HIGHFIELD RESOURCES LIMITED — Capital/Financing Update 2016

May 29, 2016

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ASX Release 30 May 2016

HIGHFIELD RESOURCES SIGNS MOUs FOR OFFTAKE FROM MUGA POTASH MINE

Highlights

• First MOUs signed with large European fertiliser companies for up to 320,000 tonnes per annum of K60 Muriate of Potash (“MOP”) from Muga Potash Mine

• Ongoing discussions with additional parties in the European and North African markets, including wholesale customers, and with potential global trading partners, for remaining production from the Muga Potash Mine

• European mine closures and expansions are expected to remove a net 1.0 million tonnes of MOP production from these markets by 2020

Highfield Resources (ASX: HFR) (“Highfield” or “the Company”) is pleased to announce that it has signed its first memorandums of understanding (“MOUs”) for potash offtake with three large fertiliser companies, active in the Spanish and French markets. Annual offtake amounts under the MOUs total up 320,000 tonnes per annum of K60 MOP.

Highfield Managing Director Anthony Hall commented:

“We have deliberately focused on major consumers in Spain and Southern France. With the current European potash price premium and our ability to truck directly to customer depots on a just-in-time-basis, we expect to receive a substantial premium over FOB Vancouver prices.

These MOUs reinforce the belief shared by ourselves and other market observers that the Muga Potash Mine will make Highfield the highest margin global producer. It is also a positive development and de-risking milestone for the Company as we move towards commencing construction this year.”

The non-binding MOUs are for supply of MOP to customers within the southern European fertiliser market to which Muga is proximal. Highfield has focused on markets that deliver it a maximum possible margin, where it has clear logistical and margin advantages over its peers, as described by Argus FMB’s independent delivered cost curve analysis (refer ASX release 19 January 2016).

Highfield Resources Ltd. ACN 153 918 257 ASX: HFR

Issued Capital

310.8 million shares 51.5 million performance shares 53.3 million options

Registered Office

Head Office

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

Avenida Carlos III, 13 - 1°B, 31002 Pamplona, Spain

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T. +61 8 8133 5098 T. +34 948 050 577 F. +61 8 8431 3502 F. +34 948 050 578

Directors

Derek Carter Pauline Carr Richard Crookes Jim Dietz Anthony Hall Owen Hegarty Pedro Rodriguez

Company Secretary Donald Stephens

www.highfieldresources.com.au

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Figure 1: European CFR cash cost curve delivered to customer

Highfield recently announced the appointment of Pablo Moreno, a highly experienced global fertiliser trader, as Global Head of Sales and Marketing. His appointment and the first MOUs demonstrate that the Company has begun to formalise its engagements with supply partners for production from Muga.

The MOUs provide a framework for further negotiation of long term contracts between the parties for the supply of K60 MOP to a variety of blending facilities within southern Europe, the closest of which is less than 100km from Muga.

Additional tailwinds in the European MOP market include the announced closure of K+S Germany’s Sigmundshall mine, in 2018/2019 and the conversion of Israel Chemical’s Boubly mine in the United Kingdom from MOP to polyhalite in 2018. Coupled with expansion plans of around 500,000 tonnes per annum at Israel Chemical´s Inberpotash operations, this is expected to remove a net 1.0 million tonnes of MOP production from the European market.

For more information:

Company Investor Relations Executives Anthony Hall Simon Hinsley Managing Director APAC Investor Relations Ph: + 34 617 872 100 Ph: +61 401 809 653 Hayden Locke Nuala Gallagher / Simon Hudson Head of Corporate Development UK Investor Relations Ph: +34 609 811 257 Ph: +44 207 920 3150

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www.highfieldresources.com.au

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About Highfield Resources

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

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

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

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

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www.highfieldresources.com.au