Highfield Resources Ltd. ACN 153 918 257 ASX: HFR Issued Capital 252.0 million shares 51.5 million performance shares 43.5 million options

Registered Office C/– HLB Mann Judd 169 Fullarton Road Dulwich, SA 5065 Australia –––––––––––––––––– Tel: +61 8 8133 5098 Fax: +61 8 8431 3502

Head Office Calle Navas de Tolosa, 5 - 1°B, 31002 Pamplona, Spain –––––––––––––––––– Tel: +34 948 050 577 Fax: +34 948 050 578

Directors Derek Carter Richard Crookes Anthony Hall Owen Hegarty Pedro Rodriguez

Company Secretary Donald Stephens

ASX Release 30 March 2015

HIGHFIELD RESOURCES DFS CONFIRMS HIGH MARGIN, LOW

CAPEX POTENTIAL FOR MUGA POTASH MINE

Highlights

Definitive Feasibility Study (DFS) completed delivering:

Post tax unlevered project NPV10 of US$1.42 billion

Post tax, unlevered IRR of 51.9%

EBITDA in first full year of production of US$296 million (EBITDA margin of 66%)

Ore Reserve of 146.0 million tonnes at average grade of 12.73% K20

Initial 24 year mine life based solely on reserves

Proposed mine is a technically robust underground conventional room and pillar operation

via twin decline access which enhances operational efficiency and reduces risk

Average yearly, steady state production of 1.123 million tonnes of granular K60

potash with operational expenditure (“opex”) in full production estimated at US$135/tonne

Independent expert spot potash prices discounted by 10% for contract pricing and sales

and marketing fees delivering a 2017 FOB Vancouver standard product reference price of

US$315 / tonne in real terms

Pre-production capital cost estimated at US$256 million including a 12.5% contingency

Total capital cost estimated at US$354 million including 12.5% contingency

DFS peer reviewed by Canadian based international engineering firm for gap analysis on

both capex and opex

Construction tenders to be released to Spanish contractors next quarter

Construction remains on track for Q4 2015

Spanish potash developer Highfield Resources Limited (HFR: ASX) (“Highfield” or “the Company”) has

completed the Definitive Feasibility Study (“DFS”) for its 100% owned Muga Potash Project (“Muga” or

“the Project”), confirming its outstanding potential as a long life, high margin operation.

The DFS is based on extracting 138m tonnes of the sylvinite Ore Reserve at an average grade of 12.75%

K2O. The 138m tonnes was taken from the total Ore Reserve of 146m tonnes of sylvinite at an average

grade of 12.73% K2O calculated by independent Spanish based consultants Consultores Independientes For

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en Gestión de Recursos Naturales SA (“CRN”). Importantly, CRN is highly experienced with Spanish

potash mining.

The Ore Reserve was taken from the high grade sub-set of the Mineral Resource Estimate (“MRE”) of

232 million tonnes at an average grade of 13.5% K20, prepared by independent US Based Agapito

Associates (refer ASX release 24 February 2015).

Highfield’s Managing Director Anthony Hall commented:

“The DFS builds on a compelling pre-feasibility study and reconfirms Muga´s potential to be a

very low capex, high margin potash mine. We believe Muga has the potential to be the highest

margin potash mine globally in production and this is very exciting for everyone involved with the

Company.

The work of our Spanish team and predominantly Spanish based consultants has been

exceptional. I cannot overstate how important it is to have such a strong local capability.

We are now moving into a construction ready phase and anticipate releasing tenders next quarter

to ensure we are ready to commence construction in Q4 of this year as planned.”

A summary of the DFS is attached to this release.

For More Information

www.highfieldresources.com.au

Company Investor Relations Executives

Anthony Hall Managing Director Ph: + 34 617 872 100

Simon Hinsley APAC Investor Relations Ph: +61 401 809 653

Hayden Locke Head of Corporate Development Ph: +34 609 811 257

Nuala Gallagher / Simon Hudson UK Investor Relations Ph: +44 207 920 3150

Competent Persons’ Statement

This ASX release was prepared by Mr. Anthony Hall, Managing Director of Highfield Resources. The information in this release that relates to Ore Reserves is based on information 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-Osinga 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. The information in this release that relates to Mineral Resources Results is based on information prepared by Mr. Leo J. Gilbride, P.E. and Ms. Vanessa Santos, P.G. of Agapito Associates, Inc. (Agapito) of Colorado, United States of America (USA). Mr. Gilbride is a licensed professional engineer in the State

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of Colorado, USA and is a registered member of the Society of Mining, Metallurgy and Exploration, Inc. (SME). Ms. Santos is a licensed professional geologist in South Carolina and Georgia, USA, and is a registered member of the SME. SME is a Joint Ore Reserves Committee (JORC) Code ‘Recognized Professional Organization’ (RPO). An RPO is 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. Gilbride is a Principal and Ms. Santos is the Chief Geologist and Senior Associate with Agapito and both have 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. Zuazo-Osinga, Mr. Gilbride and Ms. Santos consent to the inclusion in the release of the matters based on their information in the form and context in which it appears.

