The environmental watchdog has given a conditional tick of approval to Sheffield Resources’  Thunderbird mineral sands project in the Kimberley, Western Australia.

Thunderbird is one of the biggest, highest-grade mineral sands discoveries of the past 30 years.

Last month, Sheffield inked its first deal with a leading Indian ceramics company for the future sale of premium zircon from the project.

News of the approval lifted Sheffield (ASX:SFX) shares 13.4 per cent to 76c in late Monday trade. Close to 1 million shares changed hands.

The Environmental Protection Authority concluded the Thunderbird project was environmentally acceptable as long as the company adhered to strict conditions.

Development was conditional on an environmental management plan to minimise impacts to terrestrial fauna, in particular the Greater bilby.

The authority also recommended exclusion zones to avoid impacts to Aboriginal heritage sites and progressive mine rehabilitation to restore the habitat for the Greater bilby.

The full report can be accessed here.

“With clear environmental management plans in place for Thunderbird, we now have the ability to deliver a project that will bring material benefits to all stakeholders,” Sheffield’s managing director Bruce McFadzean said.

“This is an important de-risking step in the evolution of Thunderbird as we move through our funding and offtake [sales] process and toward a final investment decision.”

The project now requires final sign-off from the Minister for Environment.

Any appeals must be lodged within 14 days of publication of the report.

Sheffield’s feasibility study shows Thunderbird is a technically low risk, modest capex project that generates strong cash margins from production over a mine life of 42 years.

Meanwhile, the Federal Court recently threw out an appeal by a native title group to Sheffield’s mining lease over Thunderbird.

Initial production from Thunderbird is expected in 2019.