based on her
information in the form and context in which it appears.
The information in this report that relates to the Thunderbird Mineral Resource is based on information compiled under the
guidance of Mr Mark Teakle, a Competent Person who is a Member of the Australian Institute of Geoscientists (AIG) and the
Australasian Institute of Mining and Metallurgy (AusIMM). Mr Teakle is a consultant to Thunderbird Operations Pty Ltd and has
sufficient experience that is relevant to the style of mineralisation and type of deposit under consideration and to the activity
being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the ‘Australasian Code for Reporting of
Exploration Results, Mineral Resources and Ore Reserves’. Mr Teakle consents to the inclusion in the report of the matters
based on his information in the form and context in which it appears.
The Competent Persons for reporting of Mineral Resources and Ore Reserves in the relevant original market announcements
are listed below. The Company confirms that the form and context in which the Competent Persons’ findings are presented have
not been materially modified from the relevant original market announcement.
SUPPORTING INFORMATION REQUIRED UNDER ASX LISTING RULES, CHAPTER 5
The supporting information below is required, under Chapter 5 of the ASX Listing Rules, to be included in market announcements
reporting estimates of Mineral Resources and Ore Reserves.
PREVIOUSLY REPORTED INFORMATION
This report includes information that relates to Exploration Results, Mineral Resources and Ore Reserves prepared and first
disclosed under the JORC Code 2012 and a Bankable Feasibility Study. The information was extracted from the Company’s
previous ASX announcements as follows:
• Mineral Resource and Ore Reserve Statement: “MINERAL RESOURCE AND ORE RESERVE STATEMENT” 24 September 2019
•
Thunderbird Ore Reserve Update: “THUNDERBIRD ORE RESERVE UPDATE” 24 March 2022
• Night Train Inferred Resource and Mineral Assemblage results “HIGH GRADE MAIDEN MINERAL RESOURCE AT NIGHT TRAIN”
31 January 2019
These announcements are available to view on Sheffield’s website at www.sheffieldresources.com.au.
ANNUAL REPORT 2022 12
SHEFFIELD RESOURCES LIMITED
Ore Reserves and Mineral Resources
The Company confirms that it is not aware of any new information or data that materially affects the information included in the
relevant market announcements and, in the case of estimates of Mineral Resources, Ore Reserves and the Kimberley Mineral
Sands Bankable Feasibility Study, that all material assumptions and technical parameters underpinning the estimates in the
relevant market announcement continue to apply and have not materially changed. The Company confirms that the form and
context in which the Competent Persons’ findings are presented have not been materially modified from the relevant original
market announcements.
Ore Reserves and Mineral Resources prepared and first disclosed under the JORC Code (2012):
Item
Report title
Report Date
Competent
Person(s)
Thunderbird Ore Reserve
Thunderbird Ore Reserve Update
24 March 2022
P. Scrimshaw
Thunderbird Mineral Resource
Sheffield Doubles Measured Mineral Resource at
Thunderbird
5 July 2016
M. Teakle,
C. Standing
Night Train Mineral Resource
High Grade Maiden Mineral Resource at Night
Train
31 January 2019
C. Standing
Item
Name
Company
Professional Affiliation
Exploration Results
Mr Seb Gray
Sheffield Resources
MAIG
Mineral Resource Reporting
Mr Mark Teakle
Thunderbird Operations
MAIG, MAusIMM
Mineral Resource Estimation
Mrs Christine Standing
Ore Reserve
Mr Per Scrimshaw
Optiro
Entech
MAIG, MAusIMM
MAusIMM
FORWARD LOOKING, CAUTIONARY STATEMENTS AND RISK FACTORS
The contents of this report reflect various technical and economic conditions at the time of writing. Given the nature of the
resources industry, these conditions can change significantly over relatively short periods of time. Consequently, actual results
may vary from those contained in this report.
Some statements in this report regarding estimates or future events are forward-looking statements. They include indications of,
and guidance on, future earnings, cash flow, costs and financial performance. Forward-looking statements include, but are not
limited to, statements preceded by words such as “planned”, “expected”, “projected”, “estimated”, “may”, “scheduled”,
“intends”, “anticipates”, “believes”, “potential”, "predict", "foresee", "proposed", "aim", "target", "opportunity", “could”, “nominal”,
“conceptual” and similar expressions. Forward-looking statements, opinions and estimates included in this report are based on
assumptions and contingencies which are subject to change without notice, as are statements about market and industry trends,
which are based on interpretations of current market conditions. Forward-looking statements are provided as a general guide
only and should not be relied on as a guarantee of future performance. Forward-looking statements may be affected by a range
of variables that could cause actual results to differ from estimated results and may cause the Company’s actual performance
and financial results in future periods to materially differ from any projections of future performance or results expressed or
implied by such forward-looking statements. So there can be no assurance that actual outcomes will not materially differ from
these forward-looking statements.
ANNUAL REPORT 2022 13
SHEFFIELD RESOURCES LIMITED
Directors’ Report
DIRECTORS’ REPORT
The Directors present their report on Sheffield Resources Limited (Sheffield, parent entity or the Company) and its controlled
entities (collectively known as the Group or consolidated entity) for the year ended 30 June 2022.
DIRECTORS AND COMPANY SECRETARY
The Directors and Company Secretary of the Company during and until the date of this report are:
Mr Bruce Griffin
Qualifications
Appointed
Experience
Executive Chair
B.Ch.Eng, B.A.Econ, MBA
10 June 2020
(Previously Commercial Director, appointed Executive Chair 13 April 2021)
Mr Griffin most recently held the position of Senior Vice President Strategic
Development of Lomon Billions Group, the world’s third largest producer of high-
quality titanium dioxide pigments. Bruce previously held executive management
positions in several resource companies, including acting as the Chief Executive
Officer and a director of TZ Minerals International Pty. Ltd. (TZMI), the leading
independent consultant on the global mineral sands industry, Chief Executive Officer
and a director of World Titanium Resources Ltd, a development stage titanium
project in Africa and as Vice President Titanium for BHP Billiton.
Responsibilities
Member of the Board
Interest in shares, options and rights
200,000 Ordinary Shares
363,636 Options
1,704,546 Performance Rights
Other current directorships
Titanium Corporation Inc. (since 2019)
Past directorships last 3 years
None
Mr John Richards
Qualifications
Appointed
Experience
Responsibilities
Lead Independent Director
B. Econ (Hons)
1 August 2019
(Previously Non-Executive Chair, appointed Lead Independent Director 13 April
2021)
Mr Richards is an economist with more than 35 years' experience in the resources
industry; holding various positions within mining companies, investment banks and
private equity groups. He has been involved in a wide range of mining M&A
transaction in multiple jurisdictions. Mr Richards is an Independent Non-Executive
Director; holding previous positions at Normandy Mining Ltd, Standard Bank, Buka
Minerals and Global Natural Resource Investments; he is a Non-Executive Director
of Northern Star Resources Limited and Non-Executive Chair of Sandfire Resources
Limited.
Member of the Board, Chair of the Remuneration and Nomination Committee,
Member of the Audit and Risk Committee
Interest in shares, options and rights
480,000 Options
Other current directorships
Past directorships last 3 years
Northern Star Resources Limited (appointed 12 February 2021)
Sandfire Resources Limited (appointed 1 January 2021)
Saracen Mineral Holdings Ltd (appointed May 2019, resigned February 2021)
Adriatic Metals PLC (appointed November 2019, resigned July 2020)
ANNUAL REPORT 2022 14
SHEFFIELD RESOURCES LIMITED
Directors’ Report
Mr Ian Macliver
Qualifications
Appointed
Experience
Responsibilities
Non-Executive Director
BCom, FCA, SF Fin, FAICD
1 August 2019
Ian Macliver is the Executive Chairman of Grange Consulting Group Pty Ltd & Grange
Capital Partners. Prior to establishing Grange he held positions in various listed and
corporate advisory companies. His experience covers all areas of corporate activity
including capital raisings, acquisitions, divestments, takeovers, business and
strategic planning, debt and equity reconstructions, operating projects and financial
review and valuations. Mr Macliver is the Non-Executive Chairman of MMA Offshore
Limited.
Member of the Board, Chair of the Audit and Risk Committee, Member of the
Remuneration and Nomination Committee
Interest in shares, options and rights
100,000 Ordinary Shares
480,000 Options
Other current directorships
MMA Offshore Limited (appointed January 2020)
Past directorships last 3 years
Western Areas Limited (appointed October 2011, resigned June 2022)
Otto Energy Limited (appointed September 2010, resigned November 2019)
Mr Gordon Cowe
Qualifications
Appointed
Experience
Responsibilities
Non-Executive Director
BSc (Hons) Mechanical Engineering, GAICD
12 March 2021
Gordon Cowe is a qualified mechanical engineer with over 30 years' experience, Mr
Cowe has had significant involvement in leading business start-up, planning and
delivery of multiple complex projects including Mining & Mineral Processing, Oil &
Gas and Resources based infrastructure projects globally. He has enjoyed an
extensive career with leading contractors (including Bechtel and Worley Parsons)
and project owners on a wide range of projects.
Member of the Board, member of the Remuneration and Nomination Committee,
member of the Audit and Risk Committee
Interest in shares, options and rights
480,000 Options
Other current directorships
Past directorships last 3 years
Nil
None
Mrs Vanessa Kickett
Non-Executive Director
Appointed
Experience
1 January 2022
Vanessa Kickett has extensive experience and involvement with Aboriginal
engagement, native title and heritage matters throughout Western Australia. A
member of the Whadjuk Noongar community, Mrs Kickett is currently Deputy Chief
Executive Officer of the South West Aboriginal Land and Sea Council, responsible for
the recent implementation and operation of the South West (Western Australia)
native title settlement. Mrs Kickett has also held a variety of roles in the public
sector, leading the development of heritage and native title policy and frameworks
on behalf of Water Corporation in Western Australia.
Responsibilities
Member of the Board
Interest in shares, options and rights
Other current directorships
Nil
Nil
Past directorships last 3 years
None
ANNUAL REPORT 2022 15
SHEFFIELD RESOURCES LIMITED
Directors’ Report
Mr Bruce McFadzean
Non-Executive Director (retired 6 September 2021)
Qualifications
Appointed
Experience
Dip. Mining, FAusIMM
2 November 2015
(Previously Managing Director, appointed Non-Executive Director 1 July 2021)
Bruce McFadzean is a qualified mining engineer with more than 40 years’
experience in the global resources industry. Mr McFadzean has led the financing,
development and operation of several new mines around the world. Mr
McFadzean’s technical, operating and corporate experience includes gold, silver,
nickel, diamonds, iron ore and mineral sands. Mr McFadzean’s professional career
includes 15 years with BHP Billiton and Rio Tinto in a variety of positions and four
years as Managing Director of successful ASX gold miner Catalpa Resources Limited.
Responsibilities
Nil
Interest in shares, options and rights
2,249,239 Ordinary Shares (as at 6 September 2021)
Other current directorships
Hastings Technology Metals Limited (appointed 1 January 2021)
Aquirian Limited (appointed 27 July 2021)
Past directorships last 3 years
Indiana Resources Limited (appointed March 2015, resigned February 2019)
Mr Mark Di Silvio
Qualifications
Appointed
Experience
Company Secretary
B.Bus, CPA, MBA
15 February 2016
Mark Di Silvio is a CPA and MBA qualified finance professional with over 30 years’
resources industry experience. Mr Di Silvio’s professional career includes operations
and project development experience both in Australia and overseas, including senior
finance roles with Woodside Petroleum Limited in Australia and Africa prior to joining
Central Petroleum Limited and Centamin Plc as CFO. Mr Di Silvio has significant
commercial and financial management experience including project financing,
commercial agreement structuring and product offtake agreements.
DIRECTORS’ MEETINGS
The number of meetings held and attended by each Director during the year is shown are as follows:
Directors’ Meetings
Audit & Risk Committee
Remuneration & Nomination
Committee
Held
Attended
Held
Attended
Held
Attended
B Griffin
J Richards
I Macliver
G Cowe
V Kickett1
B McFadzean2
13
13
13
13
7
1
13
13
13
13
7
1
-
2
2
2
-
-
Note 1: Mrs Kickett appointed on 1 January 2022.
Note 2: Mr McFadzean retired on 6 September 2021.
-
2
2
2
-
-
-
1
1
1
-
-
-
1
1
1
-
-
ANNUAL REPORT 2022 16
SHEFFIELD RESOURCES LIMITED
Directors’ Report
OPTIONS
Total unlisted options on issue at the date of this report are as follows:
Date of expiry
Grant date
Exercise price
Number under options
30 November 2023
19 November 2019
30 November 2025
25 November 2021
30 October 2026
25 November 2021
$0.65
$0.65
$0.33
960,000
480,000
700,000
2,140,000
PERFORMANCE RIGHTS
Total unlisted performance rights on issue at the date of this report are as follows:
Date of expiry
Grant date
Exercise price
Number under rights
26 October 2025
6 November 2018
1 December 2025
22 December 2018
30 October 2026
25 November 2021
30 October 2026
25 November 2021
Nil
Nil
Nil
Nil
158,940
1,298,367
135,455
3,318,182
4,910,944
PRINCIPAL ACTIVITIES
The principal activities during the year were mineral sands exploration and development within Australia.
OPERATING AND FINANCIAL REVIEW
The Group’s operations during the year ended 30 June 2022 is set out in the Review of Operations and Ore Reserves and Mineral
Resources sections.
The Group recorded a net profit after tax for the year ended 30 June 2022 of $26.1m (2021: $28.0m). At 30 June 2022, the
Group had $40.2m in cash and cash equivalents (2021: $6.5m) and the Group’s net assets were $155.6m (2021: $128.4m).
