HIGHLIGHTS
- The contract for the Muga Project’s Civil Works has been signed with Acciona Construcción, S.A. (“Acciona”), a well-known Spanish international construction company with significant experience in civil works
- The contract value is a lump sum contract with a value of €56.9 million which is in line with the estimated cost included in the Updated Muga Feasibility Study of 7 November 2023
- The contract with Acciona accounts for a third of the construction budget:
o Together with the signing of the contract for the construction of the declines with EPOS-TUNELAN, almost two thirds of the planned construction budget have already been awarded; and
o The remainder relates to the processing plant which will be managed directly by Highfield using specialized subcontractors - Approximately 40% of the €449m Muga capex estimate relates to construction work (including construction of the mine, the civil works and the processing plant). The remaining 60% of Muga’s capex covers equipment, land purchases, licences, staff, and indirect costs, all of which are well prepared
- After signing with Acciona, Muga is ready to start building upon completion of funding and following Final Investment Decision
- Good progress is being made on the financing including discussions with several strategic investors which have signed non-binding term sheets, and are advancing due diligence, and negotiations
- The Company is actively negotiating with a combination of potential investors from a range of sources including offtake customers, equity investors, strategic business partners and royalty providers, to complete the remaining funding of Muga. Based on progress so far, the Company is working with a plan to conclude these negotiations in Q2 2024.
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Highfield Resources (ASX: HFR) (“Highfield” or the “Company”) is pleased to announce the award of the contract for the construction of the Civil Works and Urbanization (the provision of infrastructure including facilities and equipment for transportation, energy, water supply, waste treatment and disposal) for the Muga-
Vipasca Potash Project (“Muga” or the “Project”) to Acciona Construcción, S.A. (“Acciona”).
Acciona is a well-known Spanish international construction company. Their significant experience in civil works includes the construction of tunnels, bridges, ports and hydraulic works as well as airports.
Civil Works and Urbanization Contract
As announced in the Updated 2023 Feasibility Study (Feasibility Study) (refer ASX announcement 7 November 2023 “Updated Muga Feasibility Study”), the contracting strategy for the Muga-Vipasca Potash Project includes the construction of the Civil Works to be undertaken by a General Contractor. Following a robust tender process, Highfield has signed a contract for the construction of the Civil Works and Urbanization with Acciona.
The Acciona lump-sum based contract value (€56.9 million) is in line with the estimated capital cost included
in the Feasibility Study. The scope of the contract covers:
• Ponds for the storage of fresh water, saline water and leached waters from the tailings.
• Temporary tailings deposit.
• South dike around the project as an additional security containment measure for water overflow, and the diversion of the main local irrigation channel that goes through the plant area.
• 6.7km of high voltage power lines to link to the main electricity network between the Yamaguchi Substation (owned by Iberdrola) and the Muga substations.
• Medium voltage and low voltage electrical installations within the Project area.
• Natural gas infrastructure and the gas distribution network for the Muga processing plant.
• The construction of a 1.7 km access road to the Muga Mine between the Process Plant and the public road NA-5410.
• The general road works internal to the Project for the Process plant and Mine Gate covering earthworks, visual barriers, internal roads and the structures for the level crossings, concrete channels and waysides.
• Maintenance and spare parts workshops as well as a core shed.
• Wastewater and drinking water treatment plants.
Figure 1 – Illustration of contracted process plant urbanization works.
The design and engineering of the Civil Works and Urbanization contract was undertaken by engineering company, IDOM, an independent Spanish firm which specializes in providing consulting engineering and architecture professional services. With 5,500 professionals and 67 years of experience, IDOM has extensive experience especially in the industrial sector and has designed similar potash process plants. IDOM will provide technical support and supervision during the construction period for both the civil works and processing plant construction.
The construction duration agreed with Acciona covers 27 months and is consistent with the overall schedule of the Project. Highfield will actively collaborate with Acciona in the hiring of personnel, with a focus on engaging local people.
About ACCIONA CONSTRUCCIÓN, S.A.
Acciona is a leading player in the construction and operation of transport infrastructure: roads, bridges, railways, tunnels, data centers and sustainable solutions in the construction of transmission networks and electrical substations. The company also offers infrastructure maintenance and upkeep solutions.
For more information, contact:
Elvis Jurcevic
Investor Relations – Australia
+61 408 268 271
[email protected]