Name and Location
Muga potash project, Spain.

Client
Highfield Resources.

Project Description
The Muga potash project has been optimised to enhance operational efficiencies, sales and marketing activities, and life-of-mine in preparation for construction. Proven and probable ore reserves have increased from 146-million tonnes, at an average grade of 12.7% potassium oxide, to 253-million tonnes, with an average grade of 11.5%, an increase of 73% on the definitive feasibility study (DFS) average grade.

The optimisation study has altered the mine plan to include:
– an additional sylvinite seam (Capa A), resulting in an increased mine life from 24 years to 47 years. This new mine plan excludes any potential upside from the substantial exploration target;
– a combination of continuous miners and road headers to increase productivity in production and infrastructure development;
– an increased number of main infrastructure galleries in the mine plan from one to three to reduce ramp-up risk and increase likely operational efficiency;
– increasing the size of:
• the underground conveyor belt system to cater for an increase in underground tonnage and enable better expansion options;
• storage to enable more flexibility in smoothing grade profile to the processing plant;
• the conveyor belt to surface in one decline to 1 500 t/h of material; and
• The processing plant and its flexibility to deal with higher throughput of material;
– altering mine and process plant design to deliver a constant 90 000 t/m of granular K60 (1.08-million tonnes a year) for the balance of the revised 47-year mine life; and
– factoring potential mine expansion into design to allow for seamless expansion of production in the future.

Similar to the DFS, the principal mining horizons will be accessed by two straight line declines, about 2.5 km and 2.6 km in length. The total cross-sectional area of each decline is 35.7 m2, a slight increase on the DFS number.

The declines will access the same mining horizon at two different points. The eastern decline reaches the mineralised horizon at 440 m below surface and the western decline at about 452 m below surface. Underground extraction will be by room-and-pillar mining using a combination of continuous miners and road headers to optimise extraction efficiency and selectivity in varying orebody heights.

Additionally, continuous miners will be used for the ongoing mining development, including new transport drifts and main transport galleries.

Net Present Value/Internal Rate of Return
The optimisation study has increased the project’s net present value from $1.42-billion to $1.46-billion at a 10% discount rate; and from $1.80-billion to $2.04-billion at an 8% discount rate.

Value
Phase 1 capital expenditure in the opti-misation study has increased marginally from €249-million to €267-million.

Duration
The initial production targeted is scheduled for 2017.

Latest Developments
Highfield has completed a scoping study on the Muga project, which envisages a complementary, staged 500 000 t/y sulphate of potash (SoP) operation that demonstrates the potential to convert about 430 000 t/y muriate of potash (MoP), produced from the Muga potash mine, into SoP.

The technologically proven Mannheim process has been selected to take advan-tage of captive MoP, low-cost sulphuric acid, export ports, low-cost natural gas and limestone for hydrochloric acid (HCl) by-product treatment, all of which are located close to the proposed site.

Total capital expenditure for the operation is estimated at $147-million, including a 20% contingency.

Nonbinding memorandums of understanding have been signed for port sites, sulphuric acid supply, limestone, direct HCI sales and calcium chloride by product offtake.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Highveld Resources, tel +34 948 050 577 or fax +34 948 050 578.