Highfield Resources Ltd. (ASX:HFR) announced that it has completed a scoping study for proposed slimes crystallisation plant at its Muga project in Spain.

Highfield Resources Ltd. (ASX:HFR) announced that it has completed a scoping study for proposed slimes crystallisation plant at its Muga project in Spain.

As quoted in the press release:

The Scoping Study outlines opportunities to generate production and revenues in addition to the Definitive Feasibility Study (“DFS”) completed for the flagship Muga Potash Project in March 2015. The K62 Potash Plant will process the slimes tailings produced at the Muga Mine and produce saleable quality, high purity potash (K62 Muriate of Potash) and vacuum salt (NaCl). The study indicates that the K62 Potash Plant is both technically viable and delivers robust returns on invested capital.

Highlights from the study:

  • Post tax, unlevered NPV10 of US$222 million
  • Post tax, unlevered IRR of 33.0 percent
  • EBITDA in first full year of production of US$56 million
  • Initial 24-year operational life, based on current DFS life of Muga Mine
  • Proposed installation of a conventional crystallisation plant to treat slimes tailings produced by the Muga Mine’s flotation processing plant
  • Average yearly production of approximately 135k tonnes of granular K62 potash and a by-product of approximately 260k tonnes of high-purity vacuum salt
  • Independent expert spot potash prices, discounted by 10 percent for contract pricing and sales and marketing fees, to deliver a 2017 Free On Board (“FOB”) Vancouver standard product reference price of US$315 / tonne in real terms
  • Capital cost estimated at US$124 million, inclusive of 20 percent contingency
  • Operating margins of approximately 65 percent in full production

Anthony Hall, managing director of Highfield Resources, commented:

This Scoping Study presents an opportunity for us to benefit from the by-products of the Muga Mine. It is an option that will ultimately deliver additional production volumes and revenues to the Muga operations once the initial operations are able to support its development from free cash flow. We have deliberately focused on the primary by-product which contains a significant percentage of the potash, inevitably lost in flotation processing. The K62 Project is very attractive and we look forward to further assessing the contribution it can make to the operations of the Muga Mine from both an economic and environmental perspective.

Click here to read the full Highfield Resources Ltd. (ASX:HFR) press release.


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