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  • Highfield Resources To Target Initial Mine At Muga Potash Project 0 comments
    Jul 29, 2014 9:06 PM

    Highfield Resources (ASX:HFR) has divided its Javier Potash Project in Spain into the shallow Muga and the deeper, high grade Vipasca potash projects.

    The focus will be on developing the relatively shallow sylvinite mineralisation at Muga as its initial mine target with construction targeted to begin in 2015.

    Highfield's Muga, Vipasca, 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.

    The company had also in June, received commitments totalling $32 million for its share placement to fast-track development of its potash projects.

    It expects to carry out an Extraordinary General Meeting on 16 September 2014 to approve the second tranche of this placement.

    Applications have also been made to extend the Muga-Vipasca project area to more than 110 square kilometres.

    Muga Potash Project

    Muga is one of four permits which make up the broader Muga-Vipasca Project area.

    It is located in the south eastern section and covers relatively shallow sylvinite mineralisation.

    Assay results are being compiled from the initial drilling campaign in Muga with results to be released within days.

    In addition, an infill drilling campaign to improve Resource confidence has also commenced at Muga.

    Highfield had in May lifted the total Resources at Javier to 268 million tonnes at 11.2% K2O (17.8% KCI). This included a Measured and Indicated Resource of 157Mt at 11.3% K2O (18% KCI).

    Two drill rigs are in operation with a further two expected to be operating in early August.

    The company has established a second Spanish office close to the Muga Project area in Sangüesa.

    This will house the Muga mine delivery team, including internal appointments, contractors and the site based engineering team.

    It also represents an important step in the process to ensure the company is ready to commence constructing the mine in 2015.

    Vipasca Potash Project

    The Vipasca Project area includes the entire Vipasca permit and the deeper areas within the Goyo permit area, including new extensions.

    This is located on the north western and south western sections of the project area.

    The focus is on deeper higher-grade potash mineralisation that was evident in holes J13-06 and J13-09.

    Sylvinite intersects in J13-06 and J13-09 included:

    - 1.8 metres at 17.47% K2O and 27.66% KCI;
    - 1.2 metres at 19.02% K2O and 30.11% KCI;
    - 1.2 metres at 20.25% K2O and 32.06% KCI;
    - 1.2 metres at 17.26% K2O and 27.32% KCI; and
    - 1.5 metres at 20.42% K2O and 32.33% KCI.

    A drilling campaign in the Vipasca and southern Goyo permit areas is expected to start later this year.

    The project area is expected to provide significant future upside to the Company´s initial mine target at Muga.

    Highfield has lodged applications to extend the Company´s Goyo and Muga permits to the south, where potash mineralisation is believed to extend into.

    The southern extension of the Goyo permit is 9.6 square kilometres, whilst the southern extension of the Muga permit is 7.8 square kilometres.


    Highfield had in June placed 40 million shares priced at $0.48, or $19.2 million, to institutional fund managers while cornerstone investor EMR Capital has invested a further $12.75 million for 25 million shares priced at $0.51 each.

    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 the EGM on 16 September.


    The move to split the Javier Project into two operating projects allows Highfield Resources to focus on the Muga Project over shallow sylvinite mineralisation as the initial mine target.

    Muga offers early development potential with sylvinite mineralisation to be developed as a conventional underground mine accessed via a decline.

    Construction is expected to begin in 2015.

    The high grades from drilling at the Vipasca Project also highlight its significant potential upside.

    Share price catalysts ahead include:

    - Results from the initial drilling campaign at Muga expected in coming days;
    - Infill drilling results, campaign has started with two additional rigs expected to start in early August;
    - Drilling at deeper, high-grade Vipasca project planned for late 2014;
    - Start of construction at Muga in 2015.

    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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