going higher, page-13

Sevo

it is not "OK" & not to be compared the 'SOP' RWD, which is a different beast.

HFR is an underground 'MOP' potash mine using conventional methods

its grade is 18% - 19% KCI, where as most potash mines have potash at 32% KCI

thus HFR must mine & process close to double the amount of ore for the same production

plus their sylvanite is not the cleanest probably resulting in extra output loss & production costs

for HFR to produce 800,000t of potash per annum is the same as others producing (at least) 1,400 tonnes per annum

personally, I am very sceptical about these broker reports

to invest $300M capex for 800,000t production is close to unheard of

HFR originally acquired this project to try to restart the former Sierra del Perdón mine but now they seem to have given that up & a promoting these two greenfields projects

anyway, all the best






http://www.highfieldresources.com.au/pdfs/ReportCanaccordGenuity13Feb14.pdf

We estimate total cash costs for Javier to be ~US$171/t producing ~719ktpa of potash product over 18 years and Pintano to be ~US$160/t producing ~800ktpa of potash over 13 years.

Assumptions used for ‘Javier’ include:
• US$300m upfront Capex
• Total Cash Costs of US$171/t
• 18 year mine life
• Mining Inventory of 70Mt at average grade of 20% KCl
• 4.4Mtpa throughput
• Average annual production of 719kt of potash (excluding salt)
• Flat potash price of US$350/t FOB
• First potash production in SepQ’16
• No royalties
• 12% Discount rate applied

Assumptions used for ‘Pintano’ include:
• US$260m upfront Capex
• Total Cash Costs of US$160/t
• 13 year mine life
• Mining Inventory of 65Mt at average grade of 22% KCl
• 4.4Mtpa throughput
• Average annual production of 800kt of potash (excluding salt)
• Flat potash price of US$350/t FOB
• First potash production in SepQ’21
• No royalties
• 12% Discount rate applied