COVID-19 IMPACT
The Group continues to follow recommendations from State and Federal Government authorities to provide a COVID-19 safe
workplace.
COVID-19 impacts have not been significant to the Group during the period. The Company does not expect any negative impacts
to the financial statements nor triggers for any significant uncertainties with respect to events or conditions which may adversely
impact the Group as at the reporting date or subsequently as a result of the COVID-19 pandemic.
DIVIDENDS
No dividends were paid or declared during the year ended 30 June 2022.
CORPORATE GOVERNANCE STATEMENT
The Corporate Governance Statement is available on the Company’s website at www.sheffieldresources.com.au.
LIKELY DEVELOPMENTS AND EXPECTED RESULTS
Through its 50% investment in Kimberley Mineral Sands Pty Ltd, Sheffield’s objective is to deliver mineral sands products to
markets across the globe, through the successful development and growth of the Thunderbird Mineral Sands Project in Western
Australia. Additionally, Sheffield shall continue to assess and consider growth opportunities within the mineral sands sector
going forward.
ENVIRONMENTAL REGULATION
The Group’s exploration activities are governed by environmental regulation. To the best of the Directors’ knowledge the Group
believes it has adequate systems in place to ensure the compliance with the requirements of applicable environmental legislation
and is not aware of any material breach of those requirements during the year and up to the date of the Directors’ Report.
ANNUAL REPORT 2022 17
SHEFFIELD RESOURCES LIMITED
Directors’ Report
INDEMNIFICATION AND INSURANCE OF DIRECTORS AND OFFICERS
The Company agreed to indemnify all the Directors and key management personnel of the Company for any liabilities to another
person (other than the company or related body corporate) that may arise from their designated position of the Company, except
where the liability arises out of conduct involving a lack of good faith.
During the year the Company paid a premium in respect of a contract insuring the Directors and Officers of the Company against
any liability incurred in the course of their duties to the extent permitted by the Corporations Act 2001.
INDEMNIFICATION OF INSURANCE OF AUDITOR
The Company has not, during or since the end of the year, indemnified or agreed to indemnify the auditor of the Company or any
related entity against a liability incurred by the auditor. During the year, the Company has not paid a premium in respect of a
contract to insure the auditor of the Company or any related entity.
NON-AUDIT SERVICES
During the year the Company has not used its auditors, HLB Mann Judd, to complete any non-audit related work (2021: nil).
PROCEEDINGS ON BEHALF OF THE COMPANY
No person has applied to the Court under section 237 of the Corporations Act 2001 for leave to bring proceedings on behalf of
the Company, or to intervene in any proceedings to which the Company is a party, for the purpose of taking responsibility on
behalf of the Company for all or part of those proceedings.
ROUNDING
The amounts contained in the financial report have been rounded to the nearest $1,000 (unless otherwise stated) pursuant to
the option available to the Company under ASIC Class Order 2016/191. The Company is an entity to which the class order
applies.
AUDITOR’S INDEPENDENCE
This Auditor’s Independence Declaration is set out on page 27 and forms part of the Directors’ report for the year ended 30 June
2022.
EVENTS SUBSEQUENT TO REPORTING PERIOD
On 28 July 2022, Deputy Premier of Western Australia, Hon. Roger Cook MLA, ratified the $160m Northern Australian
Infrastructure Facility (NAIF) loan facility and that the loan facility documentation was executed by Kimberley Mineral Sands Pty
Ltd (KMS) and the Government of Western Australia for the development of the Thunderbird project.
On 8 August 2022, KMS and Orion Resource Partners (Aus) Pty Ltd (Orion) executed a non-binding term sheet for a total financing
of US$110m production linked loan facility for the Thunderbird Project. Completion of the Orion loan facility remains conditional
upon completion of due diligence, the parties entering into binding legal documentation (including intercreditor arrangements)
and satisfaction of conditions precedent.
On 23 August 2022, KMS executed a long-term port access agreement with the Shire of Derby / West Kimberley, supporting the
future export of product from the Thunderbird project. The agreement spans a minimum period through to mid-2040 and provide
KMS a long-term access to port infrastructure and a bulk handling facility at the Port of Derby. The agreement is subject to
customary conditions precedent, including regulatory approvals and KMS providing relevant notice toward the development of
the Thunderbird project.
Other than noted above, there has been no additional matter or circumstance that has arisen after balance date that has
significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of
affairs of the Group in future financial periods.
ANNUAL REPORT 2022 18
SHEFFIELD RESOURCES LIMITED
Directors’ Report
REMUNERATION REPORT (AUDITED)
This report sets out the remuneration strategy and arrangements for Key Management Personnel (KMP) of Sheffield Resources
Limited for year ended 30 June 2022. This Remuneration Report forms part of the Directors’ Report.
KEY MANAGEMENT PERSONNEL (KMP)
For the purposes of this report KMP are defined as those persons having authority and responsibility for planning, directing and
controlling the major activities of the Company and the Group, directly or indirectly, including any Director (whether Executive or
otherwise) of the Company and are detailed in the table below:
Name
Position
Non-Executive Directors
John Richards
Ian Macliver
Gordon Cowe
Lead Independent Director
Non-Executive Director
Non-Executive Director
Vanessa Kickett
Non-Executive Director (appointed 1 January 2022)
Bruce McFadzean
Non-Executive Director (retired 6 September 2021)
Senior Executives
Bruce Griffin
Mark Di Silvio
BOARD POLICY
Executive Chair
Chief Financial Officer and Company Secretary
The Board is responsible for the nomination and appointment of Directors and the remuneration of its Directors, Managing
Director and Senior Executives. To assist the Board in meeting its obligations and to address all matters pertaining to Board
nomination and executive remuneration, the Board has set in place a Nomination & Remuneration Committee during the
reporting period.
OVERVIEW OF COMPANY PERFORMANCE
The table below sets out summary of information about the movements in shareholder wealth for the following financial periods:
Profit / (loss) before tax ($’000)
Net profit / (loss) after tax ($’000)
Dividend (cents)
Basic earnings / (loss) per share (cents)
Diluted earnings / (loss) per share (cents)
Share price at year end (cents)
2022
24,991
26,079
-
7.53
7.44
48.0
2021
29,096
28,008
-
8.19
7.82
35.5
2020
(8,370)
(8,370)
-
(2.81)
(2.81)
12.5
2019
(10,250)
(10,250)
-
(4.18)
(4.18)
36.0
2018
(4,305)
(4,305)
-
(2.02)
(2.02)
78.5
VOTING AT THE COMPANY’S 2021 ANNUAL GENERAL MEETING
The Company believes it has addressed matters raised by investors in relation to which a “second strike” was received by the
Company at the 2021 Annual General Meeting, with a 27.58% vote against the prior year Remuneration Report. The Company
received advice from two proxy advisers recommending a vote IN FAVOUR of the Remuneration Report in 2021, noting that
remuneration practices of the Company were in line with market standards. A subsequent “spill resolution” was not passed with
a majority of 72.87% of shareholders voting against the resolution.
The Remuneration Committee engaged independent remuneration consultants during the prior year to address remuneration
matters, having reviewed and developed an Executive Incentive Plan approved by shareholders at the 2021 Annual General
Meeting.
Changes to Board composition since the 2020 Annual General Meeting have resulted in the increased proportion of independent
non-executive directors, and during the course of this year, the Board sought to diversify and continue its strategy of soliciting
experienced board members with the non-executive director appointment of Mrs Vanessa Kickett on 1 January 2022.
ANNUAL REPORT 2022 19
SHEFFIELD RESOURCES LIMITED
Directors’ Report
REMUNERATION STRUCTURE - NON-EXECUTIVE DIRECTORS
The structure of Non-Executive Director and Senior Executive remuneration is separate and distinct. Shareholders approve the
aggregate or total fees payable to Non-Executive Directors, with the current approved limit being $600,000 (excluding share-
based payments). The fees paid to Non-Executive Directors are set at levels that reflect both the responsibilities of, and the time
commitments required from, each Non-Executive Director to discharge their duties and are not linked to the performance of the
Company.
All Non-Executive Directors have their indemnity insurance paid by the Company. Non-Executive Directors receive fixed
remuneration consisting of a base fee and statutory superannuation contributions as set out below:
Base fees excluding statutory superannuation
Non- Executive Chair / Lead Independent Non-Executive Director
Other Non-Executive Directors
2022
$
20211
$
100,000
80,000
100,000
80,000
Note 1: All Non-Executive Directors agreed to an up to 50% reduction in base fees for the period between 1 April 2020 to 12 March 2021.
Share Options Grants
480,000 share options (with an exercise price of $0.65 per share) were granted to a non-executive director (Mr Gordon Cowe)
during the year.
Share Options Vested
480,000 share options (with an exercise price of $0.65 per share) vested in favour of a non-executive director (Mr Gordon Cowe)
during the year.
Share Options Expired
No share options awarded to non-executive directors expired during the year.
Measurement of Share Options
There are no participating rights or entitlements inherent in the options and the holders will not be entitled to participate in new
issues of capital offered to shareholders during the currency of the options. All shares allotted upon the exercise of options will
rank pari passu in respect with other shares.
REMUNERATION STRUCTURE - SENIOR EXECUTIVES
External and independent executive remuneration advice may be sought by the Board in determining remuneration strategy.
In determining the level and composition of Senior Executive remuneration year on year, the Board takes into consideration the
operational and economic circumstances the Company is facing and likely to face in the medium term together with the
complexity and responsibility associated with each role.
The Policy of the Board in determining Senior Executive remuneration levels is to:
•
•
•
•
•
•
•
provide total remuneration and employment conditions which will enable the Company to attract and retain high quality
senior executives to the business;
align remuneration with the creation and maximisation of shareholder value and the achievement of Company strategy,
business objectives and core values;
ensure the structure and quantum of remuneration is competitive and reflective of the external market in which the
Company operates;
provide a mix of fixed and variable, performance-based remuneration to drive superior performance;
reward the achievement of individual and Company objectives thus promoting a balance of individual performance and
teamwork across the executive management team;
provide a fair, equitable and scalable system that allows for sustainable business growth and is regularly reviewed for
relevance and reliability; and
is transparent, easily understood and is acceptable to Shareholders.
ANNUAL REPORT 2022 20
SHEFFIELD RESOURCES LIMITED
Directors’ Report
The Board’s specific remuneration aims for the year ending 30 June 2022 were to:
•
•
retain a core group of Senior Executives at the early stage in the Company’s development;
ensure cash preservation measures were set in place across the Company;
• maintain a Long Term Incentive (LTI) scheme designed to create alignment with the Kimberley Mineral Sands objectives
and maximise overall shareholder value;
•
•
ensure effective benchmarking of fixed and variable remuneration for Senior Executives for a clearly defined peer group of
similar companies to ensure remuneration is fair and competitive; and
retain total remuneration at or around the 50th percentile of market.
Use of External Remuneration Consultants
The Company did not engage remuneration consultants during the year ended 30 June 2022.
Remuneration Mix
Senior Executive remuneration consists of the following key elements:
•
•
•
fixed annual remuneration (FAR);
short term incentives (STI); and
long term incentives (LTI).
Fixed Annual Remuneration (FAR)
The level of FAR is set to provide a base level of remuneration which is both appropriate to the position and is competitive in the
market. FAR includes a base salary, inclusive of superannuation. Allowances and other benefits may be included, provided that
no extra cost is incurred by the Group. FAR is reviewed annually with any adjustments to FAR for Senior Executives ultimately
approved by the Board following consideration by the Remuneration Committee.
FAR applicable to the Executive Chair and Chief Financial Officer was reviewed by the Remuneration Committee during the year
ended 30 June 2022, with no changes proposed to FAR by the Remuneration Committee.
Short Term Incentive (STI)
For the year ended 30 June 2022, the following performance measures were reviewed and considered by the Remuneration
Committee to be appropriate, aligned with the Company’s strategy:
•
Achievement of a Final investment Decision for the Thunderbird Mineral Sands Project;
• Minimisation of equity contribution from Sheffield Resources Limited to Kimberley Mineral Sands Pty Ltd;
• Measurable reduction in total cost of capital relative to 2018 Bankable Feasibility Study base case assumption.
The Remuneration Committee also recommended that above performance measures should be further qualified by the following
factors:
• Health, Safety, Environmental and Governance objectives being met. In the event of a fatality or other catastrophic event,
the Board would be expected to exercise its discretion to award no STI cash or equity bonus for the period; and
•
•
Satisfactory individual performance by the executive, whereby the executive must achieve a minimum personal scorecard
target of 50% or greater to be eligible for the award; and
The executive must be employed during the entire period to be eligible for the award (noting applicable good leaver
provisions may apply).
ANNUAL REPORT 2022 21
SHEFFIELD RESOURCES LIMITED
Directors’ Report
Long Term Incentive (LTI)
The LTI program comprises the Performance Rights Plan (PRP) and the Employee Share Option Plan (ESOP), with long term
targets and performance hurdles aligned with the Company’s strategy. Each plan contains performance hurdles that need to be
achieved prior to award.
The objective of the LTI program is to:
•
•
•
align the interest of Senior Executives more closely with the interests of Shareholders by providing an opportunity to earn
shares in the Company;
provide Senior Executives with the opportunity to share in any future growth in value of the Company; and
provide greater incentive for Senior Executives to focus on the Company’s longer-term goals.
