Annual Report
31 December 2019
highfieldresources.com.au
ABN 51 153 918 257
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
Contents
Corporate Directory
Letter from the Chairman and Acting CEO
Sustainability Report
Directors’ Report
Financial Report
Consolidated Statement of Profit or Loss and Other Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Auditor’s Independence Declaration
Independent Auditor’s Report
ASX Additional Information
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Corporate Directory
Directors
Company Secretary
Registered Office &
Mr. Richard Crookes
Mr. Donald Stephens
Principal Place of Business
Non-Executive Chairman and Acting
Chief Executive Officer
Ms. Pauline Carr
Independent Non-Executive Director
Mr. Roger Davey
Independent Non-Executive Director
Mr. Jim Dietz
Independent Non-Executive Director
Mr. Brian Jamieson
Non-Executive Director
Mr. Isaac Querub
Independent Non-Executive Director
169 Fullarton Road
DULWICH, SA 5065
Telephone
+61 8 8133 5000
Facsimile
+61 8 8431 3502
Website
highfieldresources.com.au
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Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Share Registry
Auditor
Stock Exchange
Advanced Share Registry Pty Ltd
Pricewaterhouse Coopers
110 Stirling Highway
NEDLANDS, WA 6009
Telephone
+61 8 9389 8033
Facsimile
+61 8 9389 7871
Level 11/70 Franklin Street
ADELAIDE, SA 5000
Telephone
+61 8 8218 7000
Facsimile
+61 8 8218 7999
Australian Securities Exchange
(Home Exchange: Perth, Western
Australia)
ASX Code
HFR
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Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Letter from the Chairman
and Acting CEO
Dear Shareholders,
2019 marked my first year as Chairman of your Company,
having been elected at last year’s AGM in May 2019 following
the retirement of Derek Carter, your founding Chairman. Of
course, I have been a director of Highfield Resources since
2013, so I am no stranger to the Company and our stakehol-
ders, however the role of the Chair has felt like an important
step-up for me personally. I have received greater contact
from shareholders and much closer interaction with our CEO,
as well as developing more significant relationships with the
Non-Executive directors. To all, I would like to thank you for
your continual support and encouragement.
I couldn’t have wished for a better start, with the award
of our long-awaited and critical environmental approval
(Declaración de Impacto Ambiental or DIA) for the Muga
Project in June 2019, just two weeks into the job. The credit
for this though is not mine, but belongs to our outstanding
team in Pamplona, led superbly by our then CEO, Peter Albert
and ably supported by his predominantly Spanish team.
Special mention must go to Ricardo Perez, Head of External
Relations, for his tireless efforts to deliver this outcome, a
result of his excellent communications and relationships
with all the relevant approval authorities developed over
several years. Ricardo in turn is supported by an excellent
team and in addition, all the technical departments must
be also congratulated for their detailed contributions to the
permitting submissions. The next important milestone is to
secure the Mining Concession and we are well advanced
in this process, having submitted all documentation to the
Authorities on 13 March 2020.
The award of the DIA was a defining achievement for the
Company. Although always anticipated, it was nonetheless
a tremendous outcome which demonstrated to all stakehol-
ders the Company’s commitment to social, environmental
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Highfield Resources Limited 31 December 2019 Annual Report to Shareholders and technical excellence for the Muga Project and mine. The
in Vipasca to continue to prove up the potash potential in
authorities in Madrid as well as those in Aragón and Navarra
this tenement abutting Muga. In 2020 we anticipate brin-
are commended for their diligence and commitment in as-
ging this work together and updating our Resources and
sisting the Company in achieving an outcome with excellent
Reserves at Muga-Vipasca. During the year we also comple-
and sustainable ESG outcomes.
In 2019, we also made significant improvements to the de-
sign of the mine, especially in the process plant. As a conse-
quence of the environmental permit requirements, we have
improved environmental outcomes by advancing the engi-
neering of the vacuum salt device as well as the backfilling
facility. These units have been successfully integrated into
the overall plant design yielding improved recoveries and
project financial outcomes. In making these achievements,
we have been working in close co-operation with some of
the best international technical expertise available in the
potash industry, out of Germany.
ted closure activities on some tenements which demonstra-
ted little economic potential and then released those tene-
ments back to the Government.
