Highfield Resources Limited · ASX:HFR
Highfield Resources — Melbourne Mining Club Cutting Edge Series (November 2015)
15 slides from Highfield Resources's conference presentation, Nov 17, 2015
Slide 1: Low Capex, High Margin Spanish Potash
For personal use only Highfield Resources Ltd Melbourne Mining Club Cutting Edge Series Low Capex, High Margin Spanish Potash 17 November 2015 ASX Code: HFR
Slide 2: Competent Person Statement – Resources and Reserves
COMPETENT PERSON STATEMENT – RESOURCES For personal use only Information relating to resources was prepared by Mr Leo Gilbride, P.Eng and Ms Vanessa Santos, P.Geo, of Agapito Associates. The Competent Person for Resources under JORC Code standards is Mr Leo Gilbride, P.Eng and Ms Vanessa Santos, P.G
Slide 3: Contents
Highfield Resources Limited CONTENTS For personal use only 1. Success in Potash Development 2. The Muga Mine 3. Muga Project Upside 4. Highfield Upside 5. Objective – Significant Global Potash Producer 6. The Market – Balanced Supply and Demand 7. Current Potash Prices 8. Summary 3
Slide 4: Success in Potash Development: Low capex equals favourable geology and location
1. Success in Potash Development Low capex equals favourable geology and location For personal use only Capex Considerations Mineralisation Location • Depth below surface • Roads and ports • Aquifer units • Labour • Type of potassium salt • Energy and other utilities • Hanging wall, footwall • Fundi
Slide 5: High margin generally equals great logistics in bulk commodities
1. Success in Potash Development High margin generally equals great logistics in bulk commodities For personal use only Margin Considerations Margin • Markets (customers) • Extraction and processing costs (labour, energy, grade and water management ) • Sustaining capex • Corporate overheads • Royalt
Slide 6: Proven producing basin, proven extraction and processing methodology is critical
1. Success in Potash Development Proven producing basin, proven extraction and processing methodology is critical For personal use only Technical Risk Considerations Extraction Processing Producing Basins • Most global potash • Most global potash • There are very few mines are underground mines proc
Slide 7: The Muga Mine
2. The Muga Mine Muga - Highfield’s most advanced, low capex, high margin potash development project For personal use only Summary • DFS completed in March 2015 based on geological information from 34 drill holes and numerous seismic profiles • Optimisation Study completed in November 2015 post two
Slide 8: Muga Project Upside: Exploration Target
3. Muga Project Upside Muga Exploration Target has the potential to be Highfield’s second mine For personal use only Exploration Target Upside • Current Exploration Target of 127m to 255m tonnes at 12 to 16% K2O covering 7.1km2 • Additional northern extension identified covering 2.8km2 • Upside pote
Slide 9: Highfield Upside: four additional 100% owned projects
4. Highfield Upside Full control of known potash bearing evaporite with four additional 100% owned projects For personal use only 9
Slide 10: Proposed Basic Scheme – holistic approach to processing and logistics
4. Highfield Upside Proposed Basic Scheme – Potential for a holistic approach to processing and logistics For personal use only proposed slurry pipe 10
Slide 11: Objective – Significant Global Potash Producer
5. Objective – Significant Global Potash Producer Highfield’s objective is to produce at least 2m tonnes of high margin MOP per annum by 2020 For personal use only 3,000,000 2,500,000 K60 MOP Production Per Annum ? ? ? 2,000,000 1,500,000 1,000,000 500,000 0 11
Slide 12: The Market – Balanced Supply and Demand
6. The Market – Balanced Supply and Demand With global demand increasing Highfield’s projects are unlikely to be too disruptive For personal use only Observations MOP Prices - LTM • Great long term tail winds with respect to demand and food security • Demand has grown at 2.8% per annum compounding o
Slide 13: Current Potash Prices
7. Current Potash Prices At current potash pricing Muga Will have EBITDA margins of over 50% For personal use only Observations Western European Premium pricing • Although global prices have fallen the premium into Europe continues (see right) • BPC are reported to be selling GMOP at €300-310/t CFR
Slide 14: Summary
8. Summary For personal use only • Highfield Resources’ Muga Mine is its first of five 100% owned low capex, high margin potash projects in Northern Spain. • The projects are in a producing potash basin where conventional underground mines have operated via decline and sylvinite flotation circuit pr
Slide 15: 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 Anthony Hall Managing Director
Highfield Resources — Melbourne Mining Club Cutting Edge Series (November 2015) on 6ix