HIGHFIELD RESOURCES LIMITED — Capital/Financing Update 2019

Oct 9, 2019

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ASX Release 10 October 2019

HIGHFIELD RESOURCE COMPLETES ENCOURAGING EXPLORATION DRILL HOLES AT VIPASCA PERMIT AREA

Highlights

• Recent drillholes at the Vipasca permit area have confirmed the presence of potash at good grades and potentially mineable depths.

• V18-02 has confirmed the continuity of the Vipasca deposit and that the mineralisation remains open towards the West. Specifically, V18-02 intersected a total of 37 metres of potash mineralisation including:

• 4.8 metres at an average grade of 15.25% K2O from 996 metres;

• 2.4 metres at an average grade of 14.18% K2O from 1119 metres; and

• 8.1 metres at an average grade of 12.95% K2O from 1139 metres.

• V18-01 intersected a total of 1.8 metres of potash mineralization at 9.32% K2O, confirming the continuity of the mineralization towards the north-eastern edge of the Vipasca investigation permit.

• A further drillhole, V18-05, is planned between the Muga Project and the Vipasca Permit Areas with the aim of confirming the continuity of mineralisation between Vipasca and the already delineated Muga Mineral Resource.

Highfield Resources CEO, Peter Albert said: “ the outstanding results from V18-02 are very encouraging, further reinforcing the interpretation of the geological model suggesting continuity between Muga and Vipasca. The results are so promising that we have decided to drill a further hole between Vipasca and Muga, which if positive will provide even more data for the development of a single Resource across Vipasca and Muga. ”

Highfield Resources Limited ACN 153 918 257 ASX: HFR

Issued Capital 329.5 million shares 24.66 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

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

www.highfieldresources.com.au

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Overview

Highfield Resources (ASX: HFR) (“Highfield” or “the Company”) is a Spanish potash developer. The Company’s flagship Muga Project (“Muga” or “the Project”) is targeting the relatively shallow sylvinite beds in the Muga Project area that cover about 60km[2] in the Provinces of Navarra and Aragon. Mining is planned to commence at a depth of approximately 350 metres from surface and is therefore ideal for a relatively low-cost conventional mine.

Vipasca Tenement Area

The Vipasca permit area (“Vipasca”) (see Figure 3) is located adjacent to the Muga Project and covers approximately 27km[2] . The tenement is highly prospective for economic potash mineralisation, the focus in this case being the deeper, higher grade, P1 and P2 potash horizons (Figure 1).

The Muga Project Update (refer ASX release 15 October 2018 “Muga Project Update”) confirmed the strategic importance of Vipasca as a potential extension of the Muga Project. In the eastern area, Vipasca comprises the north western extension of the Muga Project. The main aim of the current drilling campaign, which has been developed since the end of 2018, is to confirm and delineate the Muga ore deposit in its westernmost area. The geology at Vipasca is analogous to Muga, and the lithologies, seams and other geological features are similar to those previously defined by drilling at Muga.

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Figure 1: Location of Highfield’s Vipasca drill holes.

Since the Company last reported its exploration results three exploration drillholes, V18-01 and V18-02 and V18-04, have been completed, logged, sampled, and analysed (see summarized results in Tables 2 and 3). A fourth drillhole, V18-03, has also recently been completed and will be reported in due course.

In V18-01 the Upper and Intermediate Potash intervals appear but are only a few centimetres thick and have a low K2O content. Only the Lower Potash interval is present in the northeast limit of the basin. V1801 intersected the whole evaporite unit reaching the basal Anhydrite and the Pamplona Marls Unit situated below the evaporite basin.

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V18-02 intersected the complete evaporitic sequence, showing significant grades in the Upper, the Intermediate and the Lower Potash Intervals. Of particular note are the 4.8 metre thickness at 15.25% K2O in the Upper Potash Interval, and more than 8 metre thickness at 12.95% K2O in the Lower Potash Interval. At the base of the drillhole, V18-02 re-intersected the Hanging wall salt unit. The presence of a thrust has been identified at depth and this tectonic structure causes the repetition of the evaporitic sequence which leaves the deposit open at depth. Further geological information can be found in Sections 1 and 2 of the JORC Table attached in this release.

V18-04 was intended to identify the western area of Vipasca. It was drilled to a depth of 859m, and stopped prematurely as the lithologies intersected corresponded with the shallower units analogous to the ones in Muga. Although previous historical seismic information showed indications of the presence of the evaporite unit at shallower depths, it is likely that the evaporite units are present at depths not amenable to conventional underground mining.

