Highfield Resources Ltd (ASX:HFR) has begun the new quarter with renewed financial backing and strengthened institutional support for its flagship Muga Potash Project in northern Spain, highlighting a post-September-quarter-end $10 million investment as it works to resolve an administrative matter relating to one of its mining concessions.
$10 million convertible note investment
Shortly after quarter-end, Highfield secured a $10 million investment from existing strategic shareholders EMR Capital Management, Tectonic Investment Management and another long-term investor. The funding, delivered via new convertible notes, follows amendments and extensions to the company’s existing notes to align maturity and pricing terms.
EMR contributed $2 million, Tectonic $5 million and the third investor $3 million. The notes, which carry 18% annual interest and a 12-month maturity, can convert into Highfield shares at the lower of $0.06 per share or a discount to any future capital raising, with a $0.03 floor price.
Highfield said the proceeds will support resolution of the Goyo concession issue, re-engagement with potential strategic partners, and ongoing working-capital needs. The company expects the first $5.15 million tranche to fund operations through to October 2026, with the remaining balance extending coverage into early 2027.
The investment follows the termination of a proposed strategic transaction with China Minmetals and Yankuang Energy, after those parties withdrew in August and September.
Institutional and government backing
In August, the Government of Navarra reaffirmed its institutional support for the Muga Project, calling it a key initiative for regional economic growth and agricultural sustainability. Navarra’s president, María Chivite, said the project would help reinforce “strategic sectors such as agrifood and [advance] towards a sustainable and balanced growth model”.
Highfield continues to engage with Spanish and regional authorities to resolve a procedural flaw identified by the Superior Court of Justice of Navarra concerning the Goyo mining concession. The matter relates to the number of concessions originally issued and does not affect Muga’s technical assessments. An appeal lodged by Spanish governments is currently before the Supreme Court, with a decision expected in November 2025.
Location of Muga-Vipasca, Pintanos and Sierra del Perdón tenement areas in Northern Spain.
Finance and project updates
During the quarter, Highfield agreed to terminate its Senior Secured Project Finance Facility, following the exit of remaining lenders ING, HSBC and Caja Rural de Navarra. The decision eliminates further commitment-fee accruals and supports the company’s focus on extending its cash runway.
At September 30, Highfield held $3.98 million in cash. The company continues to prioritise strict cost discipline, extending a staff and consultant furlough scheme (reducing total salary outlay by up to 50%) and achieving a 40% reduction in monthly payments.
Board changes and outlook
On September 23, EMR-nominated non-executive director Luke Anderson stepped down to pursue another executive role, while Carles Aleman, director general of Highfield’s Spanish subsidiary Geoalcali SLU, joined the board. Aleman brings more than 30 years’ international experience in the chemical and mining industries and will lead local operations and stakeholder engagement from Pamplona.
Looking ahead, Highfield plans to finalise shareholder approval for the convertible note investment by mid-December, continue advancing a resolution to the Goyo concession issue, and progress construction readiness for the Muga mine.
The company remains focused on unlocking Muga’s value as a low-capex, high-margin potash project in the heart of Europe’s agricultural belt — a region with a significant potash supply deficit.