HIGHFIELD RESOURCES LIMITED — Capital/Financing Update 2015

Apr 6, 2015

ASX Release 7 April 2015

HIGHFIELD RESOURCES DELIVERS MAIDEN RESOURCE ESTIMATE FOR SECOND SPANISH POTASH PROJECT

Highlights

•  Maiden Resource estimate for Sierra del Perdón Potash Project delivering:

• Indicated Mineral Resource estimate of 41.8m tonnes at 10.7% K2O

• Inferred Mineral Resource estimate at 40.3m tonnes at 10.5% K2O

•  Exploration Target estimated at:

• 50m to 100m tonnes of sylvinite at 10% to 14% K2O

• 100m to 250m tonnes of carnallite at 9% to 13% K2O

•  A Scoping Study for the Project, building on relevant work completed for the Muga Potash Project DFS, is nearing completion, with results expected to be released during the current Quarter

Spanish potash developer Highfield Resources Limited (HFR: ASX) (“Highfield” or “the Company”) is pleased to announce its JORC maiden Mineral Resource estimate for its 100%-owned Sierra del Perdón Potash Project (the “Project”). The Project is located less than 10kms from Pamplona and within 40kms of the Company´s flagship Muga Potash Project.

Sierra del Perdón is a brownfield project that was historically mined primarily for sylvinite but also for carnallite, before closing in late 1996 due to relatively low potash prices of around US$100/tonne. There is potential for potash exploitation in greenfield areas in the Sierra del Perdón Basin and for limited additional production from brownfield areas.

Highfield’s Managing Director Anthony Hall commented:

“Whilst our focus remains on our flagship Muga Potash Project, we are in a fantastic position to have a second project that we believe is also likely to be very compelling.”

The potential quantity and grade of the Exploration Target is conceptual in nature and there has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.

The reader is cautioned that a Mineral Resource is an estimate only and not a precise and completely accurate calculation, being dependent on the interpretation of limited information on the location, shape, and continuity of the occurrence and on the available sampling results. Actual mineralisation can be more or less than estimated depending upon actual geological conditions.

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 Calle Navas de Tolosa, Derek Carter 5 - 1°B, 31002 Richard Crookes Pamplona, Anthony Hall Spain Owen Hegarty –––––––––––––––––– Pedro Rodriguez

Company Secretary Donald Stephens

Issued Capital 252.0 million shares 51.5 million performance shares 43.5 million options

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

The Mineral Resource statement includes Inferred Mineral Resources. There is a low level of geological confidence associated with Inferred Mineral Resources and there can be no certainty that further exploration work will result in the determination of Indicated or Measured Mineral Resources. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. No Mineral Reserves are being stated.

Sierra del Perdón Potash Project

The Company is targeting what is designated as Upper and Lower Carnallite (CU and CL) and a lower sylvinite bed (SYL) in the Sierra del Perdón (SdP) Basin area that covers an area of more than 104 km[2] ( Figure 1 ). The basin is about 10 km east to west by 6–7 km in the north-south, plunging from 100 to 1,200 m deepest part of the basin. These beds are the stratigraphic equivalent of the P0, PA, PB, and P1 potash beds, in descending order, found in the Muga-Vipasca Basin area.

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Figure 1. Sierra del Perdón Project Area Showing Mineral Resource Footprint, Historic and Current Exploration Drill Holes and Historic Exploitation Areas

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Mineralisation in the uppermost potash bed is largely carnallite transitioning to carnallite and sylvinite in the lower beds. The Company is investigating exploitation of both minerals via new access in areas not mined previously and possibly in the largely intact carnallite beds over the existing mined footprint.

The Company drilled six holes in 2013 and has worked to compile historical data including drill hole data, production reports and detailed mapped profiles of the underground workings so as to enlighten the current exploration program. Two holes were drilled in areas not mined previously, showing good intersection of carnallite and sylvinite of moderate grade. Three holes were drilled into existing workings resulting in poor recovery and no recovery within the primary mined-out seam; incomplete intercepts in these holes are excluded from the resource estimation. The drill hole which defines the western extent of the basin was barren.

Additional drilling is recommended in the Sierra del Perdón area. Historic drill holes that were instrumental in the development of the historic mines are found in Table A-1. Completed and planned drill hole locations are found in Table A-2 and shown in Figure 1.

JORC Exploration Target

The SdP Exploration Target comprises 23 exploration core holes covering an area of approximately 44 km[2] , illustrated in Figure 1. The total Exploration Target ( Table 1 ) is estimated to contain between 100 and 250m tonnes of potash in the carnallite beds (CU and CL) ranging in average grade from 9 to 13% K2O, and between 50 and 100 Mt of potash in the sylvinite bed (SYL) ranging in average grade from 10 to 14% K2O. Approximately half (50%) of the carnallite Exploration Target in the CU and CL beds is estimated to overlie old workings of the Posusa de Navarra and Posusa de Subiza mines in the SYL bed.

Of the 23 planned exploration holes, 6 were drilled or attempted in 2013. Due to the incomplete holes and the technical difficulty with core recovery, the exploration program going forward will concentrate on drilling holes in virgin ground, stepping out from the existing workings and into the deeper part of the basin. Up to five holes are proposed for 2015. Potash beds CU, CL, and SYL are targeted at depths ranging from 100 to 1,400 m.

Table 1. Sierra del Perdón JORC Exploration Target (effective date 17 March 2015)

Potash Beds	Depth Range (m)	Tonnage (Mt)	Average K2O (wt %)
Carnallite 100‒1,400 Sylvinite Total Same		100‒250 9‒13 50‒100 10‒14 150‒350

Notes:

m = meters, Mt = million tonnes. Sylvinite is a mechanical mixture of sylvite (KCl) and halite (NaCl). Carnallite refers to a mechanical mixture predominantly of carnallite (KCl·MgCl2·6H2O) and halite (NaCl).

Carnallite occurs in up to two separate beds. Sylvinite occurs in one bed. Approximately 50% of the carnallite target overlies historical mine workings in the sylvinite bed. Target cutoffs: (a) bed true thickness ≥ 1.5m: grade cutoff ≥ 8.0%K 2O, or (b) true thickness < 1.5m: grade-thickness cutoff ≥ 12.0%K2O-m.

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JORC Mineral Resource Estimate

Independent geology and mining consultants, Agapito Associates, Inc. (AAI) has issued a JORC Mineral Resource estimate, as summarised in Table 2. The Mineral Resource was estimated using a computer 3D gridded-seam geologic (block) model constructed with Mintec Inc. MineSight 3D© v9.0 software. Historical and modern data for the property were reviewed by the CPs for quality and completeness. Data utilized in the model include historic and modern drill hole logs and assays, historic and modern interpretations of 2D seismic surveys, surface topography in the form of a digital elevation model (DEM), permit boundary lines, historic resource analysis, historic geological surface mapping, and historical mining records from the Potasas de Navarra and Potasas de Subiza mines.

Table 2. Sierra del Perdón JORC Mineral Resource Estimate

(effective date 22 March 2015)

Potash Bed	Average Bed Thickness (m)	Tonnes In-Place (Mt)	K2O (wt %)	Carnallite (KCl·MgCl2·6H2O) (wt %)	Sylvite (KCl) (wt %)	Insolubles (wt %)	In-Place Bulk Density (t/m3)
INDICATED
Upper Carnallite 1.6 Lower Carnallite 2.8 Sylvinite 2.5		16.5 8.9 47.4 1.6 12.4 1.90 18.0 10.9 47.3 4.6 9.0 1.90 7.3 14.6 1.3 22.7 11.1 2.12
		41.8 10.7 39.4 6.5 10.7 1.94
INFERRED Upper Carnallite 1.6 Lower Carnallite 2.8 Sylvinite 2.2		18.6 8.9 45.7 1.9 12.4 1.91 13.2 10.7 47.6 4.2 9.0 1.90 8.5 13.7 1.3 21.4 10.6 2.12
		40.3 10.5 37.0 6.7 10.9 1.95

Notes:

Potash mineralization bulk density varies by carnallite, sylvite, halite, and insolubles fractions ranging from 1.6 to 2.2 t/m[3] . The resource estimate does not include any out-of-bed dilution. Resource cut offs: (a) true thickness ≥ 1.5m: grade cutoff ≥ 8.0%K 2O, or (b) true thickness < 1.5m: grade-thickness cutoff ≥ 12.0%K2O-m. Resource reduced by 15.0% allowance for unknown geologic anomalies within resource footprint. Indicated Resource—potash meeting cut off criteria located between 0m and 1,000m of a modern exploration core hole with assays, except where otherwise limited by geologic or mining boundaries. Inferred Resource—potash meeting cut off criteria located between 1,000m and 2,000m radius of a modern exploration core hole with assays or within 2,000m of an historical exploration core hole, except where otherwise limited by geologic or mining boundaries.

The sylvinite bed (SYL) is reported as a single potash horizon, in the resource estimate. Minedout areas based on the historic workings map have been excluded from the Resource. Carnallite beds, CU and CL, are reported as one bed. A total of 41.8m tonnes of Indicated Resource is reported with an average grade of 10.7% K2O with an estimated 39.4m tonnes of that being carnallite and 6.5m tonnes being sylvite, and the remainder halite (NaCl) and insolubles. An additional 40.3m tonnes is classified as Inferred Resource of 10.5% K2O with 37.0m tonnes estimated to be carnallite and 6.7m tonnes sylvite with the remainder halite and insolubles.

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Permits

The SdP property comprises two main investigative permits (PI) and one extension permits ( Figure 1 and Table 3 ). These PIs have a surface of 14,898 hectares and cover 100% of the deposit Sierra del Perdón and any potential areas of exploration.

Table 3. Interests in Mining Permits Held by the Company

Project Region	Permit Name	**Permit Type **	Applied	Granted	**Ref No. **	Area	Holder	Structure
						(km2)
Sierra del Perdón Navarra	Quiñones	Investigation	19/07/11	8/7/2012	35760	32.48	Geoalcali SL	100%
Sierra del Perdón Navarra	Adiós	Investigation	19/07/11	8/7/2012	35770	75.60	Geoalcali SL	100%
Sierra del Perdón Navarra	Ampliación AdiósInvestigation		26/10/12	2/14/2014	35880	40.90	Geoalcali SL	100%
Location: All permits are located in Spain.
Holder: Geoalcali SL is a 100% owned Spanish subsidiaryof Highfield				Resources.

Scoping Study

The Company is currently completing a Scoping Study for the Project. The Scoping Study builds on relevant work completed for the Muga Potash Project DFS given the similarities with respect to mining methods, processing, utilities, logistics and likely target markets. The Company expects to be in a position to release the results of the Scoping Study in the current Quarter.

For More Information

www.highfieldresources.com.au

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

Competent Persons’ Statement

This ASX release was prepared by Mr. Anthony Hall, Managing Director of Highfield Resources. The information in this release that relates to Mineral Resources and Exploration Results is based on information prepared by Mr. Leo J. Gilbride, P.E. and Ms. Vanessa Santos, P.G. of Agapito Associates, Inc. (AAI) of Colorado, United States of America (USA). Mr. Gilbride is a licensed professional engineer in the State of Colorado, USA and is a registered member of the Society of Mining, Metallurgy and Exploration, Inc. (SME). Ms. Santos is a licensed professional geologist in South Carolina and Georgia, USA, and is a registered member of the SME. SME is a Joint Ore Reserves Committee (JORC) Code ‘Recognized Professional Organization’ (RPO). An RPO is an accredited organization to which the Competent Person (CP) under JORC Code Reporting

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Standards must belong in order to report Exploration Results, Mineral Resources, or Ore Reserves through the ASX. Mr. Gilbride is a Principal and Ms. Santos is the Chief Geologist with AAI and both have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which they are undertaking to qualify as a CP as defined in the 2012 Edition of the JORC Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Mr. Gilbride and Ms. Santos consent to the inclusion in the release of the matters based on their information in the form and context in which it appears.

About Highfield Resources

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

Highfield’s Muga, Vipasca, Los Pintanos, and Sierra del Perdón potash projects are located in the Ebro potash producing basin in Northern Spain covering a project area of close to 400km[2] . The Sierra del Perdón project includes two former operating mines. The Company has recently completed a definitive feasibility study for its Muga Project and is currently working towards commencing construction in the fourth quarter of 2015.

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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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Appendix

Explanatory Notes to the Exploration Results and Resource for the Sierra del Perdón Potash Projects

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Property Description

The Sierra de Perdón project area is located in the northern portion of Spain within the Ebro Basin and is situated within the Navarre province of Spain. Highfield Resources (Highfield) (the “Company”) holds Exploration and Investigative Permits in three areas in Navarre and Aragon (Figure 2). The western area of Sierra del Perdón contains historic mining, operations which closed in 1997, and areas within the existing permits for brownfield and greenfield development. The eastern greenfield project area is divided into two sub-basins, Javier Basin (as defined here by the Muga and Vipasca leases) and the Pintano Basin, which are separated by an elevated saddle area.

Tenure and Surface Rights

Spanish mining permits are split into three categories: Exploration Permit (PE), Investigation Permit (PI), and Mining Concession. A PE is for desktop studies and lasts for a period of 1 year (it may be rolled over once). A PI is necessary for drilling, allows for the sinking of shafts and driving of declines and lasts for a period of 3 years (it may also be rolled over for multiple 3-year periods). For a PI to be granted, an environmental review must be completed by the relevant government. A Mining Concession is for mineral extraction and lasts for periods of 30 years (it may be rolled over twice).

In addition to the above, if a permit sits in two provinces, it must be formally issued by the Central Government in Madrid under Article 71.3 of the Spanish Mining Code.

The Sierra de Perdón property is comprised of two PIs and one extension permits converted to a PI (Table 1 and Figure 1). These PIs have a surface of 14,898 hectares and cover 100% of the deposit of Sierra del Perdón and any potential areas of exploration. The Competent Persons (CPs) have reviewed the mineral tenure from documents provided by the “Company”, including permitting requirements, but have not independently verified the permitting status, legal status, ownership of the project area, underlying property agreements or permits. The Company is relied upon by the CPs for tenure status.

