PERTH (miningweekly.com) – Potash developer Highfield Resources has secured a A$25-million strategic investment from EMR Capital and Tectonic Investment Management to help advance the development of its Muga project, in Spain.

The investment will be in the form of convertible notes, with EMR Capital to invest A$18-million and Tectonic to invest A$7-million. The notes will have a maturity date of 24 months from the date of completion, with the conversion price being the lower of a 25% discount to the price implied by a change of control transaction, the volume weighted average price of Highfield shares over 20 trading days prior to the date of convertible note deed, being 51.5c a share, and a 10% discount to the price of any future equity capital raising by Highfield.

Highfield told shareholders on Tuesday that the proceeds from the investment would allow the company to continue to move the Muga project forward, and to finalise discussions with other potential strategic and financial investors to fully finance the project.

“EMR Capital has been a long supporter of Highfield. At this key moment in the company’s journey, having concluded the permitting phase, together with Tectonic, their recognition of the company’s achievements and their support is important in facilitating the commencement of construction of Muga, which is now well-placed to deliver on its potential to become a strategically located, low-cost, long-term supplier of potash, produced in an environmentally responsible manner,” said Highfield MD and CEO Ignacio Salazar.

An updated feasibility study for Muga estimated a capital cost of €436-million for the Phase 1 operation and €226-million for Phase 2. This was up from the previous estimate of  €398-million for Phase 1 and €209-million for Phase 2.

C1 costs for the project have also increased from the €76/t estimated in 2021 to €91/t.

The mine plan for the Muga has been maintained with the project expected to have a 30-year mine life and Phase 1 of the operation producing 500 000 t/y of potash and Phase 2 increasing production to one-million tonnes a year.