HIGHFIELD RESOURCES LIMITED — Interim / Quarterly Report 2017

Jul 17, 2017

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ASX Release 18 July 2017

JUNE 2017 QUARTERLY ACTIVITIES REPORT

Overview

• Updated environmental documentation for the Muga Project submitted to MAPAMA ahead of extension date.

• Strong engagement with MAPAMA and MINETAD on the Company’s environmental permitting submission as well as on the next steps in the process.

• Exploration drill hole completed at Sierra del Perdón with positive high grade results.

• Decline geotechnical drill hole completed at Muga intersecting broad zones of potash mineralisation.

• Appointment of highly experienced Spanish business people to advisory board.

• Contract mining tender process and updated cost estimates progressing.

Financial Status:

• Cash at bank as at 30 June 2017: A$69.6m.

Plans for September Quarter 2017:

Muga Potash Mine:

• Public exposition on the Company’s environmental submission for the Muga Potash Mine to commence on 1 September 2017.

• Ongoing preparation for construction and operational readiness.

• Issuing of first construction tender packages.

• Planning and permitting further geotechnical holes on declines.

Other Projects:

• Exploration drill hole underway at Vipasca Project.

• Geophysics (TDEM) planned for Vipasca Project.

• Exploration drill hole planned for Sierra del Perdón.

Highfield Resources Ltd. ACN 153 918 257 ASX: HFR

Issued Capital 329.2 million shares 41.15 million options 50.0 Performance B Shares

Registered Office Head Office Directors Company Secretary C/– HLB Mann Judd Avenida Carlos III, 13 - Derek Carter Donald Stephens 169 Fullarton Road 1°B, 31002 Peter Albert Dulwich, SA 5065 Pamplona, Pauline Carr Australia Spain Richard Crookes –––––––––––––––––– –––––––––––––––––– Jim Dietz T. +61 8 8133 5098 T. +34 948 050 577 Owen Hegarty F. +61 8 8431 3502 F. +34 948 050 578

www.highfieldresources.com.au

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Muga Potash Project

Overview

Highfield Resources (ASX: HFR) (“Highfield” or “the Company”) is a Spanish potash developer. The Company’s flagship Muga Potash Project (“Muga” or “the Project”) is targeting the relatively shallow sylvinite beds in the Muga Project area that cover about 80km[2] in the Provinces of Navarra and Aragon. Mineralisation commences at depths from surface of less than 200 metres and is ideal for a relatively low-cost conventional mine accessed via a dual decline, as demonstrated in the Company’s Muga Project Optimisation Study completed in November 2015 (refer to ASX announcement dated 17 November 2015).

Permitting Update

On 1 May 2017, the Company announced (refer ASX release “Formal Responses to Government on Muga Potash Project Submitted”) that it had submitted its revised environmental document to the Ministry of Agriculture, Fishing, Food and Environment (“MAPAMA”). The submission document, which included answers to all technical queries raised by the referral authorities and MAPAMA, as well as additional technical work completed by the Company, was compiled with the assistance of Highfield’s Spanish consultants, TYPSA. TYPSA has successfully managed over 200 Environmental Impact Assessments and Declaración de Impacto Ambiental (“DIA”) processes.

MAPAMA requested clarification and reconsideration on several components of the Project. The Company liaised extensively with the referral authorities on each item to ensure that all comments were addressed and, where possible, incorporated into the Project. The engagement with the referral authorities was positive and indicates there is a strong resolve for the Project to move forward amongst these local and regional bodies.

Following the end of the quarter, the Company announced that it would pursue a public exposition period for its recently submitted environmental documentation, commencing on 1 September 2017. Whilst there is no legislative requirement for this process, Highfield believes it is important to allow stakeholders of the Project the opportunity to make final comments before the award of the DIA.

Muga Mine Development Progress

Detailed engineering work slowed during the June quarter as the Company reached logical points to hold work ahead of the receipt of permits for Muga. Nonetheless, Bovis Project Management S.A, one of the leading local specialist project and construction management companies, has been appointed to assist in a project cost and schedule review and progress the construction contract packaging strategy in anticipation of the receipt of permits.