During the year ended 30 June 2022, the following LTI performance measures considered by the Remuneration Committee to
be appropriate, aligned with the Company’s strategy of achieving initial production from Thunderbird, whilst also considering
superior growth in the Company’s share price compared to a nominated sector per group:
•
Achievement of first commercial shipment of zircon or ilmenite product from the Thunderbird Mineral Sands Project on
or before 31 March 2024;
• Construction of the Thunderbird Mineral Sands Project is completed on or before 30 June 2024 and in accordance with
the total funding requirement for the Thunderbird Mineral Sands Project as disclosed by the Company to ASX on or before
30 June 2022;
•
•
Achievement of a minimum of 90% of throughput production capacity at the Thunderbird Mineral Sands Project,
measured over a consecutive 10-day period on or before 30 June 2024; and
Superior performance of Compound Annual Growth Rate (CAGR) calculated in respect of the Company's share price less
the percentage CAGR calculated in respect of the S&P/ASX 300 Materials Index, calculated for the period commencing
between 1 July 2021 and ending on 30 June 2024.
Employee Share Option (ESOP)
The ESOP is an equity component of at-risk remuneration. The Board determined the quantum of options to be issued to the
relevant Senior Executive, following recommendations received by the Remuneration Committee.
Share Options Grants
For the year ended 30 June 2022, long term incentives outlined above aligned with CAGR share price performance have been
granted to Senior Executives.
700,000 share options were granted to employees during the year.
Share Options Vested
No share options vested in favour of employees during the year.
Share Options Expired
No share options awarded to employees expired during the year.
Measurement of Share Options
There are no participating rights or entitlements inherent in the options and the holders will not be entitled to participate in new
issues of capital offered to shareholders during the currency of the options. All shares allotted upon the exercise of options will
rank pari passu in respect with other shares.
Change of Control Measures
In the event of a change of control event occurring, options that are not exercisable will become exercisable on and from the
date of the change of control event occurring.
ANNUAL REPORT 2022 22
SHEFFIELD RESOURCES LIMITED
Directors’ Report
Performance Rights Plan
A performance right is a right which, upon the satisfaction or waiver of the relevant vesting conditions entitles its holder to receive
fully paid ordinary shares for nil consideration.
Performance Hurdles
During the year ended 30 June 2022, the Board resolved that the following performance hurdle measures be used as a basis
for granting performance rights in favour of Senior Executives:
•
•
•
Achievement of first commercial shipment of zircon or ilmenite product from the Thunderbird Mineral Sands Project on
or before 31 March 2024;
Construction of the Thunderbird Mineral Sands Project is completed on or before 30 June 2024 and in accordance with
the total funding requirement for the Thunderbird Mineral Sands Project as disclosed by the Company to ASX on or before
30 June 2022; and
Achievement of a minimum of 90% of throughput production capacity at the Thunderbird Mineral Sands Project,
measured over a consecutive 10-day period on or before 30 June 2024.
Performance hurdles under future awards may be similar to the above or may include alternate thresholds, aligned with material
company milestones or other factors to align with shareholder value creation.
Grant of Performance Rights
3,769,698 performance rights were granted to Mr Bruce Griffin and Mr Mark Di Silvio during the year following receipt of
shareholder approval at the Annual General Meeting held on 25 November 2021.
Performance Rights Vested
No performance rights vested in favour of employees during the year.
Performance Rights Expired
3,219,509 performance rights previously awarded to Mr Bruce Griffin and Mr Mark Di Silvio expired during the year.
Hedging of At-Risk Remuneration
A participant in the PRP must not enter into an arrangement if the arrangement would have the effect of limiting the exposure of
the participant to risk relating to performance rights that have not vested.
Performance Rights on Change of Control
All vesting conditions attached to performance rights will be deemed to be automatically waived on a change of control event
occurring. Accordingly, in the case of a change of control event occurring, all performance rights will be deemed to have vested
and will be eligible for exercise.
Proposed 2023 Executive Incentive Planning & Strategy
The Remuneration Committee has considered an incremental update to the executive incentive plan which will be subject to
shareholder approval. Senior Executive incentives for 2023 shall consist of STI performance measures and a LTI Reward Plan
linked to market measures. The STI would be based upon annual performance targets and paid 50% in cash and 50% in the
form of performance rights which vest after one further year with 3 years to exercise. The Reward Plan would consider an annual
grant of out of the money options vesting after three years subject to satisfaction of market-based performance criteria and with
one further year to exercise. No further LTI is proposed for award for 2023, as this was previously considered and granted in the
2022 financial year, in the form of a performance right vesting after three years and subject to satisfaction of performance
criteria and with three further years to exercise.
Further details in relation to the proposed 2023 remuneration structure will be made available to shareholders in conjunction
with the 2022 Notice of Annual General Meeting, scheduled for release in October 2022.
Senior Executive Employment Agreements
Remuneration and other terms of employment for the following KMP are formalised in employment agreements. All contracts
with Senior Executives may be terminated early by either party with notice, per individual agreement, and subject to the
termination payments as detailed below:
Name
Position
Commencement
date
Base salary
(Including superannuation)
Termination benefit
B Griffin
Executive Chair
10 June 2020
$300,000
M Di Silvio
CFO & Company Secretary
15 February 2016
$370,000
1 months’ notice
4 months’ notice
ANNUAL REPORT 2022 23
-
-
-
-
61%
51%
41%
Total
$
122,925
100,925
214,005
50,155
19,097
SHEFFIELD RESOURCES LIMITED
Directors’ Report
REMUNERATION OF KEY MANAGEMENT PERSONNEL
The relative proportions of those elements of remuneration of key management personnel that are linked to performance:
Fixed remuneration
Remuneration linked to performance
2022
2021
Non-Executive Directors
J Richards
I Macliver
G Cowe
V Kickett1
B McFadzean2
Senior Executives
B Griffin
M Di Silvio
2022
100%
100%
67%
100%
100%
51%
55%
2021
100%
100%
100%
-
39%
49%
59%
-
-
33%
-
-
49%
45%
Note 1: Mrs Kickett appointed on 1 January 2022.
Note 2: Mr McFadzean retired on 6 September 2021.
The tables below show the fixed and variable remuneration for KMP:
Short-term
Post -
employment
Share based
payments
Salary & fees
Non-monetary2
Superannuation
Options & rights1
2022
$
$
$
$
Non-Executive Directors
J Richards
I Macliver
G Cowe3
V Kickett4
B McFadzean5
Senior Executives
B Griffin6
M Di Silvio
100,000
80,000
123,000
40,000
14,564
300,000
342,500
1,000,064
12,925
12,925
12,925
6,155
3,077
12,925
12,925
73,857
10,000
8,000
8,000
4,000
1,456
-
27,500
58,956
-
-
70,080
-
-
306,068
311,026
687,174
618,993
693,951
1,820,051
Note 1: The fair value is determined by a combination of internal and external sources using a Black-Scholes option pricing model and
independent third-party valuation which comprised of a hybrid option pricing model incorporating a Monte-Carlo simulation.
Note 2: Non-monetary benefits include either cost to the Company in providing fringe benefits and/or attributable non-cash benefit applied by
virtue of the Company’s Directors and Officer Liability policy.
Note 3: Compensation included $43,000 consulting fees paid to Mr Cowe. Further details disclosed in Other Transactions with KMP and their
Related Parties section, which forms part of the Directors’ Report.
Note 4: Mrs Kickett appointed on 1 January 2022.
Note 5: Mr McFadzean retired on 6 September 2021.
Note 6: Compensation included consulting fees paid to Mr Griffin. Further details disclosed in Other Transactions with KMP and their Related
Parties section, which forms part of the Directors’ Report.
ANNUAL REPORT 2022 24
SHEFFIELD RESOURCES LIMITED
Directors’ Report
Short-term
Cash
bonus
$
Post -
employment
Other
Share based
payments
Non-
monetary2
Super-
annuation
Termination
Benefits7
Options &
rights1
$
$
$
$
Total
$
Salary & fees
2021
$
Non-Executive Directors
J Richards3
I Macliver
G Cowe4
D Archer5
W Burbury6
82,518
66,014
30,545
28,205
28,205
-
-
-
-
-
Senior Executives
B McFadzean7
318,790
230,000
B Griffin8
M Di Silvio
S Pether9
258,065
-
272,721
171,233
183,680
171,233
1,268,743
572,466
9,278
9,278
8,505
6,959
6,959
11,354
9,278
11,354
9,078
82,043
7,839
6,271
2,332
2,680
2,680
-
-
-
-
-
-
-
-
99,635
81,563
41,382
26,977
64,821
-
37,844
21,694
238,308
708,240
1,528,386
-
21,535
24,892
-
-
-
279,042
546,385
44,418
521,261
62,058
450,941
89,923
238,308
1,120,735
3,372,218
Note 1: The fair value of the options is calculated at the date of grant using a Black-Scholes valuation model and allocated to each reporting
period starting from grant date to vesting date.
Note 2: Non-monetary benefits include either cost to the Company in providing fringe benefits and/or attributable non-cash benefit applied by
virtue of the Company’s Directors and Officer Liability policy.
Note 3: Mr Richards was appointed Lead Independent Director on 13 April 2021 (previously Non-Executive Chair).
Note 4: Mr Cowe was appointed on 12 March 2021. Compensation included $6,000 consulting fees paid to Mr Cowe.
Note 5: Mr Archer resigned on 12 March 2021.
Note 6: Mr Burbury resigned on 12 March 2021.
Note 7: Mr McFadzean stepped down from the Managing Director role on 1 July 2021 and subsequently retired from his position as Non-
Executive Director on 6 September 2021. Cash benefits (including leave entitlements) totalling $238,308 were made in favour of Mr McFadzean
reflecting his contractual and statutory rights associated with his role as Managing Director. Additionally, the Board determined that Mr
McFadzean retain a portion of awards made under the LTI plan. That amount ($337,548), in conjunction with the number of awards forfeited
by Mr McFadzean ($370,692) and totalling $708,240, was recognised at 30 June 2021.
Note 8: Compensation included consulting fees paid to Mr Griffin.
Note 9: Mr Pether departed the Group on 12 March 2021 and was appointed Chief Executive Officer of the KMS Joint Venture.
Equity Instruments
Share Options
The table below outlines the movement of the options held by each key management personnel:
2022
Opening
balance
Non-Executive Directors
Granted
Exercised
Lapsed
Closing
balance
Vested &
exercisable
Unvested
J Richards
I Macliver
G Cowe
V Kickett1
B McFadzean2
Senior Executives
B Griffin
M Di Silvio
480,000
480,000
-
-
-
-
-
-
-
480,000
-
-
363,636
336,364
960,000
1,180,000
Note 1: Mrs Kickett appointed on 1 January 2022.
Note 2: Mr McFadzean retired on 6 September 2021.
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
480,000
480,000
480,000
-
-
363,636
336,364
480,000
480,000
480,000
-
-
-
-
2,140,000
1,440,000
-
-
-
-
-
-
-
-
ANNUAL REPORT 2022 25
SHEFFIELD RESOURCES LIMITED
Directors’ Report
Performance Rights
The table below outlines the movement of the rights held by each KMP:
Year
granted
Opening
balance
Granted
Rights to deferred shares
Vested
Forfeited / Lapsed
Closing
balance
(unvested)
Value
yet to
vest
2022
Number
Number
Number %
Number
%
Number
$
Non-Executive Directors
J Richards
I Macliver
G Cowe
V Kickett1
B McFadzean2
Senior Executives
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
B Griffin
M Di Silvio
2021
3,000,000
1,863,637
2021
658,528
1,906,061
3,658,528
3,769,698
Note 1: Mrs Kickett appointed on 1 January 2022.
Note 2: Mr McFadzean retired on 6 September 2021.
Shareholdings
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(3,000,000)
100%
1,863,637
464,583
(219,509)
33%
2,345,080
511,614
(3,219,509)
4,208,717
976,197
The table below outlines the relevant interest of each KMP in the share capital (held directly or indirectly of the Company):
2022
Non-Executive Directors
J Richards
I Macliver
G Cowe
V Kickett2
Opening
balance
-
100,000
-
-
B McFadzean3
1,716,445
Senior Executives
B Griffin
M Di Silvio
200,000
641,854
2,658,299
Granted as
remuneration
Received on
exercise
Other
changes1
-
-
-
-
-
-
-
-
-
-
-
-
532,794
-
-
532,794
-
-
-
-
-
-
-
-
Closing
balance
-
100,000
-
-
2,249,239
200,000
641,854
3,191,093
Note 1: Include on-market purchases by KMP.
Note 2: Mrs Kickett appointed on 1 January 2022.
Note 3: Mr McFadzean retired on 6 September 2021.
OTHER TRANSACTIONS WITH KMP AND THEIR RELATED PARTIES
Farview Solutions Limited (Farview) provides consultancy services to the Group. Mr Griffin is a director and controlling
shareholder of Farview and also serves as Executive Chair of Sheffield. The total amount paid to Farview during the year was
$300,000 (2021: $258,065). The payment was disclosed in the Remuneration of Key Management Personnel table, which
forms part of the Directors’ Report.
Ozscot Trust (Ozscot) provides general consultancy services and workshop participation to the Group. Mr Cowe is a director of
Ozscot and also serves as Non-Executive Director of Sheffield. The total amount paid to Ozscot during the year was $43,000 plus
GST (2021: $6,000). The payment was disclosed in the Remuneration of Key Management Personnel table, which forms part
of the Directors’ Report.
ANNUAL REPORT 2022 26
SHEFFIELD RESOURCES LIMITED
Directors’ Report
LOANS TO KEY MANAGEMENT PERSONNEL
No loans were granted to KMP during the year.
END OF AUDITED REMUNERATION REPORT
Signed in accordance with a resolution of the Directors.