The potash sector remains an attractive place to invest, with
continued strong demand growth for fertilizers and potash
in particular. While we are seeing a number of new speciality
sulphate of potash (SOP) projects being developed, muriate
of potash (MOP), which our Muga Project will deliver, remains
the dominant form of potash produced and consumed, and
the supply response from the major potash producers is
well managed to match global demand. This maintains our
attractive forecast margins. In particular, the European MOP
Part of our focus in 2019 has been to ensure that we are ex-
price premium over other markets remains stable and su-
tracting the best value from our exploration programme. To
pports our view that Muga will be one of the best located
this end, we have undertaken significant drilling campaigns
and profitable potash projects in the world. This will provide
“The award of the DIA was a defining achievement
for the Company. Although always anticipated, it
was nonetheless a tremendous outcome which
demonstrated to all stakeholders the Company’s
commitment to social, environmental and technical
excellence for the Muga Project and mine.”
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Highfield Resources Limited 31 December 2019 Annual Report to Shareholders a very sound foundation for the success of a capital raising when the time comes to
complete the project financing for Muga. Notwithstanding the current depressed pricing
for MOP, we agree with the UK based independent commodity analysis group, CRU that
markets will improve over the next few years as we move into production.
Like all organisations across the world, we have been faced with the challenges of the
Covid-19 virus pandemic. Highfield has been proactive in dealing with these, almost from
the first mention of this as a potential global risk. The well-being of our staff is our pri-
mary concern and responsibility and we have enacted robust business continuity measu-
res. At the time of writing, all staff are healthy and working remotely with activity as near
to normal as possible. Fortunately, as a pre-operations company, we have far fewer risks
than many others. We are required to operate within the constraints of broader measu-
res being imposed in Spain and may suffer the ensuing impacts and consequences. We
remain confident that these measures will keep our staff safe and promote a return to
business as usual within a manageable timeframe.
I would finally like to acknowledge the CEO transition that will occur this year. We are sad-
dened that Peter Albert decided to leave the Company, and step down from the Board, at
the end of January 2020 to relocate his family back to Australia. Peter was in the role for
three and a half years and was instrumental in developing a new team and a strong cor-
porate culture, guided by our vision and core values, known locally as CREA (Commitment,
Respect, Excellence and Attitude), as well as securing the DIA. His legacy is a strong
values-based team that will continue to deliver well into the future and allow us to build a
successful, sustainable potash business. We were very fortunate to have had Peter as our
leader and I wish him and his family all the best for the future. Importantly Peter continues
to be available as a consultant to the Company, assisting where required.
The Company has engaged a global search firm to find a replacement CEO and is well
advanced in its international recruitment process, and I will remain as Acting CEO until a
new CEO commences.
Richard Crookes
Chairman and Acting Chief Executive Officer
27 March 2020
“In particular, the European MOP
price premium over other markets
remains stable and supports our
view that Muga will be one of the
best located and profitable potash
projects in the world.”
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Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
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Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
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Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
Sustainability
Report
CEO letter
About this section
Sustainability focus
Sustainability mapping
Performance highlights
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Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Letter from the Chairman
and Acting CEO
Dear Readers,
This is the Group’s fifth annual report on Sustainability.
It is appropriate to consider the Company’s stance in res-
Today, our team is more united than ever and I would like to
believe that one of the aspects key to the development of the
Muga Project has been to instil in the whole team a strong
commitment to our CREA core values, being Commitment,
Respect, Excellence and Attitude. I am a strong advocate of
the concept that navigating as a team with clearly articula-
ted corporate values is the foundation for success of any
business. I am convinced that our values have contributed
to the development of a strong and effective team, with an
unwavering commitment to high ethical, safety, social and
environmental standards, capable of facing the challenges
that will undoubtedly confront us in the future.
Today the world is changing rapidly, accelerated by the im-
pacts of climate change. The whole world faces greater cha-
llenges to sustain our current environment, to turn back the
clock on the negative impacts to date and to contribute to
a sustainable world for future generations. Mining projects
of the magnitude of Muga must be examined, implemented
and monitored with the utmost rigour as we have done at
Highfield. I am extremely proud of the achievements made
by the team to date culminating in early June 2019 with the
announcement of the DIA award, the major environmental
pect of the UN’s Sustainable Development Goals which seek
to encourage measures to build a sustainable world. This
year, our Company has once again worked towards this vi-
sion by committing to implement a large project with inte-
grated initiatives that contribute to those objectives, with
special emphasis on our social and natural environment.
