1. business and industrial
2. energy
3. coal

ASX Release
7 April 2015
HIGHFIELD RESOURCES DELIVERS MAIDEN RESOURCE
ESTIMATE FOR SECOND SPANISH POTASH PROJECT
Highlights
 Maiden Resource estimate for Sierra del Perdón Potash Project delivering:
 Indicated Mineral Resource estimate of 41.8m tonnes at 10.7% K2O
 Inferred Mineral Resource estimate at 40.3m tonnes at 10.5% K2O
 Exploration Target estimated at:
 50m to 100m tonnes of sylvinite at 10% to 14% K2O
 100m to 250m tonnes of carnallite at 9% to 13% K2O
 A Scoping Study for the Project, building on relevant work completed for the Muga
Potash Project DFS, is nearing completion, with results expected to be released during
the current Quarter
Spanish potash developer Highfield Resources Limited (HFR: ASX) (“Highfield” or “the Company”)
is pleased to announce its JORC maiden Mineral Resource estimate for its 100%-owned Sierra del
Perdón Potash Project (the “Project”). The Project is located less than 10kms from Pamplona and
within 40kms of the Company´s flagship Muga Potash Project.
Sierra del Perdón is a brownfield project that was historically mined primarily for sylvinite but also
for carnallite, before closing in late 1996 due to relatively low potash prices of around US$100/tonne.
There is potential for potash exploitation in greenfield areas in the Sierra del Perdón Basin and for
limited additional production from brownfield areas.
Highfield’s Managing Director Anthony Hall commented:
“Whilst our focus remains on our flagship Muga Potash Project, we are in a fantastic position
to have a second project that we believe is also likely to be very compelling.”
The potential quantity and grade of the Exploration Target is conceptual in nature and there has
been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration
will result in the estimation of a Mineral Resource.
The reader is cautioned that a Mineral Resource is an estimate only and not a precise and
completely accurate calculation, being dependent on the interpretation of limited information on the
location, shape, and continuity of the occurrence and on the available sampling results. Actual
mineralisation can be more or less than estimated depending upon actual geological conditions.
Highfield Resources Ltd.
ACN 153 918 257
ASX: HFR
Issued Capital
252.0 million shares
51.5 million performance shares
43.5 million options
Registered Office
C/– HLB Mann Judd
169 Fullarton Road
Dulwich, SA 5065
Australia
––––––––––––––––––
Tel: +61 8 8133 5098
Fax: +61 8 8431 3502
Head Office
Calle Navas de Tolosa,
5 - 1°B, 31002
Pamplona,
Spain
––––––––––––––––––
Tel: +34 948 050 577
Fax: +34 948 050 578
Directors
Derek Carter
Richard Crookes
Anthony Hall
Owen Hegarty
Pedro Rodriguez
Company Secretary
Donald Stephens
The Mineral Resource statement includes Inferred Mineral Resources. There is a low level of
geological confidence associated with Inferred Mineral Resources and there can be no certainty
that further exploration work will result in the determination of Indicated or Measured Mineral
Resources. Mineral Resources are not Mineral Reserves and do not have demonstrated economic
viability. No Mineral Reserves are being stated.
Sierra del Perdón Potash Project
The Company is targeting what is designated as Upper and Lower Carnallite (CU and CL) and a
lower sylvinite bed (SYL) in the Sierra del Perdón (SdP) Basin area that covers an area of more
than 104 km2 (Figure 1). The basin is about 10 km east to west by 6–7 km in the north-south,
plunging from 100 to 1,200 m deepest part of the basin. These beds are the stratigraphic equivalent
of the P0, PA, PB, and P1 potash beds, in descending order, found in the Muga-Vipasca Basin area.
Figure 1.
Sierra del Perdón Project Area Showing Mineral Resource Footprint, Historic
and Current Exploration Drill Holes and Historic Exploitation Areas
Page 2 of 6
Mineralisation in the uppermost potash bed is largely carnallite transitioning to carnallite and
sylvinite in the lower beds. The Company is investigating exploitation of both minerals via new
access in areas not mined previously and possibly in the largely intact carnallite beds over the
existing mined footprint.
The Company drilled six holes in 2013 and has worked to compile historical data including drill hole
data, production reports and detailed mapped profiles of the underground workings so as to
enlighten the current exploration program. Two holes were drilled in areas not mined previously,
showing good intersection of carnallite and sylvinite of moderate grade. Three holes were drilled
into existing workings resulting in poor recovery and no recovery within the primary mined-out seam;
incomplete intercepts in these holes are excluded from the resource estimation. The drill hole
which defines the western extent of the basin was barren.
Additional drilling is recommended in the Sierra del Perdón area. Historic drill holes that were
instrumental in the development of the historic mines are found in Table A-1. Completed and
planned drill hole locations are found in Table A-2 and shown in Figure 1.
JORC Exploration Target
The SdP Exploration Target comprises 23 exploration core holes covering an area of approximately
44 km2, illustrated in Figure 1. The total Exploration Target (Table 1) is estimated to contain
between 100 and 250m tonnes of potash in the carnallite beds (CU and CL) ranging in average
grade from 9 to 13% K2O, and between 50 and 100 Mt of potash in the sylvinite bed (SYL) ranging
in average grade from 10 to 14% K2O. Approximately half (50%) of the carnallite Exploration Target
in the CU and CL beds is estimated to overlie old workings of the Posusa de Navarra and Posusa
de Subiza mines in the SYL bed.
Of the 23 planned exploration holes, 6 were drilled or attempted in 2013. Due to the incomplete
holes and the technical difficulty with core recovery, the exploration program going forward will
concentrate on drilling holes in virgin ground, stepping out from the existing workings and into the
deeper part of the basin. Up to five holes are proposed for 2015. Potash beds CU, CL, and SYL
are targeted at depths ranging from 100 to 1,400 m.
Table 1. Sierra del Perdón JORC Exploration Target
(effective date 17 March 2015)
Potash Beds
Carnallite
Sylvinite
Depth Range
(m)
100 ‒ 1,400
Same
Total
Tonnage
(Mt)
100 ‒ 250
50 ‒ 100
150 ‒ 350
Average K2O
(wt %)
9 ‒ 13
10 ‒ 14
Notes:
m = meters, Mt = million tonnes.
Sylvinite is a mechanical mixture of sylvite (KCl) and halite (NaCl).
Carnallite refers to a mechanical mixture predominantly of carnallite
(KCl·MgCl 2 ·6H2 O) and halite (NaCl).
Carnallite occurs in up to two separate beds. Sylvinite occurs in one bed.
Approximately 50% of the carnallite target overlies historical mine workings in the sylvinite bed.
T arget cutoffs: (a) bed true thickness ≥ 1.5m: grade cutoff ≥ 8.0%K 2 O, or (b) true thickness <
1.5m: grade-thickness cutoff ≥ 12.0%K 2 O-m.
Page 3 of 6
JORC Mineral Resource Estimate
Independent geology and mining consultants, Agapito Associates, Inc. (AAI) has issued a JORC
Mineral Resource estimate, as summarised in Table 2. The Mineral Resource was estimated using
a computer 3D gridded-seam geologic (block) model constructed with Mintec Inc. MineSight 3D©
v9.0 software. Historical and modern data for the property were reviewed by the CPs for quality
and completeness. Data utilized in the model include historic and modern drill hole logs and assays,
historic and modern interpretations of 2D seismic surveys, surface topography in the form of a digital
elevation model (DEM), permit boundary lines, historic resource analysis, historic geological surface
mapping, and historical mining records from the Potasas de Navarra and Potasas de Subiza mines.
Table 2. Sierra del Perdón JORC Mineral Resource Estimate
(effective date 22 March 2015)
Potash Bed
Average
Carnallite
In-Place
Sylvite
Bed
Tonnes
Bulk
Density
Thickness In-Place K2O (KCl·MgCl 2·6H2O) (KCl) Insolubles
3
(m)
(Mt)
(wt %)
(wt %)
(wt %) (wt %)
(t/m )
INDICATED
Upper Carnallite
Lower Carnallite
Sylvinite
1.6
2.8
2.5
16.5
18.0
7.3
41.8
8.9
10.9
14.6
10.7
47.4
47.3
1.3
39.4
1.6
4.6
22.7
6.5
12.4
9.0
11.1
10.7
1.90
1.90
2.12
1.94
1.6
2.8
2.2
18.6
13.2
8.5
40.3
8.9
10.7
13.7
10.5
45.7
47.6
1.3
37.0
1.9
4.2
21.4
6.7
12.4
9.0
10.6
10.9
1.91
1.90
2.12
1.95
INFERRED
Upper Carnallite
Lower Carnallite
Sylvinite
Notes:
Potash mineralization bulk density varies by carnallite, sylvite, halite, and insolubles fractions ranging from 1.6 to 2.2 t/m 3.
The resource estimate does not include any out-of-bed dilution.
Resource cut offs: (a) true thickness ≥ 1.5m: grade cutoff ≥ 8.0%K 2O, or (b) true thickness < 1.5m: grade-thickness cutoff ≥
12.0%K2O-m.
Resource reduced by 15.0% allowance for unknown geologic anomalies within resource footprint.
Indicated Resource—potash meeting cut off criteria located between 0m and 1,000m of a modern exploration core hole with
assays, except where otherwise limited by geologic or mining boundaries.
Inferred Resource—potash meeting cut off criteria located between 1,000m and 2,000m radius of a modern exploration core
hole with assays or within 2,000m of an historical exploration core hole, except where otherwise limited by geologic or mining
boundaries.
The sylvinite bed (SYL) is reported as a single potash horizon, in the resource estimate. Minedout areas based on the historic workings map have been excluded from the Resource. Carnallite
beds, CU and CL, are reported as one bed. A total of 41.8m tonnes of Indicated Resource is
reported with an average grade of 10.7% K2O with an estimated 39.4m tonnes of that being
carnallite and 6.5m tonnes being sylvite, and the remainder halite (NaCl) and insolubles. An
additional 40.3m tonnes is classified as Inferred Resource of 10.5% K2O with 37.0m tonnes
estimated to be carnallite and 6.7m tonnes sylvite with the remainder halite and insolubles.
Page 4 of 6
Permits
The SdP property comprises two main investigative permits (PI) and one extension permits (Figure
1 and Table 3). These PIs have a surface of 14,898 hectares and cover 100% of the deposit Sierra
del Perdón and any potential areas of exploration.
Table 3. Interests in Mining Permits Held by the Company
Project
Region
Permit Name
Permit Type Applied Granted Ref No. Area
(km2)
Holder
Structure
Sierra del Perdón Navarra Quiñones
Investigation 19/07/11 8/7/2012 35760 32.48 Geoalcali SL
Sierra del Perdón Navarra Adiós
Investigation 19/07/11 8/7/2012 35770 75.60 Geoalcali SL
Sierra del Perdón Navarra Ampliación AdiósInvestigation 26/10/12 2/14/2014 35880 40.90 Geoalcali SL
Location: All permits are located in Spain.
Holder: Geoalcali SL is a 100% owned Spanish subsidiary of Highfield Resources.
100%
100%
100%
Scoping Study
The Company is currently completing a Scoping Study for the Project. The Scoping Study builds
on relevant work completed for the Muga Potash Project DFS given the similarities with respect to
mining methods, processing, utilities, logistics and likely target markets. The Company expects
to be in a position to release the results of the Scoping Study in the current Quarter.
For More Information
www.highfieldresources.com.au
Company
Investor Relations Executives
Anthony Hall
Managing Director
Ph: + 34 617 872 100
Simon Hinsley
APAC Investor Relations
Ph: +61 401 809 653
Hayden Locke
Head of Corporate Development
Ph: +34 609 811 257
Nuala Gallagher / Simon Hudson
UK Investor Relations
Ph: +44 207 920 3150
Competent Persons’ Statement
This ASX release was prepared by Mr. Anthony Hall, Managing Director of Highfield Resources.
The information in this release that relates to Mineral Resources and Exploration Results is based
on information prepared by Mr. Leo J. Gilbride, P.E. and Ms. Vanessa Santos, P.G. of Agapito
Associates, Inc. (AAI) of Colorado, United States of America (USA). Mr. Gilbride is a licensed
professional engineer in the State of Colorado, USA and is a registered member of the Society of
Mining, Metallurgy and Exploration, Inc. (SME). Ms. Santos is a licensed professional geologist in
South Carolina and Georgia, USA, and is a registered member of the SME. SME is a Joint Ore
Reserves Committee (JORC) Code ‘Recognized Professional Organization’ (RPO). An RPO is an
accredited organization to which the Competent Person (CP) under JORC Code Reporting
Page 5 of 6
Standards must belong in order to report Exploration Results, Mineral Resources, or Ore Reserves
through the ASX. Mr. Gilbride is a Principal and Ms. Santos is the Chief Geologist with AAI and
both have sufficient experience which is relevant to the style of mineralisation and type of deposit
under consideration and to the activity which they are undertaking to qualify as a CP as defined in
the 2012 Edition of the JORC Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves. Mr. Gilbride and Ms. Santos consent to the inclusion in the release
of the matters based on their information in the form and context in which it appears.
About Highfield Resources
Highfield Resources is an ASX-listed potash company with four 100%-owned projects located in
Spain.
Highfield’s Muga, Vipasca, Los Pintanos, and Sierra del Perdón potash projects are located in the
Ebro potash producing basin in Northern Spain covering a project area of close to 400km 2. The
Sierra del Perdón project includes two former operating mines. The Company has recently
completed a definitive feasibility study for its Muga Project and is currently working towards
commencing construction in the fourth quarter of 2015.
Figure 2: Location of Highfield´s Muga-Vipasca, Pintano and Sierra del Perdón Projects in
Northern Spain
Page 6 of 6
Appendix
Explanatory Notes to the Exploration Results and Resource
for the Sierra del Perdón Potash Projects
Page 1 of 50
Property Description
The Sierra de Perdón project area is located in the northern portion of Spain within the Ebro Basin and is situated
within the Navarre province of Spain. Highfield Resources (Highfield) (the “Company”) holds Exploration and
Investigative Permits in three areas in Navarre and Aragon (Figure 2). The western area of Sierra del Perdón contains
historic mining, operations which closed in 1997, and areas within the existing permits for brownfield and greenfield
development. The eastern greenfield project area is divided into two sub-basins, Javier Basin (as defined here by the
Muga and Vipasca leases) and the Pintano Basin, which are separated by an elevated saddle area.
Tenure and Surface Rights
Spanish mining permits are split into three categories: Exploration Permit (PE), Investigation Permit (PI), and Mining
Concession. A PE is for desktop studies and lasts for a period of 1 year (it may be rolled over once). A PI is necessary
for drilling, allows for the sinking of shafts and driving of declines and lasts for a period of 3 years (it may also be rolled
over for multiple 3-year periods). For a PI to be granted, an environmental review must be completed by the relevant
government. A Mining Concession is for mineral extraction and lasts for periods of 30 years (it may be rolled over
twice).
In addition to the above, if a permit sits in two provinces, it must be formally issued by the Central Government in
Madrid under Article 71.3 of the Spanish Mining Code.
The Sierra de Perdón property is comprised of two PIs and one extension permits converted to a PI (Table 1 and Figure
1). These PIs have a surface of 14,898 hectares and cover 100% of the deposit of Sierra del Perdón and any potential
areas of exploration. The Competent Persons (CPs) have reviewed the mineral tenure from documents provided by
the “Company”, including permitting requirements, but have not independently verified the permitting status, legal
status, ownership of the project area, underlying property agreements or permits. The Company is relied upon by the
CPs for tenure status.
Geology and Structure
The south Pyrenean Potash Basin extends from west to east from Navarre to Catalonia. The Eocene marine basin
was confined by the Ebro Massif on the south and the Pyrenean Ridge on the north (Ortiz and Cabo). The Sierra del
Perdón represents an asymmetrical basement-controlled sub-basin trending NE-SW and NNE-SSW. The first deposits
in the region, occurring at the end of the Cretaceous period, were characterised by a regressive period with reddish
continental deposits. The Eocene is marked by the beginning of tectonic compression, causing formation of subsiding
basins parallel to the Pyrenees Mountains, with emersion and erosion in some parts.
The Upper Eocene potash deposits occur in the sub-basins of Navarre and Aragón provinces within the larger Ebro
Basin (Figure A-1). The Navarrese sub-basins include Sierra del Perdón, Muga-Vipasca (Javier) and adjoining Pintano
deposits. This potash deposit contains a 100-meter (m)-thick Upper Eocene succession of alternating claystone and
evaporites (anhydrite, halite, and sylvite). The evaporites accumulated in the elongated basin at the southern foreland
of the Pyrenean range (Busson and Schreiber 1997). The evaporites overlie marine deposits and conclude in a
transitional marine to non-marine environment with terrigenous influence. Open marine conditions existed in the
Eocene-Oligocene epochs progressing to a more restricted environment dominated by evaporation and the deposition
of marl, gypsum, halite, and potassium minerals. Later, tectonism and resulting salt deformations formed broad
anticlines, synclines and overturned beds, which created outcrops of the evaporite sequence. The Sierra del Perdón
sub-basin is notably different from the eastern Javier Pintano basins, with predominantly carnallite mineralization
overlying sylvinite, suggesting a more immature diagenesis because carnallite is considered primary and sylvinite
secondary. The formation of the evaporites is further influenced by basin restriction, and paleo highs and lows which
are perhaps defined by block faulting as well as the main structural basin bounds.
Page 2 of 50
Figure A-1. Regional Geology of the Ebro and Jaca-Pamplona Basins (from University of Michigan 2004)
The different basins are separated by orogenic events developing in the north and south as turbidite basin carbonate
platforms. Towards the end of the Eocene epoch, the sedimentation axis migrated south to the Jaca-Pamplona Basin,
on which the Oligocene materials were deposited. The pre-evaporitic basin sedimentation occurs in a context of
continuous tectonic compression during the Eocene and Oligocene epochs, as synsedimentary tectonics of the end of
the orogeny, with pronounced sediment influx. The influence of the turbidites towards the end of the Eocene epoch in
the Bartoniense series from the northwest into the basin as the Belsue Formation is indicative of continued subsidence.
At the east end of the basin, the evaporite levels crop out, and the evaporites are largely dissolved, exhibiting the
remnants of the upper banded clays which unconformably overlie the Pamplona Marls. In some cases they are altered
to gypsum and fibrous halites. The evaporites are part of a synclinal structure with the main axis plunging to the west.
The syncline is compartmented in 3 sub-blocks which are separated by faults. The northern edge of the syncline is
usually affected by the erosion with an inclination towards the south. The deposit has a gentle slope of 12 degrees (º),
with a depth from between 60 and 70 m (elevation +700 m to 1,100 m (elevation –400 m) in a north-south extension
of 5 to 6 km. Oligio-Miocene conglomerates unconformably overlie the southern flank.
The Sierra del Perdón Basin is dominated by the SW-NE fault system named, from the south to the north, Falla (fault)
de Subiza and Falla de Esparza, with several unnamed faults in between the major ones (Figure A-2). The faults are
pre-evaporitic, and therefore have influenced the deposition within the basin and driven the historic mine advance. The
faulted blocks are uplifted in the north (Falla Esparza) and the SE (Falla Subiza) and downdropped in the center which
represents the depocenter. Displacement along Esparza is approximately 300 m and between 600 and 800 m in
Subiza (Menendez 1971; del Valle 1978). The area has been separated into mining blocks, Guendulain, Beriain, Subiza
and Uniano. (An additional area lies between the major fault and represents the basin’s synclinal axis that has not
been mined because it plunges and deepens. No drill holes have penetrated the salts so the depth of syncline is
Page 3 of 50
interpreted through historic seismic records. This area may also represent an offset similar to what is seen in the east,
the Flexura de Ruesta that divides the Javier and Pintano sub-basins. [Empresa Nacional Adaro Investigaciones
Mineras {e.n. adaro} 1988–1991]). An anticline interpreted form the historic seismic records crosses the basin NW-SE
and may define an area where the upper salt has been eroded.
Figure A-2. Sierra del Perdón Project Regional Structure and 2013 Drill Hole Locations
The depositional environment is that of a restricted marine basin, influenced by eustasy, sea floor subsidence, and/or
uplift and sediment input. It is suggested that the Ebro Basin is the result of a combination of reflux and drawdown.
Reflux describes a basin isolated from open marine conditions, and thereby characterised by restricted inflow,
increased density, and increased salinity. Drawdown is the result of simple evaporation in an isolated basin, and brine
concentration and precipitation, consistent with the classic “bulls-eye” model (Garrett 1996). In this case, the Ebro
Basin is further influenced by erosion at its edges due to contemporaneous and post-depositional uplift which results
in localised shallowing and sediment influx (Ortiz and Cabo 1981) transitioning from marine to continental-type
deposits.
In the classic “bulls-eye” model, a basin that is cut off from open marine conditions will experience drawdown by
evaporation in an arid to semi-arid environment. In the absence of sediment influx, precipitation will proceed from
limestone to dolomite to gypsum, and anhydrite to halite. Depending on the composition and influences of the brine at
that time, the remaining potassium, magnesium, sulfates, and chlorides will progress from potassium and magnesium
Page 4 of 50
sulfates to sylvite and then carnallite. It is proposed herein that the formation of carnallite and sylvite be described as
primary and secondary, respectively.
Potash is used to describe any number of potassium salts. By and large, the predominant economic potash is sylvite:
potassium chloride (KCl) usually occurring mixed with halite to form the rock sylvinite, which may
have a potassium oxide (K2O) content of up to 63%. Carnallite, a potassium magnesium chloride (KCl•MgCl2•6H2O)
is also abundant, but has K2O content only as high as 17%. “Carnallite” is used to refer to the mineral and the rock
interchangeably, although “carnallitite” is the more correct terminology for the carnallite and halite mixture. Besides
being a source of lower grade potassium, carnallite involves a more complex production process, so it is less
economically attractive than is sylvite.
The regional stratigraphy (Figure A-3) is dominated by open and restricted marine conditions. Evaporitic sedimentation
(the Guendulain Formation) directly overlies the fine marine offshore sediments (Pamplona
Marls) (Ortiz and Cabo 1981; Orti et al. 1984). Both drill hole data and outcrop observations assign an average
thickness of about 150m to the saline formation, which displays the following sequence from bottom to top:
1. Pamplona Marls.
2. Marker anhydrite member (basal banded anhydrite).
3. Lower salt member (Sal de Muro or “lower salt”), medium to very coarse recrystallised halite, medium grey to
black and the lower part may be brown and sandy as described below.
4. A carnallitic member that may be seen as an upper and lower bed and and a lower sylvinite bed. The potash
is characterised as fine to coarse granularity, typically light to medium orange-red in colour, of crystalline
structure with high insolubles and interbedded halite. The sylvinite exhibits brecciated structure suggesting
recrystallisation after carnallite formation.
5. Upper saline member (Sal de Techo or “upper salt”), alternating halite and clay layers, some of which exhibit
deformation.
6. Top marl member (Margas Fajeadas or “banded marls”) with intercalated anhydrite layers.
Overlying the salt is a siliciclastic detrital unit, made up of the Oligocene Galar Sandstone, Javier-Pintano hard layers,
the Oligocene-Miocene Rocaforte Formation and, locally, the Igaza Conglomerates (Uncastillo Formation). This unit
is capped by Quaternary and Oligocene sediments. The Quaternary is made up of alluvium, glacial till and debris (Orti
et al. 1986).
These units have been simplified in the geologic modelling database as:



Unidad del Oligoceno (UO) for Lutitas y Limolitas
Unidad Detritica (UD) for Areniscas de Galar / Belsúe and (MF) as Margas Fajeadas (MF)
Unidad Evaporitica (UE) for Sal de Techo (ST) and Sal Muro(SM) or Sal (S)
In the Sierra del Perdón Potash Project area, the mineralogy is dominated by carnallite over sylvinite, which is medium
red-orange and white, largely coarse crystalline in bands and in heavily brecciated beds containing high levels of
insoluble material, largely fine-grained clays, anhydrite, and marl. The alternation from carnallite to sylvinite is not
always complete and may vary from one bed to the next but it always occurs in the lower part of the sequence. The
upper potash beds transition to finely banded light brown marls and clays which may exhibit salt veining and distortion
as well as influx of dark grey clays and mudstones, representing the transition of the basin from marine to continental
via basin-filling. The salts just below the potash tend to be dark grey to black. In some lower beds, halite
Page 5 of 50
Figure A-3. Regional Stratigraphy of the Ebro Basin
Page 6 of 50
becomes brownish, sandy to coarsely granular sand and sandstone as sediment influx from the basin edges. The
literature denotes this salt as “sal vieja” or “old salt” (Ortiz and Cabo 1981). The evaporite beds and bands, in general,
are separated by fine to very coarse crystallised and recrystallised salts, generally grey, sometimes light-to-medium
honey brown or white, with anhydrite blebs, nodules, and clasts.
Exploration and Methodology
Historic
The Sierra del Perdón Potash Project represents the westernmost potash deposit of Navarre Basin. The deposit was
discovered in 1929 based on the assay of brines sourced from Guendulain springs area, 5.5 km southwest of Pamplona
City. On June 23, 1929, the first drill hole completed intersected 9 m at 13.92% K2O to 78 m deep. Additional regional
exploration was begun in Navarre, first by the Spanish government with five holes across the area; one each in
Pamplona, Subiza, Guendulain, Javier and Tafalla. This was followed by more detailed work in the Sierra del Perdón
area beginning with e.n. adaro (drill holes 1 through 21), probably conducted in the 1950s, and then by Potassa de
Navarra, SA (drill holes 22 to 25) (Table A-1). Additional regional exploration by e.n. adaro and Potasas de Navarra,
SA tested the outer extents from the main basin in Iborgoiti, Celigueta, Sengariz, Lecaun and into Aragon. The date
and methodology of these holes is uncertain.
It is noted that some drill holes numbered 12, 4 through 10, 13, 17 through 19 and 21 were drilled under “normal
conditions” to test the extension, grade and dip of the mine workings. The drill holes numbered 13, 21, 19, 9 and 4
mark the extension of the potash beds which are in “good condition of exploitability.” Drill holes 12 and 14 are in an
irregular zone and did not intersect significant potash. In historic drill hole 14, in the northern part of SdP between
Guendulain and Unidano shaft, there is only very weak and thin carnallite (137.91–137.93 m and 138.67–138.69 m);
dips are reported at 31°. The area near drill holes 15, 16 and 10 is covered by Aquitaniense conglomerates and sands.
These historic holes contribute to the knowledge of the basin mineralogy and thicknesses but do not contribute to the
Resource. There are no assays associated with these holes.
The drilling campaign and study resulted in a declaration of reserves for Sierra del Perdón and other areas (Mayoral
2013). This first definition of the deposits was done in the early 1950s, a 24-drill hole campaign, an area with a surface
of 5,500 hectares in the “two main levels for sylvite and upper carnallite, with a resource of 225.3 Mt at 18.0% K2O for
the deposit of sylvite and 313.5 Mt at 12.6% K2O for the carnallite within the upper zone deposit.” Additional “reserve”
reporting was by government entities of e. n. adaro (60.0 Mt of K2O) and Minas Potasse D´Alsace (30.0 Mt of K2O) and
Potasas de Navarra SA (40 Mt of K2O). The historical resources and reserves, while technically important, are not
Joint Ore Reserves Committee (JORC)-compliant. They are reported here as an indication of the historic evaluation
on the property.
Production at Pamplona began in 1963 with a capacity of 250,000 tonnes per year (tpy) of K2O. A thick carnallite
member overlies the sylvinite, so in 1970 a refinery with the capacity for 300,000tpy was built to accommodate for
carnallite from the Esparza (Stirrett and Mayes 2013). During the early 70s, preparation and development of mining
infrastructure was completed and in the mid-70s, exploitation started in Beriain Shaft and then on Subiza Ramp.
Carnallite mining was ceased in 1977. Inclined ramps for the mine were located near Esparza, reaching the centre of
the mine, with further shafts located at Beriain, Guendulain and Undiano. In 1982, 2.2 million tonnes of sylvinite were
extracted with an average K2O grade of 11.7% (Stirrett and Mayes 2013).
By 1987, the deposit was in full production with 2 shafts and 2 extraction ramps with an annual production of
159,153 tonnes per year (tpy) of K2O, and a yearly turnover of US$ 23.95 million with an average potash price of US$
149.6/t K2O. The operations in Navarre were closed in the late 1990s.
Page 7 of 50
Table A-1. Sierra Del Perdón Historic Drill Holes and Locations*
Drillhole ID
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
Coordinates ETRS89
Easting
Northing Elevation MSL
(m)
(m)
(m)
609050
604342
611953
608447
604556
607974
609861
610343
608256
609946
609984
602791
601641
603130
601085
606169
600972
606157
607194
605709
603136
608016
607700
607289
604387
4730507
4734744
4732821
4729635
4733684
4734392
4732885
4733387
4733024
4733123
4731319
4733946
4733236
4735637
4731409
4727421
4734537
4734202
4733406
4730662
4733153
4727626
4728125
4729788
4729071
Total Depth
(m)
602
527
461
626
592
508
509
470
604
496
530
522
590
472
606
544
527
562
573
723
590
600
651
758
577
347
342
175
292
559
110
473
107
742
347
126
582
887
171
1,144
541
492
387
727
1,320
987
277
305
597
1,000
* Date of drilling is unknown.
Notes: ETRS89 = European Terrestrial Reference System 1989; MSL =
mean sea level.
Historic production, as reported by Highfield (Geoalcali S.L. 2012) is given below.
Mined ore
Potassium Chloride (t)
K2O equivalent
1991
1,266,294
244,555
146,733
1992
1,460,761
275,980
165,588
1993
1,422,842
261,805
157,083
1994
1,087,059
203,170
121,902
1995
948,911
171,280
102,768
In 1996–97, Potasas de Navarra, main shareholder of POSUSA (operating company), decided to stop production
because of a combination of factors. Presumably, the fall in potash price, combined with the need to make significant
new investment in mine development. Instituto Tecnologico Geominero de España (ITGE) reported reserves of 2.0 Mt
of K2O proven and 9.0 Mt of Probable (National Inventory Potash Resources 1987).
Page 8 of 50
Modern
This maiden Mineral Resource estimate for the Sierra del Perdón Potash property was independently developed by
geology and mining consultants, Agapito Associates, Inc. (AAI), USA, based on the results of documented geological
studies, two-dimensional (2D) seismic analysis, exploration drilling, electric logging (elogs), and chemical analyses.
The records for historic drill holes are largely drill hole logs which are used primarily for structural information. Six new
drill holes from Highfield’s wholly owned Spanish subsidiary Geoalcali’s 2013 exploration campaign have been
reviewed for definitive grade and thickness information. One hole (SDP-009) was barren and interpreted to be outside
of the main basin. SDP-002 drilled into old workings in the Guendulain area, was incomplete, and showed poor core
recovery and drilling only to what is thought to be CU carnallite. One hole (SDP-006) in the same area was incomplete,
drilled to the top of the mined-out sylvinite. One hole (SDP-005) also was drilled through what is interpreted to include
the mined-out portion of the sylvinite section; it exhibits poor recovery and dissolution of the core. SDP-004 and SDP013 are the only truly complete holes used in this resource.
The potash beds have been correlated using a combination of assays, core photos and inspection, and lithological and
geophysical logs. The beds vary in grade and thickness and can be discontinuous. Traditionally, the lithologies have
only defined the carnallite upper and lower beds, and the underlying sylvinite bed.
The main beds are CU and CL, which are generally the thickest and most continuous across the basin, and largely
carnallite. The sylvinite bed (SYL) is below and generally separated from the carnallite by less than one meter of salt
or very low grade sylvinite material. CU tends to be of lower grade; composited values range from 8–10% K2O. CL
tends to be thinker and higher grade and separated from CU by 1–2 m of salt. The correlations are subject to revision
with additional drilling. Those composited intervals are shown in Table A-2. Thicknesses in this report are generally
reported as measured thickness except in the resource, where thickness is corrected to true thickness. Additional
drilling will be needed in the greenfield areas, including the deeper part of the syncline. Additional drilling has been
proposed and planned (Figure 1 and Table A-3) but exploration and drilling focus switched to the drilling out of JavierMuga.
SDP-013 lies in the eastern portion of the basin in an area not previously mined. It shows a similar lithologic sequence
to the potash in Muga-Vipasca with the exception that the mineralogy is predominantly carnallite rather than sylvinite,
over relatively thin, dark halite, and banded anhydrite at the base. The basal salt over the banded anhydrite and lower
marls is medium to dark grey and only 4.8 m thick. SYL is found in a 0.9 m layer (depth 521.3 m), 1.8 m below CL.
CU is of relatively low grade, with an average of 8.2% K2O and 1.3 m thick. The banded marls above the carnallite
show considerable distortion which may be attributable to localized faulting or mass sediment slumping and salt veining,
although they normally transition upwards and are capped by dark grey clays, likely representing sediment from the
basin edge.
SDP-009 defines the eastern extent of the basin and shows a foreshortened sequence in which the salt is thin (<2 m)
and dissolved, exhibiting a spongey texture of the original insolubles over a thin banded anhydrite with a bed of dark
mudstone. The remnant salt is capped by alternating beds of banded and deformed, black and oxidized, light reddish
brown and tan mudstones, suggesting the transition at the basin’s edge to a continental-type environment. The hole
is shallow and was drilled to a depth of about 86.5 m to the top of the anhydrite. To help define the edge of evaporites,
the logs for historic drill holes 8 and 10 were reviewed and both show complete sequences of carnallite and sylvinite
mineralization with 8 reporting steep dips of 80°. As in SDP-013, alteration of carnallite to sylvinite is incomplete as
sylvinite is found in what is interpreted to be CU, and again at the base of the potash bed.
SDP-006 is incomplete due to lost circulation in the mineralised zone below CU. The hole penetrated CU over 3.6 m
carnallite at average 6.3% K2O. Below CU, core recovery was poor, hence, this hole was not be used in the resource
estimation. This hole is excluded from the resource due to poor core recovery including below 205.7 m and complete
loss after 213.5 m. This hole was drilled in the old workings in the Guendulain area in the northern portion
Page 9 of 50
Table A-2. Potash Bed Resource Composites and Geologic Intervals from Exploration Drill Holes
Geologic Intervals
Potash Bed and
Drill Hole ID
Resource Intervals
Composite Composite
Depth Depth Measured Depth Depth Measured
True
from
to Thickness from
to
Thickness Thickness K2O MgCl2 Insolubles
(m)
(m)
(m)
(m)
(m)
(m)
(m)
(wt %) (wt %)
(wt %)
Upper Carnallite
SDP-002
Hole not deep enough
SDP-004
395.8 401.5
5.7
SDP-005
415.2 424.0
8.8
SDP-006
201.1 204.7
3.6
SDP-009
No occurrence
SDP-013
511.7 516.5
4.8
Lower Carnallite
SDP-002
Hole not deep enough
SDP-004
402.4 406.3
3.9
SDP-005
426.2 430.4
4.2
SDP-006
205.6 207.5
1.9
SDP-009
No occurrence
SDP-013
518.3 521.0
2.7
Sylvinite
SDP-002
Hole not deep enough
SDP-004
406.6 410.2
3.6
SDP-005
430.7 435.8
5.1
SDP-006
Hole not deep enough
SDP-009
No occurrence
SDP-013
521.3 522.2
0.9
Note: A blank field indicates no data.
Color
10.0
0–10m
Scale
397.9 399.7
1.8
Inadequate core recovery
203.2 204.7
1.5
1.7
9.8
16.7
13.9
1.5
8.7
14.3
12.0
514.1
1.5
1.5
8.2
17.7
11.3
402.4 406.3
3.9
Inadequate core recovery
Inadequate core recovery
3.6
12.4
15.2
9.2
519.5
1.5
1.5
8.4
17.9
8.8
406.6 409.9
3.3
Inadequate core recovery
3.0
16.1
0.4
12.0
521.3
0.9
10.3
0.5
8.6
10.0
20.0
10.0
0–10m 0–20% 0–10%
100.0
0–100%
515.6
521.0
522.2
0.9
Color
Scale
10.0
0–10m
of the deposit and even though it was planned as an unmined block, it likely drilled into an area where the lower sylvinite
was mined out. The closest historical hole is 2 which only reports “normal” conditions in the deposit which might be
interpreted as a complete section of carnallite over sylvinite. In this area, both carnallite and sylvinite were mined and
it is interpreted in this and other holes that the targeted beds were just below CU with the lowermost beds being sylvinite
in most cases.
SDP-005 was drilled within the old workings of the Subiza mine south of the main Beriain Fault and it is believed that
the entire potash section was intersected. The hole lost circulation and was cored with HQ, with the core showing
considerable dissolution and mechanical breakage and disking in the mineralised zone, making the assays suspect
through most of the interval. Mineralisation is largely carnallite. Beds CL and SYL are separated by halite and lowgrade material. Sylvinite interpreted to be bed SYL is present from 431.3 to 434.0 m where 2.7 m of core was lost,
thought to be mined out and therefore, likely to have been sylvinite of good grade. Core was recovered again from
434.0 to 435.8 m, reporting variable amounts of MgCl2. The banded marls above the salts show folding, distortion
Page 10 of 50
Table A-3. Highfield Resources Sierra Del Perdón 2013 Drilling Campaign
Drillhole
ID
Start Date
Total Investigation
Coordinates ETRS89
End Date Easting Northing Elevation Depth
Permit
(m)
(m)
MSL
(m)
SDP-001
ND
606021 4734589
600
SDP-002 06-Jul-13 29-Jul-13 604488 4735240
522
188
Adios
SDP-003
ND
601229 4734257
600
SDP-004 18-Jun-13 24-Jul-13 609018 4733706
533
436
Quiñones
SDP-005 05-Aug-13 05-Sep-13 607630 4729055
654
440
Adios
SDP-006 05-Aug-13 12-Aug-13 604181 4735183
522
214
Adios
SDP-007
ND
607439 4732968
610
SDP-008
ND
609200 4731639
600
SDP-009 22-Aug-13 03-Sep-13 610833 4733312
468
95
Quiñones
SDP-010
ND
603180 4733590
600
SDP-011
ND
600929 4733415
585
SDP-012
ND
600229 4734799
550
SDP-013 25-Oct-13 07-Nov-13 609983 4732274
532
548
Quiñones
SDP-014
ND
605388 4728455
600
SDP-015
ND
607256 4731626
600
SDP-016
ND
604267 4730142
600
SDP-017
ND
608790 4731063
600
SDP-018
ND
608544 4731782
600
SDP-019
ND
607984 4730995
600
SDP-020
ND
607288 4730629
600
SDP-021
ND
608056 4732633
600
SDP-022
ND
607983 4733475
600
SDP-023
ND
607408 4732931
600
Note: IP = in progress, ND = not drilled. Coordinates in bold are final.
and salt veining but with less basin edge influence of clastics as basin fill. Logs for nearby historical hole 4 show
carnallite from 235.2 to 244.9 m (11.7 m) and sylvinite directly below to a depth of 250.5 m (5.6 m).
SDP-004 was drilled near the old workings at Beriain and had a completed intersection of the mineralized zone. What
is interpreted as CU is 6.6 m of carnallite with overall grades of 5.6% K2O, containing higher grade beds within that. It
shows medium red orange banding directly overlying CL and SYL, the latter with the usual mixed dark and light
brecciation of clay and banding in the lower part. The lower part of CL is partially sylvinite with the alteration from a
depth of 405.1m, showing a marked difference in the appearance of the core. SYL is just below from 406.6 to 409.9
m (3.3 m) with an average grade of 16.1% K2O. In this hole, the upper marls show dark clays and mudstones as
intermediate basin edge influences. The hole finished in the basal, banded anhydrite and marls. The lower salt (Sal
Muro) is light to medium grey and tan, banded, and medium crystalline with a minor bed of clay, of 15.1 m thickness.
SDP-002 drilled into the old working in the Guendulain area and was incomplete, showing poor core recovery and
drilling only to what is thought to be CU. It has no assays and is excluded from the resource. This was the first hole
drilled; SDP-006 is an incomplete re-drill of SDP-002.
Seismic Surveys and Structure
Page 11 of 50
In 1983, a 2D seismic survey was run for e.n.adaro by Compagnie Generale de Geophysique (CGG) over the Sierra
del Perdón property (e.n. adaro 1985a and b). This consisted of 22 lines totalling 111 km (Figure A-4). Earlier work
included a seismic campaign in 1963 and a minie-sosie (shallow seismic using a vibration-rammer source) campaign
in 1979 and a vibrosesimic program by Otono in 1981. The resulting structure maps for both the top (“techo”) of salt
(base of Marl) with major faults were developed by CGG in combination with the regional seismic records, field maps,
satellite imagery and drill hole data. Additional surfaces identified at that time include the unconformity at the Miocene
conglomerates, the base of the Galar Sandstone and the resulting isopachs. In addition, early work identified an area
of possible erosion in the upper salt along the interpreted anticline.
RPS (formerly RPS Boyd Petrosearch) of Calgary, Alberta, Canada, completed a re-interpretation in 2013 of the 2D
historical seismic lines and profiles on behalf of Highfield. The re-interpretation program was designed to review the
overall accuracy of the historical data in terms of good correlation to drill hole data and geological intersections, as well
as to identify any subsurface structures that may adversely affect the salt-bearing strata. Seismic survey lines were
reviewed and were tied to wells using historical wireline data. No report was produced but structural maps for the top
and base of the salt contributed to the basin interpretation in this report. The potash-bearing zones lack any
velocity/density contrasts within the salt, so it is not possible to detect potash or map the structure of the zone directly.
The CPs used these structural data as generated by RPS but the structure map is modified and corrected to reflect
updated drill holes.
Quality Control and Data Confirmation
The 2013 drilling program was conducted by Highfield personnel. Details of the sampling techniques and oversight of
the quality control program are summarised in Table A-6.
Highfield and ALS Global (ALS), the primary contract laboratory, maintained quality control procedures of standards,
duplicates, and blanks. Highfield made multiple Standard or Certified Reference Material-type (SRM or CRM) samples
representing low-, medium-, and high-grade (LG, MG, HG) potassium material, but the insertion rate is insufficient to
determine repeatability and calibration of the target instrumentation. SRM samples, blanks, and duplicates were
inserted, both by Highfield personnel during sample preparation and by ALS as part of their own quality
assurance/quality control (QA/QC) program. ALS inserted commercial standards BCR-113 and BCR-114, both potash
fertilizer materials, muriate of potash (MOP) and sulfate of potash (SOP), respectively, as well as their own internal
standard, SY-4, a diorite gneiss used as a blank material. The insertion rate is one blank, one SRM, and one laboratory
duplicate per 20 samples or batch.
ALS assayed samples both by inductively coupled plasma (ICP) and X-ray fluorescence (XRF). In general, the ICP
and XRF techniques show reasonable agreement with the XRF method exhibiting modestly elevated K2O values over
the ICP method.
Highfield’s procedure designates duplicates on the quarter core at 1 in 20, blanks at 1 in 50, and standards at 1 in 20.
Duplicates were submitted to ALS, and ICP results show good internal agreement. Check samples (1 in 20) were
tested at Saskatchewan Research Council Laboratory (SRC). In general, SRC reports K2O values lower than reported
by ALS. Because ALS and SRC show good internal agreement, the bias suggests a calibration issue.
This drilling campaign for SdP began in the summer of 2013 and procedure was not well-established to ensure good
core recovery. The CPs reviewed the drilling records and concluded that core recovery was insufficient in three of the
six holes drilled and therefore those assays will not be used in this resource.
Page 12 of 50
Figure A-4. Index of Seismic Lines and Detected Faults on Top of Salt / Base of Marls (after CGG)
Exploration Target
The SdP Exploration Target comprises 23 exploration core holes covering an area of approximately 44 km2, illustrated
in Figure 1. The total Exploration Target (Table A-4) is estimated to contain between 100 and 250 Mt of potash in the
carnallite beds (CU and CL) ranging in average grade from 9 to 13% K2O, and between 50 and 100 Mt of potash in the
sylvinite bed (SYL) ranging in average grade from 10 to 14% K2O. Approximately half (50%) of the carnallite
Exploration Target in the CU and CL beds is estimated to overlie old workings of the Posusa de Navarra and Posusa
de Subiza mines in the SYL bed.
Of the 23 planned exploration holes, 6 were drilled or attempted in 2013. Due to the incomplete holes and the technical
difficulty with core recovery, the exploration program going forward will concentrate on drilling holes in virgin ground,
stepping out from the existing workings and into the deeper part of the basin. Up to five holes are proposed for 2015.
Potash beds CU, CL, and SYL are targeted at depths ranging from 100 to 1,400 m.
Mineral Resource Estimate
The Mineral Resource was estimated using a computer 3D gridded-seam geologic (block) model constructed with
Mintec Inc. MineSight 3D© v9.0 software. Historical and modern data for the property were reviewed by the CPs for
Page 13 of 50
Table A-4. Sierra del Perdón JORC Exploration Target
(effective date 17 March 2015)
Potash Beds
Carnallite
Sylvinite
Depth Range
(m)
100 ‒ 1,400
Same
Total
Tonnage
(Mt)
100 ‒ 250
50 ‒ 100
150 ‒ 350
Average K2O
(wt %)
9 ‒ 13
10 ‒ 14
Notes:
m = meters, Mt = million tonnes.
Sylvinite is a mechanical mixture of sylvite (KCl) and halite (NaCl).
Carnallite refers to a mechanical mixture predominantly of carnallite
(KCl·MgCl2·6H2O) and halite (NaCl).
Carnallite occurs in up to two separate beds. Sylvinite occurs in one bed.
Approximately 50% of the carnallite target overlies historical mine workings in the sylvinite
bed.
Target cutoffs: (a) bed true thickness ≥ 1.5m: grade cutoff ≥ 8.0%K 2O, or (b) true
thickness < 1.5m: grade-thickness cutoff ≥ 12.0%K 2O-m.
quality and completeness. Data utilized in the model include historic drill hole logs, modern drill hole logs and core
assays, historic and modern interpretations of 2D seismic surveys, surface topography in the form of a digital elevation
model (DEM), permit boundary lines, historic mineral inventories, historic geological surface mapping, and historical
mining records from the Potasas de Navarra and Potasas de Subiza mines which include plan view maps and elevation
profiles.
Figure A-5 shows the surface topography, permit boundaries, seismic lines, and locations of the historic and modern
exploration core holes applied to the Mineral Resource estimate. Hole SDP-009 was drilled outside of the deposit and
was used for boundary definition. Difficult drilling conditions forced Hole SDP-002 to terminate prematurely without
producing potash core for assay. SDP-002 was replaced by nearby SDP-006. SDP-006 produced core through the
CU bed, but no core was recovered from the lower beds. SDP-005 drilled through a 2.7-m-high opening in the Subiza
mine (SYL horizon). While potash was identified in the upper beds overlying the mining horizon and below the mining
horizon, core recovery was incomplete in all beds and the core could not be used for assay. Complete core was
recovered in SDP-004 and SDP-013. Composites from assays were calculated and used for resource modelling in all
three potash beds in SDP-004 and SDP-013, and CU in SDP-006.
No historical holes were used directly for resource modelling because assay data were not available. However,
lithology logs were available for a majority of historical holes. Holes showing potash were used in the interpretation of
resource continuity. Historical mining was similarly used in the interpretation of resource continuity. Detailed mine
maps and geologic profiles were available in the historical records. Maps and profiles were digitized and registered in
the 3D computer model. Mapped areas deemed unmineable by historic miners due to faulting or bed thinning were
relied upon and excluded from the resource.
Figures A-6 and A-7 describe the general 3D geometry of the block model including the base-of-salt surface and other
major structural features. Figure A-8 illustrates the subsurface block model with overburden blocks overlying the
evaporite.
Page 14 of 50
Figure A-5. Block Model Surface Topography, Seismic Lines and Drill Holes (plan view)
Figure A-6. Block Model Cutaway Exposing Drill Holes and Base-of-Salt Surface (view to north-northeast)
Page 15 of 50
Figure A-7. Block Model Cutaway Showing Major Faults and Historical Mine Workings (view to northnorthwest)
Figure A-8. Block Model Cutaway Exposing Subsurface Blocks (view to north-northwest)
Page 16 of 50
The Mineral Resource is bound to the north and east by the evaporite outcrop at surface and is open at depth to the
west. No potash resource is claimed 200–300 m downdip of the outcrop to account for abrupt upturning of the strata
near outcrop and evaporite dissolution at surface. The resource is bound to the south by the basin margin as defined
by structural interpretation, seismic surveying, and limited drilling.
Resource exclusions were applied around major faults, consistent with historic mining. Potasas de Navarra mined
approximately 23 Mt of sylvinite in the SYL horizon, grading 13.8% K2O on average, between 1972 and 1985, with
limited potash mined prior to 1972. Potasas de Navarra mined another 5 Mt of carnallite in the overlying CL horizon,
grading 11.3% K2O on average, between 1972 and 1978. Operations shifted to Subiza in 1986 where approximately
14 Mt of sylvinite was mined in the sylvinite horizon, grading 14.5% K2O on average through 1997. A minimum 50-m
buffer was applied around historical workings. The mining footprints plus buffer were excluded from the bed-specific
resource.
Grade parameters were composited as length-weighted averages of the individual assays over a continuous bed
thickness. In most instances, top and bottom bed contacts are gradational, introducing some trade-off between grade
and thickness. Contacts were selected to maximize thickness while maintaining a composite grade as close as
possible to 12.0% K2O with a true thickness equal to greater than 1.5 m. Depending upon the vertical grade distribution,
bed thicknesses less than 1.5 m and composite grades less than 8.0% K2O were required for geologic modelling in
some instances. Composite values for the drill holes used in the resource estimate are summarized in Table A-3.
Bed thicknesses were corrected to true thicknesses for modelling according to local dip and downhole deviation survey
data. Structural dip was calculated from the base-of-salt surface constructed from seismic, outcrop, historic
mine survey, and historic and modern drill hole data. Dips in individual beds were adjusted locally by stacking the
variable-thickness interburden and potash beds above the base-of-salt surface.
Block true thicknesses and grade parameters (K2O, MgCl2, insolubles content) were interpolated/extrapolated utilizing
an inverse distance squared (ID2) model. Block estimation was limited to an isotropic search radius of 20,000 m and
the 15 closest data points (drill holes). Kriging was not attempted due to the limited number of composites available.
Geostatistical modelling may be justified in the future with additional drilling.
The SdP Mineral Resource estimate is summarised by resource classification, permit area, and potash bed in Table
A-5. The Mineral Resource represents a subset of the original Exploration Target. The Mineral Resource has an
effective date of 23 March 2015.
The resource is based upon the following cutoffs which support reasonable prospects for economic extraction by
conventional mining methods:


Bed true thickness ≥ 1.5 m: Cutoff is grade ≥ 8.0% K2O
Bed true thickness < 1.5 m: Cutoff is grade x thickness ≥ 12.0 %K2O-m
The grade-thickness cutoff maintains the equivalent of an 8.0% K2O grade at 1.5 m for thin beds (<1.5 m).
The resource is reported as in-place tonnes of potash contained in the respective potash beds. The potash can occur
as either sylvinite or “carnallitite.” Sylvinite is a mechanical mixture of halite and sylvite (KCl) with minor inclusions of
insolubles (typically clays). Carnallitite is a mechanical mixture of halite and carnallite (KCl·MgCl 2·6H2O), with minor
inclusions of insolubles. Beds CU and CL are dominantly carnallitic with minor sylvite, while SYL is dominantly sylvinitic
with local occurrences of carnallite. The average weight percent of sylvinite and carnallite in the resource is reported
by bed in Table A-5.
Page 17 of 50
Table A-5. Sierra del Perdón JORC Mineral Resource Estimate
(effective date 22 March 2015)
Average
Carnallite
In-Place
Sylvite
Permit Area and
Bed
Tonnes
Potash Bed
Thickness In-Place K2O (KCl·MgCl 2·6H2O) (KCl) Insolubles Bulk Density
3
(m)
(Mt)
(wt %)
(wt %)
(wt %) (wt %)
(t/m )
INDICATED
Adiós
Upper Carnallite
Lower Carnallite
Sylvinite
Quiñones
Upper Carnallite
Lower Carnallite
Sylvinite
All Permit Areas
Upper Carnallite
Lower Carnallite
Sylvinite
1.5
-
5.5
-
8.8
-
41.9
-
2.6
-
12.0
-
1.93
-
1.7
2.8
2.5
11.0
18.0
7.3
9.0
10.9
14.6
50.1
47.3
1.3
1.1
4.6
22.7
12.7
9.0
11.1
1.89
1.90
2.12
1.6
2.8
2.5
16.5
18.0
7.3
41.8
8.9
10.9
14.6
10.7
47.4
47.3
1.3
39.4
1.6
4.6
22.7
6.5
12.4
9.0
11.1
10.7
1.90
1.90
2.12
1.94
1.6
3.1
2.5
12.6
3.2
2.9
8.9
11.3
14.4
43.7
46.6
1.3
2.3
5.3
22.4
12.3
9.1
11.0
1.92
1.90
2.12
1.7
2.7
2.1
6.1
10.0
5.6
9.0
10.6
13.4
49.8
48.0
1.3
0.9
3.9
20.8
12.6
9.0
10.4
1.89
1.90
2.12
1.6
2.8
2.2
18.6
13.2
8.5
40.3
8.9
10.7
13.7
10.5
45.7
47.6
1.3
37.0
1.9
4.2
21.4
6.7
12.4
9.0
10.6
10.9
1.91
1.90
2.12
1.95
INFERRED
Adiós
Upper Carnallite
Lower Carnallite
Sylvinite
Quiñones
Upper Carnallite
Lower Carnallite
Sylvinite
All Permit Areas
Upper Carnallite
Lower Carnallite
Sylvinite
Notes:
Potash mineralization bulk density varies by carnallite, sylvite, halite, and insolubles fractions ranging from 1.6 to 2.2 t/m 3.
The resource estimate does not include any out-of-bed dilution.
Resource cut offs: (a) true thickness ≥ 1.5m: grade cutoff ≥ 8.0%K 2O, or (b) true thickness < 1.5m: grade-thickness cutoff ≥
12.0%K2O-m.
Resource reduced by 15.0% allowance for unknown geologic anomalies within resource footprint.
Indicated Resource—potash meeting cut off criteria located between 0m and 1,000m of a modern exploration core hole with
assays, except where otherwise limited by geologic or mining boundaries.
Inferred Resource—potash meeting cut off criteria located between 1,000m and 2,000m radius of a modern exploration core
hole with assays or within 2,000m of an historical exploration core hole, except where otherwise limited by geologic or mining
boundaries.
Page 18 of 50
Tonnages are estimated using a variable in situ bulk density calculated for each model block based on the relative
modelled fractions of sylvite, carnallite, halite, and insolubles. Depending upon the mineral fractions, densities can
range from a low as 1.6 tonnes per cubic meter (t/m3) for pure carnallite to 2.2 t/m3 for insolubles only. The average
bulk densities for the beds mostly fall between 1.90 and 2.15 t/m3.
Potash bed true thicknesses from the block model are illustrated in Figures A-9 through A-11 for CU, CL, and SYL,
respectively. Composite K2O grade blocks are presented in Figures A-12 through A-14 for the corresponding beds.
The figures show blocks out to 2,000 m from a drill hole with assays.
Underground room-and-pillar mining is the base case mining scenario for justifying reasonable prospects for eventual
economic extraction. Room-and-pillar and longwall mining were historically practiced at Navarra and Subiza for
26 years. There is a reasonable expectation that potash outside the historic mining footprint can be accessed and
extracted by selective room-and-pillar mining. Potash beds overlying the historical workings also have reasonable
potential for economic extraction based on evidence that those beds remain mineable above the old workings. Industry
experience in potash and salt has shown that mining is often possible in undermined beds, even with high extraction
and thin interburden, due to the competent and highly plastic behaviour of potash and salt. The effects of thin
interburden, multi-seam mining are identified as a key risk factor with potential to affect recovery and mining economy.
Carnallite also poses a risk because carnallite creeps (plastically deforms) at a substantially faster rate than salt or
sylvinite and mining must be adapted to withstand relatively high entry closure rates. While there is extensive industry
experience mining in salt or sylvinite, industry experience with conventional mining experience in carnallite is limited.
The 5 Mt of carnallite mined over seven years at Navarra demonstrates that carnallite mining is locally feasible and
has reasonable potential in the future.
Considering these and other mining risks, the carnallite-sylvinite Mineral Resource is considered to have reasonable
prospects for eventual economic extraction. However, this is a minimum standard and does not assure that the actual
economics of extraction will prove sufficiently attractive for investment in current or future markets, depending upon
the economic criteria of investors. The impacts of these and other risks on extraction economy are only quantifiable
for a specific mine plan at the scoping, pre-feasibility, and/or feasibility study level.
The project is at an early exploration stage. Geologic uncertainty and the impacts of historical mining are principal
risks. While historical mining, and drill hole and seismic data, substantiate bed continuity across the property, variations
in potash thickness, grade, and mineralogy are expected. Faults, folds, wants, and other structural disturbances can
sterilise resource locally. Known sterilised areas defined by historical mining and known structure were explicitly
excluded from the resource estimate. An additional 15% of the resource tonnes were factored out of the estimate as
an allowance for geologic and mining uncertainty within the resource footprint.
The radii-of-influence (ROI) used for the Mineral Resource classification reflect the interpreted degree of predictability
(or conversely, variability) within the deposit. Resource classifications for the deposit are stated as follows:


Indicated Resource—Sylvinite meeting cutoff criteria located between 0 m and 1,000 m radius of a modern
exploration core hole with assays, except where otherwise limited by geologic or mining boundaries.
Inferred Resource—Sylvinite meeting cutoff criteria located between 1,000 m and 2,000 m radius of a
modern exploration core hole with assays, except where otherwise limited by geologic or mining boundaries.
No part of the resource is classified as Measured due to the limited number of reliable modern drill holes for
characterization, their wide spacing, and the uncertainty surrounding the impacts of historical mining on future
Page 19 of 50
Figure A-9. Block Model Bed True Thickness—Bed CU (plan view)
Figure A-10. Block Model Bed True Thickness—Bed CL (plan view)
Page 20 of 50
Figure A-11. Block Model Bed True Thickness—Bed SYL (plan view)
Figure A-12. Block Model Bed Composite K2O Grade—Bed CU (plan view)
Page 21 of 50
recovery methods (a Modifying Factor). Mineral Resource classification areas identified in Table A-5 are shown in
Figures A-15 through A-17 for the respective potash beds.
The criteria on which the mineral resource was based are summarized in Table A-6 “JORC Checklist of Assessment
and Reporting Criteria.”
The reader is cautioned that a Mineral Resource is an estimate only and not a precise and completely accurate
calculation, being dependent on the interpretation of limited information on the location, shape, and continuity
of the occurrence and on the available sampling results. Actual mineralisation can be more or less than
estimated depending upon actual geological conditions.
The Mineral Resource statement includes Inferred Mineral Resources. There is a low level of geological
confidence associated with Inferred Mineral Resources and there can be no certainty that further exploration
work will result in the determination of Indicated or Measured Mineral Resources. Mineral Resources are not
Mineral Reserves and do not have demonstrated economic viability. No Mineral Reserves are being stated.
References
Barcelona POSUSA, (1987). “Recursos Minerales Reservas ‘Javier-Los Pintano’ y ‘Monreal,’”. Internal document.
Busson, G. and B. C. Schreiber (Eds.) (1997). Sedimentary Deposition in Rift and Foreland Basins in France and
Spain (Paleogene and Lower Neogene). Columbia University Press, 480 pp.
Del Valle, J. (1978). Mapa geologico de Espana, E 1:50,000 2. Ser. 1st ed, Hojo norte 141, Pamplona, y Memoria
Explicativa. IGME Serv. Pub. Min. Ind.
e.n. adaro (1965). Investigacion de Potasas en la zona Subpirenaica, informe para Potasas de Subiza S.A,
Departamento de Yacimientos Sedimentarios (internal document).
e.n. adaro (1970). Resumen del resultado de los sondeos Perforados para Investigar Potasas. Anexo 2.
e.n. adaro (1985a). Proyecto de Investigacion del borde oeste del yacimiento del Perdon—Tomo I. Informe de
resultados.
e.n. adaro (1985b). Proyecto de Investigacion del borde oeste del yacimiento del Perdon—Tomo III. Estudio
petrologico, mineralogico, geoquimico.
e.n. adaro (1988–1991). Investigación y Evaluación de Mineral en el Area de Javier-Los Pintano Memoria, informe
para Potasas de Subiza S.A, Departamento de Yacimientos Sedimentarios (internal document).
Garrett, D. E. (1996). Potash Deposits, Processing, Properties and Uses. London: Chapman & Hall.
Geoalcali S.L. (2012). “Navarra-Aragón Basin Potash Deposits Assessment Spain.” Internal document.
Highfield Resources (2013). “Highfield Resources Delivers Maiden Inferred JORC Resource of 163.2 Mt of Sylvinite
at Javier.” ASX press release, 08 October, 6 pp.
Instituto Tecnologico Geominero de España (ITGE) (1987). National Inventory Potash Resources.
Page 22 of 50
Figure A-13. Block Model Bed Composite K2O Grade—Bed CL (plan view)
Figure A-14. Block Model Bed Composite K2O Grade—Bed SYL (plan view)
Page 23 of 50
Figure A-15. Mineral Resource Areas—Bed CU (plan view)
Figure A-16. Mineral Resource Areas—Bed CL (plan view)
Page 24 of 50
Figure A-17. Mineral Resource Areas—Bed SYL (plan view)
International Plant Nutrition Institute (2014). <http://www.ipni.net/publication/nss.nsf/0/8FBD66599EAB433F85257
9AF00741710/$FILE/NSS-03%20Potassi umChloride.pdf>. Website assessed by V. Santos, 5 May.
Joint Ore Reserves Committee (JORC) (2012). “Australasian Code for Reporting of Exploration Results, Mineral
Resources and Ore Reserves.” Effective 20 December 2012 and mandatory from 01 December 2013, 44 pp.
Mayoral, Gonzálo (2013). “Sierra del Perdón Potash Deposit.” Internal Geoalcali memo.
Menendez, N. (1971). Geologia. Complement al estudio geologico de nuetro yacimiento de diciembre de 1970.
Nociones generals previas. / Geologia (II Parte). Mineralogia del yacimeinto del Perdon (supplement al estudio
geologica de enero de 1971) Potasas de Navarra, SA Informe interno.
Moore, P. (2012). “Potash from Iberia.” Retrieved January 2013 from Info Mine: <http://www.infomine.
com/library/publications/docs/InternationalMining/Moore2012u.pdf>, June, accessed by V.Santos.
Ortiz, L. R. and F. R. Cabo (1981). “The Saline (Potash) Formation of the Navarra Basin (Upper Eocene, Spain).”
Petrology, Revista del Instituto de Investigaciones Geologicas Diputacion Provincial. Universiad de Barcelona, Voy
35-1981/82, pp. 72–121.
Orti Cabo, F., L. Rosell Ortiz, and J. J. L. y Pueyo Mur (1984). “Cuenca Evapor. (Potásica) Surpir. del Eoc. sup.
Aportac. para una Interpr. Deposic. Libro Homenaje a L. Sánchez de la Torre.” Publicaciones de Geología, nº 20.
Universitat Autónoma de Barcelona, pp. 209–231.
Page 25 of 50
Orti, F., J. M. Salvany, L. Rosell, J. J. Pueyo, and M. Inglés (1986). “Evaporitas Antiguas (Navarra) y Actuales (Los
Monegros) de la Cuenca del Ebro.” Guia de las Excursiones del XI Congreso Español de Sedimentología/
Stirrett, T. and K. Mayes (2013). “JORC Mineral Resource Estimate of the Javier-Pintano Project Area, Spain.” Internal
report prepared for Highfield Resources Ltd., 25 April.
University of Michigan (2004). “Geologic Map of the Pyrenees.” From <http://www-personal.umich.edu /~jmpares/
Pyrenees-Trip.html> accessed by V. Santos, October 2014.
Page 26 of 50
Table A-6. JORC Checklist of Assessment and Reporting Criteria
Section 1 Sampling Techniques and Data
Criteria
JORC Code explanation
Sampling
 Nature and quality of sampling (e.g. cut
techniques
channels, random chips, or specific specialised
industry standard measurement tools appropriate
to the minerals under investigation, such as down
hole gamma sondes, or handheld XRF
instruments, etc.). These examples should not be
taken as limiting the broad meaning of sampling.
 Include reference to measures taken to ensure
sample representivity and the appropriate
calibration of any measurement tools or systems
used.
 Aspects of the determination of mineralisation
that are Material to the Public Report.
 In cases where ‘industry standard’ work has been
done this would be relatively simple (e.g. ‘reverse
circulation drilling was used to obtain 1 m
samples from which 3 kg was pulverised to
produce a 30 g charge for fire assay’). In other
cases more explanation may be required, such
as where there is coarse gold that has inherent
sampling problems. Unusual commodities or
mineralisation types (e.g. submarine nodules)
may warrant disclosure of detailed information.
Commentary
 The Sierra del Perdón Potash Project (the “Project”) represents the westernmost
potash deposit of the Navarre Basin. Twenty-five holes (Table A-1) were drilled
and cored with the deposit area with additional holes drilled as part of a regional
exploration program. The date and methodology of these holes is uncertain, most
likely they were drilled in the 1950s. In most cases, there are lithology logs for the
historic holes and their use in the resource is limited largely to structural
information.
 Six new holes (see Table A-3) have been drilled and cored since 2013 by
Geoalcali Sociedad Limitada (Geoalcali). One hole (SDP-009) was barren and
interpreted to be outside of the main basin. SDP-002 drilled into old workings in
the Guendulain area, was incomplete, and showed poor core recovery and drilling
only to what is thought to be carnallite upper (CU). One hole (SDP-006) in the
same area was incomplete and drilled to the top of the mined-out sylvinite. One
hole (SDP-005) also drilled through what is interpreted to include the mined-out
portion of the sylvinite section; it exhibits poor recovery and dissolution of the
core. SDP-004 and SDP-013 are the only truly complete holes used in this
resource; both show core recovery at greater than 99% through the mineralized
zone. These holes have detailed logs and assay but not downhole geophysical
records.
 Additional drilling is recommended in the Sierra del Perdón property. Planned drill
hole locations are found in Table A-3 and shown in Figure 1. Geoalcali is a 100%
owned Spanish subsidiary of Highfield Resources (Highfield or the “Company”).
 The historical drilling program resulted in compiled reports which are referenced in
the Appendix. In general, the historical programs were well-documented but
lacking in detailed explanation of assay work or procedure.
 The new drill holes have been geologically logged, photographed, and assayed.
Some of the holes were geophysically logged through the mineralised zone.
Following logging and photographing, samples are marked and numbered for
assay. Core is sawed with hydraulic oil as the lubricating agent; half-core is
Page 27 of 50
Criteria
Drilling
techniques
JORC Code explanation