For and on behalf of the Directors
Bruce Griffin
Executive Chair
Perth, Western Australia
14 September 2022
ANNUAL REPORT 2022 27
AUDITOR’S INDEPENDENCE DECLARATION
As lead auditor for the audit of the consolidated financial report of Sheffield Resources Limited for
the year ended 30 June 2022, I declare that to the best of my knowledge and belief, there have
been no contraventions of:
a)
the auditor independence requirements of the Corporations Act 2001 in relation to the audit;
and
b)
any applicable code of professional conduct in relation to the audit.
Perth, Western Australia
14 September 2022
N G Neill
Partner
ANNUAL REPORT 2022 28
SHEFFIELD RESOURCES LIMITED
Consolidated Financial Statements
CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
For the year ended 30 June 2022
Note
2022
$’000
2021
$’000
Continuing operations
Other income
Gain on sale of assets
Employee benefits expenses
Share-based payments expenses
Other corporate expenses
Share of joint venture loss
Bank fees and finance charges
Depreciation expenses
Impairment exploration expenses
Gain on loss of control of subsidiary
Net profit before income tax
Income tax (expense) / benefit
Net profit after income tax
Other comprehensive income / (loss)
Other comprehensive income / (loss)
Total comprehensive income, net of tax
Earnings per share attributable to ordinary equity holders
Basic earnings per share (cents per share)
Diluted earnings per share (cents per share)
9
13
17
8
13
7
10
19
19
83
330
29,160
-
(1,263)
(1,160)
(961)
(866)
(2)
-
-
-
(2,958)
(1,027)
(3,217)
(3,717)
(3,444)
(457)
(401)
43,987
24,991
29,096
1,088
(1,088)
26,079
28,008
-
-
26,079
28,008
7.53
7.44
8.19
8.04
The consolidated statement of profit or loss and other comprehensive income should be read in conjunction with the
accompanying notes
ANNUAL REPORT 2022 29
SHEFFIELD RESOURCES LIMITED
Consolidated Financial Statements
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
As at 30 June 2022
Current assets
Cash and cash equivalents
Trade and other receivables
Total current assets
Non-current assets
Investment in joint venture
Exploration and evaluation assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Provisions
Total current liabilities
Non-current liabilities
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings / (Accumulated losses)
Total equity
Note
11
12
8
13
14
15
10
16
17
18
2022
$’000
2021
$’000
40,223
6,519
42
297
40,265
6,816
115,535
116,401
-
6,648
115,535
123,049
155,800
129,865
112
335
62
55
174
390
-
-
1,088
1,088
174
1,478
155,626
128,387
133,091
133,091
13,310
12,150
9,225
155,626
(16,854)
128,387
The consolidated statement of financial position should be read in conjunction with the accompanying notes
ANNUAL REPORT 2022 30
SHEFFIELD RESOURCES LIMITED
Consolidated Financial Statements
CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
For the year ended 30 June 2022
Issued
capital
Reserves
Retained
earnings /
(Accumulated
losses)
Total
$’000
$’000
$’000
$’000
Balance as at 1 July 2021
133,091
12,150
(16,854)
128,387
Comprehensive income / (loss)
Net profit for the year
-
-
26,079
26,079
Other comprehensive income / (loss)
-
-
-
-
Total comprehensive income
Transactions with owners
Share-based payments
Total transactions with owners
-
-
-
-
26,079
26,079
1,160
1,160
-
-
1,160
1,160
Balance as at 30 June 2022
133,091
13,310
9,225
155,626
Issued
capital
Reserves
Retained
earnings /
(Accumulated
losses)
Total
$’000
$’000
$’000
$’000
Balance as at 1 July 2020
120,559
11,123
(44,862)
86,820
Comprehensive income / (loss)
Net profit for the year
-
-
28,008
28,008
Other comprehensive income / (loss)
-
-
-
-
Total comprehensive income
-
-
28,008
28,008
Transactions with owners
Shares issued
Share issue costs
12,882
-
-
12,882
(350)
-
-
(350)
Share-based payments
-
1,027
-
1,027
Total transactions with owners
12,532
1,027
-
13,559
Balance as at 30 June 2021
133,091
12,150
(16,854)
128,387
The consolidated statement of changes in equity should be read in conjunction with the accompanying notes
ANNUAL REPORT 2022 31
SHEFFIELD RESOURCES LIMITED
Consolidated Financial Statements
CONSOLIDATED STATEMENT OF CASH FLOWS
For the year ended 30 June 2022
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Bank fees and finance charges
Net cash used in operating activities
Cash flows from investing activities
Payments for exploration and evaluation expenditure
Payments for plant and equipment
Proceeds from disposal of assets (net of GST)
Payments for mine assets under development expenditure
Net cash outflow on loss of control of subsidiary
Release of bonds / securities
Net cash from / (used in) investing activities
Cash flows from financing activities
Proceeds from issue of shares
Payments for share issue costs
Payments for lease liabilities
Net cash from financing activities
Note
2022
$’000
117
(2,326)
83
(2)
2021
$’000
-
(7,298)
41
-
11
(2,128)
(7,257)
(195)
-
36,000
-
-
27
(795)
(8)
-
(4,742)
(323)
41
35,832
(5,827)
-
-
-
-
33,704
6,519
40,223
12,882
(350)
(12)
12,520
(564)
7,083
6,519
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the period
11
The consolidated statement of cash flows should be read in conjunction with the accompanying notes
ANNUAL REPORT 2022 32
SHEFFIELD RESOURCES LIMITED
Notes to the Consolidated Financial Statements
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
For the year ended 30 June 2022
1. COPORATE INFORMATION
The consolidated financial report for the year ended 30 June 2022 covers Sheffield Resources Limited (Sheffield, parent entity
or the Company) and its controlled entities (collectively known as the Group or consolidated entity). The principal activities during
the year were mineral sands exploration and development within Australia.
Sheffield is a for-profit company limited by shares whose shares are publicly traded on the Australian Securities Exchange. The
Company and its controlled entities were incorporated and domiciled in Australia. The registered office and principal place of
business of the Company is Level 2, 41-47 Colin Street, West Perth, WA 6005.
The consolidated financial report of Sheffield for the year ended 30 June 2022 was authorised for issue in accordance with a
resolution of the Directors on 14 September 2022.
2. BASIS OF PREPARATION
These general purpose financial statements have been prepared in accordance with Australia Accounting Standards and
Interpretations issued by the Australia Accounting Standards Board (AASB) and the Corporations Act 2001. The consolidated
financial statements also comply with International Financial Reporting Standards (IFRS) as issued by the International
Accounting Standards Board (IASB). The financial statements have been prepared on a going concern basis.
(a) Functional and presentation currency
Both the functional and presentation currency of Sheffield is Australian Dollars. Each entity in the Group determines its own
functional currency and items included in the financial statements of each entity are measured using that currency.
(b) Rounding of amounts
The amounts contained in the financial report have been rounded to the nearest $1,000 (unless otherwise stated) pursuant to
the option available to the Company under ASIC Class Order 2016/191. The Company is an entity to which this class order
applies.
(c) Historical cost convention
These financial statements have been prepared under the historical cost convention and on an accruals basis, except for certain
financial assets and liabilities which are required to be measured at fair value.
(d) Going concern
The financial statements have been prepared on a going concern basis. The Group recorded a net profit after tax for the year
ended 30 June 2022 of $26.1m (2021: $28.0m). At 30 June 2022, the Group had $40.2m in cash and cash equivalents
(2021: $6.5m). The Group’s net assets were $155.6m (2021: $128.4m) and the net cash outflows from operating activities
were $2.1m (2020: $7.3m).
YGH Australia Investment Pty Ltd (Yansteel) entered into a 50:50 joint venture with Sheffield to own and develop the Thunderbird
project in 2021. The ownership of the high-grade mineral sands Thunderbird project was previously held by Sheffield through
its 100% owned subsidiary Kimberley Mineral Sands Pty Ltd (KMS) prior to the formation of the joint venture. The project is
located in north-west Western Australia. As per the terms of the agreement, Yansteel subscribed for a 50% interest in KMS and
provided $130.1 million in project equity funding. KMS became jointly owned by Sheffield and Yansteel as at 12 March 2021
following completion of the joint venture transaction.
In accordance with the terms of the agreement regarding the KMS Joint Venture, Sheffield also recognised a contingent liability
to fund any excess equity shortfall up to a maximum of $10m. The payment is not yet due and remains contingent upon KMS
reaching a final investment decision in relation to the Thunderbird project.
Following the end of the reporting period, the Company announced that the Northern Australia Infrastructure Facility (NAIF) and
Kimberley Mineral Sands Pty Ltd had entered into a $160 million loan facility agreement. This will be combined with the US$110
million facility agreed with Orion Resource Partners (Orion) also announced following the end of the reporting period. The NAIF
and Orion loan facilities, combined with existing cash on hand and further equity to be contributed by shareholders, shall
complete the project financing to fully fund Stage 1 construction of the Thunderbird Project.
3. SIGNIFICANT ACCOUNTING ESTIMATES AND JUDGEMENTS
The preparation of the Group’s consolidated financial statements requires management to make judgements, estimates and
assumptions that affect the reporting amounts of assets and liabilities at the date of the consolidated financial statements, and
the reported amounts of revenues and expenses during the reporting period.
Estimates and assumptions are continuously evaluated and are based on management’s experience and other factors, including
expectations of future events, which are believed to be reasonable under the circumstances. However, actual outcomes would
differ from these estimates if different assumptions were used, and different conditions existed.
ANNUAL REPORT 2022 33
SHEFFIELD RESOURCES LIMITED
Notes to the Consolidated Financial Statements
The Group has identified the following areas where significant judgements, estimates and assumptions are required, and where
actual results were to differ, may materially affect the financial position or financial results reported in future periods.
Share-based payments transactions
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. The fair value is determined by a combination of internal and external sources
using a Black-Scholes option pricing model and independent third-party valuation which comprised of a hybrid option pricing
model incorporating a Monte Carlo simulation.
Exploration and evaluation expenditure
Exploration and evaluation expenditure is capitalised if rights to tenure of the area of interest are current and activities in the
area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of
economically recoverable reserves.
The future recoverability of capitalised exploration and evaluation expenditure is dependent on several factors, including whether
the Group decides to exploit the related area of interest itself or, if not, whether it successfully recovers the related exploration
and evaluation asset through sale. To the extent that capitalised exploration and evaluation expenditure is determined not to be
recoverable in the future, this will reduce profits and net assets in the period in which this determination is made.
During the year, Sheffield entered into definitive binding agreements with Image Resources NL (Image) (ASX: IMA) for the sale of
its 100% owned Eneabba and McCalls Projects for total consideration of $36m. Sheffield recognised a gain on sale of the assets
totalling $29.2m for the year (2021: nil).
Investment in joint venture
The Group determines whether it is necessary to recognise an impairment loss on its investment in joint venture. At each
reporting date, the Group determines whether there is objective evidence that the investment in the joint venture is impaired. If
there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of
the joint venture and carrying value, and then recognises the loss within “Share of joint venture profit / loss” in the statement of
profit or loss.
Upon loss of significant influence or joint control over the joint venture, the Group measures and recognises any retained
investment at its fair value. Any difference between the carrying amount of the joint venture upon loss of significant influence
or joint control and the fair value of the retained investment and proceeds from disposal is recognised in profit or loss.
4. NEW AND REVISED ACCOUNTING STANDARDS AND INTERPRETATIONS
The Group adopted all new or amended Accounting Standards and Interpretations issued by the Australian Accounting Standards
Board that are relevant to its operations and are mandatory for the current financial reporting period beginning 1 July 2021. Any
new or amended Accounting Standards or Interpretations that are not yet mandatory have not been early adopted.
Conceptual Framework for Financial Reporting (Conceptual Framework)
The Group adopted the Conceptual Framework from 1 July 2021. The Conceptual Framework contains new definitions and
recognition criteria as well as new guidance on measurement that affects several Accounting Standards, but it has not had a
material impact on the Group’s financial statements.
ANNUAL REPORT 2022 34
SHEFFIELD RESOURCES LIMITED
Notes to the Consolidated Financial Statements
5. SEGMENT REPORTING
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker (CODM). The CODM is responsible for allocating resources and assessing performance of the operating segments and
has been identified as the Board. Current taxes and deferred taxes are not allocated to the segments as they are managed on
a group basis.
The Group’s operating segments are as follows:
•
•
Sheffield project – Project consists of mineral sand exploration tenements located in Western Australia held by Sheffield
Resources Limited. During the year, Sheffield entered into definitive binding agreements with Image Resources NL (Image)
(ASX: IMA) for the sale of its 100% owned Eneabba and McCalls Projects for total consideration of $36m. Sheffield
recognised a gain on sale of the assets totalling $29.2m for the year (2021: nil). The sale proceeds received from
divestment of the assets will be applied towards Sheffield’s $10m obligation to Kimberley Mineral Sands Pty Ltd payable
within 60 days following a Final Investment Decision for the Thunderbird project, plus any additional shared joint venture
equity contribution, as well as corporate purposes. Please refer to Notes 13 and 23 for additional information.
Thunderbird project – Project consists of mineral sands tenements located in the Canning Basin that form part of the
potential Thunderbird mineral sand mining operation held by Thunderbird Operations Pty Ltd, subsidiary of Kimberley
Mineral Sands Pty Ltd (KMS). YGH Australia Investment Pty Ltd (Yansteel) entered into a 50:50 joint venture with Sheffield
to own and develop the Thunderbird project in 2021. The ownership of Thunderbird project was previously held by Sheffield
through its 100% owned subsidiary KMS prior to the formation of the joint venture. KMS became jointly owned by Sheffield
and Yansteel as at 12 March 2021. Please refer to Notes 7 and 8 for additional information.
• Other unallocated items – corporate expenses and share-based payments expenses are examples of items that are not
allocated to operating segments as they are not considered part of the core operation of any segment.