About Highfield Resources

Highfield Resources is an ASX-listed potash company with four 100%-owned projects located in Spain.

Highfield’s Muga, Vipasca, Los Pintanos, and Sierra del Perdón potash projects are located in the Ebro potash producing basin in Northern Spain covering a project area of close to 400km2. The Sierra del Perdón project includes two former operating mines. The Company has recently completed a definitive feasibility study for its Muga Project and is currently working towards commencing construction in the fourth quarter of 2015.

Figure 1: Location of Highfield´s Muga-Vipasca, Pintano and Sierra del Perdón Projects in

Northern Spain

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Registered Office

169 Fullarton Road, Dulwich, SA 5071 Tel: +61 8 8133 5098 Fax: +61 8 8431 3502

Head Office

Calle Navas de Tolosa, 5 - 1°B, 31002 Pamplona, Spain Tel: +34 948 050 577 Fax: +34 948 050 578

www.highfieldresources.com.au/

Muga Potash Project

Definitive Feasibility Study (DFS)

Short Form Summary

Overview

Highfield Resources Limited (“Highfield” or “the Company”) is an ASX listed potash development

company with four 100% owned potash projects in Northern Spain.

The Company has completed a Definitive Feasibility Study (“DFS”) for its flagship Muga Potash Project

(the “Project”), located in northern Spain with close proximity to the Atlantic coastline of Northern Spain

and Southern France.

Figure 1: Muga Potash Project Location Map in Relation to Highfield´s Four 100% Owned Projects

The DFS builds upon the Pre-Feasibility Study (“PFS”) completed in May 2014, and confirms both the

technical viability of the Project and its ability to deliver robust financial returns under various

sensitivities.

The DFS was independently reviewed by an internationally recognised, Canada based, engineering

consultancy with substantial practical experience in potash. The purpose of the review was to perform

a gap analysis to ensure key inputs had not been missed from either the capital expenditure (“capex”)

or operational expenditure (“opex”) estimates, while also assessing each of the mining and processing

sections for fatal flaws. Importantly, the consulting firm concluded that the capex and opex were well

supported and within expected ranges. The firm also confirmed there appeared to be no fatal flaws in

the Project or errors or emissions from the capex and opex calculations.

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DFS Financial Highlights

Pre-production capex is estimated at US$256m with total capex estimated at US$354m including a

12.5% contingency.

This delivers a total K60 granular potash product of 1.123m tonnes per annum in full production. Opex

in full production is estimated at US$135 per tonne. This includes all transport to key customer markets.

The key financial metrics are:

- A post-tax, unlevered, internal rate of return (“IRR”) for the Project of 51.9%; and

- A net present value (NPV) using a discount rate of 10% (NPV10) of US$1.42bn.

Both calculations use spot potash price estimates provided by independent fertiliser consultants, Integer

Research (“Integer”), with a reduction of 10%. Half of the reduction (5%) is to account for sales and

marketing costs and the other half (5%) represents the current potash market dynamic where contract

pricing is often discounted to spot market pricing.

Proven and Probable Ore Reserve

The Ore Reserve used in the DFS for mine design is based upon the updated Mineral Resource

estimate (“MRE”), calculated by independent Agapito Associates, Inc. (“Agapito”) based on all drilling

completed by Highfield at the Project (refer ASX Release of 24 February 2015).

The total MRE comprises 302.4 million tonnes with an average grade of 11.5% K20, with 80% falling

under the Measured and Indicated Resource categories. Within the global MRE, Agapito estimated a

smaller higher grade subset comprising an undiluted 232Mt at an average grade of 13.5% K2O that

includes a Measured and Indicated MRE of an undiluted 178Mt with an average grade of 13.4% K2O.

The high grade subset has formed the basis for the mine design for the DFS and the subsequent

calculation of the Ore Reserve estimate, which was completed by independent Spanish consultants

Consultorers Independientes en Gestión de Recursos Naturales S.A (“CRN”).

Zone Proven Reserves Probable Reserve Proven and Probable Reserves

Millions of

Tonnes

Average

Grade

% K20

Millions of

Tonnes

Average

Grade

% K20

Millions of

Tonnes

Average

Grade

% K20

East Zone 10.54 12.76% 39.39 12.80% 49.92 12.79%

West Zone 18.01 12.66% 78.08 12.71% 96.09 12.70%

Total

East and West 28.55 12.70% 117.47 12.74% 146.01 12.73%

Figure 2: Ore Reserve Summary

The DFS contemplates an initial mine life of 24 years, based only on Proven and Probable Ore

Reserves.

