Highfield Resources

Highfield Resources LtdCorporate Presentation

May 2015

ASX Code: HFR

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COMPETENT PERSON STATEMENT – RESOURCES

Information relating to resources was prepared by Mr Leo Gilbride, P.Eng and Ms Vanessa Santos, P.Geo, of Agapito Associates. The Competent Person for

Resources under JORC Code standards is Mr Leo Gilbride, P.Eng and Ms Vanessa Santos, P.Geo. of Agapito Associates of Colorado, USA. Mr Gilbride is a

licensed professional engineer in the State of Colorado, USA and is a registered member of the Society of Mining, Metallurgy and Exploration Inc. Ms Santos is a

licensed professional geologist in South Carolina and Georgia, USA, and is a registered member of the Society of Mining, Metallurgy and Exploration Inc.

The Society of Mining, Metallurgy and Exploration Inc is a JORC Code ‘Recognised Professional Organisation’ (RPO). An RPO is an accredited organisation of

which the Competent Person under JORC Code Reporting Standards must belong in order to report Exploration Results, Mineral Resources, or Ore Reserves

through the ASX. Mr Gilbride is the Vice President of Engineering and Field Services and Ms Santos is the Chief Geologist with Agapito Associates and both have

sufficient experience to qualify as a Competent Person for the relevant style and type of mineralisation and deposit under consideration of this release. Mr Gilbride

and Ms Santos consent to the inclusion in the report of the matters based on this information in the form and context in which it appears.

COMPETENT PERSON STATEMENT – RESERVES

Information relating to reserves was prepared by Mr. José Antonio Zuazo Osinaga, Technical Director of CRN, S.A.; Mr. Jesús Fernández Carrasco, Managing

Director of CRN, S.A. and Mr Manuel Jesus Gonzalez Roldan, Geologist of CRN, S.A. Mr. José Antonio Zuazo and Mr. Jesús Fernández, are licensed professional

geologists in Spain, and are registered members of the EUROPEAN FEDERATION OF GEOLOGISTS, an accredited organisation to which the Competent Person

(CP) under JORC Code Reporting Standards must belong in order to report Exploration Results, Mineral Resources, or Ore Reserves through the ASX.

Mr. José Antonio Zuazo is the Technical Director of CRN and he has sufficient experience which is relevant to the style of mineralisation and type of deposit under

consideration and to the activity which they are undertaking to qualify as a CP as defined in the 2012 Edition of the JORC Australasian Code for Reporting of

Exploration Results, Mineral Resources and Ore Reserves.

Mr. José Antonio Zuazo and Mr. Jesús Fernández consent to the inclusion in the release of the matters based on their information in the form and context in which it

appears.

FORWARD LOOKING STATEMENTS

This presentation includes certain ‘forward looking statements’. All statements, other than statements of historical fact, are forward looking statements that involve

various risks and uncertainties. There can be no assurances that such statements will prove accurate, and actual results and future events could differ materially

from those anticipated in such statements.

Such information contained herein represents management’s best judgment as of the date hereof based on information currently available. The company does not

assume any obligation to update any forward looking statement.

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Highfield Resources Limited

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CONTENTS

1. Introduction 11. Pintano Potash Project

2. Corporate Summary 12. Izaga Potash Project

3. Board and Senior Executives 13. Production Timelines

4. Objective – Significant Global Potash Producer 14. Production Focus to Deliver Real Shareholder Value

5. Strong Pipeline at Varying Stages 15. Competitive Advantages – Mining and Processing

6. The Projects 16. Competitive Advantages – High Priced Markets

7. Muga Potash Project 17. Low Capital Cost

8. Sierra del Perdón Potash Project 18. High Margin

9. Muga By-Products K62 Project 19. Priorities – Commencement of Construction

10. Vipasca Potash Project 20. Summary

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1. Introduction

4

Highway from within 7 kms of mine gate to port

Aerial photo of Port of Pasajes

Virtual image of proposed aboveground operations

Decline accessed underground mine with project economics

boosted by first world infrastructure and domestic markets

• Highfield Resources is developing the Muga

Project, one of its five 100% owned potash

projects in northern Spain.

