Slide 1: Corporate presentation
Developing the World Class Spanish Muga Potash Mine in the Heart of a European Intensive Agricultural Region Corporate presentation May 2020 1 ASX: HFR
Slide 2: Competent Persons Statement for Muga Potash Project
COMPETENT PERSONS STATEMENT FOR MUGA POTASH PROJECT This presentation was approved by Mr Richard Crookes, Acting CEO and Chairman of Highfield Resources. The information in this presentation that relates to Ore Reserves is based on information prepared by Dr Mike Armitage, the Chairman of SRK Consul
Slide 3: Why Highfield Resources?
Why Highfield Resources? FIVE-STAR LOCATION POTASH, A KEY STRONG ESG FOCUS COMMODITY Low environmental footprint, Close proximity to An important global commodity supportive local and Power and water premium European with predictable and strong regional stakeholder groups, permits markets & well pos
Slide 4: Highly Experienced Board
Highly Experienced Board Richard Crookes Pauline Carr Isaac Querub Independent Independent Independent Non-Executive Director Non-Executive Director Non-Executive Director Chairman He has over 30 years of experience in the She has over 30 years of resources sector He was the CEO of Glencore Spain. r
Slide 5: Newly Appointed CEO
Newly Appointed CEO Highfield has appointed experienced international mining executive Ignacio Salazar to join the group as CEO from July 2020. He has over 30 years experience, most of which have been in the resources sector. His outstanding international career includes 18 years working with Royal
Slide 6: Committed Management Team
Committed Management Team Mike Norris John Claverley Ricardo Pérez Chief Financial Officer Project Director External Relations & Permitting He has over 20 years of experience in the He has over 35 years of experience in the management of investment firms, leading He was Finance Director of Avocet Mi
Slide 7: An Outstanding Location
An Outstanding Location Muga will be one Easy access to Low freight cost to Industry friendly Excellent existing of only two potash premium southern Brazil, a key location with strong infrastructure mines located in European market potash market local support Southern Europe Muga Mine All executive
Slide 8: Muga Mine Planned Production
Muga Mine Planned Production • Muga Mine production will be of 1 million tonnes of muriate of potash (“MOP”) and 1 million tonnes of salt per year • The mine will produce a mix of Granular and Standard K60 MOP • Phase 1 will be for 500,000 tonnes of MOP • Phase 2 will be an additional 500,000 tonnes
Slide 9: Permitting Process - Next Steps
Permitting Process - Next Steps All regulatory bodies which are engaged in the Mining Concession process have already given their support to the project Mining Concession Two documentation construction Positive submitted in Q1 permits Construction Environmental 2020 Estimated to begin 12-18 submitte
Slide 10: Future Demand for Potash is Positive
Future Demand for Potash is Positive Crop production and population growth 02 10 Arable land per person has been steadily 02 02 09 08 decreasing leading to global potash demand 01 07 increasing approximately 25% from 2012 to Billions of tonnes 01 06 Billion 01 01 05 04 2019. 01 03 00 02 With global
Slide 11: Potash Demand Steadily Increasing
Potash Demand Steadily Increasing Compound Annual Growth Rate (2012-2019): ~3% 80,000 70,000 60,000 tonnes of KCl per annum 50,000 40,000 30,000 20,000 10,000 0 2012 2013 2014 2015 2016 2017 2018 2019 China North America Other Asia (ex China) Brazil India Europe CIS Other Latin America Africa Oceani
Slide 12: Logistics: Delivering Key Competitive Advantage
1.Logistics Potash Delivering Key Competitive Advantage What Whereisdoes it used for? from? it come ~1,750km from mines to port ~1,700km from mines to port ~6,800 nautical miles ~8,700 nautical miles ~220km from mine to port Port of Tarragona ~5,000 nautical miles Product can be Destination (Shippin
Slide 13: Key Advantages of Muga Mine Location
Key Advantages of Muga Mine Location ✓ Muga is in close proximity to key demand areas 6.9 Mt of Europe 4.0 Mt ✓ Extremely competitive and versatile export options Total Europe ✓ No European import duties to other EU countries ✓ European potash production is declining ✓Boulby potash mine in the UK sh
Slide 14: Future Demand for Salt is Positive
Future Demand for Salt is Positive Historical and forecast consumption of salt by region (tonnes) 500 400 World’s population will rise to 9.7 billion by 300 2050 with most de-icing salt demand in the 200 north hemisphere due to harsher winters. 100 0 Global demand of salt is forecast to increase Asi
Slide 15: Sales & Marketing Strategy well advanced
