Highfield Resources Raises AU$101 Million to Develop Muga Project in Spain

Highfield Resources Ltd. (ASX:HFR) announced a placement to issue 56,125,000 fully paid ordinary shares at an issue price of AU$1.80 per share in order to raise AU$101 million.

As quoted in the press release:

The proceeds from the Placement will be used to substantially fund the likely equity component of the preproduction capital expenditure of the Company’s flagship Muga Potash Project (“Muga” or “the Project”), located in northern Spain. The Company has completed a Definitive Feasibility Study for Muga which confirmed its outstanding potential as a long life, high margin operation with a very low pre-production capital expenditure requirement estimated at US$256 million. The Company is proceeding with detailed design and engineering and other development and contracting work preparatory to full site construction start after final permitting expected later in 2015.

Highlights:

• $101 million raised in a share placement of 56.125m shares at an issue price of A$1.80 per share
• Highfield’s net cash balance now more than A$120 million, providing a significant portion of the funding to develop the Muga Potash Mine
• Shareholder base strengthened by selected leading domestic and international institutional investors joining the register
• Successful capital raising demonstrates to Spanish authorities and other stakeholders that the Company is in a position to build the Muga Potash Mine

Anthony Hall, managing director of Highfield Resources, commented:

This is a major milestone in the Company’s history as it not only reflects the quality of the Muga Potash Project but also demonstrates to the referral authorities in Spain that we are in a position to build a mine. The placement delivers a major de-risking milestone of mine funding in combination with European commercial banks. Following the placement, we are in an extremely strong financial position with more than A$120m in cash and no debt.

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