Work continues with consultants in a number of areas to optimise and fine tune the Project. Specifically, SRK is now providing ongoing mining support as well as preparing a mining tender package document. In addition, a process consultant with extensive potash experience has been appointed to advise and support the Geoalcali team and a tender process for the appointment of a sustainability consultant to undertake a gap analysis is also underway.

During the quarter, Highfield completed a drill hole to provide geotechnical information at the foot of the western decline which was drilled through to the footwall salt horizon. The drill hole was located in an area which was expected to be characterised by a thinning of mineralisation due to an anticline structure. In fact, the drill hole intersected over 6 metres of potash mineralisation from 502 metres below surface, with an average grade of 7.32% K2O. Within the PB seam, which is the primary mining horizon at Muga, drilling encountered 2.7 metres with an average grade of 10.46% K2O including 1.5 metres with an average grade of 14.82%. This result was better than expected, from both a grade and thickness

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perspective. Mineralisation was predominantly brecciated in texture. A detailed summary of drill hole R- 03 can be found in Table 2.

Highfield continues to progress the revised Feasibility Study to include new information, further optimisations and to provide updated capital cost estimates for the Project.

Project Financing

During the quarter, the Company continued its dialogue with its Project Finance syndicate with respect to the €185 million facility for Muga. It also engaged with other potential providers of capital.

Highfield remains confident of putting in place its debt financing following receipt of all approvals, to support a final investment decision and the commencement of construction.

Pintanos Potash Project

Highfield´s 100%-owned Pintanos Project (see Figure 1) abuts the Muga Project and covers an area of 60km[2] . Depths from surface to mineralisation commence at around 500 metres. The Company is building on substantial historical potash exploration information which includes seven drill holes and ten seismic profiles completed in the late 1980s.

During the quarter, limited additional work was carried out.

Sierra del Perdón

Highfield´s 100%-owned Sierra del Perdón (“SdP”) Project (see Figure 1) is located south east of Pamplona and covers approximately 145km[2] . SdP is a brownfields project with two potash mines operating from the 1960s through until the late 1990s producing nearly 500,000 tonnes of K60 MOP per annum. The Company completed a Scoping Study on SdP (refer ASX announcement 20 April 2015) which confirmed the technical and economic viability of the project.

During the period, the Company completed drill hole SDP-008 at SdP. Despite challenging conditions, which slowed the progress of the drilling, it intercepted the various lithologies, including the carnallite and sylvinite seams, at the expected levels. In particular, the results from the sylvinite seam were positive with broad zones of potash mineralisation encountered from approximately 776 metres to approximately 785 metres below surface. The sylvinite horizon intersected 3.6 metres of potash at an average grade of 15.68% K2O including 1.8 metres at an average grade of 22.42% K2O. This drilling is within close proximity to the former operating mine owned by Potasas de Subiza, which produced for nearly 30 years, closing in 1996.

A summary of the assay results can be seen in Table 3.

The Company plans to commence an additional exploration drill hole at Sierra del Perdón in the coming months.

Vipasca

Highfield´s 100%-owned Vipasca Project (“Vipasca”) is located adjacent to the Muga Project and covers approximately 120km[2] . The tenement is highly prospective for economic potash mineralisation, with primary focus on the deeper, higher grade, P1 and P2 potash horizons.

The Company is currently undertaking an exploration drill hole at Vipasca. Results are expected in the coming months. In addition, Highfield has planned an extensive geophysical (TDEM) program to complement the drill program.

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Other Projects

The Company has an additional 100%-owned project in the basin (see Figure 1) known as Izaga. Limited work was carried out on this project during the quarter.

Corporate

A recent initiative has been the appointment of Spanish advisors to both Highfield and its local subsidiary, Geoalcali. These individuals are respected Spanish nationals who are able to provide insight to the Company as it seeks to cement Muga as a worthy and sustainable enterprise in the Navarra and Aragon Provinces of Spain. Mr Sixto Jimenez is a well-known business person in Navarra with international experience who remains very active in the business and community circles of Pamplona and continues to be a significant social commentator. Mr Isaac Querub is an internationally experienced and recognised business person who has held executive roles in the minerals industry including a senior position in Glencore. Both these individuals are anticipated to contribute significantly to the Company’s long term sustainable success in Spain.

Cash Position

As at 30 June 2017, the Company had A$69.6 million in cash on its balance sheet.

