Highfield Resources to target initial mine at Muga Potash Project

Highfield Resources (ASX:HFR) has divided its Javier Potash Project in Spain into the shallow Muga and the deeper, high grade Vipasca potash projects.

The focus will be on developing the relatively shallow sylvinite mineralisation at Muga as its initial mine target with construction targeted to begin in 2015.

Highfield's Muga, Vipasca, Pintano and Sierra del Perdón potash projects are located in the Ebro potash producing basin in Northern Spain covering a project area of about 350 square kilometres.

The company had also in June, received commitments totalling $32 million for its share placement to fast-track development of its potash projects.

It expects to carry out an Extraordinary General Meeting on 16 September 2014 to approve the second tranche of this placement.

Applications have also been made to extend the Muga-Vipasca project area to more than 110 square kilometres.

Analysis

The move to split the Javier Project into two operating projects allows Highfield Resources to focus on the Muga Project over shallow sylvinite mineralisation as the initial mine target.

Muga offers early development potential with sylvinite mineralisation to be developed as a conventional underground mine accessed via a decline.