Shares of ASX-listed Highland Resources were up 32.39 percent after the company received the permit for its Muga project.
Australia-listed potash company Highfield Resources (ASX:HFR) has received an environmental permit for its Muga potash project in Spain.
The Declaración de Impacto Ambiental (DIA) approval from the Ministry for Ecological Transition is one of several permits needed to advance the company’s flagship potash project located 50 kilometers southeast of Pamplona.
Highfield was granted a trading halt on the ASX ahead of Thursday’s (June 6) announcement. Shares commenced trading following the release and were up 32 percent.
In order to move Muga forward and closer to the output stage, Highfield will now work on securing the mining concession and the building permits needed to move the project into the construction phase.
The potash developer will also purchase mining and processing plant equipment and complete the final project design.
“The awarding of the DIA is the most significant step for Highfield in de-risking the Muga project,” CEO Peter Albert said in the announcement. “The Muga project has the potential to deliver tremendous benefits to all of our stakeholders, and the Highfield team is excited to now be able to move towards mine construction.”
Highfield plans to build a low-cost conventional mine at Muga targeting the potash that is 350 meters below the surface. During Q1, an updated ore reserve estimate for the project increased the proven and probable ore estimate to 108.7 million tonnes.
In addition to the flagship Muga project, Highfield is also developing the Vipasca, Pintanos, Izaga and Sierra del Perdón projects, all located in the Ebro potash-producing basin in Northern Spain.
According to the US Geological Survey, Spanish potash production was down in 2018 from the previous year to 560,000 metric tons (MT) from 610,000 MT.
Potash prices have remained relatively stable this year at US$226 per tonne, but are still significantly lower than the 2009 high of US$850 per tonne. Despite steady price performance, demand is expected to grow to 46.2 million tonnes annually by 2022.
Shares of Highland Resources were up 32.39 percent on Thursday (June 6), trading at AU$0.92.
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.