2022
Segment Reporting
Other income
Employee benefits expenses
Share-based payments expenses
Corporate expenses
Share of joint venture loss
Gain on sale of assets
Segment profit / (loss) before tax
Segment assets
Segment liabilities
Other disclosures
Investment in joint venture
Capital expenditure
Sheffield project
Thunderbird project
$’000
$’000
-
-
-
-
-
29,160
29,160
-
-
-
192
-
-
-
-
(866)
-
(866)
115,535
-
115,535
-
Other
$’000
83
(1,263)
(1,160)
(963)
-
-
(3,303)
40,265
174
Total
$’000
83
(1,263)
(1,160)
(963)
(866)
29,160
24,991
155,800
174
-
-
115,535
192
ANNUAL REPORT 2022 35
Sheffield project
Thunderbird project
$’000
$’000
SHEFFIELD RESOURCES LIMITED
Notes to the Consolidated Financial Statements
2021
Segment Reporting
Other income
Employee benefits expenses
Corporate expenses
Depreciation expenses
Gain on loss of control of subsidiary
-
-
-
-
-
Impairment exploration expenses
(408)
Share-based payments expenses
Share of joint venture loss
Bank fees and finance charges
Segment profit / (loss) before tax
Segment assets
Segment liabilities
Other disclosures
Investment in joint venture
Capital expenditure
6. FINANCIAL RISK MANAGEMENT
-
-
-
(408)
6,648
-
-
250
Other
$’000
223
(2,958)
(3,217)
(126)
-
-
(1,027)
-
-
(7,105)
6,816
1,478
Total
$’000
330
(2,958)
(3,217)
(457)
43,987
(401)
(1,027)
(3,717)
(3,444)
29,096
129,865
1,478
-
-
116,401
4,867
107
-
-
(331)
43,987
7
-
(3,717)
(3,444)
36,609
116,401
-
116,401
4,617
The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising
the return to stakeholders through the optimisation of the debt and equity balance. The Group does not enter into or trade
financial instruments, including derivative financial instruments, for speculative purposes.
The Group have exposure to the following risks from their use of financial instruments:
•
•
•
Interest rate risk;
Credit risk; and
Liquidity risk
Risk management
The Group’s principal financial instruments comprise of cash, receivables, and payables. The Group monitors and manages its
exposure to key financial risks in accordance with the Group’s financial management policy.
Interest rate risk management
The Group is exposed to interest rate risk as the Group holds cash at both fixed and floating interest rates. The Group constantly
analyses its interest rate exposure. The Group’s exposure to interest rate risk is limited to the amount of interest income it can
potentially earn on surplus cash deposits.
Credit risk management
Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group.
The Group has adopted a policy of only dealing with creditworthy counterparties and obtaining sufficient collateral where
appropriate, as a means of mitigating the risk of financial loss from defaults. The Group’s exposure and the credit ratings of its
counterparties are continuously monitored, and the aggregate value of transactions concluded is spread amongst approved
counterparties. Credit exposure is controlled by counterparty limits that are reviewed and approved by the Directors periodically.
The carrying amount of financial assets recorded in the financial statements, net of any allowance for losses, represents the
Group’s maximum exposure to credit risk without taking account of the value of any collateral obtained.
ANNUAL REPORT 2022 36
SHEFFIELD RESOURCES LIMITED
Notes to the Consolidated Financial Statements
Liquidity risk management
Ultimate responsibility for liquidity risk management rests with the Directors, who have built an appropriate liquidity risk
management framework for the management of the Group’s short, medium and long-term funding and liquidity management
requirements. The Group manages liquidity risk by maintaining adequate reserves and banking facilities by continuously
monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities.
The Group financial instruments are as follows:
Floating
interest
rate
< 1 year
1 to 5
years
> 5
years
Non-
interest
bearing
Total
Weighted average
interest rate
$’000
$’000
$’000
$’000
$’000
$’000
Fixed
Floating
2022
Financial assets
Cash and cash equivalents
39,965
Trade and other receivables
-
Total financial assets
39,965
Financial liabilities
Trade and other payables
Total financial liabilities
-
-
-
30
30
-
-
-
-
-
-
-
-
-
-
-
-
258
40,223
12
42
270
40,265
0.25%
0.25%
112
112
112
112
-
0.36%
-
-
Floating
interest
rate
< 1 year
1 to 5
years
> 5
years
Non-
interest
bearing
Total
Weighted average
interest rate
$’000
$’000
$’000
$’000
$’000
$’000
Fixed
Floating
2021
Financial assets
Cash and cash equivalents
5,619
Trade and other receivables
Total financial assets
-
5,619
Financial liabilities
Trade and other payables
Total financial liabilities
-
-
-
51
51
-
-
-
-
-
-
-
-
-
-
-
-
900
246
6,519
297
0.23%
0.23%
1,146
6,816
335
335
335
335
-
The Group’s expected contractual outflows and maturities of financial liabilities are as follows:
2022
$’000
$’000
$’000
Current liabilities
Non-current liabilities
< 6 months
6 to 12 months
1 to 5 years
Financial liabilities
Trade and other payables
112
112
-
-
-
-
0.22%
-
-
> 5 years
$’000
-
-
ANNUAL REPORT 2022 37
SHEFFIELD RESOURCES LIMITED
Notes to the Consolidated Financial Statements
Current liabilities
Non-current liabilities
< 6 months
6 to 12 months
1 to 5 years
$’000
$’000
$’000
335
335
-
-
-
-
> 5 years
$’000
-
-
2021
Financial liabilities
Trade and other payables
7. SUBSIDIARIES
Subsidiaries are entities over which the Group has control. The Group controls an entity when the Group is exposed to, or has
rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to
direct the activities of the entity. Subsidiaries are consolidated from the date on which control is transferred to the Group. They
are deconsolidated from the date that control ceases.
Subsidiaries
Moora Talc Pty Ltd
Ironbridge Resources Pty Ltd
Sheffield Exploration (WA) Pty Ltd
8.
INVESTMENT IN JOINT VENTURE
Country of
incorporation
Ownership interest %
2022
2021
Australia
Australia
Australia
100%
100%
100%
100%
100%
100%
A joint venture is a type of joint arrangement whereby the parties that have joint control of the arrangement have rights to the
net assets of the joint venture. Joint control is the contractually agreed sharing of control of an arrangement, which exist only
when the decisions about relevant activities require the unanimous consent of the parties sharing control.
The Group’s investment in joint venture is accounted for using the equity method. Under the equity method, the investment in
a joint venture is initially recognised at cost. The carrying amount of the investment is adjusted to recognise changes in the
Group’s share of net assets of the joint venture since the acquisition date.
The statement of profit or loss reflects the Group’s share of the results of operations of the joint venture. The aggregate of the
Group’s share of profit or loss of a joint venture is shown on the face of the statement of profit or loss.
Kimberley Mineral Sands Pty Ltd Joint Venture
YGH Australia Investment Pty Ltd (Yansteel) entered into a 50:50 joint venture with Sheffield to own and develop the Thunderbird
project in 2021. The ownership of the high-grade mineral sands Thunderbird project was previously held by Sheffield through
its 100% owned subsidiary Kimberley Mineral Sands Pty Ltd (KMS) prior to the formation of the joint venture. The project is
located in north-west Western Australia. As per the terms of the agreement, Yansteel subscribed for a 50% interest in KMS and
provided $130.1 million in project equity funding. KMS became jointly owned by Sheffield and Yansteel as at 12 March 2021
following completion of the joint venture transaction. Since that date, Sheffield’s interest in KMS is accounted for using the
equity method in the consolidated financial statements.
ANNUAL REPORT 2022 38
SHEFFIELD RESOURCES LIMITED
Notes to the Consolidated Financial Statements
Carrying amount in joint venture investment is as follows:
Reconciliation of carrying amount in joint venture investment – KMS
Share of joint venture investment
Sheffield’s share of joint venture loss – 50%
Carrying amount of interest in joint venture
Less contingent liabilities (Note 23)
Closing carrying amount of interest in joint venture
2022
$’000
126,401
(866)
125,535
(10,000)
115,535
2021
$’000
130,118
(3,717)
126,401
(10,000)
116,401
KMS is governed by a four-person Board of Directors with Sheffield and Yansteel each nominating, and being represented by,
two directors. Key decisions require unanimous approval of both shareholders.
KMS also had commitments and contingent liabilities as at 30 June 2022, for which the Group has corresponding commitments
and contingent liabilities as disclosed in Notes 22 and 23.
Summarised consolidated audited statement of profit or loss and other comprehensive income of KMS for the years ended 30
June is as follows:
Other income
Expenses
Loss before income tax
Income tax expense
Loss after income tax
Other comprehensive income / (loss)
Total comprehensive loss, net of tax
Reconciliation of loss after income tax
KMS reported loss before deconsolidation (1 July 2020 to 11 March 2021)
KMS joint venture loss
Loss after income tax
Joint venture
Joint venture
2022
$’000
135
(1,141)
(1,006)
(727)
(1,733)
-
2021
$’000
140
(4,053)
(3,913)
(7,074)
(10,987)
-
(1,733)
(10,987)
-
(1,733)
(1,733)
(3,553)
(7,434)
(10,987)
Reconciliation of share of joint venture loss – continuing operations
Sheffield’s share of joint venture loss – 50%
(866)
(3,717)1
Note 1: KMS’ loss of $3.6m before formation of the joint venture on 12 March 2021 were consolidated into the Group’s statement of profit or
loss for the year ended 30 June 2021. Following the formation of the joint venture in 2021, the Group recognised 50% of the joint venture loss
for the period 12 March 2021 to 30 June 2021 being 50% of $7.4m totalling $3.7m.
ANNUAL REPORT 2022 39
SHEFFIELD RESOURCES LIMITED
Notes to the Consolidated Financial Statements
Consolidated audited statement of financial position of KMS for the years ended 30 June is as follows:
Current assets
Cash and cash equivalents
Trade and other receivables
Inventories
Total current assets
Non-current assets
Other non-current assets
Plant and equipment
Right of use asset
Mine assets under development
Exploration and evaluation assets
Total non-current assets
Total assets
Current liabilities
Trade and other payables
Interest bearing liabilities
Provisions
Total current liabilities
Non-current liabilities
Interest bearing liabilities
Provisions
Deferred tax liabilities
Total non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
Note
8 (a)
8 (a)
8 (a)
Joint venture
Joint venture
2022
$’000
53,197
1,880
194
2021
$’000
128,217
360
12
55,271
128,589
511
10,572
2,099
160,960
5,351
179,493
-
3,208
1,831
72,226
4,488
81,753
234,764
210,342
21,778
360
1,220
23,358
2,000
4,120
7,802
13,922
1,688
143
152
1,983
1,859
209
7,074
9,142
37,280
11,125
197,484
199,217
130,118
88,713
(21,347)
197,484
130,118
88,713
(19,614)
199,217
ANNUAL REPORT 2022 40
SHEFFIELD RESOURCES LIMITED
Notes to the Consolidated Financial Statements
(a) Plant and equipment, right of use assets and mine assets under development
2022
Non-current assets
Carrying amount – at cost
Accumulated depreciation
Reconciliation
Opening balance at the beginning of the year
Additions
Transfer between asset classes
Recognition of finance lease assets
Addition to mine rehabilitation asset
Depreciation expenses
2021
Non-current assets
Carrying amount – at cost
Accumulated depreciation
Reconciliation
Opening balance at the beginning of the year
Additions
Recognition of finance lease assets
Addition to mine rehabilitation asset
Depreciation expenses
Joint venture
Plant &
equipment
Right of use
assets
Mine
assets under
development
Total
$’000
$’000
$’000
$’000
12,121
(1,549)
10,572
3,208
88
7,751
-
-
(475)
10,572
2,749
(650)
2,099
1,831
-
-
675
-
(407)
2,099
160,960
-
160,960
175,830
(2,199)
173,631
72,226
92,923
(7,751)
-
3,562
-
77,265
93,011
-
675
3,562
(882)
160,960
173,631
Joint venture
Plant &
equipment
Right of use
assets
Mine
assets under
development
Total
$’000
$’000
$’000
$’000
4,282
(1,074)
3,208
3,593
44
-
-
(429)
3,208
2,073
(242)
1,831
1,393
-
529
-
(91)
1,831
72,226
-
72,226
64,979
7,101
-
146
-
72,226
78,581
(1,316)
77,265
69,965
7,145
529
146
(520)
77,265
ANNUAL REPORT 2022 41
SHEFFIELD RESOURCES LIMITED
Notes to the Consolidated Financial Statements
Consolidated audited statement of cash flows of KMS for the years ended 30 June is as follows:
Joint venture
Joint venture
Note
Cash flows from operating activities
Receipts from customers
Payments to suppliers and employees
Interest received
Net cash (used in) / from operating activities
Cash flows from investing activities
Payments for exploration and evaluation expenditure
Payments for plant and equipment
Payments for mine assets under development expenditure
Payments for bank guarantees
Net cash used in investing activities
Cash flows from financing activities
Proceeds from issue of shares
Payments for financial liabilities
Capital contribution from former parent
Net cash (used in) / from financing activities
Net increase / (decrease) in cash and cash equivalents
Cash and cash equivalents at the beginning of the year
Cash and cash equivalents at the end of the period
8 (b)
(b) Cash and cash equivalents
Current assets
Cash at bank and on hand
Short term deposits
2022
$’000
135
(300)
40
(125)
(877)
(87)
(73,014)
(600)
(74,578)
-
(317)
-
(317)
(75,020)
128,217
53,197
2021
$’000
140
(20)
43
163
(1,012)
(31)
(7,277)
-
(8,320)
130,118
(38)
4,555
134,635
126,478
1,739
128,217
Joint venture
Joint venture
2022
$’000
3,162
50,035
53,197
2021
$’000
128,217
-
128,217
ANNUAL REPORT 2022 42
SHEFFIELD RESOURCES LIMITED
Notes to the Consolidated Financial Statements
9. OTHER INCOME
Other income is recognised when the amount can be reliably measured and control of the right to receive income is passed to
the Group.