Geology and Structure

The south Pyrenean Potash Basin extends from west to east from Navarre to Catalonia. The Eocene marine basin was confined by the Ebro Massif on the south and the Pyrenean Ridge on the north (Ortiz and Cabo). The Sierra del Perdón represents an asymmetrical basement-controlled sub-basin trending NE-SW and NNE-SSW. The first deposits in the region, occurring at the end of the Cretaceous period, were characterised by a regressive period with reddish continental deposits. The Eocene is marked by the beginning of tectonic compression, causing formation of subsiding basins parallel to the Pyrenees Mountains, with emersion and erosion in some parts.

The Upper Eocene potash deposits occur in the sub-basins of Navarre and Aragón provinces within the larger Ebro Basin (Figure A-1). The Navarrese sub-basins include Sierra del Perdón, Muga-Vipasca (Javier) and adjoining Pintano deposits. This potash deposit contains a 100-meter (m)-thick Upper Eocene succession of alternating claystone and evaporites (anhydrite, halite, and sylvite). The evaporites accumulated in the elongated basin at the southern foreland of the Pyrenean range (Busson and Schreiber 1997). The evaporites overlie marine deposits and conclude in a transitional marine to non-marine environment with terrigenous influence. Open marine conditions existed in the Eocene-Oligocene epochs progressing to a more restricted environment dominated by evaporation and the deposition of marl, gypsum, halite, and potassium minerals. Later, tectonism and resulting salt deformations formed broad anticlines, synclines and overturned beds, which created outcrops of the evaporite sequence. The Sierra del Perdón sub-basin is notably different from the eastern Javier Pintano basins, with predominantly carnallite mineralization overlying sylvinite, suggesting a more immature diagenesis because carnallite is considered primary and sylvinite secondary. The formation of the evaporites is further influenced by basin restriction, and paleo highs and lows which are perhaps defined by block faulting as well as the main structural basin bounds.

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Figure A-1. Regional Geology of the Ebro and Jaca-Pamplona Basins (from University of Michigan 2004)

The different basins are separated by orogenic events developing in the north and south as turbidite basin carbonate platforms. Towards the end of the Eocene epoch, the sedimentation axis migrated south to the Jaca-Pamplona Basin, on which the Oligocene materials were deposited. The pre-evaporitic basin sedimentation occurs in a context of continuous tectonic compression during the Eocene and Oligocene epochs, as synsedimentary tectonics of the end of the orogeny, with pronounced sediment influx. The influence of the turbidites towards the end of the Eocene epoch in the Bartoniense series from the northwest into the basin as the Belsue Formation is indicative of continued subsidence.

At the east end of the basin, the evaporite levels crop out, and the evaporites are largely dissolved, exhibiting the remnants of the upper banded clays which unconformably overlie the Pamplona Marls. In some cases they are altered to gypsum and fibrous halites. The evaporites are part of a synclinal structure with the main axis plunging to the west. The syncline is compartmented in 3 sub-blocks which are separated by faults. The northern edge of the syncline is usually affected by the erosion with an inclination towards the south. The deposit has a gentle slope of 12 degrees (º), with a depth from between 60 and 70 m (elevation +700 m to 1,100 m (elevation –400 m) in a north-south extension of 5 to 6 km. Oligio-Miocene conglomerates unconformably overlie the southern flank.

The Sierra del Perdón Basin is dominated by the SW-NE fault system named, from the south to the north, Falla (fault) de Subiza and Falla de Esparza, with several unnamed faults in between the major ones (Figure A-2). The faults are pre-evaporitic, and therefore have influenced the deposition within the basin and driven the historic mine advance. The faulted blocks are uplifted in the north (Falla Esparza) and the SE (Falla Subiza) and downdropped in the center which represents the depocenter. Displacement along Esparza is approximately 300 m and between 600 and 800 m in Subiza (Menendez 1971; del Valle 1978). The area has been separated into mining blocks, Guendulain, Beriain, Subiza and Uniano. (An additional area lies between the major fault and represents the basin’s synclinal axis that has not been mined because it plunges and deepens. No drill holes have penetrated the salts so the depth of syncline is

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interpreted through historic seismic records. This area may also represent an offset similar to what is seen in the east, the Flexura de Ruesta that divides the Javier and Pintano sub-basins. [Empresa Nacional Adaro Investigaciones Mineras {e.n. adaro} 1988–1991]). An anticline interpreted form the historic seismic records crosses the basin NW-SE and may define an area where the upper salt has been eroded.

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Figure A-2. Sierra del Perdón Project Regional Structure and 2013 Drill Hole Locations

The depositional environment is that of a restricted marine basin, influenced by eustasy, sea floor subsidence, and/or uplift and sediment input. It is suggested that the Ebro Basin is the result of a combination of reflux and drawdown. Reflux describes a basin isolated from open marine conditions, and thereby characterised by restricted inflow, increased density, and increased salinity. Drawdown is the result of simple evaporation in an isolated basin, and brine concentration and precipitation, consistent with the classic “bulls-eye” model (Garrett 1996). In this case, the Ebro Basin is further influenced by erosion at its edges due to contemporaneous and post-depositional uplift which results in localised shallowing and sediment influx (Ortiz and Cabo 1981) transitioning from marine to continental-type deposits.

In the classic “bulls-eye” model, a basin that is cut off from open marine conditions will experience drawdown by evaporation in an arid to semi-arid environment. In the absence of sediment influx, precipitation will proceed from limestone to dolomite to gypsum, and anhydrite to halite. Depending on the composition and influences of the brine at that time, the remaining potassium, magnesium, sulfates, and chlorides will progress from potassium and magnesium

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sulfates to sylvite and then carnallite. It is proposed herein that the formation of carnallite and sylvite be described as primary and secondary, respectively.

Potash is used to describe any number of potassium salts. By and large, the predominant economic potash is sylvite: potassium chloride (KCl) usually occurring mixed with halite to form the rock sylvinite, which may have a potassium oxide (K2O) content of up to 63%. Carnallite, a potassium magnesium chloride (KCl•MgCl2•6H2O) is also abundant, but has K2O content only as high as 17%. “Carnallite” is used to refer to the mineral and the rock interchangeably, although “carnallitite” is the more correct terminology for the carnallite and halite mixture. Besides being a source of lower grade potassium, carnallite involves a more complex production process, so it is less economically attractive than is sylvite.

The regional stratigraphy (Figure A-3) is dominated by open and restricted marine conditions. Evaporitic sedimentation (the Guendulain Formation) directly overlies the fine marine offshore sediments (Pamplona Marls) (Ortiz and Cabo 1981; Orti et al. 1984). Both drill hole data and outcrop observations assign an average thickness of about 150m to the saline formation, which displays the following sequence from bottom to top:

1. Pamplona Marls.

2. Marker anhydrite member (basal banded anhydrite).

3. Lower salt member (Sal de Muro or “lower salt”), medium to very coarse recrystallised halite, medium grey to black and the lower part may be brown and sandy as described below.

4. A carnallitic member that may be seen as an upper and lower bed and and a lower sylvinite bed. The potash is characterised as fine to coarse granularity, typically light to medium orange-red in colour, of crystalline structure with high insolubles and interbedded halite. The sylvinite exhibits brecciated structure suggesting recrystallisation after carnallite formation.

5. Upper saline member (Sal de Techo or “upper salt”), alternating halite and clay layers, some of which exhibit deformation.

6. Top marl member (Margas Fajeadas or “banded marls”) with intercalated anhydrite layers.

Overlying the salt is a siliciclastic detrital unit, made up of the Oligocene Galar Sandstone, Javier-Pintano hard layers, the Oligocene-Miocene Rocaforte Formation and, locally, the Igaza Conglomerates (Uncastillo Formation). This unit is capped by Quaternary and Oligocene sediments. The Quaternary is made up of alluvium, glacial till and debris (Orti et al. 1986).

These units have been simplified in the geologic modelling database as:

• Unidad del Oligoceno (UO) for Lutitas y Limolitas

• Unidad Detritica (UD) for Areniscas de Galar / Belsúe and (MF) as Margas Fajeadas (MF)

• Unidad Evaporitica (UE) for Sal de Techo (ST) and Sal Muro(SM) or Sal (S)

In the Sierra del Perdón Potash Project area, the mineralogy is dominated by carnallite over sylvinite, which is medium red-orange and white, largely coarse crystalline in bands and in heavily brecciated beds containing high levels of insoluble material, largely fine-grained clays, anhydrite, and marl. The alternation from carnallite to sylvinite is not always complete and may vary from one bed to the next but it always occurs in the lower part of the sequence. The upper potash beds transition to finely banded light brown marls and clays which may exhibit salt veining and distortion as well as influx of dark grey clays and mudstones, representing the transition of the basin from marine to continental via basin-filling. The salts just below the potash tend to be dark grey to black. In some lower beds, halite

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Figure A-3. Regional Stratigraphy of the Ebro Basin

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becomes brownish, sandy to coarsely granular sand and sandstone as sediment influx from the basin edges. The literature denotes this salt as “sal vieja” or “old salt” (Ortiz and Cabo 1981). The evaporite beds and bands, in general, are separated by fine to very coarse crystallised and recrystallised salts, generally grey, sometimes light-to-medium honey brown or white, with anhydrite blebs, nodules, and clasts.

Exploration and Methodology

Historic

The Sierra del Perdón Potash Project represents the westernmost potash deposit of Navarre Basin. The deposit was discovered in 1929 based on the assay of brines sourced from Guendulain springs area, 5.5 km southwest of Pamplona City. On June 23, 1929, the first drill hole completed intersected 9 m at 13.92% K2O to 78 m deep. Additional regional exploration was begun in Navarre, first by the Spanish government with five holes across the area; one each in Pamplona, Subiza, Guendulain, Javier and Tafalla. This was followed by more detailed work in the Sierra del Perdón area beginning with e.n. adaro (drill holes 1 through 21), probably conducted in the 1950s, and then by Potassa de Navarra, SA (drill holes 22 to 25) (Table A-1). Additional regional exploration by e.n. adaro and Potasas de Navarra, SA tested the outer extents from the main basin in Iborgoiti, Celigueta, Sengariz, Lecaun and into Aragon. The date and methodology of these holes is uncertain.

It is noted that some drill holes numbered 12, 4 through 10, 13, 17 through 19 and 21 were drilled under “normal conditions” to test the extension, grade and dip of the mine workings. The drill holes numbered 13, 21, 19, 9 and 4 mark the extension of the potash beds which are in “good condition of exploitability.” Drill holes 12 and 14 are in an irregular zone and did not intersect significant potash. In historic drill hole 14, in the northern part of SdP between Guendulain and Unidano shaft, there is only very weak and thin carnallite (137.91–137.93 m and 138.67–138.69 m); dips are reported at 31°. The area near drill holes 15, 16 and 10 is covered by Aquitaniense conglomerates and sands. These historic holes contribute to the knowledge of the basin mineralogy and thicknesses but do not contribute to the Resource. There are no assays associated with these holes.

The drilling campaign and study resulted in a declaration of reserves for Sierra del Perdón and other areas (Mayoral 2013). This first definition of the deposits was done in the early 1950s, a 24-drill hole campaign, an area with a surface of 5,500 hectares in the “two main levels for sylvite and upper carnallite, with a resource of 225.3 Mt at 18.0% K2O for the deposit of sylvite and 313.5 Mt at 12.6% K2O for the carnallite within the upper zone deposit.” Additional “reserve” reporting was by government entities of e. n. adaro (60.0 Mt of K2O) and Minas Potasse D´Alsace (30.0 Mt of K2O) and Potasas de Navarra SA (40 Mt of K2O). The historical resources and reserves, while technically important, are not Joint Ore Reserves Committee (JORC)-compliant. They are reported here as an indication of the historic evaluation on the property.

Production at Pamplona began in 1963 with a capacity of 250,000 tonnes per year (tpy) of K2O. A thick carnallite member overlies the sylvinite, so in 1970 a refinery with the capacity for 300,000tpy was built to accommodate for carnallite from the Esparza (Stirrett and Mayes 2013). During the early 70s, preparation and development of mining infrastructure was completed and in the mid-70s, exploitation started in Beriain Shaft and then on Subiza Ramp. Carnallite mining was ceased in 1977. Inclined ramps for the mine were located near Esparza, reaching the centre of the mine, with further shafts located at Beriain, Guendulain and Undiano. In 1982, 2.2 million tonnes of sylvinite were extracted with an average K2O grade of 11.7% (Stirrett and Mayes 2013).

By 1987, the deposit was in full production with 2 shafts and 2 extraction ramps with an annual production of 159,153 tonnes per year (tpy) of K2O, and a yearly turnover of US$ 23.95 million with an average potash price of US$ 149.6/t K2O. The operations in Navarre were closed in the late 1990s.

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Table A-1. Sierra Del Perdón Historic Drill Holes and Locations*

Drillhole ID

Easting (m) Northing (m) Elevation MSL (m) Total Depth (m) Coordinates ETRS89

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25

609050 4730507 602 347 604342 4734744 527 342 611953 4732821 461 175 608447 4729635 626 292 604556 4733684 592 559 607974 4734392 508 110 609861 4732885 509 473 610343 4733387 470 107 608256 4733024 604 742 609946 4733123 496 347 609984 4731319 530 126 602791 4733946 522 582 601641 4733236 590 887 603130 4735637 472 171 601085 4731409 606 1,144 606169 4727421 544 541 600972 4734537 527 492 606157 4734202 562 387 607194 4733406 573 727 605709 4730662 723 1,320 603136 4733153 590 987 608016 4727626 600 277 607700 4728125 651 305 607289 4729788 758 597 604387 4729071 577 1,000

• Date of drilling is unknown. Notes: ETRS89 = European Terrestrial Reference System 1989; MSL = mean sea level.

Historic production, as reported by Highfield (Geoalcali S.L. 2012) is given below.

