HIGHFIELD RESOURCES LIMITED — Investor Presentation 2021

Dec 7, 2021

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Constructing the Next European Potash Mine Corporate Presentation December 2021

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ASX: HFR
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COMPETENT PERSONS STATEMENT FOR MUGA ORE RESERVES, MUGA MINERAL RESOURCES and EXPLORATION TARGET

This update was prepared by Mr. Ignacio Salazar Director of Highfield Resources. The information in this update that relates to Ore Reserves is based on information prepared under the direction of Dr Mike Armitage, a Corporate Consultant with SRK Consulting (UK) Limited. Dr. Mike Armitage CEng, CGeol. is the Competent Person who assumes overall professional responsibility for the reported Ore Reserve. The information related with the review of the Life of Mine (“LOM”) that underpins the Ore Reserves has been prepared by Mr Chris Bray, who is a full-time employee of and Principal Consultant (Mining) at SRK. The information in this update that relates to Mineral Resources is based on information prepared by Ms Anna Fardell, a Senior Consultant at SRK Consulting (UK) Limited.

Dr Mike Armitage is a Member the Institute of Materials, Metals and Mining (“IMMM”) which is a ‘Recognised Overseas Professional Organisation’ (“ROPO”) included in a list promulgated by the Australian Stock Exchange (“ASX”) from time to time. Dr. Mike Armitage has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which he is undertaking 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’. Dr. Mike Armitage consents to the inclusion in this update of the matters based on this information in the form and context in which it appears.

Mr Chris Bray BEng, MAusIMM (CP) is taking responsibility for the review of the LOM plan, as reported by the Company. Mr Bray is a full-time employee and Principal Consultant (Mining) at SRK. He is a Member of and Chartered Professional in the Australasian Institute of Mining and Metallurgy. He is a Mining Engineer with 24 years’ experience in the mining and metals industry, including operational experience in underground mines as well as mine planning and review experience on underground potash, salt, lithium and borate projects, and as such qualifies as a CP as defined in the JORC Code. He has also been involved in the reporting of Ore Reserves on various properties internationally for over 10 years.

Ms Anna Fardell is a Senior Resource Geologist employed by SRK, and has over five years’ experience in estimating and reporting Mineral Resources relevant to the style of mineralisation and type of deposit described herein. Ms Fardell is a registered member of the Australian Institute of Geoscientists (6555) and considered a Competent Person (CP) under the definitions and standards described in the JORC Code 2012. Ms Fardell takes responsibility for the Mineral Resource Statement and Exploration Target presented here.

Ms Anna Fardell consents to the inclusion in this update of the matters based on their information in the form and context in which it appears.

FORWARD LOOKING STATEMENTS

This presentation includes certain ‘forward looking statements’. All statements, other than statements of historical fact, are forward looking statements that involve various risks and uncertainties. There can be no assurances that such statements will prove accurate, and actual results and future events could differ materially from those anticipated in such statements.

Such information contained herein represents management’s best judgment as of the date hereof based on information currently available. The company does not assume any obligation to update any forward looking statement.

Cautionary Statement

The production target set out in this update is derived from Proved and Probable Ore Reserves and Measured, Indicated and Inferred Mineral Resources from the Muga-Vipasca tenement as well as the Exploration Target at the Vipasca and Muga Sur tenement. There is a low level of geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will result in the determination of Indicated Mineral Resources or that the production target itself will be realised. The potential quantity and grade of an Exploration Target is conceptual in nature, there has been insufficient exploration to determine a mineral resource and there is no certainty that further exploration work will result in the determination of mineral resources or that the production target itself will be realised. The technical parameters underpinning the Mineral Resource in the market announcement dated 30 March 2021 and the Exploration Target in the market announcement dated 23 November 2021 continue to apply and have not materially changed.