Table 1 provides the results from drill hole V18-01. The Lower Potash Interval intersection yielded an apparent thickness of 1.8 m with a mean grade of 9.32% K2O.

Table 2 provides the results from drill hole V18-02. The Upper Potash Interval intersection had a total apparent thickness of 15.6 m with a mean grade of 7.26% K2O. Selected intervals yielded apparent thicknesses and grades of 4.8 m at 15.25% K2O and 2.1 m at 12.32% K2O. The Middle Potash Interval had a total apparent thickness of 13.3 m with a mean grade of 7.57% K2O. Selected intervals yielded apparent thicknesses and grades of 2.4 m at 14.18% K2O and 2.7 m at 10.79% K2O. The Lower Potash Interval had a total apparent thickness of 8.1 m with a mean grade of 12.95% K2O. A selected interval yielded an apparent thickness of 5.4 m at a grade of 17.27% K2O.

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Figure 2: Cross-section showing evaporite seam (brown) correlation between projection of drill holes V17-02, V18-01 and V18-02.

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Sierra del Perdón Tenement Area

Highfield’s 100% owned Sierra del Perdón tenement area (“SdP”) comprising the three permits of Quiñones, Adiós and Ampliación de Adiós (see Figure 3) is located south east of Pamplona and covers approximately 120km[2] . SdP is a brownfield target which previously hosted two potash mines operating from the 1960s until the late 1990s producing nearly 500,000 tonnes of potash per annum. There is potential for potash exploitation in new, unmined areas in the SdP area.

The Company was advised in the fourth quarter of 2018 that the second three year extension application for the Adiós and Quiñones permits had been rejected by the mining department of the Government of Navarra. The Company has obtained legal advice and is progressing an appeal process with regards to this decision. It remains confident of a positive resolution.

Pintanos Tenement Area

Highfield´s 100% owned Pintanos Tenement Area ( Figure 3 ) comprising the three permits of Molineras 1, Molineras 2 and Puntarrón also abuts the Muga Project and covers an area of some 65km[2] . The mineralisation is slightly deeper than at Muga and starts at a depth of around 500 metres. The Company is building on potash exploration information from seven drill holes and ten seismic profiles completed in the late 1980s.

The Company has re-initiated the application process for the drilling permit Molineras 2 following the conclusion of the public consultation period. The Company has responded to all comments received during the consultation period and is now waiting for the award of the permit.

Izaga Tenement Area

The Company’s 100% owned Izaga tenement area (see Figure 3) covers an area of more than 57km[2] , where historic drill holes and 2D seismic show a relatively continuous evaporite with drill hole intersects containing potash.

Previously the Izaga tenement area comprised the three permits of Girardi, Palero and Osquia. In February 2019 the Company relinquished the less prospective areas of Girardi to the north of the Osquia permit and Palero to the west of the Osquia permit in order to focus on the more prospective Osquia permit.

During the quarter the company started drilling the Osquia permit. Once the drill hole is finished and assay analysis completed the results will be released to the market.

For more information:

Highfield Resources Limited

Peter Albert Managing Director Ph: +34 628 590 109

Olivier Vadillo Investor Relations Ph: +34 609 811 257

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About Highfield Resources

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

Highfield’s Muga-Vipasca, Pintanos, Izaga and Sierra del Perdón projects are located in the potash producing Ebro Basin in Northern Spain and together cover a project area of more than 335km[2] .

Following the granting of a positive environmental permit Highfield is now focusing on securing the Mining Concession and the construction permits necessary to take the Project into the construction phase.

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Figure 3: Location of Highfield’s Muga-Vipasca, Izaga and Sierra del Perdón Projects in Northern Spain.

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Competent Persons Statement

This ASX release was prepared by Mr. Peter Albert, Managing Director of Highfield Resources. The information in this document that relates to the reporting of the Exploration Results for, V18-01 and V1802 is based on information prepared by Highfield Resources.

The exploration results as presented in Tables 1 and 2 Summary of Drill holes V18-01 and V18-02, and the supporting information presented in JORC Table 1 has been reviewed by Ms Anna Fardell, a registered member of the Australian Institute of Geoscientists (6555). Ms Fardell is a full-time employee of SRK Consulting (UK) Ltd and has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which she has undertaken to qualify as a Competent Person as defined in the 2012 Edition of the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' (the JORC Code). Ms Fardell has reviewed this release and consents to the inclusion in the release of the matters based on his information in the form and context in which this appears.

