Pareto Securities, Research Reports

Resource upgrade delivers (By Pareto Securities)

February 24, 2015


Highfield has delivered an updated Resource Estimate on Muga Vipasca of 302Mt at 11.5% K2O (from 268Mt at 11.2%). A higher grade subset of the resource at 12.3% is expected to feed into the DFS mine design and will support a larger +1Mtpa operation (from 860ktpa) with a mine life of 19 years based in our conservative interpretation of the numbers. There is plenty of room for improvement and refinement of these numbers in the DFS which is due out in March, and significant upside to the share price on our base case numbers. We have updated our valuation based on a 1Mtpa production scenario, increasing our Price Target to AUD 1.35/share (from: AUD 1.20/share) based on an NPV10% and 0.8x multiple.

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