Drill type (e.g., core, reverse circulation, openhole hammer, rotary air blast, auger, Bangka,
sonic, etc.) and details (e.g., core diameter, triple
or standard tube, depth of diamond tails, facesampling bit or other type, whether core is
oriented and if so, by what method, etc.).
Commentary
retained and shrink-wrapped, and samples to be assayed are bagged and
secured with plastic ties and boxed for shipping to ALS Global (ALS) for crushing,
grinding and splitting. Cored samples are assayed by inductively coupled plasmaoptical emission spectrometry (ICP-OES) and X-ray fluorescence (XRF) by ALS.
Sample preparation is in Seville, Spain and assay work is completed in Loughrea,
County Galway, Ireland. ALS has a documented methodology and quality
assurance/quality control (QA/QC) protocol.
 Geophysical logs are available for SDP-004, SDP-006, and SDP-009. No
geophysical logs are available for the 25 historical holes.



Drilling and coring procedures for the historical Sierra del Perdón holes are
unknown.
The deposit was discovered in 1929 based on the assay of brines sourced from
Guendulain springs area, 5.5 km southwest of Pamplona City. On June 23, 1929,
the first drill hole completed intersected 9 m at 13.92% K2O to 78 m deep.
Additional regional exploration was begun in Navarre, first by the Spanish
government with five holes across the area; one each in Pamplona, Subiza,
Guendulain, Javier and Tafalla. This was followed by more detailed work in the
Sierra del Perdón area beginning with e.n. adaro (drill holes 1 through 21, Table
A-1) , probably conducted in the 1950s, and then by Potassa de Navarra, SA (drill
holes 22 through 25). Additional regional exploration by e.n. adaro and Potasas
de Navarra, SA tested the outer extents from the main Basin in Iborgoiti,
Celigueta, Sengariz, Lecaun and into Aragon.
In 2013, a drilling program was initiated in Sierra del Perdón. Holes were drilled
open hole to core point for SDP-013 (151.0 m), SDP-006 (95.5 m), SDP-05
(107.0 m) and from surface for SDP-009, SDP-004 and SDP-002. The tricone bit
used for open-hole drilling was reduced through stages from 12¼-inch to 5⅞-inch
diameter. Upon completion, the hole was abandoned and cemented through the
8½-inch diameter drill hole. When the top of salt is reached, the mud is reformulated to a super-saturated brine to eliminate or diminish dissolution of the
highly soluble evaporite minerals. Drilling has been contracted to Geonor
Servicios Tecnicos S.L. of Galicia, Spain using a Christensen CS3000.
Page 28 of 50
Criteria
Drill sample
recovery
Logging
JORC Code explanation
 Method of recording and assessing core and chip
sample recoveries and results assessed.
 Measures taken to maximise sample recovery
and ensure representative nature of the samples.
 Whether a relationship exists between sample
recovery and grade and whether sample bias
may have occurred due to preferential loss/gain
of fine/coarse material.



Sub-sampling
techniques
and sample
preparation

Commentary
 Detailed information on core recovery for the historical program is not available
and limited assay data is available and not used in this resource evaluation.
 Core recovery on the 2013 drilling campaign was poor in three holes (SDP-002,
SDP-005 and SDP-006) through the mineralized zones with intervals of lost,
dissolved and mechanically disturbed intervals. The holes drilled into historic
workings and core recovery was compromised above the open workings where
circulation was initially lost and not recovered through the mined-out void or
below.
 PQ core is the recommended diameter for core but in some instances, the hole is
completed with HQ if there are drilling problems such as lost circulation and there
is a need to case the hole and drop down in diameter size. SDP-005 and SDP013 had HQ core. The core sampling procedure is well-documented in the 2013–
2014 drilling program.
 Holes were drilled with NaCl and MgCl2 saturated brine or near saturated brine to
limit surficial dissolution (i.e., etching) of the core. Undersaturation could result in
preferential dissolution of NaCl, KCl, and/or MgCl2. Core was visually inspected
for etching and rejected for assay where excessive etching was observed.
Whether core and chip samples have been
geologically and geotechnically logged to a level
of detail to support appropriate Mineral Resource
estimation, mining studies and metallurgical
studies.
Whether logging is qualitative or quantitative in
nature. Core (or costean, channel, etc.)
photography.
The total length and percentage of the relevant
intersections logged.

If core, whether cut or sawn and whether quarter,
half or all core taken.


Lithology logs were completed for the historical drilling programs and results were
described in the reporting for reserves at that time.
In the modern program, cuttings were collected and core was logged,
photographed, sampled, and assayed in approximately 0.3-m lengths. The core
point, if not at the surface, was generally within the banded marls above the salt
and was completed at the base of the salt at the anhydrite marker bed to ensure
complete coring through the salts and the mineralised zones.
On the 2013 drilling campaign core holes, samples were halved and quartered,
with a quarter sent for assay. This sampling methodology is the modern industry
standard. The sample intervals of approximately 0.3-m in length were taken over
the length of the mineralised interval. Cores were usually PQ (85 millimeter
Page 29 of 50
Criteria
JORC Code explanation
 If non-core, whether riffled, tube sampled, rotary
split, etc. and whether sampled wet or dry.