Table 1: Summary of Drill hole V18-01

DDH V18-01 POTASH GRADES (ICP analysis)

			K2O(%)	MgO(%)	Na2O(%)	Cl(%)	SO4(%)	CaO(%)	Water Insolubles
Fr	om 740 to 741.8 Thickness: 1.8 m Lower Potash Interval	Average max. Value min. Value	9.32 12.47 7.31	0.16 0.20 0.07	30.80 35.72 27.23	0.84 1.08 0.55	4.36 5.21 3.27	2.91 3.33 2.43	19.58 30.10 12.00
Fr Lower Po	om 740 to 741.5 Thickness: 1.5 m tash Interval (Selected Interval)	Average max. Value min. Value	9.63 12.47 7.31	0.18 0.20 0.13	29.82 32.62 27.23	0.89 1.08 0.55	4.38 5.21 3.27	2.92 3.33 2.43	20.34 30.10 12.00

Notes:

1. Chemical analysis conducted by ALS Global (Galway, Ireland)

2. ICP (inductively coupled plasma) quantitative method

3. Intervals are cored intervals (versus true thickness intervals). Conversion to true thickness pending updated structural model. Given the shallow dipping nature of the mineralisation the true thickness correction should not have a material impact on the thicknesses reported.

4. Composite grades calculated as length-weighted averages

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Table 2: Summary of Drill hole V18-02

			Table 2: Summary of Drill hole V18-02	Table 2: Summary of Drill hole V18-02	Table 2: Summary of Drill hole V18-02	Table 2: Summary of Drill hole V18-02	Table 2: Summary of Drill hole V18-02	Table 2: Summary of Drill hole V18-02	Table 2: Summary of Drill hole V18-02	Table 2: Summary of Drill hole V18-02	Table 2: Summary of Drill hole V18-02
			DDH V18-02 POTASH GRADES (ICP analysis)
					K2O(%)	MgO(%)	Na2O(%)	Cl(%)	SO4(%)	CaO(%)	Water Insolubles
Upper Potash Interval	From		996.5 to 1012.1 Thickness: 15.6 m Upper Potash Interval	Average max. Value min. Value	7.26 16.98 2.12	0.12 0.20 0.03	30.10 39.09 23.25	40.82 49.80 34.00	4.67 7.49 2.79	2.97 4.67 1.75	26.00 37.50 9.00
	Upper Potas		996.5 to 1001.3 Thickness: 4.8 m h Interval (Upper Selected interval)	Average max. Value min. Value	15.25 29.87 2.23	0.13 0.18 0.07	28.51 34.91 18.94	43.41 49.40 39.50	5.32 7.19 3.33	3.41 4.59 2.13	17.67 27.30 11.40
	From
	Upper Potas		1002.2 to 1004.3 Thickness: 2.1 m h Interval (Lower Selected interval)	Average max. Value min. Value	12.32 16.98 9.28	0.15 0.20 0.10	28.13 31.68 23.25	41.77 44.80 38.50	6.37 7.49 4.67	3.99 4.67 2.99	22.33 28.10 17.50
		From
Middle Potash Interval		From	1119 to 1132.3 Thickness: 13.3 m Middle Potash Interval	Average max. Value min. Value	7.57 27.83 2.24	0.27 0.50 0.10	29.58 43.00 18.20	41.51 53.40 30.20	5.72 8.54 2.79	3.76 5.30 2.01	23.24 43.00 7.60
	Mi	ddle Pota	sh Interval (Upper Selected Interval)	Average max. Value min. Value	14.18 27.83 6.81	0.10 0.20 0.05	29.82 36.40 22.44	46.61 50.50 38.90	6.46 8.87 4.10	3.88 3.88 5.46	14.18 26.30 7.50
		From	1119 to 1121.4 Thickness: 2.4 m
	Mi	ddle Pota	sh Interval (Lower Selected Interval)	Average max. Value min. Value	10.79 18.85 2.24	0.28 0.50 0.17	28.35 35.45 18.20	41.13 46.30 34.70	5.53 8.54 2.79	3.66 5.30 2.01	22.94 30.70 18.20
		From	1128.4 to 1131.1 Thickness: 2.7 m
Lower Potash Interval		From	1139.2 to 1147.3 Thickness: 8.1 m Lower Potash Interval	Average max. Value min. Value	12.95 35.42 2.76	0.16 0.33 0.03	30.62 36.94 19.48	45.68 58.10 36.10	4.24 8.57 2.25	2.66 5.23 1.11	18.00 39.00 5.60
		Lower P	1139.2 to 1144.6 Thickness: 5.4 m otash Interval (Selected Interval)	Average max. Value min. Value	17.27 35.42 6.50	0.11 0.25 0.03	30.56 36.94 19.48	48.75 58.10 40.40	4.63 8.57 2.25	2.73 5.23 1.11	11.66 26.40 5.60
		From

Notes:

1. Chemical analysis conducted by ALS Global (Galway, Ireland)

2. ICP (inductively coupled plasma) quantitative method

3. Intervals are cored intervals (versus true thickness intervals). Conversion to true thickness pending updated structural model. Given the shallow dipping nature of the mineralisation the true thickness correction should not have a material impact on the thicknesses reported.