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Mining

The principle mining horizons will be accessed via two straight line declines, approximately 2.9km and

2.5km in length respectively, accessing the same mining horizon at two different points. The eastern

decline reaches the mineralised horizon at 228 metres below surface and the western decline

approximately 348 metres below surface. It is anticipated that the decline construction will be

completed by specialist Spanish contractors.

The dual decline strategy is anticipated to enhance operational efficiency and reduce risk. Each

underground operation and decline will deliver 50% of the 6.3m tonne production schedule to the

processing facility.

Each underground operation will have the installed capacity to up to 1.5 times of budgeted production

which is considered important as a risk mitigation mechanism to ensure the processing plant operates

at the design capacity of 400 tonnes per hour ramping to 800 tonnes per hour. This has the effect of

delivering processing efficiencies and ensuring that plant Opex is managed within expected metrics.

Underground extraction will be via room and pillar mining with equipment selected to optimise extraction

in varying ore body heights. Additional road headers will be used for the ongoing mining development,

including new transport drifts and main transport galleries. The fleet has been sized to ensure that, at

full capacity, the mine will deliver 6.3 million tonnes of sylvinite ore per annum (ROM) to the processing

facility.

Mining is assumed to target four distinct seams across different sections of the Resource horizon as

delineated in the block model constructed by Agapito. There are two dominant seams in the eastern

section of the Resource horizon referred to as Capa Zero and Capa B and there are two dominant

seams in the western section of the Resource horizon referred to as Capa 1 and Capa 2. CRN´s Ore

Reserve calculation only uses these four seams based on the DFS mine design (refer Figure 3 below).

Figure 3: Mine panel configuration by east and west zones across the four principle mining seams

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Highfield elected to reduce the Ore Reserve by an additional 5% to calculate the total tonnes that will

be produced over the LOM in the DFS production schedule. This reduced the total ore to 138m tonnes

at an average grade of 12.75% K2O. The reduction was designed to account for the expectation of

increased mining dilution at the edges of extraction rooms and to adjust for the known constraints of

selective mining underground in this area.

Metallurgy

Highfield engaged Saskatoon based, independent specialist consultants, EngComp, to develop and

supervise the completion of a series of detailed metallurgical test work programs. EngComp is a world

leader in the processing of sylvinite ores and has been involved in the design process for many plants

globally.

Each component of the test work program was completed by a Spanish consultant with requisite skills

and experience in that field, under the close supervision of EngComp following the submission of a

detailed brief for each part.

Test Stream Group Location

Mineralogy & Petrography University of Barcelona Barcelona, Spain

Liberation Analysis SRC Labs Saskatoon, Canada

Attrition Scrubbing Advanced Mineral Processing (AMP) Madrid, Spain

Flotation Test AGQ Labs and Technical Services Seville, Spain

Figure 4: Summary of Test work Consultants

The primary objective of the program was to characterise any ores within the orebody, to evaluate each

of the ore’s expected metallurgical response to standard processing methods ensuring a representative

sample across the ore body was obtained, as well as to obtain the design parameters necessary to

develop the detailed process flow sheet and mass balance.

Two distinct ore types were identified – banded and brecciated – of which the banded is estimated to

comprise approximately 74% of the mine schedule and the brecciated estimated to comprise the

remaining 26%.

In general, the ore exhibited a positive metallurgical response, with a clear advantage for the banded

ores over the brecciated ores. EngComp believes that operational recovery rates will benefit from

additional test work designed to further refine and optimise the metallurgical process. This work is

currently in train with the Company believing higher recovery rates may result.

EngComp confirmed the metallurgical properties of the ore at the Muga Project lends itself to a simple,

proven, and technologically sound process flow sheet, which has been successfully implemented at

many operations globally.

Based on the analysis conducted and EngComp’s operational experience with similar potash

processing operations, Highfield assumes, with a ROM feed comprising 74% banded ore and 26%

brecciated ore, a constant life of mine plant recovery of 84%.

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Processing

The processing flow sheet selected by Highfield is a simple two stage crushing process, an attrition

scrubbing and hydro-cyclone de-sliming stage followed by a simple, well understood, KCl (Potassium

Chloride) froth flotation circuit. This provides a simple, cost effective and technologically proven

process route.

Figure 5: Process Flow Sheet Design

Following processing, the product will be dried using fluid bed dryers and then conveyed to the

compacting and glazing facility for conversion from standard to granulated Muriate of Potash (“MOP”).

