Highfield Resources completes Javier DFS

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THE DRILL SERGEANT: Highfield Resources (HFR: ASX) has received the results of a Preliminary Feasibility Study (PFS) for the company’s 100 per cent-owned Javier potash project in Spain.

An initial high-grade resource of 154 million tonnes at 12.9 per cent potassium oxide has been derived from the JORC Mineral Resource estimate of 268 million tonnes at 11.2 per cent potassium oxide Highfield released earlier this month.

 

Location of Highfield´s Javier-Vipasca, Pintano and Sierra del Perdón projects in Northern Spain. Source: Company announcement

 

The company explained its initial mining focus would target two major sylvinite seams in the project area, which remain relatively thick, ranging in height from 1.77 metres to over three metres.
 
Highfield indicated it has already commenced work on a Definitive Feasibility Study (DFS), with a view to making the project construction ready for early in the 2015 Calendar Year.

Highlights from the study include:

A 20 year initial mine with a production target of 860k tonnes of K60 product per annum;

After tax NPV10 of US$1.06 billion on a headline capex of only US$307.9 million (US$249 million pre-production capex);

After tax, unlevered IRR of 48.4 per cent;

94.5 per cent of physical costs supported by Spanish contractor budget pricing;

Over 80 per cent of capex estimate peer reviewed by Spanish prime contractor IDOM that has actual potash construction experience in Spain; and

Potential upside from current drilling campaign with a 4.5 metre sylvinite intersect recently drilled not included in the mining target estimate.

“The results of the PFS demonstrate the significant project advantages that attach to mine access via a decline; underground conventional mining; flotation circuit processing; First World infrastructure; and close proximity to markets,” Highfield Resources managing director Anthony Hall said in the company’s announcement to the Australian Securities Exchange.

“We are extremely fortunate to have a project that has real advantages across all elements of the value chain from the mine to ultimate customer.

“All elements work together to drive the compelling project economics.

“We are now focussed on making the project construction ready as soon as possible.”

Website: www.highfieldresources.com.au