• Located in a producing potash basin where

undergound mines have operated via decline with

simple sylvinite flotation circuit processing.

• The flagship Muga Project has the lowest capex

of any development stage potash project.

• In production Muga will have first quartile

EBITDA margins due to a combination of high

price end markets and low total cash costs to

customer.

• Project pipeline share the characteristics required

for low capex, high margin mines and offer

significant upside potential

• Management team has proven mine building

experience in Spain and operating experience in

potash.

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Fully Diluted Equity

Ordinary Shares on Issue 252.0m

Options 43.5m

Performance B Shares* 51.5m

Fully Diluted 347.0m

Undiluted Market Cap at A$1.84

(1 May 15)A$464m

Fully Diluted Market Cap at A$1.84 A$634m

Cash as at 31 March 2015 ~A$21m

Average Daily Volume (3months) ~665,000

Shareholders (Fully Diluted)

Spanish in-country management 21%

Australian based management 8%

EMR Capital 19%

Other Shareholders 52%

Total 100%

* Class A and Class B Performance Shares were granted for acquisition of the

Spanish assets in October 2012.

The class A Performance Shares were converted to Ordinary Shares in February

2015.

Class B Performance Shares will be converted to ordinary shares if the

Company receives approvals for the construction and production of 500,000

tonnes of potash per annum before November 2016.

Broker Recommendation 12-month Price Target

Arrowhead BUY A$3.00

Bell Potter BUY A$2.31

Blue Ocean BUY A$2.85

Canaccord Genuity BUY A$2.45

Foster Stockbroking BUY A$2.45

GMP Securities BUY A$2.15

Numis Securities BUY A$3.20

Pareto Securities BUY A$2.10

RBC Capital Markets BUY A$2.70

Taylor Collison BUY A$2.70

AVERAGE A$2.59

2. Corporate Summary

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3. Board and Senior Executives

Derek Carter – Non Executive Chairman

A geologist with over 40 years experience in exploration and development, including nearly

20 years in management of ASX listed exploration companies including acting as Chief

Geologist in Spain for the Shell Group and the Managing Director of Minotaur Resources.

Anthony Hall – Managing Director

A qualified lawyer and company secretary with close to 20 years` commercial experience

in venture capital, risk management, strategy and business development, including nearly

four years as Managing Director of Highfield Resources.

Pedro Rodríguez – Development Director

A geologist with over 35 years’ experience in mining services in Spain. He has been

involved with the Highfield Spanish projects for over four years and prior to this he worked

for six international mining companies including Billiton International, Navan-Almagrera

and Newmont.

Richard Crookes – Non Executive Director

A geologist with over 28 years executive experience in the resources and investments

industry. He is currently an Investment Director of EMR Capital and was formerly a

Director of Macquarie Bank’s Metals Energy Capital Division and was Chief Geologist with

Ernest Henry Mining.

Owen Hegarty – Non Executive Director

An executive with over 40 years experience in the global mining industry that included 25

years in Rio Tinto where he was the Managing Director for Asia, and founder and 15 years

as CEO of Oxiana Ltd. He is a director of various listed and unlisted resources

companies and is Executive Chairman of EMR Capital.

Donald Stephens – Company Secretary

A Chartered Accountant and Corporate Advisor with over 25 years’ experience in the

mining industry and accounting profession. He is a director and company secretary of

multiple ASX listed entities.