Potential sales strategy MOP sales (pa) Wider Europe: Salt sales (pa) • ~250-300 kt MOP • ~200-250 kt salt US East Coast: Local: • ~50 kt MOP • ~450-500 kt MOP • ~200-250 kt salt • ~400-500 kt salt Africa: • ~50 kt MOP South America: • ~200-250 kt MOP ✓ Sales & Marketing Strategy well advanced Potas
Slide 16: Key Technical Work Completed at Muga
Key Technical Work Completed at Muga Key project Updated Ore Reserve Estimate for Muga comprising 108.7 million characteristics tonnes of Proved and Probable validated Reserves at 10.2% K2O, with 27 years LOM*, confirming the technical Key project Significant Process plant design and economic validi
Slide 17: Conventional Mine with Tier-One Infrastructure
Conventional Mine with Tier-One Infrastructure 350m Decline access to shallow mineralization. Underground Room and Pillar mining No aquifers Close to the Port of Bilbao, Spain’s largest port First class infrastructure, access to new road systems National Electricity Grid Substation in close proximit
Slide 18: Strong Financial Position and Equity Market Support
Strong Financial Position and Equity Market Support EMR Capital, strong supporter and Highfield’s largest shareholder at 30% Australian Super – supportive shareholder with 5% holding Project updated with Phase 1 capex of €368 million and Phase 2 capex of €208 million and C1 cash costs of €82/t, incl
Slide 19: Project Enhancements Continue to Improve Financials
Project Enhancements Continue to Improve Financials Project enhancements improved compliance As well as delivering better technical and commercial outcomes, project enhancements made at Muga deliver a number of value adding and improved environmental results, that comply with the DIA environmental p
Slide 20: ESG is a Key Area of Focus for Highfield Resources
ESG is a Key Area of Focus for Highfield Resources Environmental Factors Social Factors Governance Factors Environmental compliance and Positive feedback indicates Robust governance processes commitment through DIA award and strong focus on corporate local support increase (+90%) responsibility and
Slide 21: Muga Mine Enjoys Tremendous Community and Government Support
Muga Mine Enjoys Tremendous Community and Government Support The Company hosted a well attended breakfast information session with mayors from local towns in July 2019 In Sept 2019 The Company hosted a two-day Open Doors event at its core shed in Vice-President of Navarra with former CEO Peter Alber
Slide 22: A Primary Focus on Protecting the Environment
A Primary Focus on Protecting the Environment Commitment maintained to minimising Environmental commitment the use of water during its drilling works Zero environmental Improved identification of Water Consumption incidents over four drilling locations consecutive years 2.0 1.8 WATER CONSUMPTION/LIN
Slide 23: Recognition for Commitment to Health, Safety and Social Responsibility
Recognition for Commitment to Health, Safety and Social Responsibility Bonus 2018 Member of Ecodes’ Climate Action InnovarSE certificate A health and safety recognition for having initiative Receipt of the Cycle of Improvement a low accident rate award as a result of sustainable initiatives RSA 2020
Slide 24: European Prices Maintain a Premium Price
European Prices Maintain a Premium Price • Tight local supply due to mine closures and high cost local producers have maintained the European price premium even during the temporary Covid-19 disruption • Given the mine’s location, a large part of the regional premium will be captured at the mine Sli
Slide 25: Muga's Competitive Position Against Global Peers
Muga’s Competitive Position Against Global Peers FOB Cost curve forecast for 2024 (real US$) 350 Project enhancements have significantly • European prices continue to trade at a premium to 300 improved the C1 FOB cost moving the mine down the cost curve other markets 250 • Due to Muga’s European loc
Slide 26: Three Key Takeaways
Three Key Takeaways • Muga mine will be in the heart of a key European demand region • European prices have • Permitting process continues, maintained a premium to with project significantly de- other global prices risked through DIA • The mine will have • Mining Concession extremely competitive and
Slide 27: Investment Opportunity
Investment Opportunity Muga Potash Mine Highfield Resources Potentially one of the highest margin Experienced and capable potash mines globally management team Low capex intensity per tonne of Strong board with global mining potash compared to other potash industry experience and robust producers go
Slide 28: Registered Office and Further Information
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 Richard Crookes Chairman T: +34 636 758 843 Olivier Vadillo Investor Relations T: +34 609 811 257 www.high