All of the product produced will be granular K60 potash, the dominant product sold in the Company´s

target markets.

Tailings and By-Product Credits

As shown above the plant produces two streams of tailings – slimes containing clay, sodium chloride

(common salt) and potassium chloride (potash) (8% to 10% by content), and salt tailings containing

sodium chloride, minimal potassium chloride (2% to 3% by content) and water. A backfilling strategy

has been designed to place all salt tailings back into the mine. Small quantities of cement will be added

to the salt tailings in a paste backfill plant on surface after which time the tailings will be piped

underground to fill voids created in mining. This has two benefits to the Project: 1. all salt tailings are

placed underground and 2. the additional competency this creates enables the secondary extraction of

a majority of the pillars. This has the effect of increasing mine extraction ratios to over 80%. The mine

plan assumes an 82% extraction ratio which is slightly lower than the estimate provided by backfilling

study engineers, K-Utec from Germany.

Around 20% of the slimes will also be added to the salt tailings and piped underground. The balance

of the slimes will be stored on surface. The Company is at concept study level on a crystallisation

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option to process the slimes to product high grade potash (K62) and vacuum salt. This is likely to

provide margin enhancement when the mine is in operation but has not been factored into the DFS.

Mine Rehabilitation and Closure

The Restoration Plan is outlined in detail in the ESIA, which was submitted to the relevant authorities

in December 2014. The objective of the plan is to ensure the affected areas of the Project are restored

to their natural state.

The Company calculated a budget for full restoration of €16.2m in its detailed Environmental and Social

Impact Assessment (ESIA) submission lodged in December 2014 (refer ASX announcement 11

December 2014). The DFS, however, has adopted a more conservative position and assumes a higher

amount of 10% of upfront capex which is €33.7m in calendar year 2015 terms.

Site Layout and General Infrastructure

The Company has deliberately tried to minimise the surface footprint of the infrastructure for the Muga

Project. In addition, where possible the design has been adjusted to allow the use of natural features,

such as valleys and rises, to ensure that the visual impact of the Project on the surrounding area is

minimised.

Figure 6: Site Layout and Infrastructure

Utilities

The main energy source for the Project will be grid electricity. Highfield has secured 60MVA of capacity

that will be used primarily for the mine´s energy needs. It is estimated that less than 40MVA will be

required in full production, providing additional capacity for further expansion or salt processing.

Water, gas and telecommunications´ networks are all accessible and available within short distances

of the Project site.

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Logistics

Highfield has signed non-binding MOUs with the Port of Pasajes and the Port of Bilbao (refer ASX

announcements 18 December 2014 and 20 January 2015). Both MOUs confirm the ability to ship

significant quantities of product through these ports.

For the purposes of the DFS, the Company has elected to outsource its transport solution and its port

handling and ship loading facilities. This will reduce upfront Capex estimates, but will add marginally

to the Opex estimates of the Project.

Product will be delivered, by 20 tonne trucks, from the Muga site to the Port of Pasajes, which is located

approximately 150km, mostly by multi-lane motorway, north northwest of the project area.

Markets

Highfield has identified four target markets for its product:

a. North West Europe including Spain, France and Portugal;

b. Brazil;

c. US East Coast and Mid-West; and

d. West Coast of Africa

The DFS assumes 50% of product produced is sold in granular form into Brazil and 50% is sold in

granular form into North West Europe.

Potash sales price estimates were provided by independent fertiliser market consultants, Integer.

Integer provided spot potash price estimates which the Company discounted by 10%. Half of the

reduction (5%) is to account for sales and marketing costs and the other half (5%) represents the current

potash market dynamic where contract pricing is often discounted to spot market pricing.

The table below summarises the potash price estimates used for the DFS including the discount in real

terms.

Figure 7: Integer MOP price forecasts, 2015-2020 (US$ per tonne) including 10% discount

2015 2016 2017 2018 2019 2020

FOB Vancouver, real terms

(US$ per tonne)297 302 315 318 318 300

Addressable markets CFR

Average US Standard 321 325 339 342 342 324

Brazil (granular) 342 347 360 363 363 345

Average European Granular 331 335 349 352 352 334

Integer MOP price forecast, 2015-2020, including 10% discount for sales and marketing

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Capex

Capex estimates have been estimated in accordance with the AusIMM Cost Estimation Handbook

2012, based on detailed design and first principles estimation techniques. Where possible, quoted

prices for inputs have been used with all quotes obtained from reputable suppliers.

The capex estimates have been prepared to support the development of an underground room and

pillar mine capable of delivering 6.3 million tonnes of ROM ore per annum to the processing facility,

equivalent to a processing rate of 800 tonnes per hour. Estimates have been developed from first

principles using detailed equipment lists and designs for each section of the Project, supported by

quoted pricing for the majority of costs within the estimate.

