Highfield Resources Limited · ASX:HFR
Highfield Resources — Investor Presentation (June 2020)
29 slides from Highfield Resources's investor presentation, Jun 5, 2020
Slide 1: ASX Release: Highfield Resources Corporate Presentation Update
ASX Release 5 June 2020 Highfield Resources Corporate Presentation Update For personal use only Following Highfield Resources Limited’s (ASX:HFR) (“Highfield” or “the Company”) announcement on the 27 May 2020 (refer ASX announcement, “Corporate Presentation – May 2020”) (“the presentation”) the ASX
Slide 2: Developing the World Class Spanish Muga Potash Mine
For personal use only 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 3: Competent Persons Statement for Muga Potash Project
For personal use only 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
Slide 4: Why Highfield Resources?
Why Highfield Resources? For personal use only 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, perm
Slide 5: Highly Experienced Board
Highly Experienced Board For personal use only 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 CE
Slide 6: Newly Appointed CEO
Newly Appointed CEO For personal use only 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 yea
Slide 7: Committed Management Team
Committed Management Team For personal use only 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
Slide 8: An Outstanding Location
An Outstanding Location For personal use only 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 Mu
Slide 9: Muga Mine Planned Production
Muga Mine Planned Production For personal use only • 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 add
Slide 10: Permitting Process - Next Steps
Permitting Process - Next Steps For personal use only 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 t
Slide 11: Future Demand for Potash is Positive
Future Demand for Potash is Positive For personal use only 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
Slide 12: Potash Demand Steadily Increasing
Potash Demand Steadily Increasing For personal use only 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
Slide 13: Potash Delivering Key Competitive Advantage: Logistics
1.Logistics Potash Delivering Key Competitive Advantage What Whereisdoes it used for? from? it come For personal use only ~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 b
Slide 14: Key Advantages of Muga Mine Location
Key Advantages of Muga Mine Location ✓ Muga is in close proximity to key demand areas 6.9 For personal use only 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 po
Slide 15: Future Demand for Salt is Positive
Future Demand for Salt is Positive Historical and forecast consumption For personal use only 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 fo
Slide 16: Potential Sales Strategy
Potential sales strategy For personal use only 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 Strate
Slide 17: Key Technical Work Completed at Muga
Key Technical Work Completed at Muga Key project For personal use only 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 desi
Slide 18: Conventional Mine with Tier-One Infrastructure
Conventional Mine with Tier-One Infrastructure For personal use only 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 Substa
Slide 19: Strong Financial Position and Equity Market Support
Strong Financial Position and Equity Market Support For personal use only 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 cas
Slide 20: Project Enhancements Continue to Improve Financials
Project Enhancements Continue to Improve Financials Project enhancements For personal use only 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 t
Slide 21: ESG is a Key Area of Focus for Highfield Resources
ESG is a Key Area of Focus for Highfield Resources For personal use only 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
Slide 22: Muga Mine Enjoys Tremendous Community and Government Support
Muga Mine Enjoys Tremendous Community and Government Support For personal use only 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
Slide 23: A Primary Focus on Protecting the Environment
A Primary Focus on Protecting the Environment Commitment maintained to minimising Environmental commitment For personal use only 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
Slide 24: Recognition for Commitment to Health, Safety and Social Responsibility
Recognition for Commitment to Health, Safety and Social Responsibility Bonus 2018 For personal use only 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 sustainabl
Slide 25: European Prices Maintain a Premium Price
European Prices Maintain a Premium Price For personal use only • 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 ca
Slide 26: Muga's Competitive Position Against Global Peers
Muga’s Competitive Position Against Global Peers FOB Cost curve forecast for 2024 (real US$) For personal use only 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
Slide 27: Three Key Takeaways
Three Key Takeaways For personal use only • 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 ext
Slide 28: Investment Opportunity
Investment Opportunity Muga Potash Mine Highfield Resources For personal use only 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 a
Slide 29: For personal use only
REGISTERED OFFICE 169 Fullarton Road For personal use only 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: +3
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