The Group’s other income is as follows:
Other income
Government incentives
Interest income
10. INCOME TAX
2022
$’000
-
-
83
83
2021
$’000
215
74
41
330
The income tax expense or benefit is the tax payable on the current period’s taxable income based on the applicable income tax
rate adjusted by changes in deferred tax assets and liabilities attributable to temporary difference and to unused tax losses.
The carrying amount of deferred tax assets is reviewed at each balance date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred income tax asset to be utilised.
Unrecognised deferred income tax assets are reassessed at each balance date and are recognised to the extent that it has
become probable that future taxable profit will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are expected to apply to the year when the asset is realised
or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance date.
Income taxes relating to items recognised directly in equity are recognised in equity and not in profit or loss. Income taxes
relating to items recognised directly in equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets
against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation
authority.
The deductible temporary difference and tax losses do not expire under current tax legislation. Deferred tax is provided on all
temporary differences at the balance date between the tax bases of assets and liabilities and their carrying amounts for financial
reporting purposes.
Deferred tax liabilities
Deferred tax liabilities are recognised for all taxable temporary differences except:
• when the deferred tax liability arises from initial recognition of an asset or liability in a transaction that is not a business
combination and that, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss; or
• when the taxable temporary difference is associated with investments in subsidiaries or interests in joint ventures, and the
timing of the reversal of the temporary difference can be controlled and it is probable that the temporary difference will not
reverse in the foreseeable future.
Deferred tax assets
Deferred tax assets are recognised for all deductible temporary differences, carry-forward of unused tax assets and unused tax
losses, to the extent that it is probable that taxable profit will be available against which the deductible temporary differences
and the carry-forward of unused tax credits and unused tax losses can be utilised, except:
• when the deferred income tax asset relating to the deductible temporary difference arises from the initial recognition of an
asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the
accounting profit nor taxable profit or loss; or
• when the deductible temporary difference is associated with investments in subsidiaries or interests in joint ventures, in
which case a deferred tax asset is only recognised to the extent that it is probable that the temporary difference will reverse
in the foreseeable future and taxable profit will be available against which the temporary difference can be utilised.
ANNUAL REPORT 2022 43
SHEFFIELD RESOURCES LIMITED
Notes to the Consolidated Financial Statements
Tax consolidation
Sheffield Resources Limited and its wholly-owned Australian controlled entities implemented the tax consolidation legislation.
These entities are taxed as a single entity and the deferred tax assets and liabilities of these entities are set off in the consolidated
financial statements. The current and deferred tax are recognised in the statement of profit or loss.
Reconciliation of income tax expense to prima facie tax is as follows:
Profit before income tax
2022
$’000
2021
$’000
24,991
29,096
Prima facie tax calculated at 25% (2021: 26%)
6,248
7,565
Adjusted for the tax effect of:
Prior period adjustments
Change in tax rate
Non-deductible share-based payments
Share of joint venture loss
Accruals
Other non-assessable income
Other non-deductible expenses
Other deductible items
Share issue costs
Immediate deduction for exploration and evaluation expenditure
Movement in other deferred taxes
Reversal of previously recognised deferred tax liability
Tax losses utilised
Income tax expense / (benefit) reported in the statement of profit or loss
Reconciliation of recognised deferred tax balances is as follows:
Recognised deferred tax
Exploration and evaluation expenditure
Trade and other receivables
Plant and equipment
Capitalised business expenditure
Other timing differences
Net deferred tax assets / (liabilities) reported in the statement of financial position
(681)
(16)
290
-
-
-
-
-
-
-
3,527
(1,088)
(9,368)
(1,088)
2022
$’000
-
-
-
-
-
-
-
-
254
966
62
(11,437)
878
(3)
(376)
(100)
3,279
-
-
1,088
2021
$’000
(1,728)
(20)
7
569
84
(1,088)
ANNUAL REPORT 2022 44
SHEFFIELD RESOURCES LIMITED
Notes to the Consolidated Financial Statements
Reconciliation of unrecognised deferred tax balances is as follows:
Unrecognised deferred tax
Joint venture investment
Carried forward tax losses
Other timing differences
2022
$’000
(25,961)
12,473
752
2021
$’000
(27,225)
21,841
-
Unrecognised deferred tax liabilities
(12,736)
(5,384)
Note 1: Deferred tax liabilities are not recognised as the balance is associated with the interest in the joint venture, the timing of the reversal of
the temporary difference can be controlled and it is probable that it will not be reversed in the foreseeable future.
11. CASH AND CASH EQUIVALENTS
Cash comprises of cash at bank and in hand. Cash equivalents are short term, highly liquid investments that are readily
convertible to known amounts of cash. Cash at bank earns interest at floating rates based on daily bank deposit rates.
Short-term deposits are made for varying periods of up to three months, depending on the immediate cash requirements of the
Group, and earn interest at the respective short-term deposit rates.
The Group’s cash and cash equivalents are as follows:
Current assets
Cash at bank and on hand
Short-term deposits
2022
$’000
27,723
12,500
40,223
2021
$’000
6,519
-
6,519
ANNUAL REPORT 2022 45
SHEFFIELD RESOURCES LIMITED
Notes to the Consolidated Financial Statements
Reconciliation of cash used in operating activities is as follows:
Profit after income tax
Adjustments for non-cash items
Income tax expense / (benefit)
Depreciation expenses
Share-based payments expenses
Impairment exploration expenses
Gain on disposal of assets
Gain on loss of control of subsidiary (Note 7)
Share of joint venture loss
Borrowing costs and fees
Changes in assets and liabilities
(Increase) / Decrease in trade and other receivables
Increase / (Decrease) in trade and other payables
Increase / (Decrease) in provisions
Net cash (used in) operating activities
12. TRADE AND OTHER RECEIVABLES
2022
$’000
2021
$’000
26,079
28,008
(1,088)
-
1,160
-
(29,160)
-
866
-
231
(223)
7
(2,128)
1,088
457
1,027
401
-
(43,987)
3,717
3,364
203
(1,322)
(213)
(7,257)
Trade and other receivables are measured on initial recognition at fair value and are subsequently measured at amortised cost
using the effective interest rate method, less any allowance for impairment. Impairment of trade and other receivables is
continually reviewed and those that are considered uncollectable are written off by reducing the carrying amount directly.
Security deposits are non-derivative financial assets with various fixed or determinable payments and maturities. They are
included in current assets, except for those with maturities greater than 12 months which are then classified as non-current
assets.
The Group’s trade and other receivables are as follows:
Current assets
Trade receivables
Other receivables – security deposits
2022
$’000
12
30
42
2021
$’000
246
51
297
13. EXPLORATION AND EVALUATION ASSETS
Exploration and evaluation assets are initially measured at cost and include acquisition of rights to explore, studies, exploratory
drilling, sampling and associated activities and an allocation of depreciation and amortised of assets used in exploration and
evaluation activities. General and administrative costs are only included in the measurement of exploration and evaluation costs
where they are related directly to operational activities in a particular area of interest.
The recoupment of costs carried forward in relation to areas of interest in the exploration and evaluation phases is dependent
on the successful development and commercial exploitation or sale of the respective areas. Exploration and evaluation
expenditures in relation to each separate area of interest are recognised as an exploration and evaluation asset in the year in
which they are incurred where the following conditions are satisfied:
ANNUAL REPORT 2022 46
SHEFFIELD RESOURCES LIMITED
Notes to the Consolidated Financial Statements
•
•
the rights to tenure of the area of interest are current; and
at least one of the following conditions is also met:
-
-
the exploration and evaluation expenditures are expected to be recouped through successful development and
exploitation, or alternatively, by its sale; or
exploration and evaluation activities have not at the balance date reached a stage which permits a reasonable
assessment of the existence of economically recoverable reserves, and active and significant operations are
continuing.
Exploration and evaluation assets are assessed for impairment when facts and circumstances suggest that the carrying amount
of an exploration and evaluation asset may exceed its recoverable amount. The recoverable amount of the exploration and
evaluation asset is estimated to determine the extent of the impairment loss, if any.
The Group’s exploration and evaluation assets are as follows:
Non-current assets
Exploration and evaluation assets – at cost
Expenditure incurred
Sale of assets - Eneabba and McCalls Projects
Derecognition of assets – deconsolidation of subsidiary (Note 7)
Impairment of exploration expenditure1
2022
$’000
6,648
192
(6,840)
-
-
-
2021
$’000
10,137
788
-
(3,876)
(401)
6,648
Note 1: The exploration and evaluation expenditure were not considered to have further commercial value at reporting date.
During the year, Sheffield entered into definitive binding agreements with Image Resources NL (Image) (ASX: IMA) for the sale of
its 100% owned Eneabba and McCalls Projects for total consideration of $36m. Sheffield recognised a gain on sale of the assets
totalling $29.2m for the year (2021: nil).
The sale proceeds received from divestment of the assets will be applied towards Sheffield’s $10m obligation to Kimberley
Mineral Sands Pty Ltd payable within 60 days following a Final Investment Decision for the Thunderbird project, plus any
additional shared joint venture equity contribution, as well as corporate purposes. Please refer to Note 23 for additional
information.
14. TRADE AND OTHER PAYABLES
Trade and other payables represent liabilities for goods and services provided to the Group prior to the year end and which are
unpaid. These amounts are unsecured and have 30 to 60-day payment terms.
The Group’s trade and other payables are as follows:
Current liabilities
Trade payables
Other payables
2022
$’000
62
50
112
2021
$’000
17
318
335
ANNUAL REPORT 2022 47
SHEFFIELD RESOURCES LIMITED
Notes to the Consolidated Financial Statements
15. PROVISIONS
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the present
obligation at the reporting date. The discount rate used to determine the present value reflects current market assessments of
the time value of money and the risks specific to the liability. The increase in the provision due to the passage of time is
recognised as an expense.
Liabilities accruing to employees expected to be settled within 12 months of the balance date are recognised as current liabilities
in respect of employees’ services up to the balance date. They are measured at the amounts expected to be paid when the
liabilities are settled.
The Group’s provisions are as follows:
Current liabilities
Provision for employee benefits
16. ISSUED CAPITAL
2022
$’000
62
62
2021
$’000
55
55
Ordinary shares are classified as equity. Costs attributable to the issue of new shares or options are shown in equity as a
deduction, net of tax. Ordinary shares entitle their holder to one vote, either in person or by proxy, at a meeting of the Company.
Reconciliation of movements in issued capital is as follows:
2022
2021
Number
$’000
Number
$’000
Equity
Opening balance at the beginning of the year
346,054,761
133,091
311,795,340
Issued of fully paid ordinary shares1
Issued of fully paid ordinary shares2
Share issue costs
-
532,794
-
-
-
-
34,259,421
-
-
120,559
12,882
-
(350)
346,587,555
133,091
346,054,761
133,091
Note 1: On 12 August 2020, Sheffield issued 34,259,421 fully paid ordinary shares for $0.376 per share for consideration to YGH Australia
Investment Pty Ltd.
Note 2: Mr Bruce McFadzean stepped down from the Managing Director role on 1 July 2021 and subsequently retired from his position as Non-
Executive Director on 6 September 2021. In addition to cash benefits made in favour of Mr McFadzean, the Board determined that Mr
McFadzean could retain a portion of awards totalling 532,794 performance rights and the balance of 703,627 performance rights were forfeited.
The adjustments were recognised at 30 June 2021. The 532,794 performance rights vested in favour of Mr McFadzean on 1 July 2021.
17. RESERVES
The Company provides benefits to employees (including Directors) in the form of share-based payments whereby employees
render services in exchange for shares or rights over shares (share-based payments). The cost of these share-based payments
with employees is measured by reference to the fair value at the date they are granted. The value is determined using an
appropriate valuation model. In valuing share-based payments, no account is taken of any performance conditions, other than
conditions linked to the price of the shares of Sheffield (market conditions) if applicable.
The cumulative expense is recognised for share-based payments at each reporting date until vesting date and reflects the extent
to which the vesting period has expired and the number of awards, that will ultimately vest. No expense is recognised for awards
that do not ultimately vest, except for awards where vesting is conditional upon a market condition.
Where the terms of a share-based payment are modified, as a minimum an expense is recognised as if the terms had not been
modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of the modification
as measured at the date of modification.
Where a share-based payment is cancelled (other than cancellation when a vesting condition has not been satisfied), it is treated
as if it had vested on the date of cancellation and any expense not yet recognised for the award is recognised immediately.
However, if a new award is submitted for the cancelled award and designated as a replacement award on the date that it is
granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the
previous paragraph.
ANNUAL REPORT 2022 48
SHEFFIELD RESOURCES LIMITED
Notes to the Consolidated Financial Statements
Reconciliation of movements in reserves is as follows:
Equity
Opening balance at the beginning of the year
Share-based payments expenses
2022
$’000
12,150
1,160
13,310
2021
$’000
11,123
1,027
12,150
Employee share option plan
Employees of the Group (including Directors) may be issued with options over ordinary shares of Sheffield. Options are issued
for nil consideration and are subject to performance criteria established by the Directors of Sheffield. The objective of the grant
of options to employees is to assist in the recruitment, retention, reward and motivation of the employees of the Group.