Capex is deployed over two phases. The first, pre-production phase is estimated to be €243.44 million

(US$256.25m) including a 12.5% contingency. This will enable the mine to deliver a total of 3.153

million tonnes of ROM ore to the processing plant (equivalent to 400 tonnes per hour).

The design basis for the estimate includes the construction of two declines into the mining horizon,

flotation and compacting capacity for 400 tonnes per hour of ROM processing, and drying capacity for

the full 800 tonnes per hour process facility. In addition, it includes all surface and mine infrastructure

including product storage, access roads, electricity connection, gas supply, water and communications.

Pre-Production Capex Estimate Summary

Component Euros (m) USD (m)

Underground development and Machinery 59.84 62.99

Process plant and associated infrastructure 126.36 133.01

Utilities and logistics 12.08 12.72

Sub Total 198.28 208.71

Mining Permits 2.25 2.37

EPCM and Owners Costs 15.86 16.70

Contingency (12.5%) 27.05 28.47

Total 243.44 256.25 Figure 8: Summary of Pre-Production Capital Estimate

Phase 2 capex corresponds with the expansion of the underground mine and sections of the

aboveground facilities to increase mining production to deliver 6.307 million tonnes of ROM ore per

annum to the process facilities and the requisite expansions of capacity at the process plant including

new buildings, flotation circuit and compaction capacity.

Phase 2 - Capex Estimate Summary

Component Euros (m) USD (m)

Underground development and Machinery 26.32 27.70

Process plant and associated infrastructure 49.82 52.44

Utilities and logistics 0.00 0.00

Sub Total 76.14 80.14

Mining Permits 0.62 0.65

EPCM and Owners Costs 6.09 6.41

Contingency (12.5%) 10.36 10.90

Total 93.21 98.11

Figure 9: Summary of Phase 2 Capital Estimate

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Opex

In general, opex has been estimated on a € / tonne of ROM basis (assuming 6.3 million tonnes of ROM

ore per annum) and converted to a € / tonne of MOP product basis assuming production of 1.123 million

tonnes per annum of saleable granular K60 product.

Each of the mining, processing and transport costs have been built up from first principles utilising

quoted prices where possible.

The Company has included general and administrative costs of a flat €10 / tonne of granular K60

product produced which has been benchmarked against major global potash producers.

Sustaining capex has been applied at a flat 2.5% of the total Project capex. It should be noted that

ongoing mine development has been included in opex for mining.

Depreciation has been applied assuming a generic useful life of 20 years, representing 5% per annum

of total capex and ongoing of additional expansion or sustaining capex expended at the Project.

A 12.5% contingency has been added to mining, processing and logistics´ opex estimates.

A high level summary on a cost per tonne of granular K60 product is presented below.

Figure 10: Summary of Operating Cost Estimate

Financial Analysis

The DFS has produced robust financial metrics including a post-tax, unlevered internal rate of return

(“IRR”) of 51.9% and a net present value (“NPV”) with a discount rate of 10% of US$1.42 billion.

The Company has run sensitivity analysis on a variety of Project parameters to ascertain any areas of

increased risk and sensitivity to the projected returns. This analysis indicates the projected returns for

the Project are most sensitive to changes in the received potash price.

Operating Cost Summary - Per tonne MOP

Components Euros / t USD / t

C1 Cost

- Mining 35.45 37.32

- Processing 40.58 42.71

-Transport 19.61 20.64

Sub Total 95.64 100.67

- G&A 10.00 10.53

- Sustaining Capital 7.50 7.89

Total C1 Costs 113.14 119.09

C2 Costs

- Depreciation 14.99 15.78

- C1 Costs 113.14 119.09

Total C2 Costs 128.13 134.87

C3 Costs

- Royalties 0.00 0.00

- C2 Costs 128.13 134.87

Total C3 Costs 128.13 134.87

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The Company ran five scenarios assuming a parallel shift in received potash prices ranging from a fall

of 25% (equivalent to 2017 FOB Vancouver of US$236.25/tonne in real terms) to an increase of 25%

in received price (equivalent to 2017 FOB Vancouver of US$393.75/tonne in real terms). This analysis

shows that even in the downside scenario, the Project still delivers a post-tax NPV10 of US$556.7 million

with an unlevered post tax IRR of 29.43%.

Figure 11: NPV Sensitivity to Potash Price and Discount Rate

Changes to opex showed higher levels sensitivity to the underlying Project financial returns relative to

capex and, therefore, the Company also includes a sensitivity analysis of post-tax NPV to changes in

opex ranging from a fall of 25% to a rise of 25% in underlying cost.