	1991	1992	1993	1994	1995
Mined ore	1,266,294	1,460,761	1,422,842	1,087,059	948,911
Potassium Chloride (t)	244,555	275,980	261,805	203,170	171,280
K2O equivalent	146,733	165,588	157,083	121,902	102,768

In 1996–97, Potasas de Navarra, main shareholder of POSUSA (operating company), decided to stop production because of a combination of factors. Presumably, the fall in potash price, combined with the need to make significant new investment in mine development. Instituto Tecnologico Geominero de España (ITGE) reported reserves of 2.0 Mt of K2O proven and 9.0 Mt of Probable (National Inventory Potash Resources 1987).

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Modern

This maiden Mineral Resource estimate for the Sierra del Perdón Potash property was independently developed by geology and mining consultants, Agapito Associates, Inc. (AAI), USA, based on the results of documented geological studies, two-dimensional (2D) seismic analysis, exploration drilling, electric logging (elogs), and chemical analyses. The records for historic drill holes are largely drill hole logs which are used primarily for structural information. Six new drill holes from Highfield’s wholly owned Spanish subsidiary Geoalcali’s 2013 exploration campaign have been reviewed for definitive grade and thickness information. One hole (SDP-009) was barren and interpreted to be outside of the main basin. SDP-002 drilled into old workings in the Guendulain area, was incomplete, and showed poor core recovery and drilling only to what is thought to be CU carnallite. One hole (SDP-006) in the same area was incomplete, drilled to the top of the mined-out sylvinite. One hole (SDP-005) also was drilled through what is interpreted to include the mined-out portion of the sylvinite section; it exhibits poor recovery and dissolution of the core. SDP-004 and SDP013 are the only truly complete holes used in this resource.

The potash beds have been correlated using a combination of assays, core photos and inspection, and lithological and geophysical logs. The beds vary in grade and thickness and can be discontinuous. Traditionally, the lithologies have only defined the carnallite upper and lower beds, and the underlying sylvinite bed.

The main beds are CU and CL, which are generally the thickest and most continuous across the basin, and largely carnallite. The sylvinite bed (SYL) is below and generally separated from the carnallite by less than one meter of salt or very low grade sylvinite material. CU tends to be of lower grade; composited values range from 8–10% K2O. CL tends to be thinker and higher grade and separated from CU by 1–2 m of salt. The correlations are subject to revision with additional drilling. Those composited intervals are shown in Table A-2. Thicknesses in this report are generally reported as measured thickness except in the resource, where thickness is corrected to true thickness. Additional drilling will be needed in the greenfield areas, including the deeper part of the syncline. Additional drilling has been proposed and planned (Figure 1 and Table A-3) but exploration and drilling focus switched to the drilling out of JavierMuga.

SDP-013 lies in the eastern portion of the basin in an area not previously mined. It shows a similar lithologic sequence to the potash in Muga-Vipasca with the exception that the mineralogy is predominantly carnallite rather than sylvinite, over relatively thin, dark halite, and banded anhydrite at the base. The basal salt over the banded anhydrite and lower marls is medium to dark grey and only 4.8 m thick. SYL is found in a 0.9 m layer (depth 521.3 m), 1.8 m below CL. CU is of relatively low grade, with an average of 8.2% K2O and 1.3 m thick. The banded marls above the carnallite show considerable distortion which may be attributable to localized faulting or mass sediment slumping and salt veining, although they normally transition upwards and are capped by dark grey clays, likely representing sediment from the basin edge.

SDP-009 defines the eastern extent of the basin and shows a foreshortened sequence in which the salt is thin (<2 m) and dissolved, exhibiting a spongey texture of the original insolubles over a thin banded anhydrite with a bed of dark mudstone. The remnant salt is capped by alternating beds of banded and deformed, black and oxidized, light reddish brown and tan mudstones, suggesting the transition at the basin’s edge to a continental-type environment. The hole is shallow and was drilled to a depth of about 86.5 m to the top of the anhydrite. To help define the edge of evaporites, the logs for historic drill holes 8 and 10 were reviewed and both show complete sequences of carnallite and sylvinite mineralization with 8 reporting steep dips of 80°. As in SDP-013, alteration of carnallite to sylvinite is incomplete as sylvinite is found in what is interpreted to be CU, and again at the base of the potash bed.

SDP-006 is incomplete due to lost circulation in the mineralised zone below CU. The hole penetrated CU over 3.6 m carnallite at average 6.3% K2O. Below CU, core recovery was poor, hence, this hole was not be used in the resource estimation. This hole is excluded from the resource due to poor core recovery including below 205.7 m and complete loss after 213.5 m. This hole was drilled in the old workings in the Guendulain area in the northern portion

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Table A-2. Potash Bed Resource Composites and Geologic Intervals from Exploration Drill Holes

	Resource Intervals Geologic Intervals	Resource Intervals Geologic Intervals	Resource Intervals Geologic Intervals	Resource Intervals Geologic Intervals	Resource Intervals Geologic Intervals	Resource Intervals Geologic Intervals	Resource Intervals Geologic Intervals	Resource Intervals Geologic Intervals	Resource Intervals Geologic Intervals	Resource Intervals Geologic Intervals	Resource Intervals Geologic Intervals	Resource Intervals Geologic Intervals	Resource Intervals Geologic Intervals	Resource Intervals Geologic Intervals	Resource Intervals Geologic Intervals	Resource Intervals Geologic Intervals	Resource Intervals Geologic Intervals
Potash Bed and Drill Hole ID	Depth from (m) Depth to (m) Measured Thickness (m)							Depth from (m) Depth to (m) Composite Measured Thickness (m)				Composite True Thickness (m)			K2O (wt %)			MgCl2 (wt %)	Insolubles (wt %)
Upper Carnallite SDP-002	Hole not deep enough
SDP-004	395.8 401.5					5.7		397.9 399.7		1.8			1.7			9.8		16.7		13.9
SDP-005	415.2 424.0	8.					8	Inadequate core recovery
SDP-006	201.1 204.7					3.6		203.2 204.7		1.5			1.5			8.7		14.3		12.0
SDP-009	No occurrence
SDP-013	511.7 516.5					4.8		514.1 515.6		1.5			1.5			8.2		17.7		11.3
Lower Carnallite SDP-002	Hole not deep enough
SDP-004	402.4 406.3					3.9		402.4 406.3			3.9			3.6		12.4		15.2		9.2
SDP-005	426.2 430.4					4.2		Inadequate core recovery
SDP-006	205.6 207.5			1.9				Inadequate core recovery
SDP-009	No occurrence
SDP-013	518.3 521.0				2.7			519.5 521.0		1.5			1.5			8.4		17.9		8.8
Sylvinite SDP-002	Hole not deep enough
SDP-004	406.6 410.2					3.6		406.6 409.9			3.3			3.0	16.		1	0.4		12.0
SDP-005	430.7 435.8					5.1		Inadequate core recovery
SDP-006	Hole not deep enough
SDP-009	No occurrence
SDP-013	521.3 522.2		0.9					521.3 522.2		0.9			0.9			10.3		0.5		8.6
Note: A blank field indicates no data. Color Scale								Color Scale
		10.0							10.0			10.0			20.0			10.0	100.0
		0–10m							0–10m			0–10m			0–20%			0–10%	0–100%

of the deposit and even though it was planned as an unmined block, it likely drilled into an area where the lower sylvinite was mined out. The closest historical hole is 2 which only reports “normal” conditions in the deposit which might be interpreted as a complete section of carnallite over sylvinite. In this area, both carnallite and sylvinite were mined and it is interpreted in this and other holes that the targeted beds were just below CU with the lowermost beds being sylvinite in most cases.

SDP-005 was drilled within the old workings of the Subiza mine south of the main Beriain Fault and it is believed that the entire potash section was intersected. The hole lost circulation and was cored with HQ, with the core showing considerable dissolution and mechanical breakage and disking in the mineralised zone, making the assays suspect through most of the interval. Mineralisation is largely carnallite. Beds CL and SYL are separated by halite and lowgrade material. Sylvinite interpreted to be bed SYL is present from 431.3 to 434.0 m where 2.7 m of core was lost, thought to be mined out and therefore, likely to have been sylvinite of good grade. Core was recovered again from 434.0 to 435.8 m, reporting variable amounts of MgCl2. The banded marls above the salts show folding, distortion

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Table A-3. Highfield Resources Sierra Del Perdón 2013 Drilling Campaign

Drillhole ID Start Date End Date	Easting (m) Northing (m) Elevation MSL Investigation Permit Coordinates ETRS89 Total Depth (m)
SDP-001 ND SDP-002 06-Jul-13 29-Jul-13 SDP-003 ND SDP-004 18-Jun-13 24-Jul-13 SDP-005 05-Aug-13 05-Sep-13 SDP-006 05-Aug-13 12-Aug-13 SDP-007 ND SDP-008 ND SDP-009 22-Aug-13 03-Sep-13 SDP-010 ND SDP-011 ND SDP-012 ND SDP-013 25-Oct-13 07-Nov-13 SDP-014 ND SDP-015 ND SDP-016 ND SDP-017 ND SDP-018 ND SDP-019 ND SDP-020 ND SDP-021 ND SDP-022 ND SDP-023 ND	606021 4734589 600 604488 4735240 522 188 Adios 601229 4734257 600 609018 4733706 533 436 Quiñones 607630 4729055 654 440 Adios 604181 4735183 522 214 Adios 607439 4732968 610 609200 4731639 600 610833 4733312 468 95 Quiñones 603180 4733590 600 600929 4733415 585 600229 4734799 550 609983 4732274 532 548 Quiñones 605388 4728455 600 607256 4731626 600 604267 4730142 600 608790 4731063 600 608544 4731782 600 607984 4730995 600 607288 4730629 600 608056 4732633 600 607983 4733475 600 607408 4732931 600
Note: IP = inprogress,ND = not drilled.Coordinates in bold are final.

and salt veining but with less basin edge influence of clastics as basin fill. Logs for nearby historical hole 4 show carnallite from 235.2 to 244.9 m (11.7 m) and sylvinite directly below to a depth of 250.5 m (5.6 m).

SDP-004 was drilled near the old workings at Beriain and had a completed intersection of the mineralized zone. What is interpreted as CU is 6.6 m of carnallite with overall grades of 5.6% K2O, containing higher grade beds within that. It shows medium red orange banding directly overlying CL and SYL, the latter with the usual mixed dark and light brecciation of clay and banding in the lower part. The lower part of CL is partially sylvinite with the alteration from a depth of 405.1m, showing a marked difference in the appearance of the core. SYL is just below from 406.6 to 409.9 m (3.3 m) with an average grade of 16.1% K2O. In this hole, the upper marls show dark clays and mudstones as intermediate basin edge influences. The hole finished in the basal, banded anhydrite and marls. The lower salt (Sal Muro) is light to medium grey and tan, banded, and medium crystalline with a minor bed of clay, of 15.1 m thickness.

SDP-002 drilled into the old working in the Guendulain area and was incomplete, showing poor core recovery and drilling only to what is thought to be CU. It has no assays and is excluded from the resource. This was the first hole drilled; SDP-006 is an incomplete re-drill of SDP-002.

Seismic Surveys and Structure

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In 1983, a 2D seismic survey was run for e.n.adaro by Compagnie Generale de Geophysique (CGG) over the Sierra del Perdón property (e.n. adaro 1985a and b). This consisted of 22 lines totalling 111 km (Figure A-4). Earlier work included a seismic campaign in 1963 and a minie-sosie (shallow seismic using a vibration-rammer source) campaign in 1979 and a vibrosesimic program by Otono in 1981. The resulting structure maps for both the top (“techo”) of salt (base of Marl) with major faults were developed by CGG in combination with the regional seismic records, field maps, satellite imagery and drill hole data. Additional surfaces identified at that time include the unconformity at the Miocene conglomerates, the base of the Galar Sandstone and the resulting isopachs. In addition, early work identified an area of possible erosion in the upper salt along the interpreted anticline.

RPS (formerly RPS Boyd Petrosearch) of Calgary, Alberta, Canada, completed a re-interpretation in 2013 of the 2D historical seismic lines and profiles on behalf of Highfield. The re-interpretation program was designed to review the overall accuracy of the historical data in terms of good correlation to drill hole data and geological intersections, as well as to identify any subsurface structures that may adversely affect the salt-bearing strata. Seismic survey lines were reviewed and were tied to wells using historical wireline data. No report was produced but structural maps for the top and base of the salt contributed to the basin interpretation in this report. The potash-bearing zones lack any velocity/density contrasts within the salt, so it is not possible to detect potash or map the structure of the zone directly.

The CPs used these structural data as generated by RPS but the structure map is modified and corrected to reflect updated drill holes.

Quality Control and Data Confirmation

The 2013 drilling program was conducted by Highfield personnel. Details of the sampling techniques and oversight of the quality control program are summarised in Table A-6.

Highfield and ALS Global (ALS), the primary contract laboratory, maintained quality control procedures of standards, duplicates, and blanks. Highfield made multiple Standard or Certified Reference Material-type (SRM or CRM) samples representing low-, medium-, and high-grade (LG, MG, HG) potassium material, but the insertion rate is insufficient to determine repeatability and calibration of the target instrumentation. SRM samples, blanks, and duplicates were inserted, both by Highfield personnel during sample preparation and by ALS as part of their own quality assurance/quality control (QA/QC) program. ALS inserted commercial standards BCR-113 and BCR-114, both potash fertilizer materials, muriate of potash (MOP) and sulfate of potash (SOP), respectively, as well as their own internal standard, SY-4, a diorite gneiss used as a blank material. The insertion rate is one blank, one SRM, and one laboratory duplicate per 20 samples or batch.

ALS assayed samples both by inductively coupled plasma (ICP) and X-ray fluorescence (XRF). In general, the ICP and XRF techniques show reasonable agreement with the XRF method exhibiting modestly elevated K2O values over the ICP method.

Highfield’s procedure designates duplicates on the quarter core at 1 in 20, blanks at 1 in 50, and standards at 1 in 20. Duplicates were submitted to ALS, and ICP results show good internal agreement. Check samples (1 in 20) were tested at Saskatchewan Research Council Laboratory (SRC). In general, SRC reports K2O values lower than reported by ALS. Because ALS and SRC show good internal agreement, the bias suggests a calibration issue.

