27 slides from Highfield Resources's shareholder meeting presentation, Oct 30, 2015
Slide 1: Highfield Resources Ltd AGM Presentation
For personal use only Highfield Resources Ltd AGM Presentation October 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. Introduction 2. Corporate Summary 3. Board and Senior Executives 4. 2015 Financial Year Achievements 5. 2016 Milestones 6. Objective – Significant Global Potash Producer 7. The Projects 8. Value Proposition 9. Low Capital Costs 10. Priori
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 five 100% owned potash projects in northern Spain. boosted by first world infrastructure and domestic markets • Located in a producing potas
Slide 5: Corporate Summary
2. Corporate Summary 2.25 9.0 Fully Diluted Equity For personal use only 2.00 8.0 Ordinary Shares on Issue 310.3m 1.75 7.0 Options 40.8m 1.50 6.0 Volume (m) Price (A$) Performance B Shares* 51.5m 1.25 5.0 Fully Diluted 402.6m 1.00 4.0 0.75 3.0 Undiluted Market Cap at A$1.50 (28 October 2015) A$465m
Slide 6: Board and Senior Executives
3. Board and Senior Executives Board of Directorsuse only Derek Carter – Non Executive Chairman A geologist with over 40 years experience in exploration and development, including nearly 20 years in management of ASX listed exploration companies including acting as Chief Geologist in Spain for the S
Slide 7: 2015 Financial Year – A year of significant achievements
4. 2015 Financial Year – A year of significant achievements Completed Environmental and Social Impact Assessment and lodged mining concession applications For personal use only MOUs signed with Ports of Pasajes and Bilbao guaranteeing export capacity Delivered outstanding Definitive Feasibilit
Slide 8: 2016 Financial Year – Target Milestones
5. 2016 Financial Year – Target Milestones Sep 15 Dec 15 Mar 16 Jun 16 For personal use only - Optimisation studies to improve mine life and target operating efficiencies Detailed Project Design and Optimisation - Detailed design and engineering to ensure construction ready Exploration at other Proj
Slide 9: Objective – Significant Global Potash Producer
6. 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 9
Slide 10: Five 100% owned potash projects in northern Spain
7. The Projects Five 100% owned potash projects in northern Spain covering over 550km2 For personal use only 10
Slide 11: Muga Mine
7. The Projects – Muga Mine Muga - Highfield’s most advanced, low capex, high margin potash development project For personal use only Summary • DFS completed March 2015 • Decline access, conventional underground mine • Technologically proven process plant • Expected to produce over 1.1Mtpa of granul
Slide 12: Muga K62 Project
7. The Projects – Muga K62 Project Muga By-Products K62 Project - An additional high margin, low capex potash project For personal use only Summary • Scoping Study completed May 2015 • Conventional crystallisation plant to treat Muga Mine by-products • Revenues from K62 MOP and high-purity vacuum sa
Slide 13: Sierra del Perdón
7. The Projects – Sierra del Perdón Sierra del Perdón - Highfield’s second low capex, high margin potash development project For personal use only Summary • Scoping Study completed April 2015 • Decline access, conventional underground mine • Technologically proven process plant • Expected to produce
Slide 14: Pintanos
7. The Projects - Pintanos Pintano - Significant shallow JORC Inferred Resource with similar scale to Muga For personal use only Summary • Contiguous with Muga Project • Total project area of over 65km2 • Mineralisation starts at less than 500m below surface • Inferred Mineral Resource* of 187 milli
Slide 15: Vipasca
7. The Projects – Vipasca Vipasca - Outstanding exploration potential abutting Muga with substantially greater scale For personal use only Summary • Permit area is contiguous with Muga Project • Permit area of over 120km2 • TDEM and gravimetry shows continuity of the evaporitic horizon from Muga • S
Slide 16: Izaga
7. The Projects – Izaga Izaga - Grass roots exploration with good indications from historical drilling For personal use only Summary • New permits applied for April 2015 • Project area of over 100km2 • Clear continuation of sub-basin evaporitic units evidenced by outcropping • Historical drilling co
Slide 17: Basin Wide Scheme
7. The Projects – Basin Wide Scheme Proposed Basic Scheme – Potential for a holistic approach to processing and logistics For personal use only proposed slurry pipe 17
Slide 18: Competitive Location
7. The Projects – Competitive Location Highfield has a strong logistics advantage into its target markets For personal use only USA - Eastcoast Brazil West Africa EU • Approximately 3,500nm from HFR’s • Approximately 5,100nm from HFR’s • Less than 1,000nm from HFR’s ports • Less than 1,000nm from HF
Slide 19: Jurisdictional Advantages
7. The Projects – Jurisdictional Advantages Located in a jurisdiction with many advantages For personal use only Political Risk • Advanced, developed economy • Ranked 33/189 in the World Bank’s “Doing Business” survey 2015 Tax & Royalties • Spain reducing Corporate Tax Rates to 25% • Depreciation ta
Slide 20: Highfield Value Proposition – Differentiated at every touch point
8. Highfield Value Proposition Differentiated at every touch point For personal use only • Shallow mineralisation (starting at less than 250m Extraction Markets beneath surface) • Access to relatively high price domestic markets • Decline access to mineralisation (all four potash (Spain and France i
Slide 21: Value Proposition – Proven mining and processing techniques
8. Highfield Value Proposition Proven mining and processing techniques For personal use only Mining Decline access into underground conventional room and pillar mine Processing Flotation circuit processing of sylvinite ore Estimated 2015 MOP Production by Mining Method 5% 19% 76% Underground Convent
Slide 22: Value Proposition – Low total cash costs to customers
8. Highfield Value Proposition 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 $155 $1 Sustaining
Slide 23: Low Capital Cost
9. Low Capital Cost Shared geological and geographical features drive industry low Capex to production For personal use only Total capex (in absolute terms) Capital intensity per tonne of production Eurochem: VolgaKaliy W. Potash: Milestone W. Potash: Milestone Eurochem: VolgaKaliy Potashcorp: Rocan
Slide 24: Priorities – Commencement of Construction
10. Priorities – Commencement of Construction The transition from developer to producer For personal use only • Term Sheet signed with four leading European based commercial banks Debt • 65% debt to equity ratio Muga Mine • Targeting completion of legal documentation by December 2015 Funding • Consi
Slide 25: Production Focus to Deliver Real Shareholder Value
11. Production Focus to Deliver Real Shareholder Value Real opportunity to create a signficant global potash producer For personal use only NPV10 Valuation Capex (US$) (US$) Muga Potash Mine1 1,422m 354m Sierra del Perdón Potash Mine2 528m 233m Muga Mine K62 Project3 222m 124m Total 2,172m 711m Othe
Slide 26: Summary
12. Summary For personal use only • Highfield Resources is developing the Muga Potash Project, one of its five 100% owned 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 p
Slide 27: 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