Options granted may be exercised at any time from the date of vesting to the date of expiry. The exercise price for employee
options granted under the Employee Share Option Plan will be fixed by the Directors prior to the grant of the option. Each
employee share option converts to one fully paid ordinary share of Sheffield. The options do not provide any dividend or voting
rights and are not quoted on the Australian Securities Exchange.
The following options were in place at the end of the year:
Expiry date
Grant date
Exercise price
Number under options
30 November 2023
19 November 2019
30 November 2025
25 November 2021
30 October 2026
25 November 2021
$0.65
$0.65
$0.33
960,000
480,0001
700,0001
2,140,000
Note 1: Options issued during the year as part of remuneration to key management personnel, as approved by the 2021 Annual General Meeting
of Shareholders. Detailed disclosures regarding vesting conditions of the options are also set out in the Remuneration Report, which forms part
of the Directors’ Report.
The table lists the inputs to the model for the options issued during the year:
Number
Expiry date
Grant date
Vesting date
Exercise price
Dividend yield
Expected volatility
Risk-free interest rate
Expected life of options
Grant date share price
Fair value at grant date
480,000
700,000
30 November 2025
30 October 2026
25 November 2021
25 November 2021
25 November 2021
30 November 2024
$0.65
0%
80%
1.03%
$0.33
0%
80%
1.03%
3.42 years
4.34 years
$0.33
$0.10
$0.33
$0.18
The expected life of an option is based on historical data and is not necessarily indicative of exercise payments that may occur.
The expected volatility reflects the assumption that the historical volatility is indicative of future trends, which may also not
necessarily be the actual outcome. The weighted average contractual remaining life of the share options outstanding as at 30
June 2022 is 2.82 years (2021: 2.42 years).
ANNUAL REPORT 2022 49
SHEFFIELD RESOURCES LIMITED
Notes to the Consolidated Financial Statements
Movement in options
2022
2021
Number
under options
Weighted average
exercise price
Number
under options
Weighted average
exercise price
Movement in options
Outstanding at the beginning of the year
Granted during the year
Exercised during the year
Lapsed during the year
Outstanding at the end of the year
Exercisable at the end of the year
960,000
1,180,000
-
-
2,140,000
1,440,000
$0.65
$0.46
-
-
$0.55
$0.55
4,517,037
$0.57
-
-
(3,557,037)
960,000
960,000
-
-
$0.50
$0.65
$0.65
Employee incentive plan
The Employee Incentive Plan was established to enable employees of the Group to be issued with performance rights entitling
each participant to a fully paid ordinary share. The performance rights issued for nil consideration are issued in accordance with
the terms and conditions approved at a General Meeting by shareholders and in accordance with performance criteria
established by the Directors. The objective of the Employee Incentive Plan is to assist in the recruitment, reward, retention and
motivation of employees of the Group.
Employees do not possess any rights to participate in the Employee Incentive Plan as participation is solely determined by the
Directors. Performance rights convert to one fully paid ordinary share in Sheffield at an exercise price of nil upon meeting certain
non-market-based performance conditions. The performance rights do not provide any dividend or voting rights and are not
quoted on the Australian Securities Exchange. If an employee ceases to be employed by the Group within the period, the
unvested performance rights will be forfeited.
The following performance rights were in place and are subject to the Company Performance Rights plan:
Expiry date
Grant date
Exercise price
Number under rights
26 October 2025
6 November 2018
1 December 2025
22 December 2018
30 October 2026
25 November 2021
30 October 2026
25 November 2021
Nil
Nil
Nil
Nil
158,940
1,298,367
451,5161
3,318,1821
5,227,005
Note 1: Performance rights issued during the year as part of remuneration to key management personnel, as approved by the 2021 Annual
General Meeting of Shareholders. Detailed disclosures regarding vesting conditions of the Performance Rights are also set out in the
Remuneration Report, which forms part of the Directors’ Report.
ANNUAL REPORT 2022 50
SHEFFIELD RESOURCES LIMITED
Notes to the Consolidated Financial Statements
The table lists the inputs to the model for rights issued during the year:
Number
Expiry date
Grant date
Vesting date
Exercise price
Dividend yield
Expected volatility
Risk-free interest rate
Expected life of options
Grant date share price
Fair value at grant date
451,516
3,318,182
30 October 2026
30 October 2026
25 November 2021
25 November 2021
30 November 2022
30 November 2024
Nil
0%
80%
1.03%
Nil
0%
80%
1.03%
4.34 years
4.34 years
$0.33
$0.33
$0.33
$0.33
The fair value of the performance rights is measured at grant date was estimated by taking the market price of the Company’s
shares on that date less the present value of expected dividends that will not be received on the performance rights during the
vesting period. The weighted average remaining contractual life of the performance rights as at 30 June 2022 is 4.08 years
(2021: 1.95 years).
Movement in performance rights
2022
2021
Number
under rights
Weighted average
grant price
Number
under rights
Weighted average
grant price
Movement in performance rights
Outstanding at the beginning of the year
Granted during the year
Vested during the year1
Lapsed during the year
Forfeited/Cancelled during the year
Outstanding at the end of the year
Exercisable at the end of the year
7,916,861
3,769,698
(532,794)
(4,751,235)
(1,175,525)
5,227,005
-
$0.53
$0.33
$0.78
$0.36
$0.79
$0.45
-
11,191,318
$0.60
-
-
(2,570,830)
(703,627)
7,916,861
-
-
-
$0.78
$0.77
$0.53
-
Note 1: Mr Bruce McFadzean exercised the performance rights previously granted to him under the employee plan as Managing Director of the
Group. Mr McFadzean stepped down from the Managing Director role on 1 July 2021 and subsequently retired from his position as Non-Executive
Director on 6 September 2021.
18. RETAINED EARNINGS / (ACCUMULATED LOSSES)
Reconciliation of movements in retained earnings / (accumulated losses) is as follows:
Equity
Accumulated losses at the beginning of the year
Profit after income tax
2021
$’000
(16,854)
26,079
9,225
2020
$’000
(44,862)
28,008
(16,854)
ANNUAL REPORT 2022 51
SHEFFIELD RESOURCES LIMITED
Notes to the Consolidated Financial Statements
19. EARNINGS PER SHARE
Basic earnings per share is determined by dividing the operating profit after income tax by the weighted average number of
ordinary shares outstanding during the year.
Diluted earnings per share adjusted the figures used in the determination of basic earnings per share by taking into account
amounts unpaid on ordinary shares and any reduction in earnings per share that will probably arise from the exercise of partly
paid shares or options outstanding during the year.
The conversion of options and performance rights to shares for purposes of dilutive calculation is not required when the Group
is in a loss position because the conversion would cause the loss position to decrease.
From continuing operations
Basic earnings per share
Diluted earnings per share
2022
Cents per
share
2021
Cents per
share
7.53
7.44
8.19
8.04
2022
$’000
2021
$’000
Earnings used in calculating earnings per share – continuing operations
Profit after income tax attributable to owners
26,079
28,008
Weighted average number of shares used as denominator
Weighted average number of ordinary shares for basic earnings per share
346,534
342,019
2022
2021
Number (‘000)
Number (‘000)
Effects of dilution from:
- Options
- Performance rights
105
3,699
-
6,511
Weighted average number of ordinary shares for diluted earnings per share
350,338
348,530
20. RELATED PARTIES
Loans to subsidiaries
Loans made by Sheffield to its controlled entities are made to meet required expenditure. The loans are payable on demand
and are not interest bearing.
Transactions with other related parties
Farview Solutions Limited (Farview) provides consultancy services to the Group. Mr Griffin is a director and controlling
shareholder of Farview and also serves as Executive Chair of Sheffield. The total amount paid to Farview during the year was
$300,000 (2021: $258,065). The payment was disclosed in Remuneration Report section, which forms part of the Directors’
Report.
Ozscot Trust (Ozscot) provides general consultancy services and workshop participation to the Group. Mr Cowe is a director of
Ozscot and also serves as Non-Executive Director of Sheffield. The total amount paid to Ozscot during the year was $43,000 plus
GST (2021: $6,000 plus GST). The payment was disclosed in Remuneration Report section, which forms part of the Directors’
Report.
ANNUAL REPORT 2022 52
SHEFFIELD RESOURCES LIMITED
Notes to the Consolidated Financial Statements
21. KEY MANAGEMENT PERSONNEL
The key management personnel of the Group are as follows:
Name
Position
Non-Executive Directors
John Richards
Ian Macliver
Gordon Cowe
Lead Independent Director
Non-Executive Director
Non-Executive Director
Vanessa Kickett
Non-Executive Director (appointed 1 January 2022)
Bruce McFadzean
Non-Executive Director (retired 6 September 2021)
Senior Executives
Bruce Griffin
Mark Di Silvio
Executive Chair
Chief Financial Officer and Company Secretary
The aggregate compensation made to the key management personnel of the Group is as follows:
Short-term employee benefits
Post-employment benefits
Share-based payments expenses
Termination benefits
2022
$
2021
$
1,073,921
1,923,252
58,956
89,923
687,174
1,120,735
-
238,308
1,820,051
3,372,218
Other Key Management Personnel Transactions with The Company
There were no other key management personnel transactions with the Company other than the fees paid to Farview Solutions
Limited and Ozscot Trust as detailed in Note 20.
Loans to Key Management Personnel
No loans were granted to key management personnel during the year.
22. COMMITMENTS
Kimberley Mineral Sands Pty Ltd Joint Venture
YGH Australia Investment Pty Ltd (Yansteel) entered into a 50:50 joint venture with Sheffield to own and develop the Thunderbird
project in 2021. The ownership of the high-grade mineral sands Thunderbird project was previously held by Sheffield through
its 100% owned subsidiary Kimberley Mineral Sands Pty Ltd (KMS) prior to the formation of the joint venture. The project is
located in north-west Western Australia. As per the terms of the agreement, Yansteel subscribed for a 50% interest in KMS and
provided $130.1 million in project equity funding. KMS became jointly owned by Sheffield and Yansteel as at 12 March 2021
following completion of the joint venture transaction. Since that date, Sheffield’s interest in KMS is accounted for using the
equity method in the consolidated financial statements. Please refer to Notes 7 and 8 for additional information.
KMS reported exploration commitments of $1.53m for 2022 (2021: $1.49m). KMS also has the following capital commitments
relating to Thunderbird Operations Pty Ltd:
•
•
$0.4m annual support payment; and
$1.5m payable on a positive final investment decision for the Thunderbird project.
KMS has contingent liabilities as at 30 June 2022 of $2.4m (2021: nil). These liabilities relate to establishment fee payable
within 30 days of financial close of financing for the Thunderbird project.
ANNUAL REPORT 2022 53
SHEFFIELD RESOURCES LIMITED
Notes to the Consolidated Financial Statements
23. CONTINGENT LIABILITIES
In accordance with the terms of agreement with regards to the Kimberley Mineral Sands Pty Ltd (KMS), Sheffield also recognised
a contingent liability to fund any excess equity shortfall up to a maximum of $10m. The payment is contingent upon KMS
reaching a final investment decision with regards to the Thunderbird project. No such decision was made at 30 June 2022.
The Group has no other contingent liabilities as at 30 June 2022 (2021: nil).
24. EVENTS SUBSEQUENT TO REPORTING PERIOD
On 28 July 2022, Deputy Premier of Western Australia, Hon. Roger Cook MLA, ratified the $160m Northern Australian
Infrastructure Facility (NAIF) loan facility and that the loan facility documentation was executed by Kimberley Mineral Sands Pty
Ltd (KMS) and the Government of Western Australia for the development of the Thunderbird project.
On 8 August 2022, KMS and Orion Resource Partners (Aus) Pty Ltd (Orion) executed a non-binding term sheet for a total financing
of US$110m production linked loan facility for the Thunderbird Project. Completion of the Orion loan facility remains conditional
upon completion of due diligence, the parties entering into binding legal documentation (including intercreditor arrangements)
and satisfaction of conditions precedent.
On 23 August 2022, KMS executed a long-term port access agreement with the Shire of Derby / West Kimberley, supporting the
future export of product from the Thunderbird project. The agreement spans a minimum period through to mid-2040 and provide
KMS a long-term access to port infrastructure and a bulk handling facility at the Port of Derby. The agreement is subject to
customary conditions precedent, including regulatory approvals and KMS providing relevant notice toward the development of
the Thunderbird project.
Other than noted above, there has been no additional matter or circumstance that has arisen after balance date that has
significantly affected, or may significantly affect, the operations of the Group, the results of those operations, or the state of
affairs of the Group in future financial periods.
25. REMUNERATION OF AUDITORS
The auditor of Sheffield is HLB Mann Judd.
HLB Mann Judd
Amounts received or receivable for audit or review of the financial report
39,731
49,425
2022
$
2021
$
ANNUAL REPORT 2022 54
SHEFFIELD RESOURCES LIMITED
Notes to the Consolidated Financial Statements
26. PARENT ENTITY
Assets
Current assets
Non-current assets
Total assets
Liabilities
Current liabilities
Non-current liabilities
Total liabilities
Net assets
Equity
Issued capital
Reserves
Retained earnings / (Accumulated losses)
Total equity
Financial performance
Profit after income tax
Other comprehensive income / (loss)
Total comprehensive income, net of tax
Parent entity
Parent entity
2022
$’000
40,265
115,535
155,800
174
-
174
2021
$’000
6,816
123,049
129,865
390
1,088
1,478
155,626
128,387
133,091
13,310
9,225
155,626
133,091
12,150
(16,854)
128,387
26,079
28,008
-
-
26,079
28,008
ANNUAL REPORT 2022 55
SHEFFIELD RESOURCES LIMITED
Directors’ Declaration
DIRECTORS’ DECLARATION
1.
