Highfield Resources Limited · ASX:HFR
Highfield Resources — Investor Presentation (November 2017)
24 slides from Highfield Resources's investor presentation, November 2017
Slide 1: Path to Production for High Margin Muga Potash Mine
Highfield Resources Ltd Path to Production for High Margin Muga Potash Mine November 2017 Corporate Presentation ASX Code: HFR
Slide 2: Competent Person Statement and Forward Looking Statements
COMPETENT PERSON STATEMENT – RESOURCES This ASX release was prepared by Mr. Peter Albert, Managing Director of Highfield Resources. The information in this release that relates to Ore Reserves, Mineral Resources, Exploration Results and Exploration Targets is based on information prepared by Mr José
Slide 3: Contents
Highfield Resources Limited CONTENTS 1. Corporate Summary 2. Board and Senior Management 3. Core Values 4. The Muga Potash Mine 5. Timeline to Production and Key Milestones 6. Capital and Operating Costs 7. Stakeholder Engagement 8. Permitting 9. Upside Potential 10. Value Proposition 11. Summary 3
Slide 4: 1. Corporate Summary
1. Corporate Summary Fully Diluted Equity Ordinary Shares on Issue 329.2m Options & Performance shares 45.2m Fully Diluted 374.4m Undiluted Market Cap at A$1.05 (7 November 2017) A$346m Cash as at 30 September 2017 ~A$68m A$278.8m / Enterprise Value US$211.1m1 Average Daily Volume (6 months) ~195,00
Slide 5: 2. Board and Senior Management
2. Board and Senior Management Board and Senior Management experienced in construction and operations Board of Directors Derek Carter Non-Executive Chairman Pauline Carr Jim Dietz Owen Hegarty Richard Crookes Independent Independent Non-Executive Director Non-Executive Director Non-Executive Directo
Slide 6: 2. Board and Senior Management
2. Board and Senior Management Board and Senior Management experienced in construction and operations Board of Directors and Senior Management Derek Carter – Non Executive Chairman Peter Albert – Managing Director & CEO A geologist with over 40 years experience in exploration and development, includ
Slide 7: 3. Core Values
3. Core Values “To build a successful, sustainable, potash business with respect for stakeholders and the environment” Respect Excellence To act and communicate collaboratively To seek to continuously improve through with transparency, sincerity and an a cycle of goal-setting, accountability, unders
Slide 8: 4. The Muga Potash Mine
4. The Muga Potash Mine Muga - Highfield’s most advanced, low capex, high margin potash development project Summary • Located in Northern Spain, within 150km of key Atlantic Port near San Sebastian (Port of Pasajes) • Detailed engineering and design underway, long lead items ordered and deposits pai
Slide 9: 4. The Muga Potash Mine
4. The Muga Potash Mine Relatively simple, proven technology with first rate access to end markets Decline access to shallow mineralisation Simple Mining Underground room and pillar mining Sylvinite ore Conventional Processing Conventional process Direct connection to national electricity grid First
Slide 10: 5. Timeline to Production and Key Milestones
5. Timeline to Production and Key Milestones Construction ready program, two years from commencement of construction to production Month of Project 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 Item Pre-Development Stages Detailed Engineering and Design Long Lead Items Ordered Elect
Slide 11: 6. Muga Capital and Operating Costs
6. Muga Capital and Operating Costs Lowest project capital cost potash project globally on a $ / tonne of production basis • Updated MOU with Acciona to provide project Muga Phase 1 – Project Capital Cost delivery assistance. Amount • No major aquifer unit allows simple decline access Component (€ m
Slide 12: 6. Muga Capital and Operating Costs
6. Muga Capital and Operating Costs Low delivered cost to customer positions Muga to be a high margin potash mine • Muga is expected to deliver bottom quartile Muga - Operating Cost all-in-sustaining cash (AISC) cost delivered to Amount Amount Europe, Brazil and the USA Component (€ / tonne MOP) (US
Slide 13: 7. Stakeholder Engagement
7. Stakeholder Engagement Highfield is committed to sustainable development, supporting the local community - Developing a strong safety first culture within our work force Safety - Focus on minimising harm to both workers and surrounding environment - Core focus on minimising risk and impact on env
Slide 14: 7. Stakeholder Engagement
7. Stakeholder Engagement Highfield is actively participating in the community 14
Slide 15: 8. Permitting
8. Permitting Permitting process moving towards conclusion • Company’s ESIA submitted to central environmental permitting authority (MAPAMA, previously known as MAGRAMA) –December 14 • MAPAMA requested various referral authorities to provide analysis and commentary on Company’s ESIA – April/May 2016
Slide 16: 9. Upside – SOP Project & K62 Project
9. Upside – SOP Project & K62 Project Highfield has a number of near term value creation opportunities SOP Project K62 Crystallisation Project • Scoping Study complete for 500ktpa SOP Mannheim • Crystallisation plant to process slimes and tailings from facility Muga Potash Mine to produce K62 MOP an
Slide 17: 9. Upside – Other Projects
9. Upside – Other Projects Control of basin of projects with shared characteristics of Muga Potash Mine 17
Slide 18: 9. Upside – Other Projects
9. Upside – Other Projects Control of basin of projects with shared characteristics of Muga Potash Mine Muga Extension Sierra del Perdón • Exploration target of 127 to 255 million • Scoping Study completed April 2015 tonnes at 12% to 16% K2O • Decline access to underground • Target based on geophysi
Slide 19: 9. Upside – Other Projects
9. Upside – Other Projects Control of basin of projects with shared characteristics of Muga Potash Mine Pintanos Vipasca Izaga • Current Exploration Target of 343m to • Exploration Target of between 320 • Grass roots exploration tenement 1,565m tonnes at 10 to 15,4% K2O million and 1,2 billion tonne
Slide 20: 10. Value Proposition - Highfield
10. Value Proposition - Highfield Independent verification that Muga Mine would have made Highfield the highest margin producer 20
Slide 21: 10. Value Proposition – Potash Market
10. Value Proposition – Potash Market Many experts believe potash prices have reached the marginal cost of production We have seen the start of a recovery for potash prices Solid Demand Fundamentals 65 million tonnes K+S 63 million Bethune tonnes Producer Discipline 1.9 million 5.9 million Returning
Slide 22: 10. Value Proposition - Highfield
10. Value Proposition - Highfield Low capex, low risk, high margin potash development Low Capital Cost Lowest capital cost to production Outstanding High Margin Investment Metrics Bottom quartile delivered cost to customer Well funded Over A$65 million in Compelling Investment cash Value Lower Techn
Slide 23: 11. Summary
11. Summary • Outstanding portfolio of projects with Muga the flagship – Low capital cost to production – Lowest quartile delivered cash cost to customer at full capacity – NPV10 – US$1.46 billion (NPV8 over US$2 billion) • Experienced team of mine builders and operators – Peter Albert has over 30 y
Slide 24: Registered Office and Contact
REGISTERED OFFICE 169 Fullarton Road Dulwich SA 5065 Australia HEAD OFFICE Avenida Carlos III, 13-15, 1B, 31002 Pamplona, Spain T +34 948 050 577 | F +34 948 050 578 www.highfieldresources.com.au info@highfieldresources.com.au FURTHER INFORMATION Peter Albert Managing Director T +34 628 590 109 Hayd
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