Highfield Resources Investor Presentation

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INTRODUCTION

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An Investment Opportunity in the Next Major European Potash Mine

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Muga Potash Mine Highfield Resources
Strong market fundamentals Strong financial position and
Global potash prices on the move financial markets support
Location is a major strategic advantage
Experienced Management
Shallow mineralization
and Board
Infrastructure in place
Low capex intensity per tonne Strong local support
Forecast to be one of the highest
Top environmental credentials
margin potash mines globally
Moving up in project life cycle Upside growth opportunities
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Milestones Achieved

Mining concession received on 1 July 2021 Documentation submitted for construction licences Signed non-binding MOUs representing more than Phase-1 production capacity for potash and salt

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Detailed design engineering prepared and ready Permitting Engineering 85% of the process plant equipment has been contracted Endeavour Financial appointed, finalising financing strategy Sales and A$18.1 million raise completed in Sep 21 Corporate Marketing Updated feasibility study reconfirms Muga’s strong economics

Highfield Resources Investor Presentation

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Updated Feasibility Study Reconfirms Muga’s Strong Economics

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NPV8 of €1.89 Billion 25% IRR

More advanced engineering reconfirming a 30-year mine life[1]

Updated capex numbers with higher degree of accuracy: phase 1 €398 million phase 2 of €209 nillion

At full production, EBITDA of around €400 Million pa

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At current spot price Debt sizing is expected to be NPV8 of €2.8 billion around EUR300m. IRR of 42%

1 The production target set out in this update is derivedfrom Provedand Probable Ore Reserves andMeasured, IndicatedandInferredMineral Resources from the Muga-Vipasca tenement as wellas the Exploration Target at the Vipasca andMuga Sur tenement. There is a low levelof geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will result in the determination of Indicated Mineral Resources or that the production target itself will be realised. The potential quantity and grade of an Exploration Target is conceptual in nature, there has been insufficient exploration to determine a mineral resource and there is no certainty that further exploration work will result in the determination of mineral resources or that the production target itself will be realised. The technical parameters underpinning the Mineral Resource in the market announcementdated 30 March 2021 and the Exploration Target in the market announcement dated 23 November 2021 continue to apply and have not materially changed.

The Company confirms that all material assumptions underpinning these figures, in-line with the initial public report released on 8 December 2021 (refer ASX release “Muga Project Updated Feasability Study”),continue to apply and have not materially changed.

Highfield Resources Investor Presentation

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Muga Moving to Construction

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2021 2022 2023 2024
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
Contract with construction
partner
Finalise procurement of long-lead items
Mining
Local town hall construction licenses
Concession
Reconfirm debt credit
approval
Equity
Raise
Finalise funding
package
Appoint Endeavour and DD work Construction
Electricity works and above ground
installations
Reserves
MOUs sales and ports Process plant
Feasibility Ramps and underground galleries
Operational Production
readiness Phase 1
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Highfield Resources Investor Presentation

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Global Potash Prices on the Move at the Right Time

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Strong market fundamentals
02 10
08
02
06
01
04
01
02
00 00
Crop Production Global Population
2050
+29%
2018
0 5000 10000
Millions
2050
-14%
2018
0 0.1 0.2 0.3
Hectares/capita
Billion
Billions of tonnes
1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010 2013 2016 2019 2022 2025 2028
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Upward price forecasts
525 Soybean prices are the
475 highest in 5 years
425
375
325
2016 2017 2018 2019 2020 2021
600
550
500 Potash prices more than
450 doubled since last year
400
350
300
250
200
150
2016 2017 2018 2019 2020 2021
SMOP fob Vancouver USD/t GMOP cfr northwest Europe Euro/t
GMOP fob New Orleans barge USD/st GMOP cfr Brazil USD/t
US$/t
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Highfield Resources Investor Presentation

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MUGA PROJECT OVERVIEW

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Highfield Resources and the Muga Project

