Highfield Resources Limited · ASX:HFR
Highfield Resources — Investor Presentation (November 2023)
27 slides from Highfield Resources's investor presentation, November 2023
Slide 1: Investor Presentation
Investor Presentation November 2023 | ASX:HFR
Slide 2: Disclaimer
Disclaimer COMPETENT PERSONS STATEMENT FOR MUGA ORE RESERVES, MUGA MINERAL RESOURCES and EXPLORATION TARGET This update was prepared by Mr. Ignacio Salazar Director of Highfield Resources. The information in this update that relates to the Ore Reserve reported as of 31 October 2021 is based on infor
Slide 3: Highfield Resources
Highfield 7 Resources
Slide 4: Presenters
Presenters Ignacio Salazar Olivier Vadillo Managing Director & Head of Marketing & Chief Executive Officer Investor Relations ▪ Joined HFR as CEO in July 2020 ▪ Joined HFR in April 2018 ▪ Over 30 years’ experience, most of which have been in ▪ More than 12 years’ professional experience in the resou
Slide 5: Why Highfield Resources?
Why Highfield Resources? Targeting €340 Forecast to be Fully permitted Location is a major million per one of the and shovel strategic The Muga Potash annum EBITDA1 highest margin ready project in advantage. Shallow Potash operation potash mines Spain mineralization. Mine is set to in full productio
Slide 6: Corporate Structure
Corporate Structure Ticker HFR HIGHFIELD RESOURCES LIMITED Share Price (as at 15 November 2023) A$0.40 Asset Common Shares 392.2M High-grade Proved and Probable Ore Reserve of 237.3Mt at 12.0% Potassium Oxide (K2O) Dilutive Securities 35.1M Permitted and Construction ready, Market Capitalisation A$1
Slide 7: The Lifecycle of a mineral discovery
The Lifecycle of a mineral discovery Risks Funding risk Technical risk Exploration risk Discovery This is most likely the time when There is a tipping point in exploration people outside of the mining industry when drilling amounts to a real mineral hear of a new discovery while early discovery and
Slide 8: Team
Team Board overview Management overview Paul Harris, Independent Non-Executive Director Javier Aguado, CFO ▪ Joined Board March 2022. ▪ Over 20 years’ accounting and financial experience. ▪ Over 25 years’ experience in financial markets and investment banking, ▪ Previous worked at Ernst and Young an
Slide 9: Potash Market Overview
Potash Market Overview Global food security will be a key theme in the future with population increasing and arable land decreasing growing the need for more fertiliser use Potash prices are very strongly corelated to crop prices 2.5 10.0 Crop prices are expected to recover with potash prices expect
Slide 10: Muga Project Overview
Muga Project Overview A potash developer listed on Local Spanish head office and project office with the ASX (HFR) with projects the entire executive team based in Pamplona, near the Muga Project site in Northern Spain Muga Mine Muga is a two-phase project which will produce a total of 1 Mtpa of mur
Slide 11: ESG Credentials
ESG Credentials Progressively rehabilitate mine: Backfilling and salt sales Muga will be the only potash mine not to leave residue on the surface after production ENVIRONMENTAL Conventional mining drives low emission operation Social Baseline Study prepared by Government of Navarra The Company’s soc
Slide 12: Location is a Key Competitive Advantage
Location is a Key Competitive Advantage Access to Customer Markets • Strategically located in the middle of the European market • Potash price premium in Europe ~1,750km from mine to port ~1,700km from mine to port ~6,800 nautical miles Primary Market – U.S. Muga ~8,700 nautical miles Primary Market
Slide 13: Other Key Competitive Advantages
Other Key Competitive Advantages • Excellent infrastructure in place with immediate access to ports, transport and renewable grid power • Straightforward access to the mine with National Electricity Grid Substation in Sangüesa two ramps, no shafts, no aquifers and shallow mineralization • Low techni
Slide 14: Top Quartile Margins
Top Quartile Margins Europe trades at a premium to other markets Margin curve forecast for 2026 (real US$) 1,150.0 290.0 1,050.0 Rest of world Highfield Potash Standard MOP bulk fob Vancouver, USD/t 950.0 240.0 Potash Granular MOP bulk cfr northwest Europe, USD/t 850.0 190.0 750.0 USD/t 650.0 140.0