4. Composite grades calculated as length-weighted averages

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Section 1 Sampling Techniques and Data – Vipasca

Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
Sampling	•	Nature and quality of sampling (e.g. cut	•	Samples were obtained by diamond core drilling through the potash unit. The
techniques		channels, random chips, or specific specialised		full potash seam was sampled where it was intersected.
		industry standard measurement tools	•	The core was sampled from lithological boundaries at 0.3 metre downhole
		appropriate to the minerals under investigation,		intervals.
		such as down hole gamma sondes, or
		handheld XRF instruments, etc.). These
		examples should not be taken as limiting the
		broad meaning of sampling.
	•	Include reference to measures taken to ensure	•	HQ diameter core was drilled through the potash units. This diameter meant the
		sample representativity and the appropriate		drilling could continue and access the potash unit with good core recovery and
		calibration of any measurement tools or		obtain representative minimum sample volumes.
		systems used.	•	The core recovery through the potash units is very high, with every intersection
				greater than 97%. This ensures the samples provide the maximum volume for
				the drilling technique and have no representative bias due to lack of material or
				large differences in sample size, relative to the sampled lengths.
			•	Drill hole locations were surveyed using hand held detailed GPS, and by a
				professional surveyor prior to commencement and post the completion of
				drilling.
	•	Aspects of the determination of mineralisation	•	Drilling was complete using a saturated brine to limit core loss as result of water
		that are Material to the Public Report. In cases		based fluid contact with the salt horizons.
		where ‘industry standard’ work has been done
		this would be relatively simple (e.g. ‘reverse
		circulation drilling was used to obtain 1 m
		samples from which 3 kg was pulverised to
		produce a 30 g charge for fire assay’). In other
		cases more explanation may be required, such
		as where there is coarse gold that has inherent
		sampling problems. Unusual commodities or
		mineralisation types (e.g. submarine nodules)
		may warrant disclosure of detailed information.
Drilling	•	Drill type (e.g., core, reverse circulation, open-	•	V18-01 was diamond drilled vertically from surface to a depth of 763 m. It was
techniques		hole hammer, rotary air blast, auger, Bangka,		drilled with PQ diameter from surface to 420 m, then at HQ from 420m to the
		sonic, etc.) and details (e.g., core diameter,		end of hole (763 m).
		triple or standard tube, depth of diamond tails,	•	V18-02 was diamond drilled vertically from surface to a depth of 1190 m. It was
		face-sampling bit or other type, whether core is		drilled with PQ diameter from surface to 415 m, then with HQ from 415 m to the
		_oriented and if so, by what method, etc.). _		end of hole (1190 m).
Drill sample	•	Method of recording and assessing core and	•	In every drillhole the core was measured by the driller and checked by the
recovery		chip sample recoveries and results assessed.		geologists at the drill rig after every drill run. This measurement of core
				recovery and other basic geotechnical measurements such as Rock Quality
				Designation (RQD) were recorded into an excel logging sheet.
	•	Measures taken to maximise sample recovery	•	The drilling was completed through the potash horizons at HQ as drilling
		and ensure the representative nature of the		conditions were difficult and this was deemed the best way to maximise core
		samples		recovery.
			•	Drilling through the evaporite horizon was conducted with a saturated brine
				drilling mud, which aims to minimise dissolution due to the use of water-based
				drilling fluids.
	•	Whether a relationship exists between sample	•	The core recovery is over 97% through the potash units which is considered by
		recovery and grade and whether sample bias		the CP to be an acceptable level for the reporting of representative exploration
		may have occurred due to preferential		results in this case.
		loss/gain of fine/coarse material.	•	No bias between grade and core recovery has been demonstrated within these
				results.
Logging	•	Whether core and chip samples have been	•	Core has been logged for lithology, alteration, mineral assemblage and
		geologically and geotechnically logged to a		structure.

