Highfield Resources secures funding for Muga and Southey potash projects

Highfield Resources Ltd has secured binding agreements with Yankuang Energy Group Co. Ltd and several strategic investors, including Beijing Energy International Holding Co. Ltd and Singapore Taizhong Global Development Pte. Ltd. These agreements are designed to provide the remaining funding for the Muga potash project and to facilitate the acquisition of the Southey potash project in Saskatchewan, Canada.

The transaction encompasses a US$220 million equity raise through a cornerstone placement, wherein Yankuang Energy and other investors will subscribe for new shares at A$0.50 each, representing a 64% premium over Highfield’s last closing price. This investment will fully finance the construction-ready Muga Phase 1 project in Spain.

In addition, Highfield will acquire Yancoal Canada Resources, a subsidiary of Yankuang Energy and the owner of the Southey project, for US$286 million. This acquisition will be executed via the issuance of new shares, which will result in Yankuang Energy becoming the majority shareholder of Highfield. CEO Ignacio Salazar expressed optimism about the transaction, indicating that it will “position the company as a globally diversified, pure-play potash company.”

The Southey project, a greenfield potash mine located 60 kilometers north of Regina, has received significant investment and completed a feasibility study in 2016. Highfield intends to implement solution mining technology for potash extraction at Southey, a method recognized for its environmental advantages.

The completion of the transaction is anticipated in early 2025, contingent upon regulatory approvals and shareholder consent from Highfield. The company’s board has recommended that shareholders endorse the deal, pending a favorable independent assessment.

Salazar highlighted the strategic importance of the agreements, emphasizing the potential for significant value creation and asset enhancement post-transaction, “This is an outstanding outcome which is expected to result in the commencement of Muga construction and puts Highfield on a very strong platform of growth for the future.”