Highfield Resources Limited · ASX:HFR
Highfield Resources — Investor Presentation (March 2015)
24 slides from Highfield Resources's investor presentation, Mar 30, 2015
Slide 1: Corporate Presentation March 2015
For personal use only Highfield Resources Ltd Corporate Presentation March 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 APPENDICES For personal use only 1. Introduction A1 Corporate Overview 2. The Projects A2 Muga, Vipasca and Pintano Projects 3. Proven basin and proven mining and processing A3 Sierra del Perdón Project 4. Muga Definitive Feasibility Study A4 Permitting 5. Lowest
Slide 4: Introduction
1. Introduction • Highfield Resources is developing the Muga Decline accessed underground mine with project economics For personal use only Project, one of its four 100% owned potash projects in northern Spain. boosted by first world infrastructure and domestic markets • Located in a producing potas
Slide 5: The Projects
2. The Projects Four 100% owned potash projects in northern Spain For personal use only 5
Slide 6: Proven basin and proven mining and processing
3. Proven basin and proven mining and processing Mines in Ebro Basin have produced for close to 100 years For personal use only Mining Highfield Decline access into underground conventional room and pillar mine Iberpotash Processing Flotation circuit processing of sylvinite ore Estimated 2015 MOP Pr
Slide 7: Muga Definitive Feasibility Study
4. Muga Definitive Feasibility Study • Post tax NPV10 of US$1.42bn For personal use only • Post tax, unlevered IRR of 51.9% • EBITDA in first year of full production estimated at $US296m • Initial 24 year mine life of 1.12m tonnes of potash (K60 product) per annum in full production • Pre-production
Slide 8: Lowest capital cost
5. Lowest capital cost Highfield has stand-out MOP projects in terms of total capex and capital intensity For personal use only Total capex (in absolute terms) Capital intensity per tonne of production Eurochem: VolgaKaliy W. Potash: Milestone W. Potash: Milestone Eurochem: VolgaKaliy Potashcorp: Ro
Slide 9: First quartile margin in production
6. First quartile margin in production First quartile margin is driven by high priced end markets and low total costs to customer For personal use only Project Highfield – Muga* Belaruskali BHP Jansen* Intrepid Potash K+S Legacy* Price at Customer CFR Brazil / CIF NW Europe1 Asia / Brazil / Europe1
Slide 10: Advantages to our addressable markets
7. Advantages to our addressable markets Competitive access to high priced MOP markets For personal use only 18.7 21.0 Estimated 2014 MOP supply and demand by region 0.8 3.8 CIF NW Europe 6.5 FOB Vancouver $363 4.2 Canada 13.0 $290 8.7 FSU EU* 1.5 5.5 6.5 USA 1.4 CIF US Midwest China Middle East CFR
Slide 11: First quartile costs to customer
8. First quartile costs to customer Low total cash costs to customers with large royalty and logistics advantages For personal use only $350 $317 $300 $33 $280 $13 $14 $15 $23 $250 $239 $229 $40 $25 $28 $212 $25 $9 $1 $200 $186 Corporate SG&A $23 $40 $45 $30 Royalties $162 $24 $15 $154 $1 Sustaining
Slide 12: Management have built and operated mines
9. Management have built and operated mines Proven in-country team with over thirty professionals including experienced mine builders For personal use only • Geologist with over 30 years experience in Spain, Pedro including for senior management roles for multi-nationals Rodriguez including Billiton
Slide 13: 2015 – A Company defining year
10. 2015 – A Company defining year The transition from developer to producer For personal use only • Muga-Vipasca JORC Resource estimate upgrade Q1 • Sierra del Perdón maiden JORC Resource estimate • Muga Mine Definitive Feasibility Study • Muga Mine project finance term sheets agreed Q2 • Sierra de
Slide 14: Summary
11. Summary For personal use only • Highfield Resources is developing the Muga Potash Project, one of its four 100% owned potash projects in Northern Spain. • The projects are in a producing potash basin where conventional undergound mines have operated via decline and sylvinite flotation circuit pr
Slide 15: Appendices
For personal use only Highfield Resources Ltd Appendices
Slide 16: A1. Corporate Summary
A1. Corporate Summary Fully Diluted Equity 1.50 3.5 For personal use only Ordinary Shares on Issue 252.0m 1.25 3.0 Options 43.5m 2.5 1.00 Performance B* Shares 51.5m Volume (m) Price (A$) 2.0 Fully Diluted 347.0m 0.75 Undiluted Market Cap at A$1.39 $350m 1.5 (26 Mar 15) 0.50 1.0 Fully Diluted Market
Slide 17: A2. Muga-Vipasca and Pintano Projects
A2. Muga-Vipasca and Pintano Projects For personal use only Vipasca Over 490m tonnes of JORC Resource estimate* Project Area covering less than 20% of Project area Muga Project Area Pintano Project Area ≈ 15 km ≈ 52 km Map of Muga-Vipasca and Pintano Project Areas showing JORC Resource estimate, dri
Slide 18: A3. Sierra del Perdón Project
A3. Sierra del Perdón Project For personal use only Photo showing mine operations at Potasas de Subiza in the mid 1990s Potash Production History 600 30 500 25 Annual production ('000 t) 400 20 % KCl 300 15 200 10 100 5 0 0 1972 1973 1974 1975 1976 1977 1978 1979 1980 1981 1982 1983 1984 1985 1986 1
Slide 19: A4. Permitting
A4. Permitting A defined permit process is underway • Minimal visual and environmental impact For personal use only • Backfilling of salt tailings • Legislated process with recent legislative changes designed Lodgement Mine Project Environmental to quicken environmental approval process Impact Study
Slide 20: A5. 2015 MOP market supply and demand
A5. 2015 MOP market supply and demand 2015 MOP market is tight with most producers expected to be at full capacity For personal use only • The only spare capacity sits with PotashCorp and Mosaic Source: BMO – 30 January 2015 20
Slide 21: A6. Muga DFS – High Level Snapshot
A6. Muga DFS – High Level Snapshot Opex Cost Summary - per tonne MOP Total Capex Estimate Summary For personal use only Euros (m) USD (m) Euros / t USD / t Underground development and Machinery 86.16 90.70 C1 Cost Process plant and associated infrastructure 176.17 185.45 - Mining 35.45 37.32 Utiliti
Slide 22: A7. Potash price assumption
A7. Potash price assumption Potash price assumed is conservative and with a broad basis For personal use only • Our current valuation model assumes 50% potash sales into Brazil, and 50% in NW Europe, consistent with preliminary market studies • Our Potash price assumption is • Integer independent pr
Slide 23: A8. Muga DFS sensitivity overview
A8. Muga DFS sensitivity overview Projects still attractive with depressed potash prices. For personal use only NPV Sensitivity – Potash Price and Discount Rate - US$ millions Potash Price Sensitivity (Parallel Shift in Prices) 1,409.80 -30% -15% 0% +15% +30% Discount 8% 521.3 1,160.7 1,800.1 2,439.
Slide 24: For personal use only
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
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