This report sets out these initiatives and highlights those
that we have developed internally through our Living Values
programme to embed our corporate values in our daily
work. It also highlights our actions within the community,
including information events such as the Open Doors event
which attracted more than 400 people with whom we had
the opportunity to interact and reaffirm our conviction to
develop a project that respects our communities. In addi-
tion, our Foundation continued to support initiatives which
contribute to the well-being and development of our nearby
communities. Also noteworthy, have been our efforts to rai-
se awareness within our team, communities, suppliers and
people in the industry regarding the importance of health
and safety and to this end we organised presentations by
the Central Mining Rescue Brigade, as well as school com-
petitions under the heading of Safety Belongs to Everyone,
But It Is My Responsibility.
permit for the Muga Project. This tremendous outcome was
This year the Company was a major player in the Navarra
the result of years of dedicated and professional work by
Government’s MinerÉtica initiative, a joint initiative with lo-
the Highfield and Geoalcali team and our consultants. This
cal mining industry that was undertaken to raise awareness
result is a demonstration of the Group’s unwavering com-
about the importance of the sector and the reality of the
mitment to the highest environmental and social standards.
strategic importance of projects such as Muga Mine at local,
I never had any doubt that it would be achieved, nor do I
regional and national levels, especially when they are being
have any doubt that we will obtain the Mining Concessions
developed under the highest standards of protection of the
and construction permits, it is only a matter of time.
environment and the community. I am confident that Muga
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Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Mine will be an international example of modern mining at
the forefront of sustainability.
The fertiliser industry, of which Muga will be a part, helps us
to achieve the ecological transition that our planet needs. As
a future potash producer, I would like to share statements
from the International Fertilizer Association, that “the use of
fertilisers, firstly, contributes to the forestallment of defo-
restation, as they allow for increased productivity on arable
land. Secondly, they also increase the carbon sequestration
potential of agricultural soils by contributing to the buildup
of soil organic matter. In fact, 89% of the potential for mi-
tigation in the future of agriculture is based on the carbon
sequestration of the soil. Carbon sequestration in cultiva-
ted soils can be increased by adding organic and mineral
nutrients, on the one hand, but they can also optimise the
use of soil, leaving space to increase biomass production”.
From a global perspective, potash is a great mineral ally in
the battle against climate change.
Richard Crookes
Chairman and Acting Chief Executive Officer
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Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
About this Section
This section sets out the highlights of our fifth sustainability re-
port which comprises all sustainable activities carried out during
2019 by Highfield Resources Limited (the “Company” or “Highfield”
or “Highfield Resources”) and its Spanish subsidiary Geoalcali SLU
(“Geoalcali”), together “the Group”.
This section is a summary of the Group´s Sustainability Report 2019
that has been prepared in accordance with the GRI Standards: Core
option. GRI is an international independent organisation that helps
businesses, governments and other organisations understand and
communicate the impact of business on critical sustainability issues
such as climate change, human rights, corruption and many others.
Additionally, this year, the Group continued with the integration of
the Sustainability Development Goals (“SDGs”) into its corporate re-
porting by using the Business Reporting on SDGs guideline develo-
ped by GRI and the United Nations Global Compact and the Basic
Guide Communication on Progress of United Nations Global Compact
since Geoalcali has recently submitted its application as a signatory
member.
These international guidelines are the most widely adopted fra-
meworks and contribute to the Group’s commitment to transparency
and accountability. We want to preserve our high standards in sustai-
nability performance. This will require effort in all areas of the Group’s
activities, and will include adopting international frameworks which
provide a universal language for corporate responsibility for all busi-
nesses regardless of size, complexity or location.
We firmly believe that adopting these guidelines will help us assess,
define, implement, measure and communicate our sustainability stra-
tegy and will contribute to the Group’s long-term success.
Sustainability reports offer an opportunity for our stakeholders to
review the Group’s performance and to contact us with sugges-
tions or comments on the content in the report. Development, im-
plementation and disclosure of responsible corporate practices is
key to our business. This report outlines our Sustainability Focus
and our Performance Highlights which describe the main actions
that have been undertaken in the following areas: Our Business, Our
Environment, Our People, and Our Community, because that is how
the Group articulates its Sustainability Framework.
