Highfield Resources Ltd Corporate Presentation May 2015 ASX Code: HFR
COMPETENT PERSON STATEMENT – RESOURCES 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.Geo. of Agapito Associates of Colorado, USA. Mr Gilbride is a licensed professional engineer in the State of Colorado, USA and is a registered member of the Society of Mining, Metallurgy and Exploration Inc. Ms Santos is a licensed professional geologist in South Carolina and Georgia, USA, and is a registered member of the Society of Mining, Metallurgy and Exploration Inc. The Society of Mining, Metallurgy and Exploration Inc is a JORC Code ‘ Recognised Professional Organisation ’ (RPO). An RPO is an accredited organisation of which the Competent Person under JORC Code Reporting Standards must belong in order to report Exploration Results, Mineral Resources, or Ore Reserves through the ASX. Mr Gilbride is the Vice President of Engineering and Field Services and Ms Santos is the Chief Geologist with Agapito Associates and both have sufficient experience to qualify as a Competent Person for the relevant style and type of mineralisation and deposit under consideration of this release. Mr Gilbride and Ms Santos consent to the inclusion in the report of the matters based on this information in the form and context in which it appears. COMPETENT PERSON STATEMENT – RESERVES Information relating to reserves was prepared by Mr. José Antonio Zuazo Osinaga, Technical Director of CRN, S.A.; Mr. Jesús Fernández Carrasco, Managing Director of CRN, S.A. and Mr Manuel Jesus Gonzalez Roldan, Geologist of CRN, S.A. Mr. José Antonio Zuazo and Mr. Jesús Fernández, are licensed professional geologists in Spain, and are registered members of the EUROPEAN FEDERATION OF GEOLOGISTS, an accredited organisation to which the Competent Person (CP) under JORC Code Reporting Standards must belong in order to report Exploration Results, Mineral Resources, or Ore Reserves through the ASX. Mr. José Antonio Zuazo is the Technical Director of CRN and he 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 a CP as defined in the 2012 Edition of the JORC Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr. José Antonio Zuazo and Mr. Jesús Fernández consent to the inclusion in the release of the matters based on their information in the form and context in which it appears. 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. Introduction 11. Pintano Potash Project 2. Corporate Summary 12. Izaga Potash Project 3. Board and Senior Executives 13. Production Timelines 14. Production Focus to Deliver Real Shareholder Value 4. Objective – Significant Global Potash Producer 5. Strong Pipeline at Varying Stages 15. Competitive Advantages – Mining and Processing 6. The Projects Competitive Advantages – High Priced Markets 16. 7. Muga Potash Project 17. Low Capital Cost Sierra del Perdón Potash Project 8. 18. High Margin Muga By-Products K62 Project 9. 19. Priorities – Commencement of Construction Vipasca Potash Project 10. 20. Summary 3
1. Introduction • Highfield Resources is developing the Muga Decline accessed underground mine with project economics Project, one of its five 100% owned potash boosted by first world infrastructure and domestic markets projects in northern Spain. • Located in a producing potash basin where undergound mines have operated via decline with simple sylvinite flotation circuit processing. • The flagship Muga Project has the lowest capex of any development stage potash project. • In production Muga will have first quartile EBITDA margins due to a combination of high price end markets and low total cash costs to customer. • Project pipeline share the characteristics required for low capex, high margin mines and offer significant upside potential • Management team has proven mine building Highway from within 7 kms of mine gate to port experience in Spain and operating experience in Aerial photo of Port of Pasajes Virtual image of proposed aboveground operations potash. 4
2. Corporate Summary 2.00 8.0 Fully Diluted Equity 1.75 7.0 Ordinary Shares on Issue 252.0m 1.50 6.0 Options 43.5m 1.25 5.0 Volume (m) Price (A$) Performance B Shares* 51.5m 1.00 4.0 Fully Diluted 347.0m 0.75 3.0 Undiluted Market Cap at A$1.84 A$464m 0.50 2.0 ( 1 May 15 ) 0.25 1.0 Fully Diluted Market Cap at A$1.84 A$634m 0.00 0.0 Cash as at 31 March 2015 ~A$21m Average Daily Volume (3months) ~665,000 Broker Recommendation 12-month Price Target Shareholders (Fully Diluted) Arrowhead BUY A$3.00 Spanish in-country management 21% Bell Potter BUY A$2.31 Australian based management 8% Blue Ocean BUY A$2.85 EMR Capital 19% Canaccord Genuity BUY A$2.45 Foster Stockbroking BUY A$2.45 Other Shareholders 52% GMP Securities BUY A$2.15 Total 100% Numis Securities BUY A$3.20 * Class A and Class B Performance Shares were granted for acquisition of the Pareto Securities BUY A$2.10 Spanish assets in October 2012. RBC Capital Markets BUY A$2.70 The class A Performance Shares were converted to Ordinary Shares in February 2015. Taylor Collison BUY A$2.70 Class B P erformance Shares will be converted to ordinary shares if the AVERAGE A$2.59 Company receives approvals for the construction and production of 500,000 5 tonnes of potash per annum before November 2016 .
3. Board and Senior Executives 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 Shell Group and the Managing Director of Minotaur Resources. Spanish Senior Management Team Anthony Hall – Managing Director A qualified lawyer and company secretary with close to 20 years` commercial experience in venture capital, risk management, strategy and business development, including nearly four years as Managing Director of Highfield Resources. Board of Directors Pedro Rodríguez – Development Director A geologist with over 35 years’ experience in mining services in Spain. He has been involved with the Highfield Spanish projects for over four years and prior to this he worked for six international mining companies including Billiton International, Navan-Almagrera and Newmont. Richard Crookes – Non Executive Director A geologist with over 28 years executive experience in the resources and investments industry. He is currently an Investment Director of EMR Capital and was formerly a Director of Macquarie Bank’s Metals Energy Capital Division and was Chief Geologist with Ernest Henry Mining. Owen Hegarty – Non Executive Director An executive with over 40 years experience in the global mining industry that included 25 years in Rio Tinto where he was the Managing Director for Asia, and founder and 15 years as CEO of Oxiana Ltd. He is a director of various listed and unlisted resources companies and is Executive Chairman of EMR Capital. Donald Stephens – Company Secretary A Chartered Accountant and Corporate Advisor with over 25 years’ experience in the mining industry and accounting profession. He is a director and company secretary of multiple ASX listed entities. 6
4. Objective – Significant Global Potash Producer Highfield’s objective is to produce at least 2 million tonnes of high margin MOP per annum by 2020 3,000,000 2,500,000 K60 MOP Production Per Annum ? ? ? 2,000,000 1,500,000 1,000,000 500,000 0 7
5. Strong Pipeline at Varying Stages Pipeline of projects with many shared characteristics that are required for low capex and high margin mines Shared characteristics: No problems with aquifers overlying mineralisation Muga Development Potential for decline access to conventional underground mines Sierra del Perdón Simple technologically proven mining and processing Very good local infrastructure and utilities Resource Vipasca - electricity, gas and water Delineation Pintanos World class transport infrastructure Less than 150km to closest port Confirmed port capacity for export of Exploration Izaga product Close to the Brazilian, US and European potash markets 8
6. The Projects Five 100% owned potash projects in northern Spain covering over 550km 2 9
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