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Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
		level of detail to support appropriate Mineral	•	Geotechnical parameters logged: length recovery, RQD, bed degree,
		Resource estimation, mining studies and		fault/fracture (length, fill and degree).
		metallurgical studies.
	•	Whether logging is qualitative or quantitative in	•	Logging is qualitative in nature. All core was photographed and remaining half
		nature. Core (or costean, channel, etc.)		core shrink wrapped for preservation.
		photography
	•	The total length and percentage of the relevant	•	The total core length of 763 m for V18-01 metres was logged and
		intersections logged.		photographed. Core was sampled at 0.3 metre intervals from 619.10 m to
				619.70 m; 710 m to 710.30 m; 710.80 m to 711.10 m; 739.70 m to 741.8 m; a
				length of 3.3 m. This section represents the whole of the prospective potash
				unit. This length totalled 11 samples.
			•	The total core length of 1190 m for V18-02 metres was logged and
				photographed. Core was sampled mostly at 0.3 metre intervals (few samples
				with sylvinite traces were sampled at 0.1-0.2 metre intervals) from 987.4 m to
				1012.4 m; 1019.8 m to 1020.3 m; 1029.9 m to 1032.9 m; 1034 m to 1034.50 m;
				1049.85 m to 1050.05 m; 1108.8 m to 1109.1 m ; 1114.9 m to 1116.1 m;
				1118.7 m to 1132.9 m ; 1137.4 m to 1158.9 m down the hole, a length of 64.2
				m. This section represents the whole of the prospective potash unit. This length
				totalled 217 samples.
Sub-	•	If core, whether cut or sawn and whether	•	Core is sawn using hydraulic oil as the lubricating agent to minimise core loss.
sampling		quarter, half or all core taken.		Half the core was retained and shrink wrapped to ensure it is well preserved
techniques				should further analysis be required.
and sample			•	Half core samples were bagged and secured with plastic ties for shipping to
preparation				ALS Sevilleforsample preparation.
	•	If non-core, whether riffled, tube sampled,	•	Not applicable.
		rotary split, etc. and whether sampled wet or
		dry.
	•	For all sample types, the nature, quality and	•	All samples were sent to ALS in Seville for sample preparation. The whole
		appropriateness of the sample preparation		sample was dried and crushed to 70% passing -2 mm then a 250 g fraction was
		technique.		pulverised to 85% passing-75 µm.
	•	Quality control procedures adopted for all sub-	•	Sawing of core was conducted using oil-based lubricant to minimise dissolution.
		sampling stages to maximise representativity
		of samples.
	•	Measures taken to ensure that the sampling is	•	One CRM was submitted with the samples for V18-01, one additional control
		representative of the in situ material collected,		sample derived from coarse reject from a previous drill hole, and one certified
		including for instance results for field		blank. A medium grade CRM (10.53% K+) was submitted to cover the expected
		duplicate/second-half sampling.		range of mineralisation in the drill hole. Additionally, two crushed duplicates will
				be resubmitted to ALS Loughrea, and one crushed duplicate will be sent to
				SRC Canada.
			•	Twelve CRMs were submitted with the samples for V18-02, eleven additional
				control samples derived from half core from the same drillhole interval, 987.7 m
				to 988 m; 1005.8 m to 1006.1 m; 1019.8 to 1020.05 m; 1030.2 m to 1030.50 m;
				1115.2 m to 1115.5 m; 1118.7 m to 1119 m; 1119 m to 1119.3 m; 1123.2 m to
				1123.4 m; 1124.6 m to 1124.9 m; 1138 m to 1138.3m; 1155.4m to 1155.7 m
				from same drill hole and five certified blanks. Five low grade, four medium
				grade and three high grade CRM (5.358%, 10.53% and 22.00% K+) were
				submitted to cover the expected range of mineralisation in the drillhole.
				Additionally, twenty-two crushed duplicates will be resubmitted to ALS
				Loughrea and twenty-two crushed duplicates were sent to SRC Canada.
			•	The results from the duplicates have not yet been received by the company
				from the laboratory and therefore no comment on repeatability can be made at
				this time.
	•	Whether sample sizes are appropriate to the	•	Sample sizes are considered appropriate for the mineralisation type and
		grain size of the material being sampled.		lithologies sampled. In addition, the quality control samples provide a duplicate
				check on 4.82% of the sample population which when combined with the other
				crushed duplicate samples represent a 22.80%, and when combined with the
				total control samples represents a 32.44% check on the total. This is a good
				number of samples to check the sampling and analysis and ensures any bias
				willbehighlighted by the quality controlchecks.