Quality of
assay data
and laboratory
tests



For all sample types, the nature, quality and
appropriateness of the sample preparation
technique.
Quality control procedures adopted for all subsampling stages to maximise representivity of
samples.
Measures taken to ensure that the sampling is
representative of the in situ material collected,
including for instance results for field
duplicate/second-half sampling.
Whether sample sizes are appropriate to the
grain size of the material being sampled.
The nature, quality and appropriateness of the
assaying and laboratory procedures used and
whether the technique is considered partial or
total.
For geophysical tools, spectrometers, handheld
XRF instruments, etc., the parameters used in
determining the analysis including instrument
make and model, reading times, calibrations
factors applied and their derivation, etc.
Nature of quality control procedures adopted
(e.g. standards, blanks, duplicates, external
laboratory checks) and whether acceptable levels
of accuracy (i.e. lack of bias) and precision have
been established.
Commentary
[mm]), but in the case of difficult drilling conditions, coring was reduced to HQ
(63.5 mm).
 This smaller core diameter is not ideal for assay as some duplicates have shown
variability. To try to mitigate this, duplicates are selected from HQ as true
duplicates rather than on a quarter-core sample. Quarter sample duplicates are
selected for PQ core. In all cases, hole size was reduced to continue drilling in
difficult hole conditions (lost circulation or kick-off) and is not part of normal
procedure. The program forward has made procedural changes to reduce the risk
of the need to downsize hole diameter.






No detailed original assays are available for the historic drilling program.
In the 2013 sampling program, assay was by ICP-OES and XRF.
Highfield and ALS, the primary contract laboratory, maintained quality control
procedures of standards, duplicates and blanks. SRM, blanks and duplicates
were inserted, both by Highfield personnel during sample preparation and by ALS
as part of their own QA/QC program.
ALS inserted commercial standards BCR-113 and BCR-114 both potash fertilizer
materials, a Muriate of Potash (MOP) and Sulfate of Potash (SOP), respectively,
as well as their own internal standard as a blank material SY-4, a diorite gneiss.
Duplicates were submitted to ALS and show good internal agreement.
Highfield made multiple Standard or Certified Reference Material-type (SRM or
CRM) samples representing low-, medium-, and high-grade (LG, MG, HG) potash
material, but the insertion rate is insufficient and outside round-robin testing is too
limited to make reasonable conclusions as to accuracy and precision. Insertion
rate is one blank, one SRM, and one lab duplicate per 20 samples or batch.
Page 30 of 50
Criteria
Verification of
sampling and
assaying
JORC Code explanation




The verification of significant intersections by
either independent or alternative company
personnel.
The use of twinned holes.
Documentation of primary data, data entry
procedures, data verification, data storage
(physical and electronic) protocols.
Discuss any adjustment to assay data.
Commentary
 Check samples were tested at SRC. In general, SRC reports K2O values lower
than ALS reports. Because ALS and SRC show good internal agreement, this
suggests a calibration issue.




Location of
data points



Data spacing
and
distribution


Accuracy and quality of surveys used to locate
drill holes (collar and down-hole surveys),
trenches, mine workings and other locations
used in Mineral Resource estimation.
Specification of the grid system used.
Quality and adequacy of topographic control.

Data spacing for reporting of Exploration Results.
Whether the data spacing and distribution is
sufficient to establish the degree of geological
and grade continuity appropriate for the Mineral
Resource and Ore Reserve estimation
procedure(s) and classifications applied.


ALS assayed samples both by ICP and XRF. In general, ICP analysis shows
adequate agreement with assays by XRF, which consistently report slightly higher
values of K2O. Other holes showed similar bias, thereby substantiating testing
precision. The ICP method is the base method used for resource estimation.
Highfield receives all assay data in .xls or .csv format from the laboratories and
one person is responsible for transferring those data into a master database and
maintaining the QA/QC monitoring. AAI independently graphed the QA/QC data
and reports outliers to Geoalcali for re-assay. Detailed graphs are constructed
showing check samples, duplicated comparisons of duplicates for pulps, coarse
rejects, as well as SRM and blank insertions.
A database was built from the historical drill hole information by Highfield and
checked by AAI against the historical reporting of assays and intervals listed on
the lithologic logs.
The master database was checked against the ALS-issued Certificates of
Analysis (COA).
Historical collar locations were generated from detailed comparison so the historic
maps. Historical data and maps are referenced to the European Datum 50
(ED50) and have been updated to the European Terrestrial Reference System
1989 (ETRS89) datum for compatibility with modern survey information.
All new locations from the 2013 drilling program are surveyed before and after
drilling by a licensed surveyor.
Exploration drill hole spacing is illustrated on the scaled maps in Figures A-2 and
A-4 and samples have been composited (Table A-3) over the thickness of
identified potash beds for the reporting of exploration results. Potash bed names
are provisional pending regional correlations.
Page 31 of 50
Criteria
Orientation of
data in
relation to
geological
structure
JORC Code explanation
 Whether sample compositing has been applied.


Commentary
 Data spacing and distribution is poor. Of six holes drilled in the modern 2013
campaign, only two holes had sufficient recovery in the mineralised zone to
contribute to this resource. One hole was barren, representing the basin edge.
Whether the orientation of sampling achieves
unbiased sampling of possible structures and the
extent to which this is known, considering the
deposit type.
If the relationship between the drilling orientation
and the orientation of key mineralised structures
is considered to have introduced a sampling bias,
this should be assessed and reported if material.



Deviation data were available in the 2013 drilling program. In building the new
database, apparent bed dips from the lithology logs were incorporated from
historical and new holes to attempt to correct to true bed thickness.
The regional structure is discussed in more detail in “Geology”, but the basin
structural dip is interpreted from regional maps, the Compagnie Generale de
Geophysique (CGG) “top of salt” map, and new drill hole control. The deposit is
bedded.
A historical structure map with fault offsets (Figure A-2) is used for the
interpretation of bed orientation and is modified and corrected to reflect updated
drill holes. That discussion is found in “Seismic Survey and Structure.”
Sample
security

The measures taken to ensure sample security.

In the 2013 drilling program, Highfield personnel maintained effective chain of
custody procedures for the samples. Core was picked up at the drill site and
brought to the secured warehouse for detailed logging and sampling. Following
sampling (see sections on sampling herein), sample bags and boxes were
secured with zip ties for shipping to the laboratory.
Audits or
reviews

The results of any audits or reviews of sampling
techniques and data.

ALS assayed samples both by ICP and XRF and these values were compared as
discussed in “Verification of sampling and assaying data.”
Page 32 of 50
Section 2 Reporting of Exploration Results
(Criteria listed in the preceding section also apply to this section.)
Criteria
JORC Code explanation
Mineral
 Type, reference name/number, location and
tenement and
ownership including agreements or material
land tenure
issues with third parties such as joint ventures,
status
partnerships, overriding royalties, native title
interests, historical sites, wilderness or national
park and environmental settings.
 The security of the tenure held at the time of
reporting along with any known impediments to
obtaining a license to operate in the area.
Commentary
 Property descriptions and land status were obtained from the list of lands as set
forth in the documents provided by Highfield.
 The Sierra de Perdón property is comprised of two Investigative Permits (PIs)
and one extension permits converted to a PI (Table 3 and Figure 1). These PIs
have a surface area of 14,898 hectares and cover 100% of the deposit of Sierra
del Perdón and any potential areas of exploration.
 The competent persons (CPs) have reviewed the mineral tenure from documents
provided by Highfield including permitting requirements, but have not
independently verified the permitting status, legal status, ownership of the project
area, underlying property agreements or permits. Therefore, AAI has fully relied
upon Highfield, and disclaims responsibility for that information.
 Exploration and exploitation of mineral deposits and other geological resources in
Spain are governed by the Mining Law 22/1973, which is further governed by the
Royal Decree 2857/1978. All sub-surface geological structures, rocks, and
minerals are considered the property of the public domain and are categorised
into four sections under Spanish law (A, B, C, and D), and must have mining
authority authorisation and supervision for commercial exploitation. Section C
covers the minerals of interest for Highfield, and a mining concession would need
to be awarded prior to exploitation which requires the accompaniment of
environmental permits and municipal licenses (electrical, water etc.). Generally,
exploration and investigation permits are applied for prior to applying for a mining
concession (not a legal obligation), and are aimed at determining the mineral
resource potential of the area through exploration practices (drilling, seismic,
sampling. etc.). These are granted through the region’s government/mining
authority where the exploration or investigative work will take place.
 Exploration permits (PE) are valid for one year and can be renewed for one
additional year. A PE allows only non-intrusive investigation, which is defined by
the various Spanish regions and can vary.
 A PI is good for up to three years and renewable in three-year terms or longer
depending on the scope of the intended work. Investigation permits carry with
Page 33 of 50
Criteria
Exploration
done by other
parties
JORC Code explanation

Acknowledgment and appraisal of exploration by
other parties.
Commentary
them municipal approval as they are publically released for community
discussion. To carry out work under the investigation permit, the permittee must
contract with the individual landowners to allow for access and occupation of the
land during the exploration.
 In order for both types of permits to remain valid, the applicable taxes must be
paid and the permittee must comply with the applicable regulations and
exploration plan approved by the mining authority. Investigation permits require
assessment reporting which requires the permittee to submit working plans,
budgets, and initiate work within certain time allotments. Exploration and
investigation permits can be transferred in whole or in part to other third parties
with enough technical and financial backing, but must be authorised by the
proper mining authorities in Spain.


Potash was first discovered in the Ebro Basin in the Catalonia area in 1912 at
Suria after the potash discoveries in Germany (Moore 2012). Salt was first
discovered through drilling, later followed by four economic potash mining zones
with a combined total thickness of 2.0 to 8.0 m (Stirrett and Mayes 2013). The
potash horizons in the area were identified to cover approximately 160 square
kilometers (km2) at depths of approximately 500 m subsurface, unless they were
brought closer to surface by anticlinal or tectonic structures (Stirrett and Mayes
2013). Several deposits were located in the Catalonia area, including Cardona,
Suria, Fodina, Balsareny, Sallent, and Manresa. Several of these areas were
developed into mines and are all flanked by anticlinal structures. The potash
deposits in the Navarre region were not located until later, in 1927, through
comparative studies to the deposits found at Catalonia (Stirrett and Mayes 2013).
The exploration efforts later led to the development of a mine near Pamplona and
Beriain.
The Sierra del Perdón Potash Project represents the westernmost potash deposit
of Navarre basin. The deposit was discovered in 1929 based on the assay of
brines sourced from Guendulain springs area, 5.5 km southwest of Pamplona
City. On June 23, 1929, the first drill hole completed intersected 9 m at 13.92%
K2O to 78-m deep. Additional regional exploration was begun in Navarre, first by
the Spanish government with five holes across the area; one each in Pamplona,
Page 34 of 50
Criteria
Geology
JORC Code explanation

Deposit type, geological setting and style of
mineralisation.
Commentary
Subiza, Guendulain, Javier and Tafalla. This was followed by more detailed work
in the Sierra del Perdón area beginning with e.n. adaro (drill holes 1 through 21),
probably conducted in the 1950s, and then by Potassa de Navarra, SA (drill holes
22 to 25) [Table A-1].
 Production at Pamplona began in 1963 with a capacity of 250,000 tonnes per
year (tpy) of K2O. A thick carnallite member overlies the sylvinite, so in 1970 a
refinery with the capacity for 300,000 tpy was built to accommodate carnallite
from the Esparza (Stirrett and Mayes 2013). Carnallite mining was ceased in
1977. Inclined ramps for the mine were located near Esparza, reaching the
centre of the mine, with further shafts located at Beriain, Guendulain and
Undiano. In 1982, 2.2 Mt of sylvinite were extracted with an average K2O grade
of 11.7% (Stirrett and Mayes 2013). The operations in Navarre were closed in
the late 1990s.
 In 1983, a 2D seismic survey was run for e.n. adaro by CGG over the Sierra del
Perdón property (e.n. adaro 1985a and b). This consisted of 22 lines totalling
111 km (Figure A-4). Earlier work included a seismic campaign in 1963 and a
minie-sosie (shallow seismic using a vibration-rammer source) campaign in 1979
and a vibrosesimic program by Otono in 1981. The resulting structure maps for
both the top (“techo”) of salt (base of Marl), with major faults, were developed by
CGG in combination with the regional seismic records, field maps, satellite
imagery and drill hole data. Additional surfaces identified at that time include the
unconformity at the Miocene conglomerates, the base of the Galar Sandstone
and the resulting isopachs. In addition, early work identified an area of possible
erosion in the upper salt along the interpreted anticline. The potash-bearing
zones lack any velocity/density contrasts within the salt; it is not possible to
detect potash or map the structure of the zone directly

