Highfield Resources Ltd (ASX:HFR) has received credit approval for an equipment operating lease facility with Macquarie Group worth up to €25 million (A$40.72 million).
Though the funding package allows for equipment purchases up to €27 million (A$43.97 million), the peak exposure is not expected to exceed €25 million.
Nevertheless, the financing allows Highfield to purchase the necessary underground mining equipment for the Muga potash project — located in northern Spain — and is in addition to a €320.6 million (A$522.14 million) project financing package provided by BNP Paribas, ING Bank, Natixis CIB and Societe Generale.
“In addition to the €320.6 million project financing package signed in December 2022, obtaining credit approval from Macquarie on the operating lease financing is another significant milestone for the company as it moves into the construction phase of the Muga mine following the receipt of its final construction licence in March 2023,” Highfield Resources managing director and chief executive Ignacio Salazar said.
The facility is expected to have a five-year term from the date equipment is commissioned on site. From there, Highfield has the option to return the equipment, extend the term of the facility, or purchase the equipment outright.
Full steam ahead
The receipt by Highfield of its construction licence in March was a major milestone for the company and marked the close of “a long permitting chapter,” Salazar said at the time.
It was the final permit needed to launch into full-scale construction at Muga, including civil works, a process plant and the necessary ramps.
In support of this work, Highfield appointed Carles Aleman as Head of Plant Construction and Health, Safety and Environment on May 10. With more than 30 years of experience, largely in Spain’s potash mining sector, he previously acted as president of ICL Iberia and managing director of Iberpotash.
“Mr Aleman’s extensive experience, specifically in potash mining in Spain where he led the transformation and modernization of ICL in Spain, will be invaluable for Highfield,” the company said in a statement to investors.
“During his long career, Mr Aleman’s responsibilities have included oversight of several large construction and development projects.”
Once the initial on-site preparatory work has been completed, full-scale construction is expected to begin in the second half of 2023.
Written by Oliver Gray.