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Criteria			JORC Code explanation	JORC Code explanation	Commentary	Commentary
Quality		of	•	The nature, quality and appropriateness of the	•	All samples were analysed by XRF (for metals and other major constituents),
assay	data			assaying and laboratory procedures used and		ICP-OES (soluble elements) and gravimetric analysis (insoluble residue) at ALS
and				whether the technique is considered partial or		in Loughrea.
laboratory				total.
tests
			•	For geophysical tools, spectrometers,	•	No handheld devices were used to analyse the grade or mineralogical
				handheld XRF instruments, etc., the		composition of the samples for the purposes of this release.
				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	•	Both Highfield and ALS maintained independent QA/QC programs including the
				(e.g. standards, blanks, duplicates, external		insertion of Certified Reference Material (CRM), duplicates and blanks.
				laboratory checks) and whether acceptable	•	An additional 5% check samples will be submitted in the following weeks to the
				levels of accuracy (i.e. lack of bias) and		“umpire” laboratory – Saskatoon Research Centre (SRC) in Canada. This will
				precision have been established.		provide an additional check on the results from these drill holes.
					•	All CRMs showed deviation on key values outside of three deviations from their
						certified values. They broadly correlated with the values the tight deviations and
						acceptable values on other control samples do not warrant reanalysis.
					•	Duplicates showed acceptable levels of internal agreement in all key elements,
						K, Mg, Ca, Na, S and insolubles.
					•	The accuracy and precision of the CRM, and blanks are in the opinion of the
						CP within acceptable levels for reporting of Exploration Results. The results for
						the duplicates cannot be commented upon as they are pending at the time of
						the release.
Verification			•	The verification of significant intersections by	•	ALS Loughrea analysed all check samples using both the ICP-OES
of sampling				either independent or alternative company		methodology and XRF. These methods showed acceptable levels of agreement
and				personnel.		to support the precision of the testing program for blanks, CRMs and
assaying						duplicates.
			•	The use of twinned holes.	•	No twin holes have been drilled to date
			•	Documentation of primary data, data entry	•	Highfield receives all analysis data directly from the laboratories in electronic
				procedures, data verification, data storage		format (xls or csv). This is transferred to a master database and is monitored for
				(physical and electronic) protocols.		QA/QC purposes.
					•	SRK checked the transcription from the original laboratory certificate pdfs and
						foundno errors.
			•	Discuss any adjustment to assay data.	•	No adjustments have been made to the analytical results received from the
						laboratory
Location		of	•	Accuracy and quality of surveys used to locate	•	All new locations were surveyed before and after drilling by a licenced surveyor
data points				drill holes (collar and down-hole surveys),		using a differential GPS.
				trenches, mine workings and other locations
				used in Mineral Resource estimation.
			•	Specification of the grid system used.	•	Grid systems used were European Datum 50, updated to European Terrestrial
						Reference System 1989 (ETRS89) for compatibility with modern survey
						information.
			•	Quality and adequacy of topographic control.	•	All new locations were surveyed before and after drilling by a licenced surveyor.
Data spacing			•	Data spacing for reporting of Exploration	•	The results reported are within 800 metres of previous explorations drillholes in
and				Results.		Vipasca, and 1500 metres from Muga exploration drillholes. One additional
distribution						drillhole (V18-05) will be developed in the following weeks in order to confirm
						and depict the extension of the ore deposit from Muga to Vipasca.
			•	Whether the data spacing and distribution is	•	Not applicable.
				sufficient to establish the degree of geological
				and grade continuity appropriate for the
				Mineral Resource and Ore Reserve estimation
				procedure(s) and classifications applied.
			•	Whether sample compositing has been	•	Samples have been composited over the thickness of the identified potash bed
				applied.		for reporting of exploration results.
Orientation			•	Whether the orientation of sampling achieves	•	The general strike of geology in the basin is NW-SE orientation.
of data		in		unbiased sampling of possible structures and
relation		to

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Criteria		JORC Code explanation	JORC Code explanation	Commentary	Commentary
geological			the extent to which this is known, considering	•	The drill holes were orientated vertically, broadly perpendicular to the very
structure			the deposit type.		shallow dipping main potash seam to ensure the true potash seam thickness
					was intersected.
		•	If the relationship between the drilling	•	Not applicable.
			orientation and the orientation of key
			mineralised structures is considered to have
			introduced a sampling bias, this should be
			assessed and reported if material.
Sample		•	The measures taken to ensure sample	•	Chain of custody is managed by Highfield. The core is boxed at the rig and
security			security.		transported to a secure facility for logging, photographing and cutting. Following
					this, samples were bagged and secured with zip locks before they are shipped
					to ALS laboratories in Seville.
Audits	or	•	The results of any audits or reviews of	•	SRK has completed a review of the drilling, sampling and analytical techniques
reviews			sampling techniques and data.		used and the manner in which the exploration results have been reported and
					has concluded that these techniques are appropriate to the mineralisation being
					explored and that the resulting data has been reported in an unbiassed
					manner.