For more information:

Highfield Resources

Peter Albert Managing Director Ph: +34 617 872 100

Hayden Locke Investors Relations Ph: +44 7729 197 707

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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, Pintanos, 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 which will enable it to commence construction of the Mine.

In addition to the existing Muga Project, Highfield also has significant Exploration Targets for an extension to Muga, as well as for the Vipasca and Pintanos Potash Projects.

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

*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

Competent Persons Statement

This ASX release was prepared by Mr. Peter Albert, Managing Director of Highfield Resources. The information in this release that relates to Ore Reserves, Mineral Resources, Exploration Results and Exploration Targets is based on information prepared by Mr José Antonio Zuazo Osinaga, Technical Director of CRN, S.A.; Mr Jesús Fernández Carrasco, Managing Director of CRN, S.A; and Mr Manuel Jesús Gonzalez Roldan, Geologist of CRN, S.A. Mr José Antonio Zuazo Osinaga and Mr Jesús Fernández Carrasco are licensed professional geologists in Spain, and are registered members of the European Federation of Geologists, an accredited organisation to which Competent Persons (CP) under JORC 2012 Code Reporting Standards must belong in order to report Exploration Results, Mineral Resources, Ore Reserves or Exploration Targets through the ASX. Mr José Antonio Zuazo Osinaga has 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 CP as defined in the 2012 edition of the JORC Australasian Code for the Reporting of Exploration Results, Mineral Resources and Ore Reserves.

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Table 1: Summary of Highfield’s Mineral Interests as at 31 March 2017

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Location: All permits are located in Spain.

Holder: All permits are held by Geoalcali SL, a 100%-owned Spanish subsidiary of Highfield Resources Limited.

Changes: Permit applications for Permits Osquia , Borneau and Girardi were approved during the period.

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Table 2: Summary of Drillhole R-03

				Table 2: Summary of Drillhole R-03	Table 2: Summary of Drillhole R-03	Table 2: Summary of Drillhole R-03	Table 2: Summary of Drillhole R-03	Table 2: Summary of Drillhole R-03	Table 2: Summary of Drillhole R-03	Table 2: Summary of Drillhole R-03	Table 2: Summary of Drillhole R-03	Table 2: Summary of Drillhole R-03	Table 2: Summary of Drillhole R-03	Table 2: Summary of Drillhole R-03
				DDH R-03 POTASH GRADES(ICP analysis)
								K2O(%)	MgO(%)	Na2O(%)	Cl(%)	SO4(%)	CaO(%)	Water Insolubles
"PA" Seam	F	rom 502.2 to 505.5 Thickness: 3.3 m "PA" Seam					Average max. Value min. Value	5.29 13.07 1.63	0.27 0.41 0.17	28.99 33.16 24.80	37.81 43.10 31.60	3.51 4.58 2.85	2.48 3.01 2.17	29.43 39.99 18.14
	F	rom 504 to 505.2 Thickness: 1.2 m "PA" Seam (Selected interval)					Average max. Value min. Value	8.75 13.07 6.23	0.26 0.33 0.18	29.69 33.16 27.50	40.98 43.10 37.60	3.88 2.85 2.85	2.72 3.01 2.17	22.79 28.24 18.14
"PB" Seam	F	rom 505.8 to 508.5 Thickness: 2.7 m "PB" Seam					Average max. Value min. Value	10.46 19.51 3.35	0.11 0.18 0.05	29.35 34.64 25.01	42.01 44.50 40.20	3.53 4.58 2.73	2.34 3.01 1.76	23.93 29.93 18.14
	F	rom 506.7 to 508.2 Thickness: 1.5 m "PB" Seam (Selected Interval)					Average max. Value min. Value	14.82 19.51 9.11	0.09 0.12 0.05	26.73 30.20 25.01	40.96 43.90 38.70	4.58 4.88 4.28	2.71 2.85 2.53	17.73 26.65 10.45
Note	s:
	1. Chemical analysis conducted byALS Global(Galway,Ireland)
	2. ICP(inductivelycoupledplasma) quantitative method
	3. Intervals are cored intervals(versus true thickness intervals). Conversion to true thicknesspendingupdated structural model
	4. Compositegrades calculated as length-weighted averages

