Highfield Resources Ltd (ASX:HFR) has signed a non-binding Memorandum of Understanding (MOU) for the sale of salt from the Muga Potash Project in northern Spain.
The MOU is between Pardira Premium SL, trading as Maxisalt, and Geocali SLU, Highfield's wholly-owned Spanish subsidiary.
Under the MOU, the company will provide Maxisalt up to a total of 500,000 tonnes per annum of salt comprising 400,000 tonnes of vacuum salt and 100,000 tonnes of de-icing salt from Muga.
Step in commercialisation strategy
Highfield Resources chairman and acting CEO Richard Crookes said: “The signing of a salt offtake MoU with Maxisalt is another very important step in Highfield’s commercialisation strategy."
Maxisalt is an international salt distribution company in Barcelona and a global distributor of rock salt, solar salt and vacuum salt, which is used for water treatment, industrial applications and animal feed.
This partnership will provide Highfield with insights into the local and international salt markets as well as invaluable access to these markets during the first years of production.
Shares have been more than 18% higher to 39 cents intra-day.
Well-positioned to service Maxisalt
Highfield’s flagship Muga project is targeting shallow sylvinite beds in the Muga project area, which covers around 60 square kilometres in the provinces of Navarra and Aragón.
Mining is planned to begin at a depth of 350 metres from surface and is ideal for a relatively low-cost conventional mine.
Crookes said: "Maxisalt has developed a key global network and the location of our Muga mine is perfectly positioned to service Maxisalt.
"In addition to this MOU being economically significant, it also reinforces our strong ESG focus of maintaining a low environmental footprint at Muga.
“Responsible removal of salt is a key element in rehabilitating the Muga Mine site after production.”
Diversified network of international clients
Salt is produced as a by-product of the processing of potash and the sale of salt contributes economically, providing a by-product credit that benefits the Muga project’s financials.
Additionally, salt sales will help maintain the low environmental footprint of the Muga mine and will assist in ensuring full compliance with environmental conditions, including the removal of all salt from surface as part of rehabilitation of the mine site post potash production.
Maxisalt has developed a diversified network of international clients, with a focus on markets located in Spain and France.
Highfield continues to engage in ongoing offtake discussions with other potential wholesale customers, distributors and global traders for the entire production capacity of muriate of potash and salt from the Muga Mine.