Activity for Spanish potash developer Highfield Resources (ASX:HFR) is starting to heat up again after drilling at its Javier potash project intersected two thick potash seams which presage a JORC resource update and completion of a Pre-Feasibility Study.
The drill results were from an initial pass in an area known as the Fronterizo permit, part of 100% owned Javier that covers an area of 97km2 in Northern Spain.
The drilling is building on substantial historical potash exploration information that includes ten drill holes and seven seismic profiles completed in the late 1980s.
As Managing Director, Anthony Hall put it:
"We are extremely pleased with drill hole J13-12. The results confirm the continuation of a 4 metre thick sylvinite seam over a distance of approximately 2km between historic drill holes JP-1 and Nogueras.
"Importantly the mineralisation provides significant advantages due to relatively shallow depths from surface of less than 300m which we believe can be accessed via a decline.
"This provides for a fantastic landscape for successful delivery of a very robust potash project that also benefits from significant locational advantages including: first world infrastructure, skilled labour, quality transport options, short distances to multiple port choices and close proximity to key markets.
"The results of drill hole J13-12 validated the decision to delay the release of the PFS to ensure the drill hole information is included.
"We are looking forward to releasing the results of the PFS shortly."
Javier Potash Drilling In Detail
Two drill holes J13-12 and J13-02 were completed. J13-12 intersected two potash seams of 3.6 metres and 3.9 metres respectively.
The bottom potash seam of 3.9 metres averaged 12.9% K2O (20.5% KCl) and contained a higher grade intersect of 2.4 metres at 15.2% (24% KCl). J13-02 was designed to test mineralisation in the northern edge of evaporate. This drill hole did not intersect any potash mineralisation.
A total of seven drill holes have been completed over the past six months – J13-02, J13-03, J13-05, J13-06, J13-09, J13-12 and J13-13.
Forward newsflow and milestones
Further drilling has commenced in the Muga permit area that will test the eastern extension of the Project area. Positive results will enhance the JORC Resource estimate which may in turn enhance the Definitive Feasibility Study (DFS) for the Project that is due to be completed later this Calendar Year.
The initial results from this drilling campaign are expected in the current Quarter.
An independent geology and mining consultant, Agapito Associates is currently finalising an upgraded JORC Measured and Indicated Resource estimate. Results from drill holes J13-12 and J13-02 are currently being included in this Resource estimate.
Preliminary Feasibility Study (PFS)
A PFS has substantially been completed for the Project. The results of the PFS should be released after the release of the JORC Resource estimate for the Project.
Highfield is making good progress, having established good continuity of a relatively thick sylvinite seam of a distance of at least 2kms.
With the PFS nearing completion, it will benefit from recent drill holes in Fronterizo permit area that establishes good continuity of a thick sylvinite seam that starts at depths to surface of less than 300m.
The PFS will likely demonstrate a number of project advantages including:
- Shallow mineralisation that can be accessed via a decline
- Thick sylvinite seams
- First world infrastructure
- Skilled labour
- Quality transport options
- Short distances to multiple port choices
- Close proximity to key potash markets
While the Highfield share price has come off the boil to $0.39, this provides an opportunity for investors before the news flow steps up and from price catalysts such as JORC resource and PFS completion. The company is well cashed up with $4.4 million in reserves and support from major shareholder Owen Hegarty's EMR Capital with a 29.5% stake.
We have upgraded our price target to $0.75 - $0.90 within six months for Highfield.
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