Table 3: Summary of Drillhole SDP-008

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Section 1 Sampling Techniques and Data

Criteria	JORC Code explanation	JORC Code explanation	Commentary	Commentary
Sampling		Nature and quality of sampling (e.g. cut		Exploration Diamond Core (DD) drilling was completed. Core was recovered and
techniques		channels, random chips, or specific		sampled on 0.3 metre downhole intervals. Each segment of core was logged,
		specialised industry standard		photographed and, following being marked and number, each sample was halved,
		measurement tools appropriate to the		with a quarter core sent to be assayed.
		minerals under investigation, such as		Drilling was completed using a saturated brine to limit core loss as a result of water
		down hole gamma sondes, or handheld		based fluid contact with the salt horizons.
		XRF instruments, etc.). These examples
		should not be taken as limiting the broad
		_meaning of sampling. _
		Include reference to measures taken to		Drill hole locations were surveyed using GPS, and by a professional surveyor prior to
		ensure sample representivity and the		commencement and post the completion of drilling.
		appropriate calibration of any		Certified Reference Materials (CRM) are inserted on a ratio of 1:20 and blanks are
		measurement tools or systems used.		inserted on a ratio of 1:50 into sample streams to assess the accuracy, precision and
				methodology of the external laboratories used. In addition, duplicate samples were
				inserted on a ratio of 1:20 for Quality Assurance purposes.
				ALS laboratories undertook their own duplicate, CRM and blank sample insertion.
				Examination of the QA/QC sample data indicates satisfactory performance of field
				sampling protocols and assay laboratories providing acceptable levels of precision
				and accuracy.
		Aspects of the determination of		Core is sawed using hydraulic oil as the lubricating agent to minimise core loss. Half
		mineralisation that are Material to the		core is retained and shrink wrapped to ensure it is well preserved should further
		Public Report. In cases where ‘industry		assaying be required.
		standard’ work has been done this		Quarter core for assaying was bagged and secured with plastic ties for shipping to
		would be relatively simple (e.g. ‘reverse		external laboratory for assaying. Samples were crushed, ground and split in Seville,
		circulation drilling was used to obtain 1		Spain prior to being shipped to ALS Labs in Galway, Ireland. Cored samples were
		m samples from which 3 kg was		assayed using inductively coupled plasma-optical emission spectrometry and X-ray
		pulverised to produce a 30 g charge for		fluorescence (XRF).
		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,		Drilling was completed by DD method.
techniques		open-hole hammer, rotary air blast,
		auger, Bangka, 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.). _
Drill sample		Method of recording and assessing core		Core was boxed at the rig and transported to the core shed at Beriain for logging,
recovery		and chip sample recoveries and results		photographing, halving and shrink wrapping. Sample quality and recovery were
		assessed.		considered to be suitable.
		Measures taken to maximise sample		The drilling was completed using HQ core to maximise core recovery.
		recovery and ensure representative		Drilling through the evaporite horizon was conducted with a saturated brine drilling
		nature of the samples		mud,which aims to minimise dissolution due to the use of water based drillingfluids.
		Whether a relationship exists between		The core recovery is of an acceptable level and no bias is expected from any sample
		sample recovery and grade and whether		losses.
		sample bias may have occurred due to
		preferential loss/gain of fine/coarse
		material.
Logging		Whether core and chip samples have		Core has been logged for lithology, alteration, mineral assemblage and structure.
		been geologically and geotechnically		Geotechnical parameters logged: length recovery, RQD, bed degree, fault/fracture
		logged to a level of detail to support		(length, fill and degree)
		appropriate Mineral Resource
		estimation, mining studies and