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4. Objective – Significant Global Potash Producer

Highfield’s objective is to produce at least 2 million tonnes of high margin MOP per annum by 2020

0

500,000

1,000,000

1,500,000

2,000,000

2,500,000

3,000,000

K60

MO

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5. Strong Pipeline at Varying Stages

Pipeline of projects with many shared characteristics that are required for low capex and high margin mines

Muga

Sierra del Perdón

Vipasca

Pintanos

Izaga

Development

Exploration

Resource

Delineation

Shared characteristics:

No problems with aquifers overlying

mineralisation

Potential for decline access to conventional

underground mines

Simple technologically proven mining and

processing

Very good local infrastructure and utilities

- electricity, gas and water

World class transport infrastructure

Less than 150km to closest port

Confirmed port capacity for export of

product

Close to the Brazilian, US and European

potash markets

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6. The Projects

Five 100% owned potash projects in northern Spain covering over 550km2

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7. Muga Potash Project

Highfield’s most advanced, low capex, high margin potash development project

Summary

• DFS completed March 2015

• Decline access, conventional underground mine

• Technologically proven process plant

• Expected to produce over 1.1Mtpa of granular K60 MOP

• Minimum 24 year mine life with substantial upside expected with ongoing

exploration

• Pre-production capex – US$256 million (total capex of US$354m)

• EBITDA first full year of production – US$296 million

• Unlevered, post tax, NPV10 – US$1.42 billion

• Unlevered, post tax, IRR – 53.1%

Next Steps

• Detailed engineering and design

• Contracts out for tender

• Financial close (debt term sheets, equity)

• Environmental and mining approvals and construction commencement

Source: ASX Announcement dated 30 March 2015 10

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8. Sierra del Perdón Potash Project

Highfield’s second low capex, high margin potash development project

Summary

• Scoping Study completed April 2015

• Decline access, conventional underground mine

• Technologically proven process plant

• Expected to produce over 520ktpa of granular K60 MOP

• Minimum 20 year mine life with substantial upside expected with ongoing

exploration

• Total capex – US$233 million


• Unlevered, post tax, NPV10 – US$527 million


Next Steps

• Detailed metallurgical test work

• Pre-feasibility study capital and operating cost estimates

• Environmental and Social Impact Assessment

• Commence environmental approvals process

Source: ASX Announcement dated 20 April 2015 11

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9. Muga By-Products K62 Project

