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  • Highfield Resources Inks Second Potash JORC Resource In Spain 0 comments
    Nov 19, 2013 8:06 PM

    Highfield Resources (ASX: HFR) has defined a second Inferred JORC resource at its Spanish potash projects, this one a 187 million tonnes of sylvinite grading 11.2% K2O (17.8% KCl) at its 100% owned Pintano Potash Project.

    Earlier in October, Highfield delivered a maiden Inferred JORC resource of 163.2 million tonnes of sylvinite grading 10.9% K2O (17.3% KCl) from its 100% owned Javier Potash Project in Spain to the west of Pintano.

    They say two is better than one, well the effect of both resources is to lift the valuation of Highfield where both projects have barely scratched the large project areas of Pintano and Javier.

    That both projects have similar sylvinite mineralisation that can be processed by the same processing plant will reduce costs and improve project margins.

    The Pintano resource estimate covers just 10% of the entire project area (12 kms2 of project area of 125 kms2), much the same as at Javier.

    Clearly, Highfield is fast becoming a potash house of some repute. Certainly, Owen Hegarty's EMR Capital thinks so having bought a just under 30% equity shareholding in Highfield.

    Highfield´s managing director, Anthony Hall said:

    "Importantly the maiden JORC covers less than 10% of the project area suggesting significant potential resource upside. The average 7.3m sylvinite seam is also encouraging as there would appear to be grade upside in thinner potential mining heights that would not comprise optimum mining sections.

    "In addition having thick halite in both the hanging and foot walls is important for ultimate mineability. The project is likely to provide significant scale upside to our 100% owned adjacent Javier project that is our current development focus along with our 100% owned Sierra del Perdón project that hosts two former operating mines."

    Pintano background

    Potash mineralisation on the Pintano property occurs in three principal sylvinite beds (A, B, and 1) ranging in depth from 500 metres to more than 2,000m. The property hosts the same potash beds as Highfield´s 100% owned Javier potash project adjoined to the west.

    The resource estimate for the Pintano property was independently developed by U.S. geology and mining consultant Agapito Associates, Inc.

    The resource ranges in depth from 400 to 1,200m. Drill holes reporting mineralisation show that the A-B composite true thickness ranges from 6.9 to 9.7m with composite grades ranging from 10.9 to 11.5% K2O.

    The Mineral Resource estimate is classified as Inferred because of reliance upon historical exploration data. The historical data are sufficient to imply, but not verify, geological and grade continuity.

    Development strategy

    Pintano project is likely to ultimately provide significant scale upside to Highfield´s 100% owned adjacent Javier project, which is the current development focus.

    Importantly both projects have similar sylvinite mineralisation capable of being processed by the same processing plant.

    Pintano project is likely to ultimately provide significant scale upside to the Javier project.

    Next steps

    Highfield intends to complete an 8 hole drilling campaign in 2014 with a view to expanding and upgrading the present Inferred Mineral Resource estimate.

    Assuming drilling success the project´s largest permit, Puntarrón will be converted into a PI with a view to completing further drilling aimed at drilling out the entirety of the project area.

    Consideration will then be given to project optimisation with a view to developing a mine to complement the initial production at Javier.

    Analysis

    This is the second JORC resource defined at Highfield's potash projects in northern Spain, which is building the company's profile as a potash house. Certainly, EMR Capital believes so having sunk significant dollars of investment directly into Highfield stock that is now owns almost 30%.

    Significantly, there is already in place infrastructure at Javier and Sierra del Perdón potash projects and shallow sylvinite mineralisation that appears ideal for mineral extraction via a decline is likely to support a relatively low capex initial mines.

    The Javier is the main development focus which will be augmented by mineralisation from the adjacent Pintano project, capable of being processed by the same processing plant.

    This is share price and value accretive, the second potash resource for Highfield at Pintano and there is significantly greater upside in resources at both projects given the tiny amount of exploration at both projects that have been explored.

    With an 8 hole drill campaign to start in January 2014 this should upgrade and expanded the mineral resources providing further price catalysts.

    Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX "Small and Mid-cap" stocks with distribution in Australia, UK, North America and Hong Kong / China.

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