HIGHFIELD RESOURCES LIMITED — Capital/Financing Update 2015

Dec 28, 2015

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ASX Release 29 December 2015

HIGHFIELD RESOURCES ENTERS INTO COLLABORATION AGREEMENT WITH ACCIONA TO CONSTRUCT MUGA POTASH MINE; ADVANCES PROJECT FINANCE CREDIT APPROVALS

Highlights

• Collaboration agreement entered into with Spanish headquartered global construction company, Acciona Infraestructuras, part of the Acciona Group of Companies (Acciona)

• Coupled with Iberdrola it is the second IBEX 35 company involved in the Project

• Acciona expected to submit by March 2016 a guaranteed maximum price (GMP) contract to construct the Muga Potash Mine where it will assume program, cost and quality risk. The GMP is expected to be delivered within the current capital estimates for the Project

• Preparatory work for the construction of the Muga Mine will continue to move forward over the coming months with Acciona support

• Project to be delivered in accordance with Highfield´s Fair Procurement Policy that gives preference to local companies

• Credit approval received from two of the four Mandated Lead Arrangers (“MLA’s”) with the remaining two MLA’s expected to follow shortly in January 2016

• Approvals secured in respect of the eight (8) year term facility and cost overrun facility totalling up to €222m as previously announced

Spanish potash developer, Highfield Resources (ASX: HFR) (“Highfield” or “the Company”), is pleased to announce it has entered into a collaboration agreement with Acciona Infraestructuras, part of the Acciona Group of Companies, to construct the Muga Potash Mine. Acciona Infraestructuras is a Spanish headquartered global construction company with deep experience in construction in Spain. Acciona has over 60 years of experience in the design, construction, operation and maintenance of mining infrastructure.

In addition to the above, the Company wishes to advise it has received credit approval from two of the four MLA´s to participate in a long term project finance facility to aid in the construction of the Muga Mine. The remaining two MLA´s are expected to confirm credit approval in January 2016.

Highfield´s Managing Director, Anthony Hall, commented

“We are excited to be working with Acciona. It is one of Spain´s largest companies with a global workforce of over 33,000 employees in over 30 countries and most importantly a deep construction experience in Spain. Acciona’s support is another positive for the Project as we move towards commencing construction in the New Year. With Acciona and Iberdrola, who will supply grid electricity, we now have two IBEX 35 companies involved in the Project.

We are also delighted to confirm two of the four leading European banks have received credit committee approval to participate in the Project Finance facility. This is a significant milestone given the project has satisfactorily traversed the rigorous due diligence process conducted by independent technical experts on behalf of the banks.

We are now a step closer to constructing a world class global potash operation that has major geological and locational advantages over most other potash mines and producers.”

Highfield Resources Ltd.	Registered Office	Head Office	Directors	Company Secretary
ACN 153 918 257	C/– HLB Mann Judd	Avenida Carlos III, 13 -	Derek Carter	Donald Stephens
ASX: HFR	169 Fullarton Road	1°B, 31002	Pauline Carr
	Dulwich, SA 5065	Pamplona,	Richard Crookes
Issued Capital	Australia	Spain	Jim Dietz
310.6 million shares	––––––––––––––––––	––––––––––––––––––	Anthony Hall
51.5 million performance shares	Ph. +61 8 8133 5098	Ph. +34 948 050 577	Owen Hegarty
52.8 million options	F. +61 8 8431 3502	F. +34 948 050 578	Pedro Rodriguez

www.highfieldresources.com.au

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Muga Potash Project

Overview

The Company’s flagship Muga Potash Project is targeting the relatively shallow sylvinite beds in the Muga Project area that cover about 80km[2] . Mineralisation commences at depths from surface of less than 200 metres and appears ideal for a relatively low-cost conventional mine accessed via dual declines, as demonstrated in the Company’s DFS completed in March 2015 (refer to ASX announcement dated 30 March 2015) and the Company´s mine optimisation study completed in November 2015 (refer to ASX announcement dated 17 November 2015).

Collaboration Agreement

On 24 December 2015 the Company entered into a collaboration with Acciona Infraestructuras to construct the Muga Potash Mine. Under the collaboration agreement, Acciona will work with the Company over the coming three months to prepare a submission to construct the mine and installations under a guaranteed maximum price contract where it is responsible for program, cost and quality risk.

Partnering with Acciona is designed to reduce delivery risk to ensure that the mine will be built on time and within budget. The outsourced arrangement is not expected to increase cost.

The parties have also agreed to deliver the project in accordance with the Company´s Fair Procurement Policy that gives preference to local suppliers and contractors where possible.

Acciona is a part of one of Spain’s largest construction and infrastructure groups with a group revenue of €6,500 million (2014) and an EBITDA of €1,087 million in the same period. The group employs over 33,000 people and has operations in more than 30 countries.

Acciona has an established presence in Navarra and Aragón and Acciona Windpower, another group company, is headquartered in Pamplona and is one of the largest companies in Navarra based on revenue, employing some 600 people across three sites.

Acciona is one of the 20 Spanish companies listed in the Dow Jones Sustainability Index for 2015.

Acciona has a reputation for the delivery of complex industrial and infrastructure projects across Spain and globally and are engaged in numerous projects worldwide. The company is currently responsible for the construction of the Chuquicamata and Andina underground mines in Chile on behalf of Codelco and has over 60 years of experience in the design, construction, operation and maintenance of mining infrastructure.

In Australia the company is associated with Melbourne´s East/West Link, Adelaide´s desalination plant and central Sydney´s light rail network (amongst other projects).

Project Finance

The Company has secured credit approvals with respect to the financing of its flagship Muga Potash Mine, from two of the four MLA’s, with the remaining credit approvals expected to follow shortly in January 2016 upon resumption of normal business.

The credit approvals, which are subject to satisfactory documentation and finalisation of due diligence, is for each bank to participate equally in the eight (8) year term facility and cost overrun facility (together the “Project Finance Facilities”) totalling up to €222m as previously announced.

Over the past few months a rigorous and detailed technical, legal and marketing due diligence process was completed by leading global independent consultants appointed by the MLA’s. The due diligence process has resulted in credit approvals being received by the major European banks.

Finalisation of due diligence is expected to be completed early next year enabling execution of definitive legal documentation shortly thereafter, prior to the commencement of construction of the Muga Potash Mine in H1 2016.

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www.highfieldresources.com.au

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For more information:

Company

Anthony Hall Managing Director Ph: + 34 617 872 100 Hayden Locke Head of Corporate Development Ph: +34 609 811 257

Investor Relations Executives Simon Hinsley APAC Investor Relations Ph: +61 401 809 653

Nuala Gallagher / Simon Hudson UK Investor Relations Ph: +44 207 920 3150

About Highfield Resources

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

Highfield’s Muga, Vipasca, Pintano, Izaga and Sierra del Perdón potash projects are located in the Ebro potash producing basin in Northern Spain, covering a project area of more than 550km[2] . The Sierra del Perdón project includes two former operating potash mines.

The Company completed a Definitive Feasibility Study for its flagship Muga Project in March 2015, which was optimised in November 2015 to enhance operational efficiencies, sales and marketing activities and the life of mine. Highfield expects to receive a positive environmental declaration in February 2016 to enable it commence construction of the Mine.

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Figure 1: Location of Highfield´s Muga, Vipasca, Pintano, Izaga and Sierra del Perdón Projects in Northern Spain

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www.highfieldresources.com.au