Figure 12: NPV Sensitivity to Opex and Discount Rate

Finally, given the recent depreciation of the Euro relative to the US dollar, the Company has included a

sensitivity analysis for the NPV impact of exchange rate fluctuations ranging from 0.80 through to 1.10

on a USD to Euro basis.

Figure 13: NPV Sensitivity to Exchange Rate and Discount Rate

Stakeholders

The Company submitted its application for the environmental and mining permits in December 2014

(refer ASX announcement 11 December 2014) supported by a detailed Environmental and Social

Impact Assessment (“ESIA”). The Company is committed to delivering a sustainable mining project,

which benefits the local regions of Aragón and Navarra and ensures all environmental risks within the

Company’s control are identified and mitigation strategies are put in place to manage these risks while

also delivering outstanding results for its stakeholders.

Potash Price Sensitivity -25% -10% 0% 10% 25%

2017 FOB Vancouver (US$/t) 236.25 283.50 315.00 346.50 393.75

Discount 8% 734.5 1,373.9 1,800.1 2,226.4 2,865.8

Rate 10% 556.7 1,076.1 1,422.4 1,768.6 2,288.0

12% 423.1 851.7 1,137.4 1,423.1 1,851.7

NPV Sensitivity - Potash Price and Discount Rate - US$ millions

Potash Price Sensitivity (Parallel Shift in Prices)

Opex Sensitivity -25% -10% 0% 10% 25%

C3 Cost US$/t MOP 101.15 121.38 134.87 148.36 168.59

Discount 8% 2,181.5 1,952.7 1,800.1 1,647.6 1,418.7

Rate 10% 1,731.4 1,546.0 1,422.4 1,298.7 1,113.3

12% 1,391.9 1,239.2 1,137.4 1,035.6 882.9

NPV Sensitivity - Opex and Discount Rate - US$ millions

OPEX Sensitivity

Exchange Rate Sensitivity 0.800 0.875 0.950 1.025 1.100

Discount 8% 1,547.6 1,684.7 1,800.1 1,898.7 1,983.8

Rate 10% 1,209.8 1,325.2 1,422.4 1,505.3 1,577.0

12% 955.1 1,054.1 1,137.4 1,208.5 1,269.9

NPV Sensitivity - Exchange Rate and Discount Rate - US$ millions

Exchange Rate (USD:EUR)

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The Company’s experienced, Pamplona based, Spanish management team has developed a deep

working relationship with stakeholders at all levels, including the communities surrounding the Project

via regular dialogue, community consultation and feedback sessions, right through to the senior levels

of the Spanish Government.

Highfield is committed to ensuring it achieves a real social licence to operate the Muga Mine. It has

created a Spanish Foundation called the Geoalcali Foundation (the “Foundation”) as a conduit for its

social initiatives. The Foundation is currently delivering various community initiatives and is ensuring

the local communities understand the Company´s commitment to ensure all stakeholders benefit from

the development of the Project.

Project Implementation

Highfield has developed a preliminary schedule for tender and the finality of detailed engineering and a

preliminary construction schedule. The full, detailed project schedule will be developed as the Project

proceeds to construction. A project execution plan will define all project control procedures including

procurement rules, cost and change management procedures and the construction risk management.

It will also define processes to ensure Highfield´s global philosophy with respect to safety first and

environmental best practice is achieved.

The execution philosophy a hybrid mix of EPC and EPCM in which Highfield will employ a dedicated

Owner’s Team to manage and oversee all aspects of the design and construction process. Effectively,

Highfield will assume the role of Manager, and will sub-contract all of the key components of the

execution process to specialist contractors.

A construction schedule has been developed assuming the mine is approved and concessions are

awarded by October 2015. The initial construction effort will include commencement of the decline

construction, clearance of vegetation, foundation preparations, drainage system construction, upgrade

of site roads and construction of a perimeter site control fence.

Timeline and Targeted Production Profile

The Company is seeking to commence preliminary site works and to start the construction of the two

declines in Q4 of the current calendar year. Meeting this timeline will see initial production in Q2 of

calendar year 2017. It is assumed construction takes 18 months to the point of commissioning of the

processing plant.

Construction of the second phase is scheduled to commence in Q3 of calendar year 2017 with initial

production targeted for Q4 of calendar year 2018. Full production is targeted to commence on 1

January 2019.

Figure 14: Muga Project Targeted Construction and Production Timeline

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The ramp up profile sees the processing plant producing 10% of capacity in the first month of the

commissioning phase, 30% in the second month, 70% in the third month, 90% in the fourth month and

full production in the fifth month.