The Upper Eocene potash deposits occur in the sub-basins of Navarre and
Aragón provinces within the larger Ebro Basin (Figure A-1). The Navarrese subbasins include Sierra del Perdón, Muga-Vipasca (Javier) and adjoining Pintano
deposits. This potash deposit contains a 100-m-thick Upper Eocene succession
of alternating claystone and evaporites (anhydrite, halite, and sylvite). The
evaporites accumulated in the elongated basin at the southern foreland of the
Page 35 of 50
Criteria
JORC Code explanation
Commentary
Pyrenean range (Busson and Schreiber 1997). The evaporites overlie marine
deposits and conclude in a transitional marine to non-marine environment with
terrigenous influence. Open marine conditions existed in the Eocene-Oligocene
epochs progressing to a more restricted environment dominated by evaporation
and the deposition of marl, gypsum, halite, and potassium minerals. Later,
tectonism and resulting salt deformations formed broad anticlines, synclines and
overturned beds, which created outcrops of the evaporite sequence. The Sierra
del Perdón sub-basin is notably different from the eastern Javier Pintano basins,
with predominantly carnallite mineralisation overlying sylvinite, suggesting a more
immature diagenesis because carnallite is considered primary and sylvinite
secondary. The formation of the evaporites is further influenced by the basin
restriction, and paleo highs and lows which are perhaps defined by block faulting
as well as the main structural basin bounds.
 The different basins are separated by orogenic events developing in the north
and south as turbidite basin carbonate platforms. Towards the end of the Eocene
epoch, the sedimentation axis migrated south to the Jaca-Pamplona Basin, on
which the Oligocene materials were deposited. The pre-evaporitic basin
sedimentation occurs in a context of continuous tectonic compression during the
Eocene and Oligocene epochs, as synsedimentary tectonics of the end of the
orogeny, with pronounced sediment influx. The influence of the turbidites
towards the end of the Eocene epoch in the Bartoniense series from the
northwest into the basin as the Belsue Formation is indicative of continued
subsidence.
 At the east end of the basin, the evaporite levels crop out, and the evaporites are
largely dissolved, exhibiting the remnants of the upper banded clays which
unconformably overlie the Pamplona Marls. In some cases they are altered to
gypsum and fibrous halites. The evaporites are part of a synclinal structure with
the main axis plunging to the west. The syncline is compartmented in 3 subblocks which are separated by faults. The northern edge of the syncline is
usually affected by the erosion with an inclination towards the south. The deposit
has a gentle slope of 12 degrees (º), with a depth from between 60 and 70 m
(elevation +700 m) to 1,100 m (elevation –400 m) in a north-south extension of 5
Page 36 of 50
Criteria
JORC Code explanation
Commentary
to 6 km. Oligio-Miocene conglomerates unconformably overlie the southern
flank.
 The Sierra del Perdón basin is dominated by the SW-NE fault system named,
from the south to the north, Falla (fault) de Subiza and Falla de Esparza, with
several unnamed but numbered faults in between the major ones (Figure A-2).
The faults are pre-evaporitic and therefore have influenced deposition within the
basin and driven the historic mine advance. The faulted blocks are uplifted in the
north (Falla Esparza) and the SE (Falla Subiza) and downdropped in the center
which represents the depocenter.
 Displacement along Esparza is approximately 300 m and between 600 and
800 m in Subiza (Menendez 1971; del Valle 1978). The area has been separated
into mining blocks, Guendulain, Beriain, Subiza and Uniano. (An additional area
lies between the major fault and represents the basin’s synclinal axis that has not
been mined because it plunges and deepens. No drill holes have penetrated the
salts so the depth of syncline is interpreted through historic seismic records. This
area may also represent an offset similar to what is seen in the east, the Flexura
de Ruesta that divides the Javier and Pintano sub-basin. [Empresa Nacional
Adaro Investigaciones Mineras {e.n. adaro} 1988–1991]). An anticline interpreted
from the historic seismic records crosses the basin NW-SE and may define an
area where the upper salt has been eroded.
 Potash is used to describe any number of potassium salts. By and large, the
predominant economic potash is sylvite: potassium chloride (KCl) usually
occurring mixed with halite to form the rock sylvinite, which may have a
potassium oxide (K2O) content of up to 63%. Carnallite, a potassium magnesium
chloride (KCl•MgCl2•6H2O) is also abundant, but has K2O content only as high as
17%. “Carnallite” is used to refer to the mineral and the rock interchangeably,
although “carnallitite” is the more correct terminology for the carnallite and halite
mixture. Besides being a source of lower grade potassium, carnallite involves a
more complex production process, so it is less economically attractive than is
sylvite.
 The depositional environment is that of a restricted marine basin, influenced by
eustasy, sea floor subsidence, and/or uplift and sediment input. It is suggested
Page 37 of 50
Criteria
JORC Code explanation
Commentary
that the Ebro Basin is the result of a combination of reflux and drawdown. Reflux
describes a basin isolated from open marine conditions, and thereby
characterised by restricted inflow, increased density, and increased salinity.
Drawdown is the result of simple evaporation in an isolated basin, and brine
concentration and precipitation, consistent with the classic “bulls-eye” model
(Garrett 1996). In this case, the Ebro Basin is further influenced by erosion at its
edges due to contemporaneous and post-depositional uplift which results in
localised shallowing and sediment influx (Ortiz and Cabo 1981) ) transitioning
from marine to continental-type deposits. In the classic “bulls-eye” model, a basin
that is cut off from open marine conditions will experience drawdown by
evaporation in an arid to semi-arid environment. In the absence of sediment
influx, precipitation will proceed from limestone to dolomite to gypsum, and
anhydrite to halite. Depending on the composition and influences of the brine at
that time, the remaining potassium, magnesium, sulfates, and chlorides will
progress from potassium and magnesium sulfates to sylvite and then carnallite.
It is proposed herein that the formation of carnallite and sylvite be described as
primary and secondary, respectively.
 In the Sierra del Perdón Potash Project area, the mineralogy is dominated by
carnallite over sylvinite, which is medium red-orange and white, largely coarse
crystalline in bands and in heavily brecciated beds containing high levels of
insoluble material, largely fine-grained clays, anhydrite, and marl. The alternation
from carnallite to sylvinite is not always complete and may vary from one bed to
the next but it always occurs in the lower part of the sequence. The upper potash
beds transition to finely banded light brown marls and clays which may exhibit
salt veining and distortion as well as influx of dark grey clays and mudstones,
representing the transition of the basin from marine to continental via basin-filling.
The salts just below the potash tend to be dark grey to black. In some lower
beds, halite becomes brownish, sandy to coarsely granular sand and sandstone
as sediment influx from the Basin edges. The literature denotes this salt as “sal
vieja” or “old salt” (Ortiz and Cabo 1981). The evaporite beds and bands, in
general, are separated by fine to very coarse crystallised and recrystallised salts,
generally grey, sometimes light-to-medium honey brown or white, with anhydrite
blebs, nodules, and clasts.
Page 38 of 50
Criteria
Drill hole
information
JORC Code explanation
Commentary
 A summary of all information material to the
 Table A-1 shows the historical drill holes and Table A-3 shows the drill holes from
understanding of the exploration results including
the 2013 drilling program as well as wells proposed for the continued evaluation
a tabulation of the following information for all
for the Project. This press release includes some picks that are preliminary.
Material drill holes:
 SDP-013 lies in the eastern portion of the basin in an area not previously mined.
o easting and northing of the drill hole collar
It shows a similar lithologic sequence to the potash in Muga-Vipasca with the
exception that the mineralogy is predominantly carnallite rather than sylvinite,
o elevation or RL (Reduced Level—
over relatively thin, dark halite, and banded anhydrite at the base. The basal salt
elevation above sea level in metres) of the
over the banded anhydrite and lower marls is medium to dark grey and only
drill hole collar
4.8 m thick. SYL is found in a 0.9-m layer (depth 521.3 m), 1.8 m below CL. CU
o dip and azimuth of the hole
is of relatively low grade, with an average of 8.2% K2O and 1.3 m thick. The
o down hole length and interception depth
banded marls above the carnallite show considerable distortion which may be
o hole length.
attributable to localised faulting or mass sediment slumping and salt veining,
although they normally transition upwards and are capped by dark grey clays,
 If the exclusion of this information is justified on
likely representing sediment from the basin edge.
the basis that the information is not Material and
this exclusion does not detract from the
 SDP-009 defines the eastern extent of the basin and shows a foreshortened
understanding of the report, the Competent
sequence in which the salt is thin (<2 m) and dissolved, exhibiting a spongey
Person should clearly explain why this is the case.
texture of the original insolubles over a thin banded anhydrite with a bed of dark
mudstone. The remnant salt is capped by alternating beds of banded and
deformed, black and oxidized, light reddish brown and tan mudstones,
suggesting the transition at the basin’s edge to a continental-type environment.
The hole is shallow and was drilled to a depth of about 86.5 m to the top of the
anhydrite. To help define the edge of evaporites, the logs for historic drill holes 8
and 10 were reviewed and both show complete sequences of carnallite and
sylvinite mineralization with 8 reporting steep dips of 80°. As in SDP-013,
alteration of carnallite to sylvinite is incomplete as sylvinite is found in what is
interpreted to be CU, and again at the base of the potash bed.
 SDP-006 is incomplete due to lost circulation in the mineralised zone below CU.
The hole penetrated CU over 3.6 m carnallite at average 6.3% K2O. Below CU,
core recovery was poor, hence, this hole was not be used in the resource
estimation. This hole is excluded from the resource due to poor core recovery
including below 205.7 m and complete loss after 213.5 m. This hole was drilled
in the old workings in the Guendulain area in the northern portion of the deposit
Page 39 of 50
Criteria
JORC Code explanation
Commentary
and even though it was planned as an unmined block, it likely drilled into an area
where the lower sylvinite was mined out. The closest historical hole is 2 which
only reports “normal” conditions in the deposit which might be interpreted as a
complete section of carnallite over sylvinite. In this area, both carnallite and
sylvinite were mined and it is interpreted in this and other holes that the targeted
beds were just below CU with the lowermost beds being sylvinite in most cases.
 SDP-005 was drilled within the old workings of the Subiza mine south of the main
Beriain Fault and it is believed that the entire potash section was intersected.
The hole lost circulation and was cored with HQ, with the core showing
considerable dissolution and mechanical breakage and disking in the mineralised
zone, making the assays suspect through most of the interval. Mineralisation is
largely carnallite. Beds CL and SYL are separated by halite and low-grade
material. Sylvinite interpreted to be bed SYL is present from 431.3 to 434.0 m
where 2.7 m of core was lost, thought to be mined out and therefore, likely to
have been sylvinite of good grade. Core was recovered again from 434.0 to
435.8 m, reporting variable amounts of MgCl2. The banded marls above the salts
show folding, distortion and salt veining but with less basin edge influence of
clastics as basin fill. Logs for nearby historical hole 4 show carnallite from 235.2
to 244.9 m (11.7 m) and sylvinite directly below to a depth of 250.5 m (5.6 m).
 SDP-004 was drilled near the old workings at Beriain and had a completed
intersection of the mineralised zone. What is interpreted as CU is 6.6 m of
carnallite with overall grades of 5.6% K2O, containing higher grade beds within
that. It shows medium red orange banding directly overlying CL and SYL, the
latter with the usual mixed dark and light brecciation of clay and banding in the
lower part. The lower part of CL is partially sylvinite with the alteration from a
depth of 405.1 m, showing a marked difference in the appearance of the core.
SYL is just below, from 406.6 to 409.9 m (3.3 m), with an average grade of 16.1%
K2O. In this hole, the upper marls show dark clays and mudstones as
intermediate basin edge influences. The hole finished in the basal, banded
anhydrite and marls. The lower salt (Sal Muro) is light to medium grey and tan,
banded, and medium crystalline with a minor bed of clay, of 15.1-m thickness.
Page 40 of 50
Criteria
Data
aggregation
methods
JORC Code explanation



Relationship
between
mineralisation
widths and
intercept
lengths

Diagrams



Commentary
 SDP-002 drilled into the old working in the Guendulain area and was incomplete,
showing poor core recovery and drilling only to what is thought to be CU. It has
no assays and is excluded from the resource. This was the first hole drilled;
SDP-006 is an incomplete re-drill of SDP-002.
In reporting Exploration Results, weighting
averaging techniques, maximum and/or minimum
grade truncations (e.g. cutting of high grades) and
cut off grades are usually Material and should be
stated.
Where aggregate intercepts incorporate short
lengths of high grade results and longer lengths of
low grade results, the procedure used for such
aggregation should be stated and some typical
examples of such aggregations should be shown
in detail.
The assumptions used for any reporting of metal
equivalent values should be clearly stated.

These relationships are particularly important in
the reporting of Exploration Results.
If the geometry of the mineralisation with respect
to the drill hole angle is known, its nature should
be reported.
If it is not known and only the down hole lengths
are reported, there should be a clear statement to
this effect (e.g. ‘down hole length, true width not
known’).

Appropriate maps and sections (with scales) and
tabulations of intercepts should be included for
any significant discovery being reported. These
should include, but not be limited to a plan view of





Composites by weighted average were made from the geochemical data to
optimise grade and thickness of the mineralised seams in both the new and
historical data. Composites were summarised by bed and hole in Table A-2.
This press release includes some picks that are preliminary and further drilling
will add confidence.
All potassic values are in K2O percent. Most cations are reported as oxides and
water-soluble material on a percent basis. ICP and XRF testing reports are in
elemental values, but the industry standard is to report in oxides.
Deviation data were available in the 2013 drilling program. In building the new
database, apparent bed dips from the lithology logs were incorporated from
historical and new holes to attempt to correct to true vertical bed thickness
Data on bed orientation were incorporated into the database to calculate
apparent true thickness.
Figure 1 illustrate Highfield’s Sierra del Perdón property showing the current
JORC Mineral Resource footprints.
Figure A-2 shows the Sierra del Perdón interpreted regional structure and
location of drill holes.
Page 41 of 50
Criteria
JORC Code explanation
Commentary
drill hole collar locations and appropriate sectional
views.
Balanced
reporting

Where comprehensive reporting of all Exploration
Results is not practicable, representative reporting
of both low and high grades and/or widths should
be practiced to avoid misleading reporting of
Exploration Results.

Detailed exploration drilling results from individual holes appear in Highfield’s 27
November 2013 ASX release and included information on SDP-004, SDP-005,
SDP-006 and SDP-013. These releases were before the detailed QA/QC review
was conducted by AAI and before the adoption of 2012 JORC standards.
Other
substantive
exploration
data

Other exploration data, if meaningful and material,
should be reported including (but not limited to):
geological observations; geophysical survey
results; geochemical survey results; bulk
samples—size and method of treatment;
metallurgical test results; bulk density,
groundwater, geotechnical and rock
characteristics; potential deleterious or
contaminating substances.

In 1983, a 2D seismic survey was run for e.n. adaro by CGG over the Sierra del
Perdón property (e.n. adaro 1985a and b). This consisted of 22 lines totalling
111 km (Figure A-4). Earlier work included a seismic campaign in 1963 and a
minie-sosie (shallow seismic using a vibration-rammer source) campaign in 1979
and a vibrosesimic program by Otono in 1981. The resulting structure maps for
both the top (“techo”) of salt (base of Marl) with major faults were developed by
CGG in combination with the regional seismic records, field maps, satellite
imagery and drill hole data.
RPS (formerly RPS Boyd Petrosearch) of Calgary, Alberta, Canada, completed a
re-interpretation in 2013 of the 2D historical seismic lines and profiles on behalf of
Highfield. The re-interpretation program was designed to review the overall
accuracy of the historical data in terms of good correlation to drill hole data and
geological intersections, as well as to identify any subsurface structures that may
adversely affect the salt-bearing strata. Seismic survey lines were reviewed and
were tied to wells using historical wireline data. No report was produced but
structural maps for the top and base of the salt were produced that contributed to
the interpretation of the basin in this report. The potash-bearing zones lack any
velocity/density contrasts within the salt, so it is not possible to detect potash or
map the structure of the zone directly.
The CPs used these structural data as generated by RPS but the structure map
is modified and corrected to reflect updated drill holes.


Further work

The nature and scale of planned further work (e.g.
tests for lateral extensions or depth extensions or
large-scale step-out drilling).

