Numis Securities, Research Reports

Site Visit: Blazing a Trail (By Numis Securities)

March 18, 2015

This week we visited Highfield’s impressive potash projects in Pamplona, Spain.The company continues to impress us with some of the best projects in the potash space. With a long term production target of 2Mtpa, the company is in the unique
position of having first world infrastructure and shallow, easily accessible deposits with peer-leading low capital intensity. The flagship Muga project is expected to receive its mining licence in Q3 and, with a bulked up management team, it felt very
much as if the company were ready to make a construction decision in August. We are not short of newsflow to keep the shares going up, with the Muga DFS expected this quarter and the Sierra Del Perdon scoping study to follow. There are lots of
value in the projects, with plenty of money to be had even at these potash prices. We see plenty of upside to our numbers, based mainly on Muga, and Highfield could no doubt be an M&A target. We maintain our BUY recommendation and A$2.20 TP. The
stock is trading at a cheap 0.5x P/NAV, which is heavily risk-adjusted. One to own.

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