Slide 15: Low Initial Investment
Low Initial Investment MUGA has half the capex intensity compared to other global development projects (US$ Per Tonne Of Potash) 2,500 Capex intensity US$/t 2,000 1,500 Average capex (US$/t) 1,000 500 - Milestone Phase Bamnet Narong Southey Jansen Phase 1 Woodsmith Colluli Kola Vanguard & Autazes Mu
Slide 16: Outstanding Project Economics
Outstanding Project Economics ECONOMICS OPERATIONAL 2 phase planned Excellent logistics with €340 million pa Strategically located NPV8 of €1.82 billion First quartile margin production up to access to renewable EBITDA in full with low cost access 23% IRR (post-tax) position 1Mtpa of Muriate of grid
Slide 17: 2023 Project Progress Report
2023 Project Progress Report Highfield has made significant progress in the last twelve months announcing a number of key project milestones ✓ Fully permitted: Environmental, mining concessions and construction licences obtained. ✓ Successful expropriation process: Access to all land for the project
Slide 18: 2023 Construction Progress Report
2023 Construction Progress Report ● Preliminary works around the mine gate finalised early 2023 ● Access to all land, expropriation completed by June 2023 ● H2 2023 preliminary works on newly acquired areas and electricity line in progress ● Three construction workstreams planned: Process Plant, Urb
Slide 19: Financing Strategy
Financing Strategy PHASE 1 MUGA PROJECT CAPITAL ESTIMATED FUNDING FUNDING OPTIONS IN PROGRESS SECURED AND IN PLACE Strategic Royalty €320M Senior Secured Project Financing BNP Paribas S.A.; Offtake Equity ING Bank N.V.; Remaining Natixis CIB; SECURED • Working with Macquarie Capital, Clarksons Socie
Slide 20: Progress to Date and Next Steps
Progress to Date and Next Steps 2022 2023 2024 2025 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Key permits obtained: • Environmental approval (DIA) Permitting • Mining Concession • Electricity line Authorisation • Mine gate and decline construction licence • Process plant construction licence
Slide 21: Why Highfield Resources?
Why Highfield Resources? Targeting €340 Forecast to be Fully permitted Location is a major million per one of the and shovel strategic The Muga Potash annum EBITDA1 highest margin ready project in advantage. Shallow Potash operation potash mines Spain mineralization. Mine is set to in full productio
Slide 22: Appendix
APPENDIX
Slide 23: What is Potash?
Potash Market Overview What is Potash ? Potash (potassium chloride, KCl, Muriate of Potash, or MOP), is an essential crop nutrient Potash is the most widely used potassium fertilizer along with Nitrogen and Phosphorous. It’s primary role in plants is to support and improve: ● growth ● water retentio
Slide 24: Overview of fertilizers
Potash Market Overview Overview of fertilizers Fertilisers contain essential nutrients which act as the foundation for plant growth Primary nutrients in fertiliser are nitrogen, phosphorus and potassium which perform different functions and not substitutable Potassium is required for healthy growth
Slide 25: Supply / Demand
Potash Market Overview Supply / Demand 18Mt ● Potash supply is highly concentrated with Top 5 countries producing 85% of global supply 26Mt 27Mt 4Mt 6Mt ● Low logistics cost is a key part of a potash producer’s 4Mt 10Mt CIS competitive advantage 8Mt Europe 7Mt ● 3 of the top 5 have significant geopo
Slide 26: Outstanding Project Economics
Outstanding Project Economics Overview of Feasibility Outcomes November 2023 CAPEX PHASE 1: RECONCILIATION CAPEX phase 1 (500,000 tpa MOP) €449 million CAPEX phase 2 (Additional 500,000 tpa MOP) €286 million Total CAPEX €735 million ROM tonnes 173.7 million tonnes Average plant tonnage feed rate 800
Slide 27: ASX:HFR
ASX:HFR REGISTERED OFFICE 169 Fullarton Road Dulwich SA 5065 Australia SPAIN HEAD OFFICE Avenida Carlos III, 13-15, 1B, 31002 Pamplona, Spain T: +34 948 050 577 | F: +34 948 050 578 FURTHER INFORMATION Ignacio Salazar CEO T: +34 948 050 577 Olivier Vadillo Investor Relations T: +34 609 811 257
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