HIGHFIELD RESOURCES LIMITED — Capital/Financing Update 2014

Jul 28, 2014

ASX Release 29 July 2014

Javier Potash Project Divided into two Potash Projects Equity Placement Timeline

Highlights

• Former Javier Potash Project divided into two projects – Muga and Vipasca potash projects

• Shallow Muga Potash Project is Company’s target for initial mine

• Drilling at deeper, high-grade Vipasca project planned for late 2014

• Applications made to extend Muga-Vipasca project area to more than 110 km[2]

• Final assay results received for initial 14-hole campaign at Muga

• Infill drilling campaign commenced at Muga Potash Project

• EGM to approve tranche 2 of institutional equity placement expected midSeptember

Spanish potash developer Highfield Resources (HFR: ASX) is pleased to announce it has divided its Javier Potash Project into two separate projects titled Muga and Vipasca.

Muga Potash Project

The separation of Javier into two projects demonstrates the Company’s operational focus on its initial mine target, the relatively shallow sylvinite mineralisation in the south eastern section of the broader Muga-Vipasca Project area.

Muga is one of four permits which make up the Muga-Vipasca Project area. The name Muga is symbolic as it is a word from the regional dialect that refers to stones that were used to define borders between countries and provinces. Muga is an appropriate name as the operating Muga potash mine is likely to straddle the border of the Navarra and Aragón provinces.

The Company has established a second Spanish office close to the Muga Project area in Sangüesa. The office will house the Muga mine delivery team, including internal appointments, contractors and the site based engineering team. It is an important step in the process to ensure the Company is ready to commence constructing the mine in 2015.

Assay results are being compiled from the initial drilling campaign in the Muga Potash Project area. The Company expects results to be released over the coming days.

An infill drilling campaign to improve Resource confidence has also commenced at Muga. Two drill rigs are in operation drilling J14-03 and J14-06 (refer Figure 1 below) with a further two expected to be operating in early August.

Highfield Resources Ltd. ACN 153 918 257 ASX: HFR

Registered Office C/– HLB Mann Judd 169 Fullarton Road Dulwich, SA 5065 Australia

Head Office Directors Company Secretary Calle Navas de Tolosa, Derek Carter Donald Stephens 5 - 1°B, 31002 Richard Crookes Pamplona, Anthony Hall Spain Owen Hegarty –––––––––––––––––– Pedro Rodriguez

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Issued Capital 155.825 million shares 103 million performance shares 23.3 million options

Tel: +61 8 8133 5098 Tel: +34 948 050 577 Fax: +61 8 8431 3502 Fax: +34 948 050 578

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----- Start of picture text ----- Vipasca Project Muga ProjectPintano Project----- End of picture text -----

Figure 1 – Map showing extent of historical and current drilling programs in both the Muga-Vipasca and Pintano project areas with JORC M&I Resource for Muga-Vipasca Project

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Vipasca Potash Project

The Vipasca Project area includes the entire Vipasca permit and the deeper areas within the Goyo permit area, including new extensions. The focus is on deeper higher-grade potash mineralisation that was evident in holes J13-06 and J13-09. Sylvinite intersects in J13-06 and J13-09 included:

Drill Hole	Depth	Depth	Thickness	K2O %	KCl %
	From	To
J13-06	773.9m	775.7m	1.8m	17.47%	27.66%
	778.4m	779.6m	1.2m	19.02%	30.11%
J13-09	922.1m	923.3m	1.2m	20.25%	32.06%
	926.9m	928.1m	1.2m	17.26%	27.32%
	986.0m	987.5m	1.5m	20.42%	32.33%

Refer: ASX Release 1 May 2014

A drilling campaign in the Vipasca and southern Goyo permit areas is expected to start later this year. The project area is expected to provide significant future upside to the Company´s initial mine target at Muga.

Project Area Extensions

Highfield has lodged applications to extend the Company´s Goyo and Muga permits to the south. The Company’s geological team believes potash mineralisation may extend into these areas.

The southern extension of the Goyo permit is 9.6 km[2] , whilst the southern extension of the Muga permit is 7.8 km[2] .

Timetable for EGM to Approve Second Tranche of Placement

The proposed Notice of Meeting (NOM) and Independent Experts Report (IER) were lodged with ASIC on Tuesday 29 July 2014. ASIC has 14 days in which to review and provide comment on the contents of the NOM and IER. This period will conclude on 12 August 2014. Should the review be satisfactory, as expected, the Company proposes to hold the EGM to consider approving tranche 2 of the placement on Tuesday 16 September 2014. Further updates will be provided.

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For more information: Mr Anthony Hall Managing Director Ph: +34 617 872 100

Mr Simon Hinsley Investor Relations Ph: +61 401 809 653

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ABOUT HIGHFIELD RESOURCES

Highfield Resources is an ASX-Listed potash company with four 100%-owned projects located in Spain.

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 close to 400 km[2] . The Sierra del Perdón project includes two former operating mines. The Company has completed a PFS for its Muga Project and is currently working towards completing a DFS by the end of the 2014 Calendar Year.

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Figure 2: Location of Highfield´s Muga-Vipasca, Pintano and Sierra del Perdón Projects in Northern Spain

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