Slide 1: Path to Production for High Margin Muga Potash Mine
For personal use only Highfield Resources Ltd Path to Production for High Margin Muga Potash Mine May 2017 Corporate Presentation ASX Code: HFR
Slide 2: Competent Person Statement and Forward Looking Statements
COMPETENT PERSON STATEMENT – RESOURCES Information relating to mineral resources was prepared by Mr. José Antonio Zuazo Osinaga, Technical Director of CRN, S.A.; Mr. Jesús Fernández Carrasco, Managing Director of CRN, S.A. and Mr Manuel Jesus Gonzalez Roldan, Geologist of CRN, S.A. Mr. José Antonio
Slide 3: Contents
Highfield Resources Limited CONTENTS For personal use only 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 Prop
Slide 4: Corporate Summary
1. Corporate Summary 2.25 2.5 For personal use only Fully Diluted Equity 2.00 Ordinary Shares on Issue 323.0m 1.75 2.0 1.50 Volume (m) Price (A$) Options & Performance shares 98.5m 1.5 1.25 1.00 Fully Diluted 421.5m 1.0 0.75 Undiluted Market Cap at A$1.06 (27 April 2017) A$342m 0.50 0.5 0.25 Cash as
Slide 5: Board and Senior Management
2. Board and Senior Management Board and Senior Management experienced in construction and operations For personal use only Board of Directors Derek Carter Non-Executive Chairman Pauline Carr Jim Dietz Owen Hegarty Richard Crookes Independent Independent Non-Executive Director Non-Executive Director
Slide 6: Board and Senior Management
2. Board and Senior Management Board and Senior Management experienced in construction and operations For personal use only 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 a
Slide 7: Core Values
3. Core Values For personal use only “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,
Slide 8: The Muga Potash Mine
4. The Muga Potash Mine Muga - Highfield’s most advanced, low capex, high margin potash development project For personal use only Summary • Located in Northern Spain, within 150km of key Atlantic Port near San Sebastian (Port of Pasajes) • Project Optimisation Study completed in November 2015 • Deta
Slide 9: Simple proven technology with first rate market access
4. The Muga Potash Mine Relatively simple, proven technology with first rate access to end markets For personal use only Decline access to shallow mineralisation Simple Mining Underground room and pillar mining Sylvinite ore Simple Processing Simple flotation process flowsheet Direct connection to n
Slide 10: Timeline to Production and Key Milestones
5. Timeline to Production and Key Milestones Construction ready program, two years from commencement of construction to production For personal use only 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 Le
Slide 11: Muga Capital and Operating Costs
6. Muga Capital and Operating Costs Lowest project capital cost potash project globally on a $ / tonne of production basis For personal use only • Negotiations continue with Acciona for a fixed Muga Phase 1 – Project Capital Cost price lump sum contract for project delivery Amount • No major aquifer
Slide 12: Low delivered cost to customer
6. Muga Capital and Operating Costs Low delivered cost to customer positions Muga to be a high margin potash mine For personal use only • 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 Compone
Slide 13: Stakeholder Engagement
7. Stakeholder Engagement Highfield is committed to sustainable development, supporting the local community For personal use only - 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
Slide 14: Geoalcali Foundation
7. Stakeholder Engagement Highfield is actively participating in the community through its Geoalcali Foundation For personal use only Geoalcali Foundation • Established in September 2014 • Over 70 community projects to date • Visible statement of Company´s intent to actively support the community Se
Slide 15: Permitting process moving towards conclusion
8. Permitting Permitting process moving towards conclusion For personal use only • Company’s ESIA submitted to central environmental permitting authority (MAPAMA, previously known as MAGRAMA) – November 2015 • MAPAMA requested various referral authorities to provide analysis and commentary on Compan
Slide 16: Upside – Muga Expansion & K62 Project
9. Upside – Muga Expansion & K62 Project Highfield has a number of near term value creation opportunities For personal use only Muga Expansion Project K62 Crystallisation Project • Upfront investment at Muga will allow cost effective • Crystallisation plant to process slimes and tailings from expans
Slide 17: Upside – Other Projects
9. Upside – Other Projects Control of basin of projects with shared characteristics of Muga Potash Mine For personal use only 17
Slide 18: Upside – Other Projects
9. Upside – Other Projects Control of basin of projects with shared characteristics of Muga Potash Mine For personal use only Muga Extension SOP Project Sierra del Perdón • Exploration target of 127 to 255 million • Scoping Study complete for 500ktpa • Scoping Study completed April 2015 tonnes at 12
Slide 19: Upside – Other Projects
9. Upside – Other Projects Control of basin of projects with shared characteristics of Muga Potash Mine For personal use only Pintanos Vipasca Izaga • Current Exploration Target of 127m to • Exploration Target of between 320 • Grass roots exploration tenement 255m tonnes at 12 to 16% K2O million and
Slide 20: Value Proposition - Highfield
10. Value Proposition - Highfield Independent verification that Muga Mine would have made Highfield the highest margin producer For personal use only 20
Slide 21: Potash Market Value Proposition
10. Value Proposition – Potash Market Many experts believe potash prices have reached the marginal cost of production For personal use only Have we seen the start of a recovery for potash prices? Solid Demand Fundamentals 65 million tonnes 60 million tonnes Producer Discipline 0.9 million 5.9 millio
Slide 22: Potash companies command premium multiples
10. Value Proposition Potash companies command premium multiples relative to diversified mining companies For personal use only Project Pipeline • When in full production Muga will deliver: - Muga Extension - Muga Exploration Target – Unlevered, post tax, NPV101 – US$1.46 billion - Sierra del Perdón
Slide 23: Low capex, low risk, high margin potash development
10. Value Proposition - Highfield Low capex, low risk, high margin potash development with majority of its funding in place For personal use only Low Capital Cost Lowest capital cost to production Outstanding High Margin Investment Metrics Bottom quartile delivered cost to customer Well funded Over
Slide 24: Summary
11. Summary For personal use only • Outstanding portfolio of projects with Muga the flagship – Lowest capital cost to production – Lowest quartile delivered cash cost to customer – NPV10 – US$1.46 billion (NPV8 over US$2 billion) • Experienced team of mine builders and operators – Peter Albert has o
Slide 25: Registered Office and Further Information
For personal use only 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