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Conventional Underground
A potash developer listed on the Muga is a two phase project Room and Pillar mining. Conventional Flotation and
ASX (HFR) with projects in which will produce a total of 1
Declines accessing shallow Crystallisation processing
Northern Spain Mtpa of muriate of potash
mineralisation
Local Spanish head office and project office
with the entire executive team based in
Pamplona, near the Muga Project site
Muga Mine
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Shallow Mineralization, Conventional Mining, with Tier-One Infrastructure in Place

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350m
Decline access to shallow mineralization; underground Close to the Port of Bilbao (~220km),
Room and Pillar mining. No aquifers Spain’s largest port
First class infrastructure and National Electricity Grid Substation is in close
access to new road systems proximity to mine site
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Highfield Resources Investor Presentation

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SALES AND MARKETING

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Significant Logistical Competitive Advantage

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Extremely competitive and versatile export options

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Muga will be one of only two ~1,750km from mines to port
~1,700km from mines to
potash mines located in port
Southern Europe
~130- 220km from ~6,800 nautical miles
mine to ports
~8,700 nautical miles
~5,000 nautical miles
Competing Markets
Destination
(Shipping Days)
Country of Time to West
Higher netback with local market Low freight cost to Spain departure ~ port 2h Brazil 18 Europe -
within trucking distance Brazil, a key potash Germany ~3h 21 -
market Russia/
Belarus ~2-3 days 26 5
Canada West
Coast ~3 days 43 35
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Highfield Resources Investor Presentation

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MOU signed for more than phase 1 production

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MOP sales (pa) Wider Europe:
Salt sales (pa) •• ~250-300 kt MOP~200-250 kt salt
US East Coast:
• ~50 kt MOP
L oc al:
• ~200-250 kt salt • ~450-500 kt MOP
• ~400-500 kt salt
Africa:
• ~50 kt MOP
South America:
• ~200-250 kt MOP
Sales & Marketing Strategy well advanced
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Potash MOUs signed
MOP
Ameropa 250,000 tpa
Keytrade 300,000 tpa
Salt MOUs signed
-
Vacuum De icing
-
Cargill 1,000,000 tpa
Maxisalt 400,000 tpa 100,000 tpa
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• ✓ Sales & Marketing Strategy well advanced

• ✓ A high level of interest in the mine with MOUs signed for more than phase 1 production

• ✓ Salt sales will convert residue management into a commercial opportunity​

• ✓ Africa & Brazil provide key future growth areas for potash demand

Highfield Resources Investor Presentation

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PROJECT ECONOMICS

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Muga Mine – Key Physicals and Financials

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		2 December 2021
	CAPEX phase 1 (500,000 tpa MOP)	€398 million
	CAPEX phase 2 (Additional 500,000 tpa MOP)	€209 million
	Total CAPEX	€607 million
	ROM tonnes	173.7 million tonnes
	Average plant tonnage feed rate	400 tph
	K2O grade	10.5%
	KCl recovery	91%
	LOM MOP production1	27.5 million tonnes
	LOM MOP average potash prices1 Foreign exchange Euro:USD De-icing salt production Vacuum salt production	€440/t 1:1.12 8.5 Mt 15.9 Mt	At current spot price NPV8 of €2.8 billion IRR of 42%
	C1 cost (€/t)	€76/t
	Tax rate (Navarra)	28%
	Life of mine	30 years
	NPV8	€1.89 billion
	IRR	25%

1 The production target set out in this update is derivedfrom Provedand Probable Ore Reserves andMeasured, IndicatedandInferredMineral Resources from the Muga-Vipasca tenement as wellas the Exploration Target at the Vipasca andMuga Sur tenement. There is a low levelof geological confidence associated with Inferred Mineral Resources and there is no certainty that further exploration work will result in the determination of Indicated Mineral Resources or that the production target itself will be realised. The potential quantity and grade of an Exploration Target is conceptual in nature, there has been insufficient exploration to determine a mineral resource and there is no certainty that further exploration work will result in the determination of mineral resources or that the production target itself will be realised. The technical parameters underpinning the Mineral Resource in the market announcementdated 30 March 2021 and the Exploration Target in the market announcement dated 23 November 2021 continue to apply and have not materially changed.