This drilling campaign for SdP began in the summer of 2013 and procedure was not well-established to ensure good core recovery. The CPs reviewed the drilling records and concluded that core recovery was insufficient in three of the six holes drilled and therefore those assays will not be used in this resource.

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Figure A-4. Index of Seismic Lines and Detected Faults on Top of Salt / Base of Marls (after CGG)

Exploration Target

The SdP Exploration Target comprises 23 exploration core holes covering an area of approximately 44 km[2] , illustrated in Figure 1. The total Exploration Target (Table A-4) is estimated to contain between 100 and 250 Mt of potash in the carnallite beds (CU and CL) ranging in average grade from 9 to 13% K2O, and between 50 and 100 Mt of potash in the sylvinite bed (SYL) ranging in average grade from 10 to 14% K2O. Approximately half (50%) of the carnallite Exploration Target in the CU and CL beds is estimated to overlie old workings of the Posusa de Navarra and Posusa de Subiza mines in the SYL bed.

Of the 23 planned exploration holes, 6 were drilled or attempted in 2013. Due to the incomplete holes and the technical difficulty with core recovery, the exploration program going forward will concentrate on drilling holes in virgin ground, stepping out from the existing workings and into the deeper part of the basin. Up to five holes are proposed for 2015. Potash beds CU, CL, and SYL are targeted at depths ranging from 100 to 1,400 m.

Mineral Resource Estimate

The Mineral Resource was estimated using a computer 3D gridded-seam geologic (block) model constructed with Mintec Inc. MineSight 3D© v9.0 software. Historical and modern data for the property were reviewed by the CPs for

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Table A-4. Sierra del Perdón JORC Exploration Target

(effective date 17 March 2015)

Potash Beds	Depth Range (m)	Tonnage (Mt)	Average K2O (wt %)
Carnallite 100‒1,400 Sylvinite Total Same		100‒250 9‒13 50‒100 10‒14 150‒350
Notes: m = meters, Mt = million tonnes.
Sylvinite is a mechanical mixture of sylvite (KCl) and halite (NaCl). Carnallite refers to a mechanical mixture predominantly of carnallite (KCl·MgCl2·6H2O) and halite (NaCl).
Target cutoffs: (a) bed true thickness ≥ 1.5m: grade cutoff ≥ 8.0%K2O, or (b) true thickness < 1.5m:grade-thickness cutoff ≥ 12.0%K2O-m. Carnallite occurs in up to two separate beds. Sylvinite occurs in one bed. Approximately 50% of the carnallite target overlies historical mine workings in the sylvinite bed.

quality and completeness. Data utilized in the model include historic drill hole logs, modern drill hole logs and core assays, historic and modern interpretations of 2D seismic surveys, surface topography in the form of a digital elevation model (DEM), permit boundary lines, historic mineral inventories, historic geological surface mapping, and historical mining records from the Potasas de Navarra and Potasas de Subiza mines which include plan view maps and elevation profiles.

Figure A-5 shows the surface topography, permit boundaries, seismic lines, and locations of the historic and modern exploration core holes applied to the Mineral Resource estimate. Hole SDP-009 was drilled outside of the deposit and was used for boundary definition. Difficult drilling conditions forced Hole SDP-002 to terminate prematurely without producing potash core for assay. SDP-002 was replaced by nearby SDP-006. SDP-006 produced core through the CU bed, but no core was recovered from the lower beds. SDP-005 drilled through a 2.7-m-high opening in the Subiza mine (SYL horizon). While potash was identified in the upper beds overlying the mining horizon and below the mining horizon, core recovery was incomplete in all beds and the core could not be used for assay. Complete core was recovered in SDP-004 and SDP-013. Composites from assays were calculated and used for resource modelling in all three potash beds in SDP-004 and SDP-013, and CU in SDP-006.

No historical holes were used directly for resource modelling because assay data were not available. However, lithology logs were available for a majority of historical holes. Holes showing potash were used in the interpretation of resource continuity. Historical mining was similarly used in the interpretation of resource continuity. Detailed mine maps and geologic profiles were available in the historical records. Maps and profiles were digitized and registered in the 3D computer model. Mapped areas deemed unmineable by historic miners due to faulting or bed thinning were relied upon and excluded from the resource.

Figures A-6 and A-7 describe the general 3D geometry of the block model including the base-of-salt surface and other major structural features. Figure A-8 illustrates the subsurface block model with overburden blocks overlying the evaporite.

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Figure A-5. Block Model Surface Topography, Seismic Lines and Drill Holes (plan view)

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Figure A-6. Block Model Cutaway Exposing Drill Holes and Base-of-Salt Surface (view to north-northeast)

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Figure A-7. Block Model Cutaway Showing Major Faults and Historical Mine Workings (view to northnorthwest)

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Figure A-8. Block Model Cutaway Exposing Subsurface Blocks (view to north-northwest)

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The Mineral Resource is bound to the north and east by the evaporite outcrop at surface and is open at depth to the west. No potash resource is claimed 200–300 m downdip of the outcrop to account for abrupt upturning of the strata near outcrop and evaporite dissolution at surface. The resource is bound to the south by the basin margin as defined by structural interpretation, seismic surveying, and limited drilling.

Resource exclusions were applied around major faults, consistent with historic mining. Potasas de Navarra mined approximately 23 Mt of sylvinite in the SYL horizon, grading 13.8% K2O on average, between 1972 and 1985, with limited potash mined prior to 1972. Potasas de Navarra mined another 5 Mt of carnallite in the overlying CL horizon, grading 11.3% K2O on average, between 1972 and 1978. Operations shifted to Subiza in 1986 where approximately 14 Mt of sylvinite was mined in the sylvinite horizon, grading 14.5% K2O on average through 1997. A minimum 50-m buffer was applied around historical workings. The mining footprints plus buffer were excluded from the bed-specific resource.

Grade parameters were composited as length-weighted averages of the individual assays over a continuous bed thickness. In most instances, top and bottom bed contacts are gradational, introducing some trade-off between grade and thickness. Contacts were selected to maximize thickness while maintaining a composite grade as close as possible to 12.0% K2O with a true thickness equal to greater than 1.5 m. Depending upon the vertical grade distribution, bed thicknesses less than 1.5 m and composite grades less than 8.0% K2O were required for geologic modelling in some instances. Composite values for the drill holes used in the resource estimate are summarized in Table A-3.

Bed thicknesses were corrected to true thicknesses for modelling according to local dip and downhole deviation survey data. Structural dip was calculated from the base-of-salt surface constructed from seismic, outcrop, historic mine survey, and historic and modern drill hole data. Dips in individual beds were adjusted locally by stacking the variable-thickness interburden and potash beds above the base-of-salt surface.

Block true thicknesses and grade parameters (K2O, MgCl2, insolubles content) were interpolated/extrapolated utilizing an inverse distance squared (ID2) model. Block estimation was limited to an isotropic search radius of 20,000 m and the 15 closest data points (drill holes). Kriging was not attempted due to the limited number of composites available. Geostatistical modelling may be justified in the future with additional drilling.

The SdP Mineral Resource estimate is summarised by resource classification, permit area, and potash bed in Table A-5. The Mineral Resource represents a subset of the original Exploration Target. The Mineral Resource has an effective date of 23 March 2015.

The resource is based upon the following cutoffs which support reasonable prospects for economic extraction by conventional mining methods:

• Bed true thickness ≥ 1.5 m: Cutoff is grade ≥ 8.0% K2O

• Bed true thickness < 1.5 m: Cutoff is grade x thickness ≥ 12.0 %K2O-m

The grade-thickness cutoff maintains the equivalent of an 8.0% K2O grade at 1.5 m for thin beds (<1.5 m).

The resource is reported as in-place tonnes of potash contained in the respective potash beds. The potash can occur as either sylvinite or “carnallitite.” Sylvinite is a mechanical mixture of halite and sylvite (KCl) with minor inclusions of insolubles (typically clays). Carnallitite is a mechanical mixture of halite and carnallite (KCl·MgCl2·6H2O), with minor inclusions of insolubles. Beds CU and CL are dominantly carnallitic with minor sylvite, while SYL is dominantly sylvinitic with local occurrences of carnallite. The average weight percent of sylvinite and carnallite in the resource is reported by bed in Table A-5.

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Table A-5. Sierra del Perdón JORC Mineral Resource Estimate

(effective date 22 March 2015)

Permit Area and Potash Bed	Average Bed Thickness (m)	Tonnes In-Place (Mt)	K2O (wt %)	Carnallite (KCl·MgCl2·6H2O) (wt %)	Sylvite (KCl) (wt %)	Insolubles (wt %)	In-Place Bulk Density (t/m3)
INDICATED
Adiós
Upper Carnallite 1.5 Lower Carnallite - Sylvinite - Quiñones Upper Carnallite 1.7 Lower Carnallite 2.8 Sylvinite 2.5		5.5 8.8 41.9 2.6 12.0 1.93 - - - - - - - - - - - - 11.0 9.0 50.1 1.1 12.7 1.89 18.0 10.9 47.3 4.6 9.0 1.90 7.3 14.6 1.3 22.7 11.1 2.12
All Permit Areas
Upper Carnallite 1.6 Lower Carnallite 2.8 Sylvinite 2.5		16.5 8.9 47.4 1.6 12.4 1.90 18.0 10.9 47.3 4.6 9.0 1.90 7.3 14.6 1.3 22.7 11.1 2.12
		41.8 10.7 39.4 6.5 10.7 1.94
INFERRED Adiós
Upper Carnallite 1.6 Lower Carnallite 3.1 Sylvinite 2.5 Quiñones Upper Carnallite 1.7 Lower Carnallite 2.7 Sylvinite 2.1		12.6 8.9 43.7 2.3 12.3 1.92 3.2 11.3 46.6 5.3 9.1 1.90 2.9 14.4 1.3 22.4 11.0 2.12 6.1 9.0 49.8 0.9 12.6 1.89 10.0 10.6 48.0 3.9 9.0 1.90 5.6 13.4 1.3 20.8 10.4 2.12
All Permit Areas
Upper Carnallite 1.6 Lower Carnallite 2.8 Sylvinite 2.2		18.6 8.9 45.7 1.9 12.4 1.91 13.2 10.7 47.6 4.2 9.0 1.90 8.5 13.7 1.3 21.4 10.6 2.12
		40.3 10.5 37.0 6.7 10.9 1.95

Notes:

Potash mineralization bulk density varies by carnallite, sylvite, halite, and insolubles fractions ranging from 1.6 to 2.2 t/m[3] . The resource estimate does not include any out-of-bed dilution. Resource cut offs: (a) true thickness ≥ 1.5m: grade cutoff ≥ 8.0%K2O, or (b) true thickness < 1.5m: grade-thickness cutoff ≥ 12.0%K2O-m.

Resource reduced by 15.0% allowance for unknown geologic anomalies within resource footprint. Indicated Resource—potash meeting cut off criteria located between 0m and 1,000m of a modern exploration core hole with assays, except where otherwise limited by geologic or mining boundaries. Inferred Resource—potash meeting cut off criteria located between 1,000m and 2,000m radius of a modern exploration core hole with assays or within 2,000m of an historical exploration core hole, except where otherwise limited by geologic or mining boundaries.

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Tonnages are estimated using a variable in situ bulk density calculated for each model block based on the relative modelled fractions of sylvite, carnallite, halite, and insolubles. Depending upon the mineral fractions, densities can range from a low as 1.6 tonnes per cubic meter (t/m[3] ) for pure carnallite to 2.2 t/m[3] for insolubles only. The average bulk densities for the beds mostly fall between 1.90 and 2.15 t/m[3] .

Potash bed true thicknesses from the block model are illustrated in Figures A-9 through A-11 for CU, CL, and SYL, respectively. Composite K2O grade blocks are presented in Figures A-12 through A-14 for the corresponding beds. The figures show blocks out to 2,000 m from a drill hole with assays.

Underground room-and-pillar mining is the base case mining scenario for justifying reasonable prospects for eventual economic extraction. Room-and-pillar and longwall mining were historically practiced at Navarra and Subiza for 26 years. There is a reasonable expectation that potash outside the historic mining footprint can be accessed and extracted by selective room-and-pillar mining. Potash beds overlying the historical workings also have reasonable potential for economic extraction based on evidence that those beds remain mineable above the old workings. Industry experience in potash and salt has shown that mining is often possible in undermined beds, even with high extraction and thin interburden, due to the competent and highly plastic behaviour of potash and salt. The effects of thin interburden, multi-seam mining are identified as a key risk factor with potential to affect recovery and mining economy.

Carnallite also poses a risk because carnallite creeps (plastically deforms) at a substantially faster rate than salt or sylvinite and mining must be adapted to withstand relatively high entry closure rates. While there is extensive industry experience mining in salt or sylvinite, industry experience with conventional mining experience in carnallite is limited.

The 5 Mt of carnallite mined over seven years at Navarra demonstrates that carnallite mining is locally feasible and has reasonable potential in the future.

Considering these and other mining risks, the carnallite-sylvinite Mineral Resource is considered to have reasonable prospects for eventual economic extraction. However, this is a minimum standard and does not assure that the actual economics of extraction will prove sufficiently attractive for investment in current or future markets, depending upon the economic criteria of investors. The impacts of these and other risks on extraction economy are only quantifiable for a specific mine plan at the scoping, pre-feasibility, and/or feasibility study level.

The project is at an early exploration stage. Geologic uncertainty and the impacts of historical mining are principal risks. While historical mining, and drill hole and seismic data, substantiate bed continuity across the property, variations in potash thickness, grade, and mineralogy are expected. Faults, folds, wants, and other structural disturbances can sterilise resource locally. Known sterilised areas defined by historical mining and known structure were explicitly excluded from the resource estimate. An additional 15% of the resource tonnes were factored out of the estimate as an allowance for geologic and mining uncertainty within the resource footprint.

The radii-of-influence (ROI) used for the Mineral Resource classification reflect the interpreted degree of predictability (or conversely, variability) within the deposit. Resource classifications for the deposit are stated as follows:

• Indicated Resource —Sylvinite meeting cutoff criteria located between 0 m and 1,000 m radius of a modern exploration core hole with assays, except where otherwise limited by geologic or mining boundaries.