An additional high margin, low capex potash project

Summary

• Scoping Study completed May 2015

• Conventional crystallisation plant to treat Muga Mine by-products

• Revenues from K62 MOP and high-purity vacuum salt

• Expected to produce approx 135ktpa K62 and 260ktpa vacuum salt

• Operational life to match Muga Mine life

• Total capex – US$124 million


• Unlevered, post tax, NPV10 – US$222 million


Next Steps

• Further metallurgical test work

• Pre-feasibility study capital and operating cost estimates

• Environmental and general approvals

• Potential offtake partnering agreements

Location of crystallisation plant within Muga installations

Source: ASX Announcement dated 1 May 2015

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10. Vipasca Potash Project

Outstanding exploration potential abutting Muga with substantially greater scale

Summary

• Permit area is contiguous with Muga Project

• Permit area of over 120km2

• TDEM and gravimetry shows continuity of the evaporitic horizon from Muga

• Significant high grade resource potential with ongoing exploration work

• Potential for similar scale operation to Muga

• Benefits from the majority of the value drivers of Muga and Sierra del Perdón

Next Steps

• Exploration drilling and resource delineation

• Metallurgical test work program

• Move directly into Definitive Feasibility Study

13Source: ASX Announcement dated 28 April 2015

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11. Pintano Potash Project

Significant shallow JORC Inferred Resource with similar scale to Muga

Summary

• Contiguous with Muga Project

• Total project area of over 65km2

• Mineralisation starts at less than 500m below surface

• Inferred Mineral Resource* of 187 million tonnes at 11.2% K20

• Resource estimate covers less than 20% of total permit area

• Significant resource potential with ongoing exploration

• Potential for similar scale operation to Muga mine

• Benefits from the majority of the value drivers of Muga and Sierra del Perdón

Next Steps

• Exploration drilling and resource delineation

• Metallurgical test work program

• Move directly into Definitive Feasibility Study

Source: ASX Announcement dated 20 November 2013 14

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12. Izaga Potash Project

Grass roots exploration with good indications from historical drilling

Summary

• New permits applied for April 2015

• Project area of over 100km2

• Clear continuation of sub-basin evaporitic units evidenced by outcropping

• Historical drilling completed with potash mineralisation encountered

Next Steps

• Initial geophysics

• First round exploration drilling

• Resource delineation

Source: ASX Announcement dated 28 April 2015 15

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13. Production Timelines

Five 100% owned potash projects in northern Spain

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PROJECT TIMELINE

MUGA Phase 11

Construction

Production

MUGA Phase 22

Construction

Production

SIERRA DEL PERDON2 or VIPASCA

Construction

Production

MUGA K62 & Vacuum Salt Project3

Construction

Production

Additional Projects post 2020

SIERRA DEL PERDON or VIPASCA

PINTANOS

IZAGA

20202015 2016 2017 2018 2019

Q4Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3

Sources:

1. ASX Announcement 30 March 2015

2. ASX Announcement 20 April 2015

3. ASX Announcement 1 May 2015

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Real opportunity to create a signficant global potash producer

14. Production Focus to Deliver Real Shareholder Value

NPV10 Valuation

(US$)

Muga Potash Mine1 1,422m

Sierra del Perdón Potash Mine2 528m

Muga Mine K62 Project3 222m

Total NPV 2,172m

Other Projects:

Vipasca Potash Project ?

Pintanos Potash Project ?

Izaga Potash Project ?

Further K62 By-Products Projects ?

Sources:

1. ASX Announcement 30 March 2015

2. ASX Announcement 20 April 2015

3. ASX Announcement 1 May 2015

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15. Competitive Advantages – Mining and Processing

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Highfield’s projects share many technical characteristics required to be high margin potash mines

Highfield

Iberpotash

Israeli Chemicals Ltd (ICL:IT) owns Iberpotash and on 7 August

2014, Stefan Borgas, CEO noted:

“[our expansion projects in the Ebro Basin] are so

shockingly attractive … we`re putting an accelerator on”

76%

19%

5%

Underground Conventional Brines Solution

Source: Scotiabank, HFR Research

Mining

Decline access into underground conventional room and

pillar mine

Processing

Flotation circuit processing of sylvinite ore

Estimated 2015 MOP Production by Mining Method

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0 0.8

Africa0.5

12.5

Asia2

1.8 2.2

Sth America1

19

1.5

8.7

USA

4.2 6.5

EU*

18.7

0.8

Canada

0.3

9.3

Brazil

21.0

3.8

FSU

5.5

13.0

China

6.5 1.4

Middle East

1Excluding Brazil2Excluding China

MOP spot Prices in USD as at 1 Jan 2015 – Prices for Standard Product

Source: IFA, Scotiabank, Uralkali, HFR Research

Global Totals (2014)

Production Consumption

60.0 59.0

FOB Vancouver

$290

CFR Brazil

$350

CFR India

$322

CFR China

$305

CFR SE Asia

$330

CIF US Midwest

$432

CIF NW Europe

$363

MOP spot

US$/mt

And have a geographical advantage over producing peers…

16. Competitive Advantages – High Priced Markets

Estimated 2014 MOP supply and demand by region

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- 2,000 4,000 6,000

Highfield: SdP

Highfield: Muga

Allana: Danakil

Pros. Glb'l: Hollbrook

MagIndustries: Mengo

South Boulder: Colluli

Uralkali: Ust

Elemental: Sintoukola

Passport: Hollbrook

Brazil Potash: Autazes

Karnalyte: Wynyard

Verde: Cerrado Verde

Uralkali: Polovodovsky

Encanto: Muskowekwan

Eurochem: Usolskiy

Potashcorp: Rocanville

W. Potash: Milestone

Eurochem: VolgaKaliy

Capital Expenditure US$ millions0 500 1,000 1,500

Highfield: Muga

Highfield: SdP

Potashcorp: Rocanville

Prospect Global

Uralkali: Ust

Allana: Danakil

South Boulder: Colluli

Verde: Cerrado Verde

Passport: Hollbrook

Eurochem: Usolskiy

Karnalyte: Wynyard

Elemental: Sintoukola

Uralkali: Polovodovsky

Brazil Potash: Autazes

Encanto: Muskowekwan

MagIndustries: Mengo

Eurochem: VolgaKaliy

W. Potash: Milestone

Capital Intensity US$/tonne of Production

Total capex (in absolute terms) Capital intensity per tonne of production

17. Low Capital Cost

20

Shared geological and geographical features drive industry low Capex to production

