From * in Feb 2021New IdeasOften those undervalued...

From * in Feb 2021

New Ideas
Often those undervalued companies in the pre-development, post DFS/BFS phase present excellent risk-return propositions. Everyone playing with small cap miners wants leverage to world class, or potentially world class mining assets.Highfield Resources (ASX:HFR) has been on the radar for a couple of years and like Greenland Minerals Ltd (ASX:GGG) has been marking time waiting for a mining licence.HFR is an emerging potash producer on the back of its Muga MoP (muriate of potash, KCL) project in Spain.Environmental approvals have been granted and the final phase is the granting of a mining concession which we are confident of (fingers crossed) this calendar year.The DFS contemplates production of 1Mtpa of MoP (phase 2) and 0.50Mtpa (phase 1) over a 30-year mine life based on a very achievable CAPEX of $580 million with C1 costs of US$95/t (figure 14) and AISC US$104/t (lowest cost quartile), life of mine operating margins in excess of US$170/tonne and a $3b NPV8 (Phase 1+2).At a market capitalisation of $200 million there is plenty of upside potential here.Furthermore, there are no government royalties and a local work force with good access to port/infrastructure.With Europe a net importer of potash and prices moving up sharply, the imminent granting of a mining licence should see a significant re-rating.With peers such as ABR up 520% in 12 months (current market cap of $450 million), I am optimistic of HFR being re-rated well above $1.00 this calendar year following the granting of a mining license