Highfield Resources Ltd (ASX:HFR) has released an updated ore reserve estimate for its flagship Muga-Vipasca Potash Project, encompassing a new life of mine plan ahead of construction.
Muga-Vipasca now sits at 104.3 million tonnes at a mean grade of 10.2% potassium oxide, comprising a proved reserve of 45.3 million tonnes at 10.5% and a probable reserve of 58.9 million tonnes at 10.0%.
The latest estimate reflects additional drilling completed at Vipasca, a new life of mine plan and conditions agreed to under the environmental permit and the mining concession.
Muga contains a measured and indicated mineral resource of 237.3 million tonnes at 12% potassium oxide.
Highfield CEO Ignacio Salazar said the update was the final step ahead of construction.
“As we approach the start of construction at Muga, we are delighted to announce an up-to-date mine plan and the results of the review of our ore reserve estimate,” he said.
“With this work, we have advanced our understanding of the mineralisation and the mine plan of the project to the point we can start construction.
“With this result, we reconfirmed the significant mining and geological characteristics of Muga.”
“Together with IGAN, a Spanish mining consultant company, we recently completed a detailed mine plan for the project with revised production and backfilling schedules.
“The mine plan provides detailed design of access development to the production zones where the shallow dipping seams, which cover most of the initial years of production, will be mined.
Highfield says the low-cost Muga is a unique project, with decline-accessible shallow potash mineralisation without overlying aquifers.
It is in the heart of a European agricultural region which has a clear demand for potash supply to meet future requirements.
It is estimated that the Muga project at full production will create approximately 800 jobs in administration, operations, logistics mining and support services, with the surface facilities to occupy about 200 hectares.
Foster Stockbroking rates Highfield as a buy with a price target of A$1.56 – well above its current trading price of A$0.545 – thanks to the potential at Muga.
– Daniel Paproth