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Updated Feasibility Study Reconfirms Muga Potash Mine Outstanding Economics

Highfield Resources Limited asx.HFR 2 mins read


Outstanding project economics include:

  • NPV8 of €1.82 billion and 24% IRR (post tax)

  • EBITDA of approximately €340 million per annum at full production

  • 30 year Life of Mine with planned production over 2 phases to produce up to 1Mtpa of Muriate of Potash (MOP)

  • Pre-production construction capital requirement of €449 million for Phase 1 and €286 million for Phase 2, including 10% contingency

  • Competitive C1 cash cost estimate of €108/t post salt by-product revenue

  • Proximity to potash consumers results in low transportation costs which, for such a high-volume commodity, are key for outstanding margins and the robustness of the project through price cycles

  • Higher level of confidence in this updated capex number with 93% of the capex based on contracts plus firm offers compared to 76% in the 2022 FS.

Significant competitive advantages:

  • Strategically located in the middle of the European market

  • Excellent logistics with immediate access to ports, transport and renewable grid power

  • Straightforward access to the mine with two ramps, no shafts, no aquifers and shallow mineralization

  • Low technical risk with conventional underground Room and Pillar mining method and flotation and crystallization processing

  • Global demand for MOP as a critical fertilizer input expected to grow driven by geopolitical supply diversity, population growth, and declining arable land. All these factors being particularly acute in Europe

  • Fully permitted and construction ready, subject to financing

  • Major focus on completing remaining Phase 1 funding, working with financial advisors, Macquarie Capital, Clarksons Securities and Endeavour Financial in negotiations with numerous parties encompassing strategic partnerships, non dilutive royalty funding, equity and offtake agreements.


Highfield Resources (ASX: HFR) (“Highfield” or the “Company”) is pleased to provide a 2023 update to the Muga-Vipasca Potash Project (“Muga” or the “Project”) Feasibility Study (“FS”) that reconfirms the compelling economics of the Project.

Commenting on the updated Feasibility Study, Highfield CEO/MD, Ignacio Salazar, said:

“We are delighted to announce the updated Feasibility Study for the Muga Project. After significant progress, now fully permitted and construction ready, with access to all the project land and a much higher level of confidence in the Capex estimate, the Muga Potash mine stands out with a value of €1.8 billion. The difficult global geopolitical backdrop reinforces the importance of Muga, and the strategic nature of the project for Europe.”


For full details, see ASX Announcement:


Media inquiries:

Elvis Jurcevic
Investor Relations – Australia
+61 408 268 271


Olivier Vadillo
Investor Relations – Global
+34 609 811 257


Cautionary Statement. The production target set out in this update is derived from Proved and Probable Ore Reserves, additional Measured, Indicated and Inferred Mineral Resources from the Muga-Vipasca tenement as well as the Exploration Target at the Vipasca and Muga Sur tenements. There is a low level of geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will result in the determination of Indicated Mineral Resources or that the production target itself will be realised. The potential quantity and grade of an Exploration Target is conceptual in nature, there has been insufficient exploration to determine a mineral resource and there is no certainty that further exploration work will result in the determination of mineral resources or that the production target itself will be realised. The technical parameters underpinning the Mineral Resource in the market announcement dated 30 March 2021 and the Exploration Target in the market announcement dated 23 November 2021 and 2 November 2022 continue to apply and, in the Company’s opinion, have not materially changed.

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