Sheffield Resources (Australia) Thunderbird Mineral Sands Project: Cost of Capital

Russell Poskitt, Colette Southam

Research output: Contribution to specialist publicationArticleEducation


In early October 2022, the ASX-listed mineral exploration company Sheffield Resources announced its final investment decision to proceed with the Thunderbird mineral sands project, its only project under development. Olivia Montalbano’s investment banking firm decided to provide coverage of Sheffield’s stock and asked her to determine a fair value estimate. The investor’s bankable feasibility study (BFS) provided an estimate of $1.84 per share, but the stock price was only $0.47. What troubled Montalbano was that the BFS employed a real discount rate of 8 per cent, which seemed low, given typical mining project risk. Montalbano’s immediate task was to develop her own estimate of the project’s cost of capital.
Original languageEnglish
Number of pages10
Specialist publicationIvey Publishing [Case Studies]
PublisherIvey Publishing
Publication statusPublished - 11 Dec 2023


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