The Company confirms that all material assumptions underpinning these figures, in-line with the initial public report released on 8 December 2021 (refer ASX release “Muga Project Updated Feasability Study ,continue to apply and have not materially changed.

Highfield Resources Investor Presentation

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Top Quartile Margins in the Industry

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European prices continue to trade at a premium to other markets​

Margin curve forecast for 2024 (real US$)

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750
650
550
450
350
250
150
Potash Standard MOP bulk fob Vancouver US$/t
Potash Granular MOP bulk cfr northwest Europe (EUR/t converted to US$/t)
US$/t
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200
150
100
50
00
0 10 20 30 40 50 60 70
-50
-100 Millions of tonnes of MOP
Rest of world Highfield
US$/t
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Mine location provides exposure to significantly lower potash delivery rates to European market, meaning higher netbacks at mine gate

Low costs and higher netbacks at mine gate position the mine as potentially one of the highest margin potash mines globally

Source: Argus Media, CRU, Highfield Resources., ASX Release 8 December 2021

The Company confirms that all material assumptions underpinning these figures, in-line with the initial public report released on 8 December 2021 (refer ASX release “Muga Project Updated Feasability Study) continue to apply and have not materially changed.

Highfield Resources Investor Presentation

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Low Capex Intensity and Strong Project Economics

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Phase 1 capex of €398 million + Phase 2 capex of €209 million

MUGA: HALF THE CAPEX INTENSITY OF OTHER GLOBAL DEVELOPMENT PROJECTS (US$ per tonne of potash)

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1,800
1,600
1,400
1,200
1,000
800
600
400
200
-
BHP (Jansen) Canadian mine BHP (Jansen) Eurochem K+S (Bethune) Russian mine Eurochem Muga
Phase 2 average Phase 1 (Usolsky) average (Volgakali)
Capex intensity $/t
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Compelling financials, with an NPV8 of €1.89 billion, IRR 25% and EBITDA of €400 million per annum at full production

The Company confirms that all material assumptions underpinning these figures, in-line with the initial public report released on 8 December 2021 (refer ASX release “Muga Project Updated Feasability Study) continue to apply and have not materially changed.

Highfield Resources Investor Presentation

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CSR AND SUSTAINABILITY

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Industry Leading ESG Credentials

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• Environmental compliance and commitment through DIA award

• Progressively rehabilitate mine: Backfilling and salt sales

• Environmental • Muga will be the only mine not to leave residue on the surface after production

• Factors • Strong local support in favour of the Muga Project

• • Qualified and available local labour market (+4000 CVs received)

• • 100+ foundation initiatives already invested in the community

• Social Factors • Robust governance and strong focus on responsibility and ethics

• • Admitted as a signatory to the UN Global Compact initiative

• Governance • Adherence to rigorous ASX and EU disclosure and reporting obligations

• Factors

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Recognition for Commitment to Health, Safety and Social Responsibility

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Bonus 2018
Member of Ecodes’ Climate Action
A health and safety recognition for initiative
having a low accident rate
RSA 2021 certificate
Reconcilia certificate
Aragón Province Social Responsibility Seal
Work Life Balance Award
for the fourth consecutive year
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InnovarSE certificate Receipt of the Cycle of Improvement award as a result of sustainable initiatives Blue Stamp/Seal For Health and Safety

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Highfield Resources Investor Presentation

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Appendix

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Corporate Snapshot

Capital Structure
Share Price (30 November 2021)	$0.60
Shares on Issue	364.4 million
Options & Performance Rights Market Capitalisation Cash (31 March 2021) Drawn Debt* Enterprise Value	- $219 million $26.5 million - $245.5 million

*Note: Debt of €185 million previously approved by leading European banks. Work ongoing with Endeavour financial for updated debt package

