2017 COMPETENT PERSON STATEMENT RESOURCES This ASX release was - PowerPoint PPT Presentation

AGM Presentation Highfield Resources 2017

COMPETENT PERSON STATEMENT – RESOURCES This ASX release was prepared by Mr. Peter Albert, Managing Director of Highfield Resources. The information in this release that relates to Ore Reserves, Mineral Resources, Exploration Results and Exploration Targets is based on information prepared by Mr José Antonio Zuazo Osinaga, Technical Director of CRN, S.A.; and Mr Manuel Jesús Gonzalez Roldan, Geologist of CRN, S.A. Mr José Antonio Zuazo Osinaga is a licensed professional geologist in Spain, and is a registered member of the European Federation of Geologists, an accredited organisation to which Competent Persons (CP) under JORC 2012 Code Reporting Standards must belong in order to report Exploration Results, Mineral Resources, Ore Reserves or Exploration Targets through the ASX. Mr José Antonio Zuazo Osinaga has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as CP as defined in the 2012 edition of the JORC Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves. FORWARD LOOKING STATEMENTS This presentation includes certain ‘forward looking statements’ . All statements, other than statements of historical fact, are forward looking statements that involve various risks and uncertainties. There can be no assurances that such statements will prove accurate, and actual results and future events could differ materially from those anticipated in such statements. Such information contained herein represents management’s best judgment as of the date hereof based on information currently available. The company does not assume any obligation to update any forward looking statement.

Highfield Resources Limited. CONTENTS 1. Corporate Summary 2. Board and Senior Management 3. Core Values 4. The Muga Potash Mine Timeline to Production and Key 5. Milestones Capital and Operating Costs 6. 7. Stakeholder Engagement 8. Sustainable strategy 9 Permitting 10. Upside Potential 11. Value Proposition 12. Summary 3

1. Corporate Summary Fully Diluted Equity Ordinary Shares on Issue 329.2m Options & Performance shares 45.2m Fully Diluted 374.4m Undiluted Market Cap at A$1.05 (7 November 2017) A$346m Cash as at 30 September 2017 ~A$68m A$278.8m / Enterprise Value US$211.1m 1 Average Daily Volume (6 months) ~195,000 Broker Recommendation 12-month Price Target Bell Potter BUY A$1.10 Shareholders (Fully Diluted) Blue Ocean BUY A$3.10 Spanish in-country management 6.6% Canaccord Genuity BUY A$1.45 Foster Stockbroking BUY A$2.30 Board 4.4% RBC Capital Markets BUY A$2.00 EMR Capital 28% Taylor Collison BUY A$3.47 Other Shareholders 57% AVERAGE A$2.24 Total 100% 4 1) USD:AUD exchange rate 0.76:1.00

2. Board and Senior Management Board and Senior Management experienced in construction and operations Derek Carter Non-Executive Chairman Pauline Carr Jim Dietz Owen Hegarty Richard Crookes Independent Independent Non-Executive Director Non-Executive Director Board of Directors Non-Executive Director Non-Executive Director Sixto Jiménez Peter Albert Isaac Querub Advisor Managing Director & CEO Advisor Senior Leadership Team Mike Norris Ricardo Peréz Hayden Locke John Claverley Gonzalo Mayoral Javier Olloqui Chief Financial Stakeholder Head of Corporate & Project Director Permitting Human Resources Officer Management Strategy 5

3. Vision and Core Values “To build a successful, sustainable, potash business with respect for stakeholders and the environment” Excellence Respect To act and communicate collaboratively To seek to continuously improve through with transparency, sincerity and an a cycle of goal-setting, accountability, understanding of cultural diversity. evaluation and innovation, resulting in enhanced value creation. Commitment Attitude We are committed to best practices in To uphold the highest standards in health and safety, the environment, regards to ethical performance, honesty, and the communities in which we integrity, fairness and equality with all operate. stakeholders.