Figure 15: Targeted Monthly Production Profile

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10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000A

pr-

17

Jun

-17

Au

g-1

7

Oct-

17

Dec-1

7

Fe

b-1

8

Ap

r-18

Jun

-18

Au

g-1

8

Oct-

18

De

c-1

8

Fe

b-1

9

Ap

r-19

Jun

-19

Au

g-1

9

Oct-

19

Dec-1

9

To

nn

es

of

K6

0 P

ota

sh

Month

Targeted Monthly Production Profile

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Detailed Capex Tables

Pre-Production Capex Estimate for Underground Development and Machinery

Item Euros (m) USD (m)

Surface Infrastructure (electrical equipment, air supply installation, access, temporary fill) 0.41 0.43

Decline Construction (2 declines with 29.4m2portal area) 21.20 22.31

Primary Underground Infrastructure (conveyor belts in decline, initial galleries and to plant, first gallery infrastructure) 10.97 11.55

Initial Ventilation Raise (1,000 metres @ €356 / metre) 2.24 2.35

Initial Services Installation (electricity, pumping, air supply, communications and safety) 0.67 0.70

Machinery - Phase 1 (6 M360 roadheaders, 2 M520 roadheaders, 7 trucks, 2 loaders, 4 bolters) 24.36 25.64

Total 59.84 62.99

Pre-Production Capex Estimate for Aboveground

Item Euros (m) USD (m)

Processing Plant (feeding and crushing, grinding, flotation, drying, compaction) 46.84 49.31

Civil Works and Site Preparations (TSF, construction preliminaries, site clearance, levelling, cut-fill, drainage, landscaping ) 23.53 24.76

General Site Infrastructure (all site buildings, permiter fencing, laboratory, weighbridge, site roads) 37.50 39.47

Storage Facility (feed storage and product storage) 9.15 9.63

Waste Management (800tph backfilling plant, buildings and piping) 9.34 9.83

Total 126.36 133.01

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Pre-Production Capex Estimate and Details for Utilities

Item Euros (m) USD (m)

Electrical Supply and Installation (connection to site, substation, stanby generators, renewable generators) 9.84 10.36

Natural Gas Supply and Installation (onsite LNG storage) 0.00 0.00

Water Supply and Installation (supply, metering, additional pumping allowance) 0.19 0.20

Voice and Data Connections 0.20 0.21

Total 10.23 10.77

Pre-Production Capex Estimate for Logistics

Item Euros (m) USD (m)

Road Connections to Existing Highways 1.85 1.94

Local Road Improvements 0.00 0.00

Upgrade to port facilities 0.00 0.00

Total 1.85 1.94

Pre-Production Capex Estimate for Project Delivery and Owners Costs

Item Euros (m) USD (m)

Engineering, Procurement and Construction Management 7.93 8.35

Owners Costs 7.93 8.35

Permit Fees 2.25 2.37

Total 18.11 19.07

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Pre-Production Capex Estimate for Contingency

Item Euros (m) USD (m)

Underground 7.48 7.87

Above Ground 15.79 16.63

Utilities and Logistics 1.51 1.59

Project Delivery and Owners Costs 2.26 2.38

Total 27.05 28.47

Pre-Production Capex Estimate Summary

Component Euros (m) USD (m)

Underground development and Machinery 59.84 62.99

Process plant and associated infrastructure 126.36 133.01

Utilities and logistics 12.08 12.72

Sub Total 198.28 208.71

Mining Permits 2.25 2.37

EPCM and Owners Costs 15.86 16.70

Contingency (12.5%) 27.05 28.47

Total 243.44 256.25

Phase 2 Capex Estimate for Underground Development and Machinery

Item Euros (m) USD (m)

Surface Infrastructure (electrical equipment, air supply installation, access, temporary fill) 0.00 0.00

Decline Construction (2 declines with 29m2) 0.00 0.00

Primary Underground Infrastructure (conveyor belts in decline, initial galleries and to plant, first gallery infrastructure) 6.41 6.75

Initial Ventilation Raise (1,000 metres @ €356 / metre) 0.00 0.00

Initial Services Installation (electricity, pumping, air supply, communications and safety) 0.48 0.51

Machinery - Phase 2 (5 M360 roadheaders, 2 M520 roadheaders, 7 trucks, 2 loaders) 19.42 20.45

Total 26.32 27.70

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Phase 2 Capex Estimate for Aboveground

Item Euros (m) USD (m)

Processing Plant (feeding and crushing, grinding, flotation, drying, compaction) 39.45 41.52

Civil Works and Site Preparations (TSF, construction preliminaries, site clearance, levelling, cut-fill, drainage, landscaping ) 0.00 0.00

General Site Infrastructure (all site buildings, permiter fencing, laboratory, weighbridge, site roads) 10.37 10.91