• Inferred Resource —Sylvinite meeting cutoff criteria located between 1,000 m and 2,000 m radius of a modern exploration core hole with assays, except where otherwise limited by geologic or mining boundaries.

No part of the resource is classified as Measured due to the limited number of reliable modern drill holes for characterization, their wide spacing, and the uncertainty surrounding the impacts of historical mining on future

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Figure A-9. Block Model Bed True Thickness—Bed CU (plan view)

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Figure A-10. Block Model Bed True Thickness—Bed CL (plan view)

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Figure A-11. Block Model Bed True Thickness—Bed SYL (plan view)

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Figure A-12. Block Model Bed Composite K2O Grade—Bed CU (plan view)

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recovery methods (a Modifying Factor). Mineral Resource classification areas identified in Table A-5 are shown in Figures A-15 through A-17 for the respective potash beds.

The criteria on which the mineral resource was based are summarized in Table A-6 “JORC Checklist of Assessment and Reporting Criteria.”

The reader is cautioned that a Mineral Resource is an estimate only and not a precise and completely accurate calculation, being dependent on the interpretation of limited information on the location, shape, and continuity of the occurrence and on the available sampling results. Actual mineralisation can be more or less than estimated depending upon actual geological conditions.

The Mineral Resource statement includes Inferred Mineral Resources. There is a low level of geological confidence associated with Inferred Mineral Resources and there can be no certainty that further exploration work will result in the determination of Indicated or Measured Mineral Resources. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. No Mineral Reserves are being stated.

References

Barcelona POSUSA, (1987). “Recursos Minerales Reservas ‘Javier-Los Pintano’ y ‘Monreal,’”. Internal document .

Busson, G. and B. C. Schreiber (Eds.) (1997). Sedimentary Deposition in Rift and Foreland Basins in France and Spain (Paleogene and Lower Neogene) . Columbia University Press, 480 pp.

Del Valle, J. (1978). Mapa geologico de Espana, E 1:50,000 2. Ser. 1[st] ed, Hojo norte 141, Pamplona, y Memoria Explicativa. IGME Serv. Pub. Min. Ind.

e.n. adaro (1965). Investigacion de Potasas en la zona Subpirenaica, informe para Potasas de Subiza S.A, Departamento de Yacimientos Sedimentarios (internal document).

e.n. adaro (1970). Resumen del resultado de los sondeos Perforados para Investigar Potasas. Anexo 2.

e.n. adaro (1985a). Proyecto de Investigacion del borde oeste del yacimiento del Perdon—Tomo I. Informe de resultados.

e.n. adaro (1985b). Proyecto de Investigacion del borde oeste del yacimiento del Perdon—Tomo III. Estudio petrologico, mineralogico, geoquimico.

e.n. adaro (1988–1991). Investigación y Evaluación de Mineral en el Area de Javier-Los Pintano Memoria, informe para Potasas de Subiza S.A, Departamento de Yacimientos Sedimentarios (internal document).

Garrett, D. E. (1996). Potash Deposits, Processing, Properties and Uses . London: Chapman & Hall.

Geoalcali S.L. (2012). “Navarra-Aragón Basin Potash Deposits Assessment Spain.” Internal document.

Highfield Resources (2013). “Highfield Resources Delivers Maiden Inferred JORC Resource of 163.2 Mt of Sylvinite at Javier.” ASX press release, 08 October, 6 pp.

Instituto Tecnologico Geominero de España (ITGE) (1987). National Inventory Potash Resources.

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Figure A-13. Block Model Bed Composite K2O Grade—Bed CL (plan view)

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Figure A-14. Block Model Bed Composite K2O Grade—Bed SYL (plan view)

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Figure A-15. Mineral Resource Areas—Bed CU (plan view)

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Figure A-16. Mineral Resource Areas—Bed CL (plan view)

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Figure A-17. Mineral Resource Areas—Bed SYL (plan view)

International Plant Nutrition Institute (2014). http://www.ipni.net/publication/nss.nsf/0/8FBD66599EAB433F85257 9AF00741710/$FILE/NSS-03%20Potassi umChloride.pdf. Website assessed by V. Santos, 5 May.

Joint Ore Reserves Committee (JORC) (2012). “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves.” Effective 20 December 2012 and mandatory from 01 December 2013, 44 pp.

Mayoral, Gonzálo (2013). “Sierra del Perdón Potash Deposit.” Internal Geoalcali memo.

Menendez, N. (1971). Geologia. Complement al estudio geologico de nuetro yacimiento de diciembre de 1970. Nociones generals previas. / Geologia (II Parte). Mineralogia del yacimeinto del Perdon (supplement al estudio geologica de enero de 1971) Potasas de Navarra, SA Informe interno.

Moore, P. (2012). “Potash from Iberia.” Retrieved January 2013 from Info Mine: http://www.infomine. com/library/publications/docs/InternationalMining/Moore2012u.pdf, June, accessed by V.Santos.

Ortiz, L. R. and F. R. Cabo (1981). “The Saline (Potash) Formation of the Navarra Basin (Upper Eocene, Spain).” Petrology, Revista del Instituto de Investigaciones Geologicas Diputacion Provincial . Universiad de Barcelona, Voy 35-1981/82, pp. 72–121.

Orti Cabo, F., L. Rosell Ortiz, and J. J. L. y Pueyo Mur (1984). “Cuenca Evapor. (Potásica) Surpir. del Eoc. sup. Aportac. para una Interpr. Deposic. Libro Homenaje a L. Sánchez de la Torre.” Publicaciones de Geología , nº 20. Universitat Autónoma de Barcelona, pp. 209–231.

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Orti, F., J. M. Salvany, L. Rosell, J. J. Pueyo, and M. Inglés (1986). “Evaporitas Antiguas (Navarra) y Actuales (Los Monegros) de la Cuenca del Ebro.” Guia de las Excursiones del XI Congreso Español de Sedimentología /

Stirrett, T. and K. Mayes (2013). “JORC Mineral Resource Estimate of the Javier-Pintano Project Area, Spain.” Internal report prepared for Highfield Resources Ltd., 25 April.

University of Michigan (2004). “Geologic Map of the Pyrenees.” From http://www-personal.umich.edu /~jmpares/ Pyrenees-Trip.html accessed by V. Santos, October 2014.

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Table A-6. JORC Checklist of Assessment and Reporting Criteria

Section 1 Sampling Techniques and Data

Criteria	**JORC Code explanation **	**JORC Code explanation **	Commentary	Commentary
Sampling		Nature and quality of sampling (e.g. cut		The Sierra del Perdón Potash Project (the “Project”) represents the westernmost
techniques		channels, random chips, or specific specialised		potash deposit of the Navarre Basin. Twenty-five holes (Table A-1) were drilled
		industry standard measurement tools appropriate		and cored with the deposit area with additional holes drilled as part of a regional
		to the minerals under investigation, such as down		exploration program. The date and methodology of these holes is uncertain, most
		hole gamma sondes, or handheld XRF		likely they were drilled in the 1950s. In most cases, there are lithology logs for the
		instruments, etc.). These examples should not be		historic holes and their use in the resource is limited largely to structural
		taken as limiting the broad meaning of sampling.		information.
		Include reference to measures taken to ensure		Six new holes (see Table A-3) have been drilled and cored since 2013 by
		sample representivity and the appropriate		Geoalcali Sociedad Limitada (Geoalcali). One hole (SDP-009) was barren and
		calibration of any measurement tools or systems		interpreted to be outside of the main basin. SDP-002 drilled into old workings in
		used.		the Guendulain area, was incomplete, and showed poor core recovery and drilling
		Aspects of the determination of mineralisation		only to what is thought to be carnallite upper (CU). One hole (SDP-006) in the
		that are Material to the Public Report.		same area was incomplete and drilled to the top of the mined-out sylvinite. One
		In cases where ‘industry standard’ work has been		hole (SDP-005) also drilled through what is interpreted to include the mined-out
		done this would be relatively simple (e.g. ‘reverse		portion of the sylvinite section; it exhibits poor recovery and dissolution of the
		circulation drilling was used to obtain 1 m		core. SDP-004 and SDP-013 are the only truly complete holes used in this
		samples from which 3 kg was pulverised to		resource; both show core recovery at greater than 99% through the mineralized
		produce a 30 g charge for fire assay’). In other		zone. These holes have detailed logs and assay but not downhole geophysical
		cases more explanation may be required, such		records.
		as where there is coarse gold that has inherent		Additional drilling is recommended in the Sierra del Perdón property. Planned drill
		sampling problems. Unusual commodities or mineralisation types (e.g. submarine nodules) may warrant disclosure of detailed information.		hole locations are found in Table A-3 and shown in Figure 1. Geoalcali is a 100% owned Spanish subsidiary of Highfield Resources (Highfield or the “Company”). The historical drilling program resulted in compiled reports which are referenced in
				the Appendix. In general, the historical programs were well-documented but
				lacking in detailed explanation of assay work or procedure.
				The new drill holes have been geologically logged, photographed, and assayed.
				Some of the holes were geophysically logged through the mineralised zone.
				Following logging and photographing, samples are marked and numbered for
				assay.Coreis sawedwith hydraulic oilasthelubricating agent;half-coreis

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Criteria	**JORC Code explanation **	**JORC Code explanation **	Commentary	Commentary
				retained and shrink-wrapped, and samples to be assayed are bagged and
				secured with plastic ties and boxed for shipping to ALS Global (ALS) for crushing,
				grinding and splitting. Cored samples are assayed by inductively coupled plasma-
				optical emission spectrometry (ICP-OES) and X-ray fluorescence (XRF) by ALS.
				Sample preparation is in Seville, Spain and assay work is completed in Loughrea,
				County Galway, Ireland. ALS has a documented methodology and quality
				assurance/quality control (QA/QC) protocol.
				Geophysical logs are available for SDP-004, SDP-006, and SDP-009. No
				geophysical logs are available for the 25 historical holes.
Drilling		Drill type (e.g., core, reverse circulation, open-		Drilling and coring procedures for the historical Sierra del Perdón holes are
techniques		hole hammer, rotary air blast, auger, Bangka,		unknown.
		sonic, etc.) and details (e.g., core diameter, triple or standard tube, depth of diamond tails, face- sampling bit or other type, whether core is oriented and if so, by what method, etc.).		The deposit was discovered in 1929 based on the assay of brines sourced from Guendulain springs area, 5.5 km southwest of Pamplona City. On June 23, 1929, the first drill hole completed intersected 9 m at 13.92% K2O to 78 m deep. Additional regional exploration was begun in Navarre, first by the Spanish
				government with five holes across the area; one each in Pamplona, Subiza,
				Guendulain, Javier and Tafalla. This was followed by more detailed work in the
				Sierra del Perdón area beginning with e.n. adaro (drill holes 1 through 21, Table
				A-1) , probably conducted in the 1950s, and then by Potassa de Navarra, SA (drill
				holes 22 through 25). Additional regional exploration by e.n. adaro and Potasas
				de Navarra, SA tested the outer extents from the main Basin in Iborgoiti,
				Celigueta, Sengariz, Lecaun and into Aragon.
				In 2013, a drilling program was initiated in Sierra del Perdón. Holes were drilled
				open hole to core point for SDP-013 (151.0 m), SDP-006 (95.5 m), SDP-05
				(107.0 m) and from surface for SDP-009, SDP-004 and SDP-002. The tricone bit
				used for open-hole drilling was reduced through stages from 12¼-inch to 5⅞-inch
				diameter. Upon completion, the hole was abandoned and cemented through the
				8½-inch diameter drill hole. When the top of salt is reached, the mud is re-
				formulated to a super-saturated brine to eliminate or diminish dissolution of the
				highly soluble evaporite minerals. Drilling has been contracted to Geonor
				Servicios Tecnicos S.L. of Galicia, Spain using a Christensen CS3000.

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Criteria	**JORC Code explanation **	**JORC Code explanation **	Commentary	Commentary
Drill sample		Method of recording and assessing core and chip		Detailed information on core recovery for the historical program is not available
recovery		sample recoveries and results assessed.		and limited assay data is available and not used in this resource evaluation.
		Measures taken to maximise sample recovery		Core recovery on the 2013 drilling campaign was poor in three holes (SDP-002,
		and ensure representative nature of the samples.		SDP-005 and SDP-006) through the mineralized zones with intervals of lost,
		Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine/coarse material.		dissolved and mechanically disturbed intervals. The holes drilled into historic workings and core recovery was compromised above the open workings where circulation was initially lost and not recovered through the mined-out void or below.
				PQ core is the recommended diameter for core but in some instances, the hole is
				completed with HQ if there are drilling problems such as lost circulation and there
				is a need to case the hole and drop down in diameter size. SDP-005 and SDP-
				013 had HQ core. The core sampling procedure is well-documented in the 2013–
				2014 drilling program.
				Holes were drilled with NaCl and MgCl2saturated brine or near saturated brine to
				limit surficial dissolution (i.e., etching) of the core. Undersaturation could result in
				preferential dissolution of NaCl, KCl, and/or MgCl2. Core was visually inspected
				for etching and rejected for assay where excessive etching was observed.
Logging		Whether core and chip samples have been		Lithology logs were completed for the historical drilling programs and results were
		geologically and geotechnically logged to a level		described in the reporting for reserves at that time.
		of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.		In the modern program, cuttings were collected and core was logged, photographed, sampled, and assayed in approximately 0.3-m lengths. The core point, if not at the surface, was generally within the banded marls above the salt
		Whether logging is qualitative or quantitative in		and was completed at the base of the salt at the anhydrite marker bed to ensure
		nature. Core (or costean, channel, etc.)		complete coring through the salts and the mineralised zones.
		photography.
		The total length and percentage of the relevant
		intersections logged.
Sub-sampling		If core, whether cut or sawn and whether quarter,		On the 2013 drilling campaign core holes, samples were halved and quartered,
techniques		half or all core taken.		with a quarter sent for assay. This sampling methodology is the modern industry
and sample				standard. The sample intervals of approximately 0.3-m in length were taken over
preparation				thelengthof themineralisedinterval.Coreswere usuallyPQ (85millimeter