Additional drilling will be needed in the greenfield areas, including the deeper part
of the syncline. Additional drilling has been proposed and planned (Figure 1 and
Table A-3).
Page 42 of 50
Criteria
JORC Code explanation
Commentary
 Diagrams clearly highlighting the areas of
possible extensions, including the main geological
interpretations and future drilling areas, provided
this information is not commercially sensitive.
Page 43 of 50
Section 3 Estimation and Reporting of Mineral Resources
(Criteria listed in the preceding section also apply to this section.)
Criteria
JORC Code explanation
Database
 Measures taken to ensure that data has not been
integrity
corrupted by, for example, transcription or keying
errors, between its initial collection and its use for
Mineral Resource estimation purposes.
 Data validation procedures used.
Site visits


Comment on any site visits undertaken by the
Competent Person and the outcome of those visits.
If no site visits have been undertaken indicate why
this is the case.
Commentary
 Published lithologic intercepts from historical holes and associated footages and
hole coordinates were manually entered into spreadsheets for modelling. Entries
were systematically checked against the original publications to ensure accuracy.
 Composite values and hole depths/coordinates in the MineSight geologic block
model were visually compared (on screen) with values in the database values for
accuracy.
 In modern holes, duplicate and check assay samples were prepared for select
intervals in each potash cycle. Duplicate cores were quartered and sent to ALS
for analysis. ALS incorporated blank, repeat, and potash standard samples in the
testing protocol. Check samples were sent to a second qualified laboratory to
verify results. ALS maintains its own internal procedure and chain of custody to
high industry standards. There was good agreement in the duplicates.
 ALS is a laboratory of international repute for the analysis of potash. ALS
maintains its own QC program. QC measures, and data verification procedures
applied, include the preparation and analysis of standards, duplicates, and blanks.
 Check samples were sent to SRC in Saskatoon, Canada, an accredited lab, and
run with the same procedure as SRC and also showed good agreement.



Geological
interpretation

Confidence in (or conversely, the uncertainty of)
the geological interpretation of the mineral deposit.


CPs Vanessa Santos and Leo Gilbride visited the project multiple times between
2011 and 2014 and oversaw the geologic operations before, during, and after
drilling.
The CPs visited the ALS Laboratory Group assay sample preparation facility in
Seville, Spain on 30 August 2013.
The visits were conducted for the purposes of exploration planning, data
collection, site observation, core inspection, drill rig inspection, assay lab
inspection, and QA/QC confirmation.
The SdP Exploration Target comprises covers an area of approximately 44 km2.
Potash beds CU, CL, and SYL are targeted at depths ranging from 100 to
1,400 m.
Page 44 of 50
Criteria
JORC Code explanation
 Nature of the data used and of any assumptions
made.
 The effect, if any, of alternative interpretations on
Mineral Resource estimation.
 The use of geology in guiding and controlling
Mineral Resource estimation.
 The factors affecting continuity both of grade and
geology.
Commentary
 The Exploration Target is bound to the north and east by the evaporite outcrop at
surface.
 The Exploration Target is bound to the south by the basin margin as defined by
structural interpretation, seismic surveying, and limited drilling.
 The Exploration Target remains open at depth to the west.
 The total Exploration Target is estimated to contain between 100 and 250 Mt of
potash in the carnallite beds (CU and CL) ranging in average grade from 9 to 13%
K2O, and between 50 and 100 Mt of potash in the sylvinite bed (SYL) ranging in
average grade from 10 to 14% K2O. Approximately half (50%) of the carnallite
Exploration Target in the CU and CL beds is estimated to overlie old workings of
the Posusa de Navarra and Posusa de Subiza mines in the SYL bed.
 The Mineral Resource comprises a subset of the Exploration Target.
 No potash resource is claimed 200–300 m downdip of the outcrop to account for
abrupt upturning of the strata near outcrop and evaporite dissolution at surface.
 Grade parameters were composited as length-weighted averages of the individual
assays over a continuous bed thickness. In most instances, top and bottom bed
contacts are gradational, introducing some trade-off between grade and
thickness. Contacts were selected to maximize thickness while maintaining a
composite grade as close as possible to 12.0% K2O with a true thickness equal to
greater than 1.5 m. Depending upon the vertical grade distribution, bed
thicknesses less than 1.5 m and composite grades less than 8.0% K2O were
required for geologic modelling in some instances.
 Structural dip was calculated from the base-of-salt surface constructed from
seismic, outcrop, historical mining surveys, and drill hole data. Dips in individual
beds were adjusted locally by stacking the variable-thickness interburden and
potash beds above the base-of-salt surface.
 Drill hole and seismic data indicate reasonable bed continuity across the property,
nonetheless variation in potash thickness, grade, and mineralogy are likely
between control points. Faults, folds, and other structural disturbances can
sterilise resource locally. Mineralogy can be affected by varying depositional
environments or structure, including depositional highs, syngenetic faulting,
Page 45 of 50
Criteria
JORC Code explanation
Commentary
basement carbonate mounds, algal reefs, post-depositional gypsum dewatering,
groundwater dissolution along fault conduits, and by other complex depositional
and structural features.
 Resource exclusions were applied around major faults, consistent with historic
mining.
 A minimum 50-m buffer was applied around historical workings. The mining
footprints plus buffer were excluded from the bed-specific resource.
 The radii-of-influence (ROI) used for the Mineral Resource classification reflect
the interpreted degree of predictability (or conversely, variability) within the
deposit. Resource classifications for the deposit are stated as follows:
o Indicated Resource—Sylvinite meeting cutoff criteria located between 250
m and 1,000 m radius of a modern exploration core hole with assays,
except where otherwise limited by geologic or mining boundaries.
o Inferred Resource—Sylvinite meeting cutoff criteria located between
1,000 m and 2,000 m radius of a modern exploration core hole with
assays, except where otherwise limited by geologic or mining boundaries.
 No part of the resource is classified as Measured due to the limited number of
reliable modern drill holes for characterization, their wide spacing, and the
uncertainty surrounding the impacts of historical mining on future recovery
methods (a Modifying Factor).
 The resource is reported as in-place tonnes of potash contained in the respective
potash beds. The potash can occur as either sylvinite or “carnallitite.” Sylvinite is
a mechanical mixture of halite and sylvite (KCl) with minor inclusions of insolubles
(typically clays). Carnallitite is a mechanical mixture of halite and carnallite
(KCl·MgCl2·6H2O), with minor inclusions of insolubles.
 Beds CU and CL are dominantly carnallitic.
 Bed SYL is dominantly sylvinitic with local occurrences of carnallite.
 Classification areas for the Mineral Resource are shown in Figures A-15 through
A-17.
Page 46 of 50
Criteria
Dimensions
Estimation
and modelling
techniques
JORC Code explanation
 The extent and variability of the Mineral Resource
expressed as length (along strike or otherwise),
plan width, and depth below surface to the upper
and lower limits of the Mineral Resource.






The nature and appropriateness of the estimation
technique(s) applied and key assumptions,
including treatment of extreme grade values,
domaining, interpolation parameters and maximum
distance of extrapolation from data points. If a
computer assisted estimation method was chosen
include a description of computer software and
parameters used.
The availability of check estimates, previous
estimates and/or mine production records and
whether the Mineral Resource estimate takes
appropriate account of such data.
The assumptions made regarding recovery of byproducts.
Estimation of deleterious elements or other nongrade variables of economic significance (eg
sulphur for acid mine drainage characterisation).
In the case of block model interpolation, the block
size in relation to the average sample spacing and
the search employed.
Any assumptions behind modelling of selective
mining units.
Commentary
 The Mineral Resource occurs in potash beds CU, CL, and SYL over the footprints
shown in Figures A-15 through A-17.
 The Mineral Resource ranges in depth between 100 m and 1,050 m deep.
 Bed true thickness variability is described by the block model in Figures A-9
through A-11.
 Bed composite K2O grade variability is described by Figures A-12 through A-14.
 Secondary grade constituents (MgCl2 and insolubles) were modelled with the
block model and show a degree of variability similar to K2O grade.








The Mineral Resource was quantitatively estimated using a computer 3D griddedseam geologic (block) model constructed with Mintec Inc. MineSight 3D© v9.0
software.
Data utilized in the model include historic and modern drill hole logs and assays,
historic and modern interpretations of 2D seismic surveys, surface topography in
the form of a digital elevation model (DEM), permit boundary lines, historic resource
analysis, historic geological surface mapping, and historical mining records from
the Potasas de Navarra and Potasas de Subiza mines.
Grade parameters used in the block model were composited as length-weighted
averages of the individual assays over a continuous bed thickness. Composite
values are summarized in Table A-2.
Composites were only developed for beds with core recovery exceeding 85%.
No vetted drill hole data were excluded from the model. No assay or composite
outliers were identified, and none were excluded, cut, or capped in the model.
Bed thicknesses were corrected to true thicknesses for modelling according to
local dip and downhole deviation survey data.
Block true thicknesses and grade parameters (K2O, MgCl2, insoluble content)
were interpolated/extrapolated utilizing an inverse distance squared (ID2) model.
Block estimation was limited to an isotropic search radius of 20,000 m and the 15
closest data points (drill holes).
Page 47 of 50
Criteria
Moisture
JORC Code explanation
 Any assumptions about correlation between
variables.
 Description of how the geological interpretation
was used to control the resource estimates.
 Discussion of basis for using or not using grade
cutting or capping.
 The process of validation, the checking process
used, the comparison of model data to drill hole
data, and use of reconciliation data if available.

Whether the tonnages are estimated on a dry basis
or with natural moisture, and the method of
determination of the moisture content.
Commentary
 Kriging was not attempted due to the limited number of composites available.
Geostatistical modelling may be justified in the future with additional drilling.
 The potash beds of interest were gridded into single layers of 50-m square blocks
of variable vertical thickness representing the local thickness of the respective
potash bed.


Cut off
parameters

The basis of the adopted cutoff grade(s) or quality
parameters applied.


Mining factors
or
assumptions

Assumptions made regarding possible mining
methods, minimum mining dimensions and internal
(or, if applicable, external) mining dilution. It is
always necessary as part of the process of
determining reasonable prospects for eventual
economic extraction to consider potential mining
methods, but the assumptions made regarding
mining methods and parameters when estimating
Mineral Resources may not always be rigorous.
Where this is the case, this should be reported with





Tonnages are estimated using a variable in situ bulk density calculated for each
model block based on the relative modelled fractions of sylvite, carnallite, halite,
and insolubles. Depending upon the mineral fractions, densities can range from a
low as 1.6 tonnes per cubic meter (t/m3) for pure carnallite to 2.2 t/m3 for
insolubles only.
Resource densities typically fall between 1.90 and 2.15 t/m3.
The Mineral Resource estimate is based upon the following cut offs which support
reasonable prospects for economic extraction by conventional mining methods:
o Bed true thickness ≥ 1.5 m: Cut off is grade ≥ 8.0% K2O
o Bed true thickness < 1.5 m: Cut off is grade x thickness ≥ 12.0%K2O-m
The grade-thickness cutoff maintains the equivalent of an 8.0% K2O grade at 1.5
m for thin beds (<1.5 m).
The Mineral Resource estimate does not include any out-of-bed dilution.
Known sterilised areas defined by historical mining and known structure were
explicitly excluded from the resource estimate.
An additional 15% of the resource tonnes were factored out of the estimate as an
allowance for geologic and mining uncertainty within the resource footprint.
Underground room-and-pillar mining is the base case mining scenario for
justifying reasonable prospects for eventual economic extraction.
Room-and-pillar and longwall mining were historically practiced at Navarra and
Subiza for 26 years. There is a reasonable expectation that potash outside the
Page 48 of 50
Criteria
JORC Code explanation
an explanation of the basis of the mining
assumptions made.
Commentary
historic mining footprint can be accessed and extracted by selective room-andpillar mining.
 Potash beds overlying the historical workings also have reasonable potential for
economic extraction based on evidence that those beds remain mineable above
the old workings.
 Industry experience in potash and salt supports that mining is often possible in
undermined beds, even with high extraction and thin interburden, due to the
competent and highly plastic behaviour of potash and salt. The effects of thin
interburden, multi-seam mining are identified as a key risk factor with potential to
affect recovery and mining economy.
 Carnallite poses a risk because carnallite creeps (plastically deforms) at a
substantially faster rate than salt or sylvinite and mining must be adapted to
withstand relatively high entry closure rates. While there is extensive industry
experience mining in salt or sylvinite, industry experience with conventional
mining experience in carnallite is limited.
 The 5 Mt of carnallite mined over seven years at Navarra demonstrates that
carnallite mining is locally feasible and has reasonable potential in the future.
 Preliminary, contemporary high-level economic modelling was conducted for the
Muga-Vipasca property which justifies reasonable prospects for eventual
economic extraction of the Highfield Muga-Vipasca Mineral Resource. The MugaVipasca analysis is considered a reasonable analogue for supporting prospects
for eventual economic extraction at Sierra del Perdón. The Sierra del Perdón
carnallite is expected to result in incrementally higher mining and processing
costs compared to sylvinite mining at Muga-Vipasca.
 The Sierra del Perdón Mineral Resource is considered to have reasonable
prospects for eventual economic extraction. The impacts of overmining, mining in
carnallite, and other risks on extraction economy can be quantified for a specific
mine plan at the scoping, pre-feasibility, and/or feasibility study level.
 A positive return on investment is considered a minimum for justifying reasonable
prospects for eventual economic extraction and designation as a Mineral
Resource, but does not necessarily represent an economically attractive mining
Page 49 of 50
Criteria
Metallurgical
factors or
assumptions
JORC Code explanation

Commentary
opportunity depending upon the desired minimum return on investment. For this
reason, not all parts of the Mineral Resource are necessarily suitable for inclusion
in a production target or are upgradeable to a Mineral Reserve. Detailed
engineering and mine planning are required to determine which parts of a Mineral
Resource are suitable for mining for a specific project.
The basis for assumptions or predictions regarding
 Reasonable prospects for eventual economic extraction of the Mineral Resource
metallurgical amenability. It is always necessary as
assume processing with conventional crushing and flotation.
part of the process of determining reasonable
 Flotation was used successfully to process potash at Posusa de Navarra and
prospects for eventual economic extraction to
Posusa de Subiza from the 1970s through 1990s.
consider potential metallurgical methods, but the
 Preliminary flotation testing conducted by Geoalcali on sylvinite core from Mugaassumptions regarding metallurgical treatment
Vipasca, a related Ebro Basin potash deposit, supports KCl recoveries in excess
processes and parameters made when reporting
of 80%. Lower recovery is anticipated in carnallite.
Mineral Resources may not always be rigorous.
Where this is the case, this should be reported with
an explanation of the basis of the metallurgical
assumptions made.
Section 4 Estimation and Reporting of Ore Reserves
No mineral reserves are reported.
Page 50 of 50