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Criteria			JORC Code explanation	JORC Code explanation	Commentary	Commentary
				metallurgical studies.
				Whether logging is qualitative or		Logging is qualitative in nature. All core was photographed and remaining half core
				quantitative in nature. Core (or costean,		shrink wrapped for preservation.
				channel, etc.) photography
				The total length and percentage of the		Core was logged and photographed at 0.3 metre intervals.
				relevant intersections logged.
Sub-				If core, whether cut or sawn and whether		Half core was shrink wrapped and retained in storage.
sampling				quarter, half or all core taken.		Quarter core was sent for assaying.
techniques						Quarter core was retained for metallurgical testing purposes.
and sample
preparation
				If non-core, whether riffled, tube		Not applicable.
				sampled, rotary split, etc. and whether
				_sampled wet or dry. _
				For all sample types, the nature, quality		Samples were quarter core taken at 0.3 metre intervals downhole. All samples were
				and appropriateness of the sample		sent to an external laboratory for preparation and assaying.
				preparation technique.
				Quality control procedures adopted for		Sawing of core was conducted using oil based lubricant to minimise dissolution.
				all sub-sampling stages to maximise
				representivity of samples.
				Measures taken to ensure that the		Duplicate samples were taken on a 1:20 basis and submitted to the laboratory with the
				sampling is representative of the in situ		other samples. These showed acceptable levels of variation and repeatability.
				material collected, including for instance
				results for field duplicate/second-half
				_sampling. _
				Whether sample sizes are appropriate to		Sample sizes are appropriate for the mineralisation type.
				the grain size of the material being
				sampled.
Quality		of		The nature, quality and appropriateness		Assaying was conducted using ICP-OES and XRF, which are modern industry
assay	data			of the assaying and laboratory		standards
and				procedures used and whether the		These are considered to be total mineral measurements.
laboratory				technique is considered partial or total.
tests
				For geophysical tools, spectrometers,		No handheld devices were used to estimate the grade or mineralogical composition of
				handheld XRF instruments, etc., the		the assays for the purposes of this release.
				parameters used in determining the analysis including instrument make and		Parameters in chemical analysis: K2O, MgO, Na2O, Cl, SO4,CaO, water insolubles
				model, reading times, calibrations
				factors applied and their derivation, etc.
				Nature of quality control procedures		Both Highfield and ALS maintained independent QA/QC programs including the
				adopted (e.g. standards, blanks,		insertion of Certified Reference Material (CRM), duplicates and blanks.
				duplicates, external laboratory checks)		In addition, check samples were submitted to an “umpire” laboratory – Saskatoon
				and whether acceptable levels of		Research Centre (SRC)
				accuracy (i.e. lack of bias) and precision		Duplicates showed acceptable levels of internal agreement.
				have been established.		Accuracyandprecision of the CRM,duplicate and blanks are within acceptable levels.
Verification				The verification of significant		DD core limits potential for in hole contamination.
of sampling				intersections by either independent or		ALS assayed all samples using both the ICP-OES methodology and XRF. These
and				alternative company personnel.		methods showed acceptable levels of agreement to support the precision of the
assaying						testing program.
				The use of twinned holes.		No holes were required to be twinned in thisprogram.
				Documentation of primary data, data		Highfield receives all assay data directly from the laboratories in electronic format (xls
				entry procedures, data verification, data		or csv). This is transferred to a master database and is monitored for QA/QC
				storage (physical and electronic)		purposes.
				protocols.
				Discuss any adjustment to assay data.		No adjustments were made to assaydata.
Location		of		Accuracy and quality of surveys used to		All new locations were surveyed before and after drilling by a licenced surveyor.
data points				locate drill holes (collar and down-hole
				surveys), trenches, mine workings and
				other locations used in Mineral

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Criteria		JORC Code explanation	JORC Code explanation	Commentary	Commentary
			Resource estimation.
			Specification of the grid system used.		Grid systems used were European Datum 50, updated to European Terrestrial
					Reference System 1989(ETRS89)for compatibilitywith modern surveyinformation.
			Quality and adequacy of topographic		All new locations were surveyed before and after drilling by a licenced surveyor.
			control.		A specific report isprepared for each drillhole
Data			Data spacing for reporting of Exploration		The results reported are within 500 metres of other drilling and are considered to be
spacing and			Results.		“infill” in nature.
distribution
			Whether the data spacing and		Not applicable.
			distribution is 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 for
			applied.		reporting purposes.
Orientation			Whether the orientation of sampling		The general strike of geology in the basin is NW-SE orientation.
of data	in		achieves unbiased sampling of possible		Drilling was conducted vertically, logging noted the orientation of the structure to
relation	to		structures and the extent to which this is		ensure adjustments were made to determine “true thickness”.
geological			known, considering the deposit type.
structure
			If the relationship between the drilling		Drilling was vertical. This was taken into account to calculate the “true thicknesses” of
			orientation and the orientation of key		the mineralisation intersected.
			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. Core is boxed at the rig and transported to
security			security.		a secure facility for logging, photographing and quartering. Following this, samples for
					assaywere bagged and secured with ziplocks to be shipped to ALS laboratories.
Audits	or		The results of any audits or reviews of		Audits and reviews are ongoing. These consistently show the methods applied by the
reviews			sampling techniques and data.		Companyare acceptable.