4. The Muga Potash Mine Muga - Highfield’s high margin potash development project All-in-sustaining Cash Cost to Port Located in Northern Spain, within Full production1.08 Mtpa: – €130 / tonne of MOP 150km of key Atlantic Port near San Sebastian (Port of Pasajes) • Phase 1 – delivering 540ktpa • Phase 2 – delivering an additional 540ktpa At full capacity, unlevered, post Detailed engineering and design tax, NPV 10 – US$1.46 billion underway, long lead items ordered and deposits paid MoUs signed with two Atlantic MOUs signed with three traders Coast ports for long term logistics for the sale of MOP, discussions Current reserves of 47 years with solution underway with fertiliser offtakers substantial mine life upside potential 7

4. The Muga Potash Mine Relatively simple, proven technology with first rate access to end markets Proximity to Local Markets Simple Mining Located in a potash consuming region Decline access to shallow mineralisation Good access to the large Brazilian an US markets Underground room and pillar mining First Class Infrastructure Conventional Processing Direct connection to national electricity grid Close to port, no road or rail upgrades Sylvinite ore 8

5. The Muga Potash Mine Marginal farm land with natural terrain features allowing low impact development 9

5. The Muga Potash Mine Restoration plan designed to progressively reinvigorate the project site at end of mine life 10

5. Timeline to Production and Key Milestones Construction and commissioning – 2 years from commencement of construction 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 Lead Items Ordered Electricity Connection Water Site Preparation: Plant Site Waste Dumps Brine / Salt Ponds Underground: Box Cut Decline Drifts and Conveyors Aboveground: Storage Buildings Process Plant Drying, Compacting and Glazing Plant Commissioning 11 First Production

6. Muga Capital and Operating Costs Muga’s low capital cost on $/t of production basis ranks best in class Key Attributes: No major aquifer unit allows simple decline access Decline access to mineralisation significantly lowers capital cost relative to most potash peers Sylvinite ore enables simple and conventional process flow sheet Grid electricity connection lowers capital and operating cost No port upgrades, rail spurs or other infrastructure expenditure First class roads and motorways and access to site Updated MOU with Acciona to provide project delivery assistance 12

6. Muga Capital and Operating Costs Low delivered cost to customer positions Muga to be a high margin potash mine • Muga is expected to deliver bottom third Muga – Estimated Operating Cost all-in-sustaining cash (AISC) cost delivered to Amount Amount Component Europe, Brazil and the USA (€ / tonne MOP) (US$ / tonne MOP) Mining 55.1 61.2 Processing 45.1 50.1 • Muga benefits strongly from: Transport (FOB Pasajes) 17.4 19.4 Direct Cash Operating Cost 117.6 130.7 – No brine inflow management costs SG&A 7.5 8.3 Sustaining Capital 5.0 5.6 – Proximity to domestic customers (< 200km) Royalties 0.0 0.0 All-in-Sustaining Cash (AISC) Cost (FOB Pasajes) 130.1 144.6 – Proximity to export port (< 150km) Cost to fob $/t Cash Cost to FOB Export Port 250 – No royalties or government levies 200 – Low sustaining capital cost 150 Highfield 100 – Low ongoing SG&A cost due to location 50 Source: Argus FMB Consulting Services 0 Note: Argus cash cost to FOB curve is not on an all-in-sustaining basis 13 0 10 20 30 40 50 60 70 and excludes SG&A and sustaining capital costs MOP Capacity (mn t)

6. Muga Capital and Operating Costs Independent verification that Muga would make Highfield the highest margin producer 14

7. Stakeholder Engagement Committed to sustainable development, supporting the local community Safety Minimise Environmental Impact • Developing a strong safety first culture within our work • Core focus on minimising risk and impact on environment force surrounding the project area Focus on minimising harm to both workers and • • ESIA completed in compliance with industry best practice, surrounding environment Spanish legislation, IFC’s guidelines and Equator Principles Implement robust and appropriate ongoing monitoring and • response plans Social Development Creating an industry and direct employment for the long • term Sustainable Economic Development • Creating indirect employment in multiple supporting Creating quality employment with a preference for local • industries employees and contractors Continue to invest in community initiatives surrounding the • • Become a significant employer in the region project 15

7. Stakeholder Engagement Open and transparent communication with the local community Open Doors Event – October 2017 The Company welcomed over 200 persons from local community Mayors of the region and Company representatives Feedback forms to measure our social acceptance Working sessions, information talks, and site visits to explain the project to all our local stakeholders 16