Name of the Project
Muga potash project.

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

Project Owner/s
Highfield Resources.

Project Description
An update on the Muga 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 stretching 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; the East decline will be developed using road-headers. The same type of equipment will be used to develop underground infrastructure, including workshops and service areas such as emergency evacuation chambers, pumpstations 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 for Phase 2 from €206-million to €209-million. Highfield believes that there is still some scope to optimise and reduce initial capital expenditure such as using contract mining.

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

Latest Developments
Highfield Resources has signed a €23.3-million nonbinding indicative termsheet with financial services group Macquarie for an equipment operating lease facility for the Muga potash mine, subject to contract and Macquarie’s completing its final due diligence and all requisite approvals.

If executed, the facility will provide financing for the Muga project’s various units of underground mining equipment. The facility will be in addition to the €312.5-million senior secured project financing package.

The Muga project was granted a mining concession in July 2021 and was awarded the mine gate and declines construction licence in June 2022.

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.