Name of the Project
Muga-Vipasca potash project.

Location
About 50 km to the south-east of Pamplona, Spain.

Project Owner/s
Highfield Resources.

Project Description
An update to the Muga-Vipasca feasibility study has reconfirmed the compelling economics of the project.

The mine plan is based on proven and probable ore reserves of 104.3-million tonnes grading 10.2% potassium oxide, which includes the abutting exploration target.

The plan proposes the delivery of about one-million tonnes a year of muriate of potash – Phase 1 and Phase 2 will both produce 500 000 t/y – over a mine life of 30 years, comprising about 18 years of mine-life from ore reserves and 12 years from additional mineral resources and the exploration target.

Underground access will be by twin parallel declines from over a length of 2.6 km to a depth of about 350 m.

The West decline will be developed with a bolter-miner using continuous haulage systems to transport mined material to surface and the East decline with road-headers. The same type of equipment will be used to develop underground infrastructure, including workshops and service areas such as emergency evacuation chambers, pumping stations and electrical rooms.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has an estimated net present value, at an 8% discount rate, of €1.89-billion and an internal rate of return of 25%.

Capital Expenditure
Capital costs for Phase 1 have increased from €368-million to €398-million and Phase 2 from €206-million to €209-million. Highfield believes that there is still some scope to optimise and reduce initial capital expenditure, for example by using contract mining.

Planned Start/End Date
The project expects construction to start in the first half of 2022.

Latest Developments
Highfield Resources has secured a €312.5-million financing package to help fund the construction of its Muga-Vipasca potash project.

The company has agreed to a nonbinding indicative termsheet with a group of experienced European mining finance lenders, including Société Générale, ING Bank N.V. and Natixis, for a €300-million senior secured project financing facility and an additional €12.5-million cost overrun facility.

The facilities will cover a significant portion of the preproduction investment required to complete the Phase I construction of Muga.

In addition, the company has received strong interest from local Spanish banks who wish to participate in the facilities.

Key Contracts, Suppliers and Consultants
IGAN Consulting Group (revised mine plan).

Contact Details for Project Information
Highfield Resources, tel +34 948 050 577 or email info@geoalcali.com.