In the opinion of the Directors of the Company:
a.
the accompanying financial statements and notes are in accordance with the Corporations Act 2001 including:
i.
ii.
giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its performance
for the year then ended; and
complying with Australian Accounting Standards, the Corporations Regulations 2001, professional
reporting requirements and other mandatory requirements.
b.
there are reasonable grounds to believe that the Company will be able to pay its debts as and when they
become due and payable.
c. the financial statements and notes thereto are in accordance with International Financial Reporting Standards
issued by the International Accounting Standards Board.
2.
This declaration has been made after receiving the declarations required to be made to the Directors in accordance
with Section 295A of the Corporations Act 2001 for the year ended 30 June 2022.
This declaration was signed in accordance with a resolution of the Board of Directors.
Bruce Griffin
Executive Chair
Perth, Western Australia
14 September 2022
ANNUAL REPORT 2022 56
INDEPENDENT AUDITOR’S REPORT
To the members of Sheffield Resources Limited
Report on the Audit of the Financial Report
Opinion
We have audited the financial report of Sheffield Resources Limited (“the Company”) and its controlled
entities (“the Group”), which comprises the consolidated statement of financial position as at 30 June
2022, the consolidated statement of profit or loss and other comprehensive income, the consolidated
statement of changes in equity and the consolidated statement of cash flows for the year then ended,
and notes to the financial statements, including a summary of significant accounting policies, and the
directors’ declaration.
In our opinion, the accompanying financial report of the Group is in accordance with the Corporations
Act 2001, including:
(a) giving a true and fair view of the Group’s financial position as at 30 June 2022 and of its financial
performance for the year then ended; and
(b) complying with Australian Accounting Standards and the Corporations Regulations 2001.
Basis for Opinion
We conducted our audit in accordance with Australian Auditing Standards. Our responsibilities under
those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
Report section of our report. We are independent of the Group in accordance with the auditor
independence requirements of the Corporations Act 2001 and the ethical requirements of the
Accounting Professional and Ethical Standards Board’s APES 110 Code of Ethics for Professional
Accountants (“the Code”) that are relevant to our audit of the financial report in Australia. We have also
fulfilled our other ethical responsibilities in accordance with the Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis
for our opinion.
Key Audit Matters
Key audit matters are those matters that, in our professional judgement, were of most significance in
our audit of the financial report of the current period. These matters were addressed in the context of
our audit of the financial report as a whole, and in forming our opinion thereon, and we do not provide
a separate opinion on these matters.
We have determined the matters described below to be the key audit matters to be communicated in
our report.
ANNUAL REPORT 2022 57
Key Audit Matter
How our audit addressed the key audit
matter
Accounting for the Group’s interest in the
Kimberley Mineral Sands Pty Ltd Joint Venture
Note 8 in the financial statements
The carrying amount of the investment in the joint
venture as at 30 June 2022 is $115.5 million and
the share of joint venture loss for the financial year
then ended was $866 thousand.
for
This accounting
joint venture was
the
considered a key audit matter as it forms a large
component of the overall result of the Group for the
year.
Our procedures included but were not
limited to the following:
• Reviewed management’s accounting
treatment of the joint arrangement;
• Examined the recognition of the share of
joint venture loss in comparison to the
joint venture’s
financial
statements and ensured it has been
correctly recorded and disclosed; and
• Examined the disclosures made in the
audited
financial report.
Information Other than the Financial Report and Auditor’s Report Thereon
The directors are responsible for the other information. The other information comprises the information
included in the Group’s annual report for the year ended 30 June 2022, but does not include the
financial report and our auditor’s report thereon.
Our opinion on the financial report does not cover the other information and accordingly we do not
express any form of assurance conclusion thereon.
In connection with our audit of the financial report, our responsibility is to read the other information
and, in doing so, consider whether the other information is materially inconsistent with the financial
report, or our knowledge obtained in the audit or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this
other information, we are required to report that fact. We have nothing to report in this regard.
Responsibilities of the Directors for the Financial Report
The directors of the Company are responsible for the preparation of the financial report that gives a
true and fair view in accordance with Australian Accounting Standards and the Corporations Act 2001
and for such internal control as the directors determine is necessary to enable the preparation of the
financial report that gives a true and fair view and is free from material misstatement, whether due to
fraud or error.
In preparing the financial report, the directors are responsible for assessing the ability of the Group to
continue as a going concern, disclosing, as applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either intend to liquidate the Group or to cease
operations, or have no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Report
Our objectives are to obtain reasonable assurance about whether the financial report as a whole is free
from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes
our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit
conducted in accordance with Australian Auditing Standards will always detect a material misstatement
ANNUAL REPORT 2022 58
when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in the aggregate, they could reasonably be expected to influence the economic decisions of users
taken on the basis of this financial report.
As part of an audit in accordance with the Australian Auditing Standards, we exercise professional
judgement and maintain professional scepticism throughout the audit. We also:
−
Identify and assess the risks of material misstatement of the financial report, whether due to fraud
or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a
material misstatement resulting from fraud is higher than for one resulting from error, as fraud may
involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
control.
− Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s internal control.
− Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by the directors.
− Conclude on the appropriateness of the directors’ use of the going concern basis of accounting
and, based on the audit evidence obtained, whether a material uncertainty exists related to events
or conditions that may cast significant doubt on the Group’s ability to continue as a going concern.
If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s
report to the related disclosures in the financial report or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of
our auditor’s report. However, future events or conditions may cause the Group to cease to
continue as a going concern.
− Evaluate the overall presentation, structure and content of the financial report, including the
disclosures, and whether the financial report represents the underlying transactions and events in
a manner that achieves fair presentation.
We communicate with the directors regarding, among other matters, the planned scope and timing of
the audit and significant audit findings, including any significant deficiencies in internal control that we
identify during our audit.
We also provide the directors with a statement that we have complied with relevant ethical requirements
regarding independence, and to communicate with them all relationships and other matters that may
reasonably be thought to bear on our independence, and where applicable, related safeguards.
From the matters communicated with the directors, we determine those matters that were of most
significance in the audit of the financial report of the current period and are therefore the key audit
matters. We describe these matters in our auditor’s report unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter
should not be communicated in our report because the adverse consequences of doing so would
reasonably be expected to outweigh the public interest benefits of such communication.
ANNUAL REPORT 2022 59
Report on the Remuneration Report
Opinion on the Remuneration Report
We have audited the Remuneration Report included in the directors’ report for the year ended 30 June
2022.
In our opinion, the Remuneration Report of Sheffield Resources Limited for the year ended 30 June
2022 complies with section 300A of the Corporations Act 2001.
Responsibilities
The directors of the Company are responsible for the preparation and presentation of the Remuneration
Report in accordance with section 300A of the Corporations Act 2001. Our responsibility is to express
an opinion on the Remuneration Report, based on our audit conducted in accordance with Australian
Auditing Standards.
HLB Mann Judd
Chartered Accountants
Perth, Western Australia
14 September 2022
N G Neill
Partner
ANNUAL REPORT 2022 60
SHEFFIELD RESOURCES LIMITED
ASX Additional Information
ASX ADDITIONAL INFORMATION
The Company was admitted to the official list of ASX on 15 December 2010. The shareholder information set out below was
applicable as at 31 August 2022.
DISTRIBUTION OF EQUITY SECURTIES
Spread of Holdings
1 – 1,000
1,001 – 5,000
5,001 – 10,000
10,001 – 100,000
100,001 and over
Total holders
Number held
250
612
358
1,032
358
2,610
93,529
1,770,377
2,848,117
38,117,084
303,758,448
346,587,555
Unmarketable parcels amount to 119,462 shares held by 274 shareholders.
SUBSTANTIAL SHAREHOLDERS
Ordinary shareholders – fully paid ordinary shares
Number held
Percentage %
YGH AUSTRALIA INVESTMENT PTY LTD
MR & MRS WALTER MG YOVICH
BLACKROCK INVESTMENT MANAGEMENT (UK)
UNLISTED OPTIONS
34,259,421
31,319,960
22,037,539
87,616,920
9.9%
9.0%
6.4%
25.3%
Expiry date
Grant date
Exercise price
Number under options
30 November 2023
19 November 2019
30 November 2025
25 November 2021
30 October 2026
25 November 2021
UNLISTED PERFORMANCE RIGHTS
$0.65
$0.65
$0.33
960,000
480,000
700,000
2,140,000
Date of expiry
Grant date
Exercise price
Number under rights
26 October 2025
6 November 2018
1 December 2025
22 December 2018
30 October 2026
30 October 2026
25 November 2021
25 November 2021
Nil
Nil
Nil
Nil
158,940
1,298,367
135,455
3,318,182
4,910,944
STATEMENT OF QUOTATION AND RESTRICTIONS
•
•
•
Listed on the ASX are 346,587,555 fully paid shares. All fully paid shares are free of escrow conditions.
All 2,140,000 options are not quoted on the ASX. All options are free of escrow conditions.
All 4,910,944 rights are not quoted on the ASX. All rights are free of escrow conditions.
VOTING RIGHTS
All ordinary shares carry one vote per share without restriction. Options for ordinary shares do not carry any voting rights.
ANNUAL REPORT 2022 61
SHEFFIELD RESOURCES LIMITED
ASX Additional Information
TWENTY LARGEST SHAREHOLDERS
Details of the twenty largest shareholders by registered shareholding are as follows:
Ordinary shareholders – fully paid ordinary shares
Number held
Percentage %
YGH AUSTRALIA INVESTMENT PTY LTD
HSBC CUSTODY NOMINEES (AUSTRALIA) LIMITED
CITICORP NOMINEES PTY LIMITED
MR WALTER MICK GEORGE YOVICH & MRS JEANETTE JULIA YOVICH
MR WALTER MICK GEORGE YOVICH
BNP PARIBAS NOMINEES PTY LTD HUB24 CUSTODIAL SERV LTD
UBS NOMINEES PTY LTD
MR BRUCE MORRISON MCQUITTY
MR WILLIAM BURBURY
SATORI INTERNATIONAL PTY LTD
BNP PARIBAS NOMS PTY LTD
ARCHER ENTERPRISES (WA) PTY LTD
TUCARNDI PTY LTD
SEVEN FOUR SEVEN PTY LTD
KIMBERLEY SUSTAINABLE DEVELOPMENT PTY LTD
MR DAVID LINDSAY ARCHER & MRS SIMONE ELIZABETH ARCHER
CRESCENT NOMINEES LIMITED
SHARNEM PTY LTD
BNP PARIBAS NOMINEES PTY LTD
NASUTI PTY LTD
34,259,421
27,540,885
17,534,539
17,375,524
13,944,436
10,226,444
8,193,129
8,109,289
7,548,500
7,124,667
6,982,623
5,401,634
4,000,000
3,071,500
2,836,120
2,503,945
2,237,085
2,210,000
2,147,680
2,000,000
9.9%
7.9%
5.1%
5.0%
4.0%
3.0%
2.4%
2.3%
2.2%
2.1%
2.0%
1.6%
1.2%
0.9%
0.8%
0.7%
0.6%
0.6%
0.6%
0.6%
185,247,421
53.4%
ANNUAL REPORT 2022 62
SHEFFIELD RESOURCES LIMITED
Tenement Schedule
TENEMENT SCHEDULE
Sheffield Resources Limited
Project
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Tenement
E70/37621
E70/38131
E70/38141
E70/38591
E70/39291
E70/39671
E70/41901
E70/42921
E70/45841
E70/47191
E70/47471
E70/49221
M70/8721&2
M70/9651&2
M70/11531&2
R70/3521&2
Holder
Sheffield Resources Ltd
Sheffield Resources Ltd
Sheffield Resources Ltd
Sheffield Resources Ltd
Sheffield Resources Ltd
Sheffield Resources Ltd
Sheffield Resources Ltd
Sheffield Resources Ltd
Sheffield Resources Ltd
Sheffield Resources Ltd
Sheffield Resources Ltd
Sheffield Resources Ltd
Sheffield Resources Ltd
Sheffield Resources Ltd
Sheffield Resources Ltd
Sheffield Resources Ltd
Interest
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Location
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Perth Basin
Status
Granted
Granted
Granted
Pending
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Note 1: Sale and purchase agreements were executed with Image Resources NL (Image) (ASX: IMA) and its registered subsidiary entities during
2022. All tenements are beneficially held on behalf of Image and are subject to customary registration and transfer by the WA Government.
Note 2: Iluka Resources Ltd (ASX: ILU) retains a gross sales royalty of 1.5% in respect to tenements R70/35, M70/872, M70/965 & M70/1153.
Kimberley Mineral Sands Pty Ltd Joint Venture (Sheffield interest – 50%)3
Project
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Mineral Sands
Tenement
E04/2081
E04/2083
E04/2084
E04/2171
E04/2349
E04/2390
E04/2456
E04/2478
E04/2494
E04/2509
E04/2540
E04/2554
E04/2571
E04/2597
L04/82
L04/83
L04/84
L04/85
L04/86
L04/92
L04/93
M04/459
Holder
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Thunderbird Operations Pty Ltd
Interest
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
100%
Location
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Canning Basin
Status
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Granted
Note 3: Thunderbird Operations Pty Ltd is a wholly owned subsidiary of Kimberley Mineral Sands Pty Ltd (refer to ASX announcement 12 March
2021). Kimberley Mineral Sands Pty Ltd is a 50:50 incorporated joint venture between Sheffield Resources Limited and YGH Australia
Investment Ltd (Yansteel).
ANNUAL REPORT 2022 63
info@sheffieldresources.com.au | T +61 8 6555 8777 F +61 8 6555 8787
Level 2, 41-47 Colin Street, West Perth WA 6005 | PO Box 205, West Perth WA 6872
sheffieldresources.com.au
Sheffield Resources Limited ACN 125 811 083