Please Note: Blog posts are not selected, edited or screened by Seeking Alpha editors.

Highfield Resources Raises $32M For Spanish Potash Projects

Highfield Resources (HFR:ASX) has placed shares worth $19.2 million to institutional fund managers while cornerstone investor EMR Capital has invested a further $12.75 million at a premium to the price paid by other incoming funds.

EMR Capital subscribed for 25 million shares at $0.51 while the institutional investors will be placed 40 million shares at $0.48.

Highfield will allocate the funds to fast-tracking the development activities at the company's advanced Spanish Potash Projects.

Anthony Hall, managing director for Highfield, commented: "We are delighted with the support received from both Australia and offshore institutions as a part of the capital raising. The extent of this support has demonstrated confidence in the robustness of our projects.

"The successful capital raising will allow us to now develop the Spanish potash projects with the ultimate aim of commencing construction at Javier in 2015.

"We have three fantastic potash projects that we are looking forward to developing into mines over the coming years."

Highfield's Javier, Pintano and Sierra del Perdón potash projects are located in the Ebro potash producing basin in Northern Spain covering a project area of about 350 square kilometres.

EMR Capital's interest

EMR Capital will as a result increase in its undiluted interest from 29.5% to 32.4% or from 15.4% to 20% fully diluted.

Use of Funds

Funds raised will be primarily allocated to progressing the company´s three 100% owned Spanish projects as follows:

- Javier Project development activities: $10 million;
- Sierra del Perdón Project development activities: $5.5 million;
- Pintano Project development activities: $4.5 million;
- Javier long lead initial capital expenditure items: $5 million;
- Working capital: $6 million; and
- Offer costs: $1 million.

Placement tranche details

The placement will be completed in two tranches with 20,000,000 shares placed under the company's capacity in accordance with ASX Listing Rules 7.1, and 45,000,000 shares (inclusive of EMR Capital's 25 million) subject to shareholder approval.

This will be sought at an Extraordinary General Meeting, with the date pending.

Analysis

The large uptake by Australian and overseas institutions for a developer is relatively rare and demonstrates the upside perceived by the market in the potash projects.

The fact EMR Capital paid a premium speaks even louder.

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.