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Criteria	**JORC Code explanation **	**JORC Code explanation **	Commentary	Commentary
		If non-core, whether riffled, tube sampled, rotary		[mm]), but in the case of difficult drilling conditions, coring was reduced to HQ
		split, etc. and whether sampled wet or dry.		(63.5 mm).
				This smaller core diameter is not ideal for assay as some duplicates have shown
		For all sample types, the nature, quality and		variability. To try to mitigate this, duplicates are selected from HQ as true
		appropriateness of the sample preparation		duplicates rather than on a quarter-core sample. Quarter sample duplicates are
		technique.		selected for PQ core. In all cases, hole size was reduced to continue drilling in
		Quality control procedures adopted for all sub- sampling stages to maximise representivity of samples.		difficult hole conditions (lost circulation or kick-off) and is not part of normal procedure. The program forward has made procedural changes to reduce the risk of the need to downsize hole diameter.
		Measures taken to ensure that the sampling is
		representative of the in situ material collected,
		including for instance results for field
		duplicate/second-half sampling.
		Whether sample sizes are appropriate to the
		grain size of the material being sampled.
Quality of		The nature, quality and appropriateness of the		No detailed original assays are available for the historic drilling program.
assay data and laboratory tests	 	assaying and laboratory procedures used and whether the technique is considered partial or total. For geophysical tools, spectrometers, handheld XRF instruments, etc., the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation, etc. Nature of quality control procedures adopted (e.g. standards, blanks, duplicates, external	   	In the 2013 sampling program, assay was by ICP-OES and XRF. Highfield and ALS, the primary contract laboratory, maintained quality control procedures of standards, duplicates and blanks. SRM, blanks and duplicates were inserted, both by Highfield personnel during sample preparation and by ALS as part of their own QA/QC program. ALS inserted commercial standards BCR-113 and BCR-114 both potash fertilizer materials, a Muriate of Potash (MOP) and Sulfate of Potash (SOP), respectively, as well as their own internal standard as a blank material SY-4, a diorite gneiss. Duplicates were submitted to ALS and show good internal agreement.
		laboratory checks) and whether acceptable levels		Highfield made multiple Standard or Certified Reference Material-type (SRM or
		of accuracy (i.e. lack of bias) and precision have		CRM) samples representing low-, medium-, and high-grade (LG, MG, HG) potash
		been established.		material, but the insertion rate is insufficient and outside round-robin testing is too
				limited to make reasonable conclusions as to accuracy and precision. Insertion
				rate is one blank, one SRM, and one lab duplicate per 20 samples or batch.

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
				Check samples were tested at SRC. In general, SRC reports K2O values lower
				than ALS reports. Because ALS and SRC show good internal agreement, this
				suggests a calibration issue.
Verification of		The verification of significant intersections by		ALS assayed samples both by ICP and XRF. In general, ICP analysis shows
sampling and		either independent or alternative company		adequate agreement with assays by XRF, which consistently report slightly higher
assaying		personnel.		values of K2O. Other holes showed similar bias, thereby substantiating testing
		The use of twinned holes.		precision. The ICP method is the base method used for resource estimation.
	 	Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols. Discuss any adjustment to assay data.		Highfield receives all assay data in .xls or .csv format from the laboratories and one person is responsible for transferring those data into a master database and maintaining the QA/QC monitoring. AAI independently graphed the QA/QC data and reports outliers to Geoalcali for re-assay. Detailed graphs are constructed showing check samples, duplicated comparisons of duplicates for pulps, coarse
				rejects, as well as SRM and blank insertions.
				A database was built from the historical drill hole information by Highfield and
				checked by AAI against the historical reporting of assays and intervals listed on
				the lithologic logs.
				The master database was checked against the ALS-issued Certificates of
				Analysis (COA).
Location of		Accuracy and quality of surveys used to locate		Historical collar locations were generated from detailed comparison so the historic
data points		drill holes (collar and down-hole surveys),		maps. Historical data and maps are referenced to the European Datum 50
		trenches, mine workings and other locations		(ED50) and have been updated to the European Terrestrial Reference System
		used in Mineral Resource estimation.		1989 (ETRS89) datum for compatibility with modern survey information.
		Specification of the grid system used.		All new locations from the 2013 drilling program are surveyed before and after
		Quality and adequacy of topographic control.		drilling by a licensed surveyor.
Data spacing		Data spacing for reporting of Exploration Results.		Exploration drill hole spacing is illustrated on the scaled maps in Figures A-2 and
and distribution		Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral		A-4 and samples have been composited (Table A-3) over the thickness of identified potash beds for the reporting of exploration results. Potash bed names are provisional pending regional correlations.
		Resource and Ore Reserve estimation
		procedure(s) and classifications applied.

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Criteria	**JORC Code explanation **	**JORC Code explanation **	Commentary	Commentary
		Whether sample compositing has been applied.		Data spacing and distribution is poor. Of six holes drilled in the modern 2013
				campaign, only two holes had sufficient recovery in the mineralised zone to
				contribute to this resource. One hole was barren, representing the basin edge.
Orientation of		Whether the orientation of sampling achieves		Deviation data were available in the 2013 drilling program. In building the new
data in		unbiased sampling of possible structures and the		database, apparent bed dips from the lithology logs were incorporated from
relation to		extent to which this is known, considering the		historical and new holes to attempt to correct to true bed thickness.
geological structure		deposit type. If the relationship between the drilling orientation		The regional structure is discussed in more detail in “Geology”, but the basin structural dip is interpreted from regional maps, the Compagnie Generale de
		and the orientation of key mineralised structures		Geophysique (CGG) “top of salt” map, and new drill hole control. The deposit is
		is considered to have introduced a sampling bias,		bedded.
		this should be assessed and reported if material.		A historical structure map with fault offsets (Figure A-2) is used for the
				interpretation of bed orientation and is modified and corrected to reflect updated
				drill holes. That discussion is found in “Seismic Survey and Structure.”
Sample		The measures taken to ensure sample security.		In the 2013 drilling program, Highfield personnel maintained effective chain of
security				custody procedures for the samples. Core was picked up at the drill site and
				brought to the secured warehouse for detailed logging and sampling. Following
				sampling (see sections on sampling herein), sample bags and boxes were
				secured with zip ties for shipping to the laboratory.
Audits or		The results of any audits or reviews of sampling		ALS assayed samples both by ICP and XRF and these values were compared as
reviews		techniques and data.		discussed in “Verification of sampling and assaying data.”

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Section 2 Reporting of Exploration Results

Section 2 Reporting of Exploration Results	Section 2 Reporting of Exploration Results	Section 2 Reporting of Exploration Results
(Criterialistedin the preceding sectionalso applytothis section.)
Criteria	JORC Code explanation
Mineral		Type, reference name/number, location and
tenement and		ownership including agreements or material
land tenure status		issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.
		The security of the tenure held at the time of reporting along with any known impediments to obtaining a license to operate in the area.

• Commentary  Property descriptions and land status were obtained from the list of lands as set forth in the documents provided by Highfield.

• The Sierra de Perdón property is comprised of two Investigative Permits (PIs) and one extension permits converted to a PI (Table 3 and Figure 1). These PIs have a surface area of 14,898 hectares and cover 100% of the deposit of Sierra del Perdón and any potential areas of exploration.

• The competent persons (CPs) have reviewed the mineral tenure from documents provided by Highfield including permitting requirements, but have not independently verified the permitting status, legal status, ownership of the project area, underlying property agreements or permits. Therefore, AAI has fully relied upon Highfield, and disclaims responsibility for that information.

• Exploration and exploitation of mineral deposits and other geological resources in Spain are governed by the Mining Law 22/1973, which is further governed by the Royal Decree 2857/1978. All sub-surface geological structures, rocks, and minerals are considered the property of the public domain and are categorised into four sections under Spanish law (A, B, C, and D), and must have mining authority authorisation and supervision for commercial exploitation. Section C covers the minerals of interest for Highfield, and a mining concession would need to be awarded prior to exploitation which requires the accompaniment of environmental permits and municipal licenses (electrical, water etc.). Generally, exploration and investigation permits are applied for prior to applying for a mining concession (not a legal obligation), and are aimed at determining the mineral resource potential of the area through exploration practices (drilling, seismic, sampling. etc.). These are granted through the region’s government/mining authority where the exploration or investigative work will take place.

• Exploration permits (PE) are valid for one year and can be renewed for one additional year. A PE allows only non-intrusive investigation, which is defined by the various Spanish regions and can vary.

• A PI is good for up to three years and renewable in three-year terms or longer depending on the scope of the intended work. Investigation permits carry with

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Criteria **JORC Code explanation **	Commentary
	them municipal approval as they are publically released for community discussion. To carry out work under the investigation permit, the permittee must contract with the individual landowners to allow for access and occupation of the land during the exploration.  In order for both types of permits to remain valid, the applicable taxes must be paid and the permittee must comply with the applicable regulations and exploration plan approved by the mining authority. Investigation permits require assessment reporting which requires the permittee to submit working plans, budgets, and initiate work within certain time allotments. Exploration and investigation permits can be transferred in whole or in part to other third parties with enough technical and financial backing, but must be authorised by the proper mining authorities in Spain.
Exploration done by other parties  Acknowledgment and appraisal of exploration by other parties.	 Potash was first discovered in the Ebro Basin in the Catalonia area in 1912 at Suria after the potash discoveries in Germany (Moore 2012). Salt was first discovered through drilling, later followed by four economic potash mining zones with a combined total thickness of 2.0 to 8.0 m (Stirrett and Mayes 2013). The potash horizons in the area were identified to cover approximately 160 square kilometers (km2) at depths of approximately 500 m subsurface, unless they were brought closer to surface by anticlinal or tectonic structures (Stirrett and Mayes 2013). Several deposits were located in the Catalonia area, including Cardona, Suria, Fodina, Balsareny, Sallent, and Manresa. Several of these areas were developed into mines and are all flanked by anticlinal structures. The potash deposits in the Navarre region were not located until later, in 1927, through comparative studies to the deposits found at Catalonia (Stirrett and Mayes 2013). The exploration efforts later led to the development of a mine near Pamplona and Beriain.  The Sierra del Perdón Potash Project represents the westernmost potash deposit of Navarre basin. The deposit was discovered in 1929 based on the assay of brines sourced from Guendulain springs area, 5.5 km southwest of Pamplona City. On June 23, 1929, the first drill hole completed intersected 9 m at 13.92% K2O to 78-m deep. Additional regional exploration was begun in Navarre, first by the Spanishgovernment with five holes across the area;one each in Pamplona,

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
				Subiza, Guendulain, Javier and Tafalla. This was followed by more detailed work
				in the Sierra del Perdón area beginning with e.n. adaro (drill holes 1 through 21),
				probably conducted in the 1950s, and then by Potassa de Navarra, SA (drill holes
				22 to 25) [Table A-1].
				Production at Pamplona began in 1963 with a capacity of 250,000 tonnes per
				year (tpy) of K2O. A thick carnallite member overlies the sylvinite, so in 1970 a
				refinery with the capacity for 300,000 tpy was built to accommodate carnallite
				from the Esparza (Stirrett and Mayes 2013). Carnallite mining was ceased in
				1977. Inclined ramps for the mine were located near Esparza, reaching the
				centre of the mine, with further shafts located at Beriain, Guendulain and
				Undiano. In 1982, 2.2 Mt of sylvinite were extracted with an average K2O grade
				of 11.7% (Stirrett and Mayes 2013). The operations in Navarre were closed in
				the late 1990s.
				In 1983, a 2D seismic survey was run for e.n. adaro by CGG over the Sierra del
				Perdón property (e.n. adaro 1985a and b). This consisted of 22 lines totalling
				111 km (Figure A-4). Earlier work included a seismic campaign in 1963 and a
				minie-sosie (shallow seismic using a vibration-rammer source) campaign in 1979
				and a vibrosesimic program by Otono in 1981. The resulting structure maps for
				both the top (“techo”) of salt (base of Marl), with major faults, were developed by
				CGG in combination with the regional seismic records, field maps, satellite
				imagery and drill hole data. Additional surfaces identified at that time include the
				unconformity at the Miocene conglomerates, the base of the Galar Sandstone
				and the resulting isopachs. In addition, early work identified an area of possible
				erosion in the upper salt along the interpreted anticline. The potash-bearing
				zones lack any velocity/density contrasts within the salt; it is not possible to
				detect potash or map the structure of the zone directly
Geology		Deposit type, geological setting and style of		The Upper Eocene potash deposits occur in the sub-basins of Navarre and
		mineralisation.		Aragón provinces within the larger Ebro Basin (Figure A-1). The Navarrese sub-
				basins include Sierra del Perdón, Muga-Vipasca (Javier) and adjoining Pintano
				deposits. This potash deposit contains a 100-m-thick Upper Eocene succession
				of alternating claystone and evaporites (anhydrite, halite, and sylvite). The
				evaporites accumulated in the elongated basin at the southern foreland of the

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Commentary

Pyrenean range (Busson and Schreiber 1997). The evaporites overlie marine deposits and conclude in a transitional marine to non-marine environment with terrigenous influence. Open marine conditions existed in the Eocene-Oligocene epochs progressing to a more restricted environment dominated by evaporation and the deposition of marl, gypsum, halite, and potassium minerals. Later, tectonism and resulting salt deformations formed broad anticlines, synclines and overturned beds, which created outcrops of the evaporite sequence. The Sierra del Perdón sub-basin is notably different from the eastern Javier Pintano basins, with predominantly carnallite mineralisation overlying sylvinite, suggesting a more immature diagenesis because carnallite is considered primary and sylvinite secondary. The formation of the evaporites is further influenced by the basin restriction, and paleo highs and lows which are perhaps defined by block faulting as well as the main structural basin bounds.  The different basins are separated by orogenic events developing in the north and south as turbidite basin carbonate platforms. Towards the end of the Eocene epoch, the sedimentation axis migrated south to the Jaca-Pamplona Basin, on which the Oligocene materials were deposited. The pre-evaporitic basin sedimentation occurs in a context of continuous tectonic compression during the Eocene and Oligocene epochs, as synsedimentary tectonics of the end of the orogeny, with pronounced sediment influx. The influence of the turbidites towards the end of the Eocene epoch in the Bartoniense series from the northwest into the basin as the Belsue Formation is indicative of continued subsidence.  At the east end of the basin, the evaporite levels crop out, and the evaporites are largely dissolved, exhibiting the remnants of the upper banded clays which unconformably overlie the Pamplona Marls. In some cases they are altered to gypsum and fibrous halites. The evaporites are part of a synclinal structure with the main axis plunging to the west. The syncline is compartmented in 3 sub- blocks which are separated by faults. The northern edge of the syncline is usually affected by the erosion with an inclination towards the south. The deposit has a gentle slope of 12 degrees (º), with a depth from between 60 and 70 m (elevation +700m)to1,100m(elevation –400m)inanorth-southextensionof5

