Two years down the track, with more advanced engineering and significant procurement progress under its belt, the review has confirmed "compelling economics" for the project, however the total costs have risen from €576 to €607 million, an extra A$49 million.

 

Phase one is now estimated to cost €398 million, while capex is €209 million for phase two.

 

Highfield said it had been able to offset some of the higher costs thanks to design savings, and through its early procurement strategy, and it believes optimisation may further reduce initial capex by examining options, such as the use of contract mining.

 

Highfield is confident about the costs given 86% of the capex estimate is based on signed contracts, firm offers and updated prices.

 

The underground mining project is expected to generate earnings of around €400 million per annum over 30 years at full production of one million tonnes per annum, up from €310 million per annum.

 

The company says it is robust enough to cope with lower prices, and has the lowest capital intensity of any potash project in the world.

 

Net present value using 2019 price assumptions has been trimmed from €1.97 billion to €1.89 billion, but the internal rate of return was steady at 25%, however plugging in real world spot prices boosts the NPV and IRR to €2.8 billion and 42%.

 

The updated numbers will be used by the company and financial advisor Endeavour Financial as it chases €300 million to start construction of phase one within the next six months, up from the €185 million it was offered in 2017.

 

Discussions with a potential syndicate of lenders are advancing and are described as positive.

 

Highfield, which counts EMR Capital as its major shareholder, also says early talks with certain strategic investors are exploring complementary financing options.

 

CEO Ignacio Salazar said the updated study "reconfirms Muga's outstanding economics, and the

effect on revenue of current spot prices would multiply returns". 

 

It has non-binding agreements for more than its expected 500,000tpa phase one output. 

 

Last month, Highfield delivered slightly lower reserves of 104.3 Mt grading 10.2% due to changes in the mine plan, and an exploration target for adjacent areas of 80-130Mt at 8-10% for Vipasca and between 500,000t and 1Mt at 78-12% for Muga Sur.

 

Highfield has its approvals from the Spanish government, and is now seeking construction licences from the two towns closest to the proposed mines. 

 

The company raised A$18 million in fresh equity in September at 52c.

 

Highfield's shares were last traded at 58c, valuing it at $211 million.

 

The stock has traded between 42.5c and 88.5c over the past year.