Highfield Resources to receive funds for Spain potash project, acquire Canada greenfield

HOUSTON (ICIS)–Spanish fertilizer firm Highfield Resources has entered a non-binding letter of intent for cooperation with Yankuang Energy Group and other investors which would give the company funding for its Muga Potash project and acquisition of a greenfield development in Saskatchewan, Canada.

Yankuang Energy Group would become the largest shareholder under the deal, which would see the company and other investors, collectively referred to as the Cornerstone Placement. provide $220 million in funding for Muga phase one, which Highfield confirms is construction ready.

The producer said Yankuang Energy intends to provide up to $90 million to support the Cornerstone Placement with the other strategic investors providing the remaining balance in exchange Highfield will issue the investors new ordinary shares.

Beyond allowing it to advance the Spanish project, this agreement would also pave the way company officials said for the transformation of Highfield into a globally diversified potash company as they would receive the Southey Potash project in Saskatchewan.

This would be completed by the acquisition of the shares in Yancoal Canada, a subsidiary of Yankuang Energy, who currently has this development, which is described as a greenfield potash mine project.

Southey is located approximately 60km north of Regina, Saskatchewan, Canada and is being designed as a solution mining operation with environmental approval in place and a feasibility study completed.

Highfield added that there is a high confidence reserve estimate at the project with significant resource potential and that it is forecasted to have a mine life of more than 65 years.

The planned annual production is estimated at 2.8 million tonnes/year of muriate of potash (MOP).

The producer said the combination of Southey and Muga is expected to turn Highfield into a more significant potash market participant as it could eventually have a total production capacity potential of 3.8 million tonnes/year of MOP.