High margins in a growing market (By Pareto Securities)

On a risk/return adjusted basis, we believe Highfield represents the best development exposure in the potash sector. The capital cost is financeable at 1.4x the company’s diluted market capitalisation, coupled with 4.0x equity upside (un-risked) over the next three years based on the average producers EV/EBITDA multiple. The key near term catalysts for the project are completion of the DFS, permitting and financing. We rate Highfield a BUY with a riskadjusted (0.8x NPV10%) Price Target of AUD 1.20/share.

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