Major Shareholders	%
EMR Capital	27%
Australian Super (subject to BCI minerals shareholder approval being sought on 24 Dec 2021)	7%
WWB Investments	6%
Top 20 Total	59.7%

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1.00 60
0.90
50
0.80
0.70
40
0.60
0.50 30
0.40
20
0.30
0.20
10
0.10
0.00 0
Volume Share price
Share price (A$)
Volume (100,000 shares)
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Highfield Resources Investor Presentation

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Strong Board with Global Mining Industry Experience and Robust Governance Processes

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Richard Crookes Independent Non-Executive Director Chairman

Richard has over 30 years of experience in the resources sector. He worked as Chief Geologist and Mining Manager for Ernest Henry Mining in Australia (now Glencore). He has been Executive Director for the Energy Metals Division of Macquarie Bank and Investment Director for EMR Capital.

Pauline Carr Independent Non-Executive Director

Pauline has over 30 years of resources sector experience. She has occupied senior and executive positions for Newmont Asia Pacific and Normandy Mining Limited and has worked for a number of years in the petroleum and gas sector with Exxon Mobil.

Ignacio Salazar MD & Chief Executive Officer

Ignacio has over 30 years’ experience, most of which have been in the resources sector. His outstanding international career includes 18 years working with Royal Dutch Shell and 12 years with Orosur Mining Inc. including seven years as CEO.

Ignacio joined HFR as CEO in July 2020.

Brian Jamieson Non-Executive Director

Roger Davey Independent Non-Executive Director

Brian was on the Board of Oxiana/Oz Minerals for 10 years and assisted Owen Hegarty in developing that company into a major mining house. Brian has over 40 years’ experience in the advisory, manufacturing, resources and technology industries in Australia and offshore and is experienced in developing exploration-focused companies into producers.

Roger was a Director, Vice President and GM of Minorco (AngloGold) subsidiaries in Argentina. More recently he was Senior Mining Engineer in the project finance team for NM Rothschild Mining and Metals. Roger is experienced in operating in Spain as the Chairman of Atalaya Mining and has considerable knowledge of start-up mines around the world.

Highfield Resources Investor Presentation

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Management with strong mining experience and local background

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Ignacio Salazar MD and Chief Executive Officer

Mike Norris Chief Financial Officer

Mike was Finance Director of Avocet Mining, a gold producing company listed on the London Stock Exchange. He was Head of Business Performance for Industrial Minerals at Anglo American, and CFO at two Rio Tinto mines in the USA.

Javier Olloqui Human Resources

Javier has over 25 years of experience in Human Resources management, nationally as well as internationally, for companies such as Aludium, Gamesa Eólica, Faurecia, Mondragón Group and 3P Biopharmaceuticals.

Leonardo Torres-Quevedo Project Construction Director

Olivier Vadillo Marketing and Investor Relations

Susana Bieberach Communication and CSR

Leonardo is a mining engineer with more than 20 years’ experience in project management focused on large construction projects in Spain. Prior to becoming an employee of the Company, he worked for 9 years at Bovis Project Management where he spent the last 2 years working on the Muga.

Olivier has more than 15 years professional experience in strategic consultancy. He has worked for companies such as Wood Mackenzie and Deloitte where he developed business strategies and financial models. Previously he was Head of Metals and Mining Research Asia for Wood Mackenzie in Sydney.

15 years of experience in communication and CSR field. She began her work experience as a journalist at The Washington Times. She has been a communications and CSR consultant for more than 300 companies, organisations and associations.

Highfield Resources Investor Presentation

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ASX:HFR

REGISTERED OFFICE 169 Fullarton Road Dulwich SA 5065 Australia

SPAIN HEAD OFFICE Avenida Carlos III, 13-15, 1B, 31002 Pamplona, Spain T: +34 948 050 577 | F: +34 948 050 578

FURTHER INFORMATION Ignacio Salazar CEO T: +34 948 050 577 Olivier Vadillo Investor Relations T: +34 609 811 257

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