HIGHFIELD RESOURCES LIMITED — Capital/Financing Update 2012

Jun 26, 2012

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ASX Release

26 June 2012

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HIGHFIELD RESOURCES LIMITED ACN 153 918 257

ACQUISITION OF SIGNIFICANT ASSET IN POTASH PRODUCING BASIN

HIGHLIGHTS

Level 1 33 Richardson Street West Perth WA Australia

Tel: +61 8 9200 4426 Fax: +61 8 9200 4469

• Agreement (subject to due diligence, ASX and shareholder approval) to purchase 100% of the Navarra Potash Project located in Northern Spain.

• Granted tenements comprise 430kms[2] of highly prospective ground within a potash producing basin and include a former operating mine.

• All necessary infrastructure in place for potentially globally competitive potash extraction.

Contact

Mr Anthony Hall Managing Director

E-mail info@highfieldresources. com.au

• Existing experienced in country management team.

• Distinguished industry professional, Derek Carter, to join Highfield’s Board.

• 100% scrip transaction with no cash payment and performance shares linked to value adding milestones.

NAVARRA POTASH PROJECT

Officeholders Anthony Hall Jonathan Murray Mark Arundell Aaron Bertolatti Scott Funston

Issued Capital 44.0 million shares 6.0 million options

ASX Symbol HFR

The Board of Highfield Resources Limited ( Company or Highfield ) is pleased to announce (subject to due diligence, ASX and shareholder approval) the acquisition of a 100% interest in the Navarra Potash Project ( Project ) located in Northern Spain (refer Figure 1 ).

The tenements cover 430kms[2] and are located in the Ebro potash producing basin (refer Figure 2 ) (Iberpotash presently produces “ over 1 million tonnes of red potash from its…mines in Spain ”[1] ).

Exploration licenses have been granted for both areas covered by the tenements and a drill hole program aimed at securing a maiden JORC resource is the Company’s initial aim.

The tenements in the Navarra Sub-basin cover the Subiza Mine which was a significant potash producer in Spain between 1977 and 1996. In its latter years of operation the mine was producing around 200,000 tonnes of potash per annum. The mine was closed in 1997 when potash prices were US$110 per tonne. Potash prices are presently around US$470 per tonne.

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In addition, the Company has been able to secure the services of a strong existing in country management team to ensure project continuity.

TRANSACTION DETAILS

The material terms of the agreement can be summarised as follows:

1. Subject to the satisfactory completion by the Company of due diligence, ASX and shareholder approval, the Company will issue:

2. a. 50,000,000 (50m) ordinary shares as consideration for 100% of the Project; and

3. b. 100,000,000 (100m) performance shares to be converted to ordinary shares upon the successful completion of two Project related milestones (50m ordinary shares per milestone).

4. The vendor may place two directors on the Board of the Company.

The vendor’s present intention is to place Derek Carter and Pedro Rodrigeuz on the Board.

FUNDING

The Company presently has over $3.6m cash at bank and intends to allocate some of these funds to progressing the Project.

APPROVALS

The Company has made application to ASX for a determination on the relevant transaction approvals which may be required for the acquisition of the Project.

Once this determination has been made, the Company proposes to update the market on the indicative transaction timing.

Further information regarding the Project, acquisition terms (including milestones for performance shares) and the Company’s intentions will be set out in a notice of meeting to shareholders.

The Board believes the acquisition is extremely positive for the Company.

Anthony Hall Managing Director

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1 http://www.iclfertilizers.com/FERTILIZERS/FERTEUROPE/Pages/Spain.aspx

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Figure 1 – Map of Spain showing location of tenements

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Figure 2 – Map of Ebro Basin showing location of tenements in Navarra and Catalan sub-basins

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