Source: GMP Europe Research

HFR: Muga figures from DFS

HFR: SdP figures from Scoping Study

Average: US$1,990 million Average: US$787/tonne

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$(80) $(63) $(67)

$(215)

$(80)

$(26) $(43) $(45)

$(40)

$(58)$(8)$(37) $(10)

$(15)

$(36)

$(21)

$(14)

$(40)

$(11)

$(19) $(11)

$(33)

$(25)

$232

$186

$136 $115

$51

$(350)

$(300)

$(250)

$(200)

$(150)

$(100)

$(50)

$-

$50

$100

$150

$200

$250

Operating Costs Freight Costs Sustaining Capital Royalties Corporate SG&A EBITDA Margin

18. High Margin

* Under development1 Assumes sales evenly distributed 21

Estimated

delivered cost

to customer

(US$ / tonne)

Estimated

EBITDA

margin

(US$ / tonne)

Project Highfield – Muga* Belaruskali BHP Jansen* Intrepid Potash K+S Legacy*

Price at Customer CFR Brazil / CIF NW Europe1

US$357 / tonne

Asia / Brazil / Europe1

US$348 / tonne

FOB Vancouver

US$290 / tonne

CIF US Midwest

US$432 / tonne

FOB Vancouver

US$290 / tonne

US$124

US$162 US$154

US$317

US$239

Highfield expects its project pipeline to deliver margins similar to Muga

Source: Street research, Company reports and HFR estimates

Prices received as per slide 16

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19. Priorities – Commencement of Construction

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The transition from developer to producer

Muga Mine

Funding

Debt

•Discussions ongoing with eight leading European based commercial banks

• Initial indicative term sheets received suggest funding likely on a 65% debt to equity ratio

•Targeting completion of legal documentation by September 2015

Equity

•Consider on-market equity options

•Explore off-take related mezzanine finance

•Pursue asset level partner options with both strategic and financial investors

Muga Mine

Construction

Ready

Detailed Design

•Complete detailed design for mine and process plant construction

•Ensure overall site design is consistent with finalisation of mine and process plant design

•Complete infrastructure and logistics design with local authorities

Appointment of

Contractors

•Prepare tender packs including contractual documentation and detailed design

•Prequalify construction companies and publish tendering documents

•Review tenders and appoint contractors

Muga Mine

Approvals

•Completion of public consultation period

•Continued work with local communities to ensure full transparency and sensitive design

outcome

•Prepare and lodge construction licence applications

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20. Summary

23

Logo of the Company’s Spanish Foundation that is currently delivering

several projects with local communities

• Highfield Resources is developing the Muga Potash Project, one of its five

100% owned potash projects in Northern Spain.

• The projects are in a producing potash basin where conventional

underground mines have operated via decline and sylvinite flotation

circuit processing.

• The projects share many characteristics required to be low capex,

high margin potash mines.

• The flagship Muga Mine Project has the lowest capex of any

development stage potash project.

• In production it will have first quartile EBITDA margins driven by

combination of high price end markets and low total cash costs to

customer.

• A management team has been assembled with proven mine building

experience in Spain and in potash operations.

• 2015 is a defining year for the Company.

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REGISTERED OFFICE

169 Fullarton Road

Dulwich SA 5065

Australia

HEAD OFFICE

Avenida Carlos III, 13-15, 1B, 31002 Pamplona, Spain

T +34 948 050 577 | F +34 948 050 578

www.highfieldresources.com.au

[email protected]

FURTHER INFORMATION

Anthony Hall Managing Director T +34 617 872 100

John Claverley General Manager T +34 607 748 435

Hayden Locke Corporate Development T +34 609 811 257

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