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Section 2 Reporting of Exploration Results – Vipasca

(Criteria listed in the preceding section also apply to this section.)

Criteria		JORC Code explanation	JORC Code explanation				Commentary
Mineral		•	Type, reference name/number, location	•	The	Vipasca tenement was issued as an Investigation Permit (PI) by the Spanish
tenement and			and ownership including agreements or		authorities under reference number of 35900 on 11/12/14 and extended on 09/04/18.
land	tenure		material issues with third parties such		The	permit is due to be renewed for a further 3 years from December 2020. The
status			as joint ventures, partnerships,		permit covers a total area of 27.30 Km2and the entire Vipasca extension of Muga
			overriding royalties, native title interests,		deposit.
			historical sites, wilderness or national	•	Geoalcali S.L.U., a wholly owned subsidiary of Highfield Resources Limited, is the
			park and environmental settings.		permit holder. There are no Joint Ventures, partnerships, royalties or other
					commitments relating to the Investigation Permit.
		•	The security of the tenure held at the	•	Highfield Resources has completed a legal review which concluded its tenure to be
			time of reporting along with any known		secure.
			impediments to obtaining a license to
			operate in the area.
Exploration		•	Acknowledgment and appraisal of	•	Potash		was first discovered in the Ebro Basin in the Catalonia area in 1912 at Suria
done by other			exploration by other parties.		after the potash discoveries in Germany (Moore 2012). Salt was first discovered
parties					through drilling which subsequently also confirmed the presence of up four potentially
					economic potash mining horizons with a combined total thickness of between 2.0
					and	8.0m (Stirrett and Mayes 2013). The potash horizons in the area were identified
					over an area of approximately 160 square kilometers (km2) and at depths of
					approximately 500m below surface 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 exploration programmes to the deposits
					found at Catalonia undertaken largely by E.N. Adaro in 1989 and1990 (Stirrett and
					Mayes		2013). The exploration efforts later led to the development of a mine near
					Pamplona and Beriain.
				•	Production at Pamplona began in 1963 with a capacity of 250,000 tonnes per year
					(tpy) of		K2O. A thick carnallite horizon 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.
				•	A 2D high-resolution seismic survey was run for POSUSA in August–October 1988,
					by CGG over eastern Vipasca area, most of what is now Muga Mine project area.
					This consisted of 9 lines totalling 55 km (Geoalcali, 2012). An additional 2D seismic
					was run at a later date (unknown) increasing the total available seismic to 16 lines,
					totalling 87.3 km (RPS 2013). RPS of Calgary, Alberta, Canada, completed a re-
					interpretation of the 2D historical seismic lines and profiles on behalf of Highfield.
					The	re-interpretation programme was designed to review the overall accuracy of the
					historical data in terms of good correlation to drillhole data and geological
					intersections, as well as identify any sub-surface structures that may adversely affect
					the salt-bearing strata within the project area. A total of 16 lines were reviewed and
					were tied to wells with historical wireline data from the 2D seismic RPS. The paper
					copies of the seismic were digitized as the original tapes were unavailable. An
					historical drilling programme completed in 1989–1990 was outlined in detail by E.N.
					Adaro (1989–1991) over the eastern edge of Vipasca. E.N. Adaro, the state-owned
					group tasked with exploration and development of Spain’s Mineral Resources,
					produced detailed reports and“reserve”studies of the Javier-Pintanos area.
Geology		•	Deposit type, geological setting and	•	The	geological description below is taken from the Highfield Resources ASX Release
			style of mineralisation.		dated 24 February 2015 and details the geology of the Javier Pintano Basin in which
					Vipasca extension in settled.
				•	The	Upper Eocene potash deposits occur in the sub-basins of Navarre and Aragón
					provinceswithinthelarger EbroBasin(FigureA-1). TheNavarrese sub-basins

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Criteria	JORC Code explanation		Commentary
			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 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 epoch progressing to a more restricted
			environment dominated by evaporation and the deposition of marl, gypsum, halite,
			and potassium minerals. Later, tectonism formed narrow anticlines and broad
			synclines, which created outcrops of the evaporite sequence. 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.
		•	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 are indicative of continued subsidence.
		•	Vipasca comprises the West end of the Muga basin. The evaporites are part of the
			northern limb of Javier-Pintanos synclinal structure with the main axis plunging to the
			west. The northern limb is compartmented in at least 2 sub-blocks which are
			separated by an unnamed thrust fault which outcrops in the vicinity of the last
			developed drill holes. The deposit has a variable slope ranging from 15-40 degrees
			(º), with a depth from between 40 to 250 m (elevation +500 m). Further drilling is
			programmed for the next months to check the extension of the deposit
		•	The Vipasca basin is dominated by a SW-NE unnamed fault. This fault was probably
			active during the precipitation of potash and therefore has influenced final
			configuration within the basin edge delimiting two different domains where potash is
			present. (Fig 4)
		•	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
			incipient tectonics coming from the north, causing 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
			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 Muga Extension of Vipasca Potash Project area, the mineralogy is dominated
			by sylvinite asit occursin Muga. The upperpotashbeds transitiontofinely banded