Storage Facility (feed storage and product storage) 0.00 0.00

Waste Management (800tph backfilling plant, buildings and piping) 0.00 0.00

Total 49.82 52.44

Phase 2 Capex Estimate and Details for Utilities

Item Euros (m) USD (m)

Electrical Supply and Installation (connection to site, substation, stanby generators, renewable generators) 0.00 0.00

Natural Gas Supply and Installation (onsite LNG storage) 0.00 0.00

Water Supply and Installation (supply, metering, additional pumping allowance) 0.00 0.00

Offsite drainage 0.00 0.00

Voice and Data Connections 0.00 0.00

Total 0.00 0.00

Phase 2 Capex Estimate for Logistics

Item Euros (m) USD (m)

Road Connections to Existing Highways 0.00 0.00

Local Road Improvements 0.00 0.00

Upgrade to port facilities 0.00 0.00

Total 0.00 0.00

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Phase 2 Capex Estimate for Project Delivery and Owners Costs

Item Euros (m) USD (m)

Engineering, Procurement and Construction Management 3.05 3.21

Owners Costs 3.05 3.21

Permit Fees 0.62 0.65

Total 6.71 7.07

Phase 2 Capex Estimate for Contingency

Item Euros (m) USD (m)

Underground 3.29 3.46

Above Ground 6.23 6.55

Utilities and Logistics 0.00 0.00

Project Delivery and Owners Costs 0.84 0.88

Total 10.36 10.90

Phase 2 - Capex Estimate Summary

Component Euros (m) USD (m)

Underground development and Machinery 26.32 27.70

Process plant and associated infrastructure 49.82 52.44

Utilities and logistics 0.00 0.00

Sub Total 76.14 80.14

Mining Permits 0.62 0.65

EPCM and Owners Costs 6.09 6.41

Contingency (12.5%) 10.36 10.90

Total 93.21 98.11

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Detailed Opex Tables

Opex Detail for Underground Operations

Item € / t ROM USD / t ROM

Labour

(production, infrastructure, transport, auxillary) 1.50 1.57

Electricity Consumption

(all vehicles electrified) 1.54 1.62

Maintenance

(main galleries, ore access galleries, ongoing transport drifts) 0.48 0.50

Consumables

(rockbolts, hydraulic fluids and specialty lubricants) 0.88 0.93

Miscellaneous & Services

(boring, ventilation supplies, hand tools, external services, etc) 0.94 0.98

Diesel Fuel

(7,000 litres) 0.24 0.26

Health, Safety and Communications

(PPE, radios etc.) 0.04 0.04

Sub Total 5.61 5.91

Contingency (12.5% ) 0.70 0.74

Total 6.31 6.64

Per tonne of Product 35.45 37.32

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Opex Detail for Above Ground Operations

Item Euros / t ROM USD / t ROM

Labour

(plant operations, maintenance, laboratory) 0.95 1.00

Electricity consumption

(processing plant, drying, compaction, general) 1.71 1.80

Gas consumption

(drying plant and glazing) 0.52 0.55

Water consumption

(processing) 0.05 0.05

Flotation reagent consumption

(desliming and flotation) 0.93 0.97

Operations and Maintenance

(flotation, drying and compaction) 0.35 0.37

Backfilling (binders,

pumping capacity, O&M, labour) 1.90 2.00

Sub Total 6.42 6.76

Contingency (12.5% ) 0.80 0.84

Total 7.22 7.60

Per Tonne of Product 40.58 42.71

Opex Detail for Transport

Item Euros / t USD / t

Road transportation

(100km to Port of Pasajes) 12.83 13.51

Port Charges and Taxes

(Port of Pasajes charges and taxes) 4.60 4.84

Sub Total 17.43 18.35

Contingency (12.5% ) 2.18 2.29

Total (per tonne of product) 19.61 20.64

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Opex Detail for Sustaining Capex, G&A and Depreciation

Item Euros / t USD / t

Sustaining Capex

(2.5% per annum of initial capex) 1.33 1.40

General and Administative

(€10 per tonne of product) 1.78 1.87

Depreciation

(5% per annum of initial capex) 2.67 2.81

Total 5.78 6.09

Per Tonne of Product 32.49 34.20

Operating Cost Summary - Per tonne MOP

Components Euros / t USD / t

C1 Cost

- Mining 35.45 37.32

- Processing 40.58 42.71

-Transport 19.61 20.64

Sub Total 95.64 100.67

- G&A 10.00 10.53

- Sustaining Capital 7.50 7.89

Total C1 Costs 113.14 119.09

C2 Costs

- Depreciation 14.99 15.78

- C1 Costs 113.14 119.09

Total C2 Costs 128.13 134.87

C3 Costs

- Royalties 0.00 0.00

- C2 Costs 128.13 134.87

Total C3 Costs 128.13 134.87

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