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Commentary

to 6 km. Oligio-Miocene conglomerates unconformably overlie the southern flank.  The Sierra del Perdón basin is dominated by the SW-NE fault system named, from the south to the north, Falla (fault) de Subiza and Falla de Esparza, with several unnamed but numbered faults in between the major ones (Figure A-2). The faults are pre-evaporitic and therefore have influenced deposition within the basin and driven the historic mine advance. The faulted blocks are uplifted in the north (Falla Esparza) and the SE (Falla Subiza) and downdropped in the center which represents the depocenter.  Displacement along Esparza is approximately 300 m and between 600 and 800 m in Subiza (Menendez 1971; del Valle 1978). The area has been separated into mining blocks, Guendulain, Beriain, Subiza and Uniano. (An additional area lies between the major fault and represents the basin’s synclinal axis that has not been mined because it plunges and deepens. No drill holes have penetrated the salts so the depth of syncline is interpreted through historic seismic records. This area may also represent an offset similar to what is seen in the east, the Flexura de Ruesta that divides the Javier and Pintano sub-basin. [Empresa Nacional Adaro Investigaciones Mineras {e.n. adaro} 1988–1991]). An anticline interpreted from the historic seismic records crosses the basin NW-SE and may define an area where the upper salt has been eroded.  Potash is used to describe any number of potassium salts. By and large, the predominant economic potash is sylvite: potassium chloride (KCl) usually occurring mixed with halite to form the rock sylvinite, which may have a potassium oxide (K2O) content of up to 63%. Carnallite, a potassium magnesium chloride (KCl•MgCl2•6H2O) is also abundant, but has K2O content only as high as 17%. “Carnallite” is used to refer to the mineral and the rock interchangeably, although “carnallitite” is the more correct terminology for the carnallite and halite mixture. Besides being a source of lower grade potassium, carnallite involves a more complex production process, so it is less economically attractive than is sylvite.  The depositional environment is that of a restricted marine basin, influenced by eustasy,sea floor subsidence,and/or uplift and sediment input. It is suggested

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that the Ebro Basin is the result of a combination of reflux and drawdown. Reflux describes a basin isolated from open marine conditions, and thereby characterised by restricted inflow, increased density, and increased salinity. Drawdown is the result of simple evaporation in an isolated basin, and brine concentration and precipitation, consistent with the classic “bulls-eye” model (Garrett 1996). In this case, the Ebro Basin is further influenced by erosion at its edges due to contemporaneous and post-depositional uplift which results in localised shallowing and sediment influx (Ortiz and Cabo 1981) ) transitioning from marine to continental-type deposits. In the classic “bulls-eye” model, a basin that is cut off from open marine conditions will experience drawdown by evaporation in an arid to semi-arid environment. In the absence of sediment influx, precipitation will proceed from limestone to dolomite to gypsum, and anhydrite to halite. Depending on the composition and influences of the brine at that time, the remaining potassium, magnesium, sulfates, and chlorides will progress from potassium and magnesium sulfates to sylvite and then carnallite. It is proposed herein that the formation of carnallite and sylvite be described as primary and secondary, respectively.  In the Sierra del Perdón Potash Project area, the mineralogy is dominated by carnallite over sylvinite, which is medium red-orange and white, largely coarse crystalline in bands and in heavily brecciated beds containing high levels of insoluble material, largely fine-grained clays, anhydrite, and marl. The alternation from carnallite to sylvinite is not always complete and may vary from one bed to the next but it always occurs in the lower part of the sequence. The upper potash beds transition to finely banded light brown marls and clays which may exhibit salt veining and distortion as well as influx of dark grey clays and mudstones, representing the transition of the basin from marine to continental via basin-filling. The salts just below the potash tend to be dark grey to black. In some lower beds, halite becomes brownish, sandy to coarsely granular sand and sandstone as sediment influx from the Basin edges. The literature denotes this salt as “sal vieja” or “old salt” (Ortiz and Cabo 1981). The evaporite beds and bands, in general, are separated by fine to very coarse crystallised and recrystallised salts, generally grey, sometimes light-to-medium honey brown or white, with anhydrite blebs, nodules, and clasts.

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
Drill hole		A summary of all information material to the		Table A-1 shows the historical drill holes and Table A-3 shows the drill holes from
information		understanding of the exploration results including		the 2013 drilling program as well as wells proposed for the continued evaluation
		a tabulation of the following information for all		for the Project. This press release includes some picks that are preliminary.
		Material drill holes:		SDP-013 lies in the eastern portion of the basin in an area not previously mined.
		o easting and northing of the drill hole collar		It shows a similar lithologic sequence to the potash in Muga-Vipasca with the
		o elevation or RL (Reduced Level—		exception that the mineralogy is predominantly carnallite rather than sylvinite,
		elevation above sea level in metres) of the		over relatively thin, dark halite, and banded anhydrite at the base. The basal salt
		drill hole collar		over the banded anhydrite and lower marls is medium to dark grey and only
		o dip and azimuth of the hole o down hole length and interception depth		4.8 m thick. SYL is found in a 0.9-m layer (depth 521.3 m), 1.8 m below CL. CU is of relatively low grade, with an average of 8.2% K2O and 1.3 m thick. The banded marls above the carnallite show considerable distortion which may be
		o hole length.		attributable to localised faulting or mass sediment slumping and salt veining,
		If the exclusion of this information is justified on the basis that the information is not Material and		although they normally transition upwards and are capped by dark grey clays, likely representing sediment from the basin edge.
		this exclusion does not detract from the		SDP-009 defines the eastern extent of the basin and shows a foreshortened
		understanding of the report, the Competent		sequence in which the salt is thin (<2 m) and dissolved, exhibiting a spongey
		Person should clearly explain why this is the case.		texture of the original insolubles over a thin banded anhydrite with a bed of dark
				mudstone. The remnant salt is capped by alternating beds of banded and
				deformed, black and oxidized, light reddish brown and tan mudstones,
				suggesting the transition at the basin’s edge to a continental-type environment.
				The hole is shallow and was drilled to a depth of about 86.5 m to the top of the
				anhydrite. To help define the edge of evaporites, the logs for historic drill holes 8
				and 10 were reviewed and both show complete sequences of carnallite and
				sylvinite mineralization with 8 reporting steep dips of 80°. As in SDP-013,
				alteration of carnallite to sylvinite is incomplete as sylvinite is found in what is
				interpreted to be CU, and again at the base of the potash bed.
				SDP-006 is incomplete due to lost circulation in the mineralised zone below CU.
				The hole penetrated CU over 3.6 m carnallite at average 6.3% K2O. Below CU,
				core recovery was poor, hence, this hole was not be used in the resource
				estimation. This hole is excluded from the resource due to poor core recovery
				including below 205.7 m and complete loss after 213.5 m. This hole was drilled
				in the old workings in the Guendulain area in the northernportion of the deposit

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Criteria	JORC Code explanation	Commentary	Commentary
			and even though it was planned as an unmined block, it likely drilled into an area
			where the lower sylvinite was mined out. The closest historical hole is 2 which
			only reports “normal” conditions in the deposit which might be interpreted as a
			complete section of carnallite over sylvinite. In this area, both carnallite and
			sylvinite were mined and it is interpreted in this and other holes that the targeted
			beds were just below CU with the lowermost beds being sylvinite in most cases.
			SDP-005 was drilled within the old workings of the Subiza mine south of the main
			Beriain Fault and it is believed that the entire potash section was intersected.
			The hole lost circulation and was cored with HQ, with the core showing
			considerable dissolution and mechanical breakage and disking in the mineralised
			zone, making the assays suspect through most of the interval. Mineralisation is
			largely carnallite. Beds CL and SYL are separated by halite and low-grade
			material. Sylvinite interpreted to be bed SYL is present from 431.3 to 434.0 m
			where 2.7 m of core was lost, thought to be mined out and therefore, likely to
			have been sylvinite of good grade. Core was recovered again from 434.0 to
			435.8 m, reporting variable amounts of MgCl2. The banded marls above the salts
			show folding, distortion and salt veining but with less basin edge influence of
			clastics as basin fill. Logs for nearby historical hole 4 show carnallite from 235.2
			to 244.9 m (11.7 m) and sylvinite directly below to a depth of 250.5 m (5.6 m).
			SDP-004 was drilled near the old workings at Beriain and had a complete~~d~~
			intersection of the mineralised zone. What is interpreted as CU is 6.6 m of
			carnallite with overall grades of 5.6% K2O, containing higher grade beds within
			that. It shows medium red orange banding directly overlying CL and SYL, the
			latter with the usual mixed dark and light brecciation of clay and banding in the
			lower part. The lower part of CL is partially sylvinite with the alteration from a
			depth of 405.1 m, showing a marked difference in the appearance of the core.
			SYL is just below, from 406.6 to 409.9 m (3.3 m), with an average grade of 16.1%
			K2O. In this hole, the upper marls show dark clays and mudstones as
			intermediate basin edge influences. The hole finished in the basal, banded
			anhydrite and marls. The lower salt (Sal Muro) is light to medium grey and tan,
			banded, and medium crystalline with a minor bed of clay, of 15.1-m thickness.

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
				SDP-002 drilled into the old working in the Guendulain area and was incomplete,
				showing poor core recovery and drilling only to what is thought to be CU. It has
				no assays and is excluded from the resource. This was the first hole drilled;
				SDP-006 is an incomplete re-drill of SDP-002.
Data		In reporting Exploration Results, weighting		Composites by weighted average were made from the geochemical data to
aggregation		averaging techniques, maximum and/or minimum		optimise grade and thickness of the mineralised seams in both the new and
methods		grade truncations (e.g. cutting of high grades) and		historical data. Composites were summarised by bed and hole in Table A-2.
		cut off grades are usually Material and should be stated.		This press release includes some picks that are preliminary and further drilling will add confidence.
		Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical		All potassic values are in K2O percent. Most cations are reported as oxides and water-soluble material on a percent basis. ICP and XRF testing reports are in elemental values, but the industry standard is to report in oxides.
		examples of such aggregations should be shown
		in detail.
		The assumptions used for any reporting of metal
		equivalent values should be clearly stated.
Relationship		These relationships are particularly important in		Deviation data were available in the 2013 drilling program. In building the new
between		the reporting of Exploration Results.		database, apparent bed dips from the lithology logs were incorporated from
mineralisation widths and intercept lengths	 	If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported. If it is not known and only the down hole lengths		historical and new holes to attempt to correct to true vertical bed thickness Data on bed orientation were incorporated into the database to calculate apparent true thickness.
		are reported, there should be a clear statement to
		this effect (e.g. ‘down hole length, true width not
		known’).
Diagrams		Appropriate maps and sections (with scales) and		Figure 1 illustrate Highfield’s Sierra del Perdón property showing the current
		tabulations of intercepts should be included for		JORC Mineral Resource footprints.
		any significant discovery being reported. These should include, but not be limited to a plan view of		Figure A-2 shows the Sierra del Perdón interpreted regional structure and location of drill holes.

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Criteria **JORC Code explanation **	Commentary
drill hole collar locations and appropriate sectional views.
Balanced reporting  Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.	 Detailed exploration drilling results from individual holes appear in Highfield’s 27 November 2013 ASX release and included information on SDP-004, SDP-005, SDP-006 and SDP-013. These releases were before the detailed QA/QC review was conducted by AAI and before the adoption of 2012 JORC standards.
Other substantive exploration data  Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples—size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.	 In 1983, a 2D seismic survey was run for e.n. adaro by CGG over the Sierra del Perdón property (e.n. adaro 1985a and b). This consisted of 22 lines totalling 111 km (Figure A-4). Earlier work included a seismic campaign in 1963 and a minie-sosie (shallow seismic using a vibration-rammer source) campaign in 1979 and a vibrosesimic program by Otono in 1981. The resulting structure maps for both the top (“techo”) of salt (base of Marl) with major faults were developed by CGG in combination with the regional seismic records, field maps, satellite imagery and drill hole data.  RPS (formerly RPS Boyd Petrosearch) of Calgary, Alberta, Canada, completed a re-interpretation in 2013 of the 2D historical seismic lines and profiles on behalf of Highfield. The re-interpretation program was designed to review the overall accuracy of the historical data in terms of good correlation to drill hole data and geological intersections, as well as to identify any subsurface structures that may adversely affect the salt-bearing strata. Seismic survey lines were reviewed and were tied to wells using historical wireline data. No report was produced but structural maps for the top and base of the salt were produced that contributed to the interpretation of the basin in this report. The potash-bearing zones lack any velocity/density contrasts within the salt, so it is not possible to detect potash or map the structure of the zone directly.  The CPs used these structural data as generated by RPS but the structure map is modified and corrected to reflect updated drill holes.
Further work  The nature and scale of planned further work (e.g. tests for lateral extensions or depth extensions or large-scale step-out drilling).	 Additional drilling will be needed in the greenfield areas, including the deeper part of the syncline. Additional drilling has been proposed and planned (Figure 1 and Table A-3).

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Criteria	JORC Code explanation	JORC Code explanation	Commentary
		Diagrams clearly highlighting the areas of
		possible extensions, including the main geological
		interpretations and future drilling areas, provided
		this information is not commercially sensitive.

