SHEFFIELD RESOURCES LIMITED (SFX)
Share Price Analysis and Chart

13/11/2024

3

Initiation of coverage with Hold

$0.08

-52.94%

Ord Minnett initiates coverage on Sheffield Resources with a Hold rating and sets an 8c target price.

The company owns 50% of KMS, the operating entity for the Thunderbird mine, which began production in October 2023 and is facing technical difficulties in ramp-up, explain the analysts.

Despite some support from 50% joint venture partner Yansteel, Ord Minnett highlights significant uncertainty arising from the need for additional funds and a debt restructure.

The broker forecasts that surpluses in the mineral sands market over the past two years will cease, with tightness in zircon and high-grade TiO2 feedstocks expected to endure until late in the decade.

Following a slide in mineral sands prices since late 2023, the current quarter is viewed by the broker as the trough, with prices expected to begin lifting in 2025.

25/10/2024

3

Downgrade to Hold from Buy

$0.28

64.71%

Sheffield Resources reported production at its Thunderbird mineral sands project was -11-14% below expectations, despite throughput being 3% ahead of forecast.

Petra Capital observes no zircon sales were made during the quarter due to weak market conditions, leading to revenue of $24m, significantly below the broker's forecast of $63m.

A $14m prepayment from the JV partner is expected to provide short-term liquidity. As a result, the broker has downgraded the price target to $0.28 from $0.57 and reduced its NPV estimate.

Sheffield Resources has been downgraded to Hold from Buy. 

FORECAST
Petra Capital forecasts a full year FY25 dividend of 0.00 cents and EPS of minus -6.30 cents.
Petra Capital forecasts a full year FY26 dividend of 0.00 cents and EPS of 0.50 cents.