Highfield Resources Ltd (ASX:HFR) is trading higher as it signs a project finance mandate letter with a group of experienced European mining finance lenders for secured project finance of 312.5 million euros.
The package includes a €300 million senior secured project finance facility and a €12.5 million reserve cost overrun facility to finance the construction and development of its owned Muga Potash project. 100% in Spain.
Investors reacted positively to the news with shares up 10.2% in the first hour of trading at A$1.135, while the company’s market capitalization is around A$400 million.
Experienced European mining financiers
A group of four international financial institutions, comprising BNP Paribas SA, ING Bank NV, Natixis and Société Générale (London branch) will act as mandated lead manager (MLA).
The execution of the mandate letter follows the agreement in principle of the non-binding indicative term sheet for the facilities, which will cover a significant part of the pre-production investment required to complete the construction of Muga Phase 1 .
“We are delighted to have taken this next step towards building Muga,” said CEO Ignacio Salazar.
Favorable geopolitical location for potash
“BNP Paribas, ING, Natixis and Societe Generale have extensive experience in financing mining projects and the signing of this €312.5 million mandate letter is undoubtedly a testament to the solid economic quality and best ESG credentials of this project,” he said. mentioned.
“Furthermore, Muga’s strategic location in southern Europe is viewed more favorably than ever in the current geopolitical situation, making it an attractive candidate for funding from the international banking community.
“As part of exploring alternative financing options complementary to project finance, Muga’s strategic advantages also provide added impetus to the company’s engagement with potential strategic partners. “
About Highfield Resources
Highfield Resources is an ASX-listed potash company focused on building its flagship low-cost, low-investment Muga project in Spain, for which it was awarded a mining concession in July 2021.
Muga has shallow mineralization with no aquifers above, so there is no need to construct a well.
Quality infrastructure is readily available in the region and, above all, the project is located in the heart of a European agricultural region which suffers from an obvious shortage of potash supply.
In addition to its secure location in southern Europe, the company says recent events in Russia and Belarus have heightened awareness of the strategic value of the Muga project for Spain and the European Union.