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Criteria		JORC Code explanation	JORC Code explanation				Commentary
					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.
				•	Potash		seams are present in the basin which are sometimes separated by halite
					beds.	These are the Upper Potash Interval (P0, PA and PB seams), the Intermediate
					Potash		Interval (P1 seam) and Lower Potash Interval (P2 seam).
Drill	hole	•	A summary of all information material to	•	Analysis information is shown in the body of this release in Tables 2 and 3.
information			the understanding of the exploration results including a tabulation of the following information for all Material drill holes:	• •	V18-01:X:644939.366, Y:4719359.952, RL: 488.4218, EOH: 763m, first appearance of potash: 619.10 m V18-02:X: 645033.3886, Y: 4718690.5761 m, RL: 491.705 m, EOH: 1190 m, first
			o easting and northing of the drill		appearance of potash: 987.40 m.
			hole collar	•	The drillholes dip at 90, with an azimuth of 000.
			o elevation or RL (Reduced Level—elevation above sea level in metres) of the drill hole collar	•	InV18-01the three potash intervals are present in this drillhole, although Upper Potash Interval and Intermediate Potash Interval only appear in centimetric beds showing traces of sylvinite. Lower Potash Interval appears at 740.00-741.65 m.
			o dip and azimuth of the hole o down hole length and interception depth o hole length.	•	InV18-02the three potash intervals are present in this drillhole. Upper Potash Interval appears with first traces at 987.40 m to 1012.10 m, Intermediate Potash Interval appears at 1119.00 to 1132.30, Lower Potash Interval appears at 1139.2 to 1147.3 m
		•	If the exclusion of this information is
			justified on the basis that the information
			is not Material and this exclusion does
			not detract from the understanding of
			the report, the Competent Person
			should clearly explain why this is the
			case.
Data		•	In reporting Exploration Results,	•	Composites by weighted average were made from the geochemical data to optimise
aggregation			weighting averaging techniques,		grade and thickness of the mineralised seams in both the new and historical data.
methods			maximum and/or minimum grade	•	All grades are presented in percentage of K2O over a selected interval.
			truncations (e.g. cutting of high grades)
			and cut off grades are usually Material
			and should be stated.
		•	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
			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	•	V18-01 and V18-02 are drilled vertically as to best perpendicularly intersect the
between			important in the reporting of Exploration		expected mineralisation.
mineralisation			Results.	•	Data on bed angle and orientation will be incorporated into geological database to
widths	and	•	If the geometry of the mineralisation		calculate the true thickness of the beds intersected.
intercept			with respect to the drill hole angle is
lengths			known, its nature should be reported.
		•	If it is not known and only the down hole
			lengths are reported, there should be a
			clear statement to this effect (e.g. ‘down
			hole length, true width not known’).

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Criteria	JORC Code explanation	JORC Code explanation		Commentary
Diagrams	•	Appropriate maps and sections (with	•	Appropriate maps and diagrams are included in the body of this release.
		scales) and tabulations of intercepts
		should be included for any significant
		discovery being reported. These should
		include, but not be limited to a plan view
		of drill hole collar locations and
		appropriate sectional views.
Balanced	•	Where comprehensive reporting of all	•	All results are included in the body of this release.
reporting		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.
Other	•	Other exploration data, if meaningful	•	Not applicable.
substantive		and material, should be reported
exploration		including (but not limited to): geological
data		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.
Further work	•	The nature and scale of planned further	•	Ongoing exploration work is intended for the interpreted extensional areas of the
		work (e.g. tests for lateral extensions or		deposit in Vipasca, and its correlation and continuity from Muga. Vipasca is western
		depth extensions or large-scale step-out		extension of Muga Project, one drillhole (V18-03) is recently completed and one
		drilling).		additional drillhole (V18-05) is planned in the following weeks in order to confirm and
	•	Diagrams clearly highlighting the areas		depict the extension of the ore deposit.
		of possible extensions, including the
		main geological interpretations and
		future drilling areas, provided this
		information is not commercially
		sensitive.

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