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Section 3 Estimation and Reporting of Mineral Resources (Criteria listed in the preceding section also apply to this section.)

Criteria JORC Code explanation	Commentary
Database integrity  Measures taken to ensure that data has not been corrupted by, for example, transcription or keying errors, between its initial collection and its use for Mineral Resource estimation purposes.  Data validation procedures used.	 Published lithologic intercepts from historical holes and associated footages and hole coordinates were manually entered into spreadsheets for modelling. Entries were systematically checked against the original publications to ensure accuracy.  Composite values and hole depths/coordinates in the MineSight geologic block model were visually compared (on screen) with values in the database values for accuracy.  In modern holes, duplicate and check assay samples were prepared for select intervals in each potash cycle. Duplicate cores were quartered and sent to ALS for analysis. ALS incorporated blank, repeat, and potash standard samples in the testing protocol. Check samples were sent to a second qualified laboratory to verify results. ALS maintains its own internal procedure and chain of custody to high industry standards. There was good agreement in the duplicates.  ALS is a laboratory of international repute for the analysis of potash. ALS maintains its own QC program. QC measures, and data verification procedures applied, include the preparation and analysis of standards, duplicates, and blanks.  Check samples were sent to SRC in Saskatoon, Canada, an accredited lab, and run with the same procedure as SRC and also showed good agreement.
Site visits  Comment on any site visits undertaken by the Competent Person and the outcome of those visits.  If no site visits have been undertaken indicate why this is the case.	 CPs Vanessa Santos and Leo Gilbride visited the project multiple times between 2011 and 2014 and oversaw the geologic operations before, during, and after drilling.  The CPs visited the ALS Laboratory Group assay sample preparation facility in Seville, Spain on 30 August 2013.  The visits were conducted for the purposes of exploration planning, data collection, site observation, core inspection, drill rig inspection, assay lab inspection, and QA/QC confirmation.
Geological interpretation  Confidence in (or conversely, the uncertainty of) the geological interpretation of the mineral deposit.	 The SdP Exploration Target comprises covers an area of approximately 44 km2.  Potash beds CU, CL, and SYL are targeted at depths ranging from 100 to 1,400 m.

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Commentary

 Nature of the data used and of any assumptions made.  The effect, if any, of alternative interpretations on Mineral Resource estimation.  The use of geology in guiding and controlling Mineral Resource estimation.  The factors affecting continuity both of grade and geology.

 The Exploration Target is bound to the north and east by the evaporite outcrop at surface.  The Exploration Target is bound to the south by the basin margin as defined by structural interpretation, seismic surveying, and limited drilling.  The Exploration Target remains open at depth to the west.  The total Exploration Target is estimated to contain between 100 and 250 Mt of potash in the carnallite beds (CU and CL) ranging in average grade from 9 to 13% K2O, and between 50 and 100 Mt of potash in the sylvinite bed (SYL) ranging in average grade from 10 to 14% K2O. Approximately half (50%) of the carnallite Exploration Target in the CU and CL beds is estimated to overlie old workings of the Posusa de Navarra and Posusa de Subiza mines in the SYL bed.  The Mineral Resource comprises a subset of the Exploration Target.  No potash resource is claimed 200–300 m downdip of the outcrop to account for abrupt upturning of the strata near outcrop and evaporite dissolution at surface.  Grade parameters were composited as length-weighted averages of the individual assays over a continuous bed thickness. In most instances, top and bottom bed contacts are gradational, introducing some trade-off between grade and thickness. Contacts were selected to maximize thickness while maintaining a composite grade as close as possible to 12.0% K2O with a true thickness equal to greater than 1.5 m. Depending upon the vertical grade distribution, bed thicknesses less than 1.5 m and composite grades less than 8.0% K2O were required for geologic modelling in some instances.  Structural dip was calculated from the base-of-salt surface constructed from seismic, outcrop, historical mining surveys, and drill hole data. Dips in individual beds were adjusted locally by stacking the variable-thickness interburden and potash beds above the base-of-salt surface.  Drill hole and seismic data indicate reasonable bed continuity across the property, nonetheless variation in potash thickness, grade, and mineralogy are likely between control points. Faults, folds, and other structural disturbances can sterilise resource locally. Mineralogy can be affected by varying depositional environments orstructure,including depositional highs, syngeneticfaulting,

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Commentary

basement carbonate mounds, algal reefs, post-depositional gypsum dewatering, groundwater dissolution along fault conduits, and by other complex depositional and structural features.  Resource exclusions were applied around major faults, consistent with historic mining.  A minimum 50-m buffer was applied around historical workings. The mining footprints plus buffer were excluded from the bed-specific resource.  The radii-of-influence (ROI) used for the Mineral Resource classification reflect the interpreted degree of predictability (or conversely, variability) within the deposit. Resource classifications for the deposit are stated as follows: o Indicated Resource—Sylvinite meeting cutoff criteria located between 250 m and 1,000 m radius of a modern exploration core hole with assays, except where otherwise limited by geologic or mining boundaries. o Inferred Resource—Sylvinite meeting cutoff criteria located between 1,000 m and 2,000 m radius of a modern exploration core hole with assays, except where otherwise limited by geologic or mining boundaries.  No part of the resource is classified as Measured due to the limited number of reliable modern drill holes for characterization, their wide spacing, and the uncertainty surrounding the impacts of historical mining on future recovery methods (a Modifying Factor).  The resource is reported as in-place tonnes of potash contained in the respective potash beds. The potash can occur as either sylvinite or “carnallitite.” Sylvinite is a mechanical mixture of halite and sylvite (KCl) with minor inclusions of insolubles (typically clays). Carnallitite is a mechanical mixture of halite and carnallite (KCl·MgCl2·6H2O), with minor inclusions of insolubles.  Beds CU and CL are dominantly carnallitic.  Bed SYL is dominantly sylvinitic with local occurrences of carnallite.  Classification areas for the Mineral Resource are shown in Figures A-15 through A-17.

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Criteria	JORC	Code explanation	Commentary	Commentary
Dimensions		The extent and variability of the Mineral Resource		The Mineral Resource occurs in potash beds CU, CL, and SYL over the footprints
		expressed as length (along strike or otherwise),		shown in Figures A-15 through A-17.
		plan width, and depth below surface to the upper and lower limits of the Mineral Resource.	 	The Mineral Resource ranges in depth between 100 m and 1,050 m deep. Bed true thickness variability is described by the block model in Figures A-9
				through A-11.
				Bed composite K2O grade variability is described by Figures A-12 through A-14.
				Secondary grade constituents (MgCl2and insolubles) were modelled with the
				block model and show a degree of variability similar to K2O grade.
Estimation		The nature and appropriateness of the estimation		The Mineral Resource was quantitatively estimated using a computer 3D gridded-
and modelling		technique(s) applied and key assumptions,		seam geologic (block) model constructed with Mintec Inc. MineSight 3D© v9.0
techniques		including treatment of extreme grade values,		software.
		domaining, interpolation parameters and maximum distance of extrapolation from data points. If a computer assisted estimation method was chosen include a description of computer software and parameters used.		Data utilized in the model include historic and modern drill hole logs and assays, historic and modern interpretations of 2D seismic surveys, surface topography in the form of a digital elevation model (DEM), permit boundary lines, historic resource analysis, historic geological surface mapping, and historical mining records from the Potasas de Navarra and Potasas de Subiza mines.
		The availability of check estimates, previous estimates and/or mine production records and whether the Mineral Resource estimate takes		Grade parameters used in the block model were composited as length-weighted averages of the individual assays over a continuous bed thickness. Composite values are summarized in Table A-2.
	 	appropriate account of such data. The assumptions made regarding recovery of by- products. Estimation of deleterious elements or other non- grade variables of economic significance (eg sulphur for acid mine drainage characterisation).	  	Composites were only developed for beds with core recovery exceeding 85%. No vetted drill hole data were excluded from the model. No assay or composite outliers were identified, and none were excluded, cut, or capped in the model. Bed thicknesses were corrected to true thicknesses for modelling according to local dip and downhole deviation survey data.
		In the case of block model interpolation, the block size in relation to the average sample spacing and		Block true thicknesses and grade parameters (K2O, MgCl2, insoluble content) were interpolated/extrapolated utilizing an inverse distance squared (ID2) model.
		the search employed.		Block estimation was limited to an isotropic search radius of 20,000 m and the 15
		Any assumptions behind modelling of selective		closest data points (drill holes).
		mining units.

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Criteria **JORC Code explanation **	Commentary
 Any assumptions about correlation between variables.  Description of how the geological interpretation was used to control the resource estimates.  Discussion of basis for using or not using grade cutting or capping.  The process of validation, the checking process used, the comparison of model data to drill hole data, and use of reconciliation data if available.	 Kriging was not attempted due to the limited number of composites available. Geostatistical modelling may be justified in the future with additional drilling.  The potash beds of interest were gridded into single layers of 50-m square blocks of variable vertical thickness representing the local thickness of the respective potash bed.
Moisture  Whether the tonnages are estimated on a dry basis or with natural moisture, and the method of determination of the moisture content.	 Tonnages are estimated using a variable_in situ_bulk density calculated for each model block based on the relative modelled fractions of sylvite, carnallite, halite, and insolubles. Depending upon the mineral fractions, densities can range from a low as 1.6 tonnes per cubic meter (t/m3) for pure carnallite to 2.2 t/m3for insolubles only.  Resource densities typically fall between 1.90 and 2.15 t/m3.
Cut off parameters  The basis of the adopted cutoff grade(s) or quality parameters applied.	 The Mineral Resource estimate is based upon the following cut offs which support reasonable prospects for economic extraction by conventional mining methods: o Bed true thickness ≥ 1.5 m: Cut off is grade ≥ 8.0% K2O o Bed true thickness < 1.5 m: Cut off is grade x thickness ≥ 12.0%K2O-m  The grade-thickness cutoff maintains the equivalent of an 8.0% K2O grade at 1.5 m for thinbeds (<1.5m).
Mining factors or assumptions  Assumptions made regarding possible mining methods, minimum mining dimensions and internal (or, if applicable, external) mining dilution. It is always necessary as part of the process of determining reasonable prospects for eventual economic extraction to consider potential mining methods, but the assumptions made regarding mining methods and parameters when estimating Mineral Resources may not always be rigorous. Where this is the case, this should be reported with	 The Mineral Resource estimate does not include any out-of-bed dilution.  Known sterilised areas defined by historical mining and known structure were explicitly excluded from the resource estimate.  An additional 15% of the resource tonnes were factored out of the estimate as an allowance for geologic and mining uncertainty within the resource footprint.  Underground room-and-pillar mining is the base case mining scenario for justifying reasonable prospects for eventual economic extraction.  Room-and-pillar and longwall mining were historically practiced at Navarra and Subiza for 26years. There is a reasonable expectation thatpotash outside the

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Criteria	JORC Code explanation	Commentary	Commentary
	an explanation of the basis of the mining		historic mining footprint can be accessed and extracted by selective room-and-
	assumptions made.		pillar mining.
			Potash beds overlying the historical workings also have reasonable potential for
			economic extraction based on evidence that those beds remain mineable above
			the old workings.
			Industry experience in potash and salt supports that mining is often possible in
			undermined beds, even with high extraction and thin interburden, due to the
			competent and highly plastic behaviour of potash and salt. The effects of thin
			interburden, multi-seam mining are identified as a key risk factor with potential to
			affect recovery and mining economy.
			Carnallite poses a risk because carnallite creeps (plastically deforms) at a
			substantially faster rate than salt or sylvinite and mining must be adapted to
			withstand relatively high entry closure rates. While there is extensive industry
			experience mining in salt or sylvinite, industry experience with conventional
			mining experience in carnallite is limited.
			The 5 Mt of carnallite mined over seven years at Navarra demonstrates that
			carnallite mining is locally feasible and has reasonable potential in the future.
			Preliminary, contemporary high-level economic modelling was conducted for the
			Muga-Vipasca property which justifies reasonable prospects for eventual
			economic extraction of the Highfield Muga-Vipasca Mineral Resource. The Muga-
			Vipasca analysis is considered a reasonable analogue for supporting prospects
			for eventual economic extraction at Sierra del Perdón. The Sierra del Perdón
			carnallite is expected to result in incrementally higher mining and processing
			costs compared to sylvinite mining at Muga-Vipasca.
			The Sierra del Perdón Mineral Resource is considered to have reasonable
			prospects for eventual economic extraction. The impacts of overmining, mining in
			carnallite, and other risks on extraction economy can be quantified for a specific
			mine plan at the scoping, pre-feasibility, and/or feasibility study level.
			A positive return on investment is considered a minimum for justifying reasonable
			prospects for eventual economic extraction and designation as a Mineral
			Resource, butdoesnot necessarilyrepresentaneconomically attractivemining

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Criteria	JORC	Code explanation	Commentary	Commentary
				opportunity depending upon the desired minimum return on investment. For this
				reason, not all parts of the Mineral Resource are necessarily suitable for inclusion
				in a production target or are upgradeable to a Mineral Reserve. Detailed
				engineering and mine planning are required to determine which parts of a Mineral
				Resource are suitable for miningfor a specificproject.
Metallurgical		The basis for assumptions or predictions regarding		Reasonable prospects for eventual economic extraction of the Mineral Resource
factors or		metallurgical amenability. It is always necessary as		assume processing with conventional crushing and flotation.
assumptions		part of the process of determining reasonable prospects for eventual economic extraction to consider potential metallurgical methods, but the assumptions regarding metallurgical treatment processes and parameters made when reporting Mineral Resources may not always be rigorous.	 	Flotation was used successfully to process potash at Posusa de Navarra and Posusa de Subiza from the 1970s through 1990s. Preliminary flotation testing conducted by Geoalcali on sylvinite core from Muga- Vipasca, a related Ebro Basin potash deposit, supports KCl recoveries in excess of 80%. Lower recovery is anticipated in carnallite.
		Where this is the case, this should be reported with
		an explanation of the basis of the metallurgical
		assumptions made.

Section 4 Estimation and Reporting of Ore Reserves No mineral reserves are reported.

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