Section Reporting of Exploration Results

(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 Pintanos tenements was issued as an Investigation Permit (PI) by the Spanish
tenement and			and ownership including agreements or		authorities under reference number 3495/10 on 6/03/2014. Molineras 20 and
land	tenure		material issues with third parties such as		Puntarrón are pending. Muga tenements were issued as a PI under reference
status			joint ventures, partnerships, overriding		number of 3500 on 07/04/2014. Quiñones was issued as a PI under reference
			royalties, native title interests, historical		number of 35760 on 07/08/2012 and extended on 02/10/2015
			sites, wilderness or national park and		Highfield owns the rights 100%. There are no JVs, partnerships, royalties or other
			environmental settings.		relatingto the Investigation Permit.
			The security of the tenure held at the		Highfield has completed a legal review which concluded its tenure to be secure.
			time of reporting along with any known
			impediments to obtaining a license to
			operate in the area.
Exploration			Acknowledgment and appraisal of		Historical exploration was completed by E.N. Adaro in 1989-1990, however, potash
done by other			exploration by other parties.		was first discovered as early as 1927.
parties					Historical production occurred at the Potasas de Subiza and Potasas de Navarra
					mines,located close to the Sierra del Perdón Project.
Geology			Deposit type, geological setting and		The deposit is an evaporite or chemical sedimentary type deposit. Its genesis is that
			style of mineralisation.		of a restricted marine sedimentary basin influenced by eustacy, sea floor subsidence
					and/or uplift of sedimentary units.
					The potash deposits are Upper Eocene, with evaporites accumulating in an

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Criteria		JORC Code explanation	JORC Code explanation			Commentary
					elongated basin, trending NW-SE, at the southern foreland of the Pyrenean
					mountain range. The deposit includes thick zones of alternating claystone (marls)
					and	evaporite with well-formed footwall and hanging wall salts.
					Potash mineralisation is predominantly in the form of sylvinite (KCl + NaCl) with
					some minority carnallite (KCL.MgCl2.6H20). It is typically founded interbedded with
					halite(NaCl)and insoluble materials in the form of lutite.
Drill	hole		A summary of all information material to		Assay information is shown in the body of this release in Table 2.
information			the understanding of the exploration results including a tabulation of the following information for all Material drill		SdP-008:X: 609308.000 Y: 4731864.094, RL: 587.372 R-03:X: 649416.276 Y:4715407.956, RL: 531.052
			holes:
			o easting and northing of the drill
			hole collar		Holes are drilled vertically
			o elevation or RL (Reduced
			Level—elevation above sea
			level in metres) of the drill hole
			collar
			o dip and azimuth of the hole
			o down hole length and
			interception depth
			o hole length.
			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 K20 over a selected interval, which is
			truncations (e.g. cutting of high grades)		industry standard.
			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
			clearlystated.
Relationship			These relationships are particularly		All drill holes are drilled vertically as this is the best orientation to intersect the
between			important in the reporting of Exploration		expected mineralisation in a perpendicular manner.
mineralisation			Results.		Data on bed angle and orientation were incorporated into geological database to
widths	and		If the geometry of the mineralisation with		calculate the true thickness of the beds intersected.
intercept			respect to the drill hole angle is known,
lengths			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’).
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.

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Criteria	JORC Code explanation	JORC Code explanation		Commentary
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
		contaminatingsubstances.
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, eastern extent of the Pintanos Project however this is currently unplanned
		depth extensions or large-scale step-out
		drilling).
		Diagrams clearly highlighting the areas
		of possible extensions, including the
		main geological interpretations and
		future drilling areas, provided this
		information is not commercially
		sensitive.

Section 2: Estimation and Reporting of Mineral Resources

No new information regarding the estimation and reporting of mineral resources is presented.

Section 3: Estimation and Reporting of Ore Reserves

No mineral reserves are reported.

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