For further information visit:
https://www.highfieldresources.com.au/sustainability-reports/
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Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
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Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Sustainability Focus
“As the Chairman of the Board of
Directors of Highfield Resources,
I believe our duty to shareholders
is to protect their investment from
any potential downside risk both
over the short and long-term time
horizons. The best way to achieve
this is to understand and manage
not only technical, financial and
external risk, but increasingly ESG
factors, as an integrated part of
the strategy and management of
the Company. The overall aim is
to protect and enhance project
commercial value by achieving
positive political and stakeholder
outcomes, within a robust
governance framework”
Richard Crookes
Chairman, Highfield Resources
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Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
Our Journey for
Sustainability
The Group understands that the implementation of corpo-
rate sustainability strategies is critical for business suc-
cess. Since its inception, the Company has implemented
Environmental, Social and Governance factors by adopting
a broad view of issues and impacts in order to be able to
address every aspect that is key for a successful outcome.
In order to understand where sustainability efforts should
be concentrated, the Group undertakes internal and exter-
nal analysis to identify those issues that have the biggest
impact and are most relevant to the business and to stake-
holders. The Group has engaged actively with its stake-
holders and keeps innovating via different communication
channels to maintain a constant dialogue.
Identifying key environmental, social and governance issues
through engagement methods for each stakeholder group
has helped the Group define commitments and goals in or-
der to drive the Company´s efforts towards minimising ne-
gative impacts and at the same time seize opportunities to
maximise benefits.
These commitments and goal setting are backed up by
specific systems and detailed processes that are monito-
red and tracked to allow the Company to detect areas for
improvement.
This is summarised in the graphic below where the Group’s
vision and core values form the centre of our strategy. The
Group divides its sustainable focus in four main areas: Our
Business, Our Environment, Our People and Our Community
– these combined, form our Sustainability Framework.
15
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Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Sustainability Framework
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Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Vision and Values
The Group’s vision is “to build a successful, sustainable, potash business with respect for stakeholders and the
environment”.
The vision of the Company is encompased by its core values CREA Commitment, Excellence, Respect, and Attitude
which lay the foundations of the eight principles of our sustainable roadmap outlined below:
1.
Integrate an ethical
management
that considers
risk analysis to
guarantee the best
results for our
stakeholders
2.
Adopt best practices
in health and safety
with the aim of
guaranteeing the
protection of our
employees and our
communities
3.
Ensure the best
environmental
results, optimising
energy use and
the responsible
management of
resources
5.
Uphold the
principles of
diversity to ensure
that equality is part
of our corporate
culture
6.
Look for continuous
improvement
through
measurement
mechanisms with
the aim of achieving
excellence in all our
activities
7.
Always act with
integrity, honesty
and equanimity with
all our stakeholders
4.
Encourage the
participation and
communication of
our communities
to ensure that
their expectations
and needs are
considered
8.
Adopt an approach
that is consistent
with our vision and
corporate values in
our decision-making
processes, as the
main drivers to
generate value and a
sustainable outcome
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Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Sustainability Mapping
Stakeholders Process
The Group has several mechanisms in place to communicate
acceptable to the majority of stakeholders, especially local
with its stakeholders and will continue to do so throughout
communities. The information received and the media mo-
the life of the Project. At this early stage of the Project, regu-
nitoring of our activities form the basis of our stakeholder
lar consultation is essential to ensure that requirements are
plan refinement and will contribute to continuous improve-
agreed upon, and a delivery solution is negotiated that is
ment of our stakeholder engagement.
Material topics identified
Business Development
Environmental Topics
Safety issues
Sustainable approach
1
3
Receipt of necessary
Permits
6
Water Management
Anti-Corruption
Measures
8
Waste Management
2
5
4
Wealth Creation
9
Restoration of the area
7
Generation of Quality
Employment
Ensure employee Health
and Safety
10
Community Involvement
Prioritise Health
and Safety in the
Community
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Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Stakeholder Type
How
Frequency
Material Topics
Local Communities
Physical suggestion boxes located in the
communities involved in the Project
Monthly
4
7
10
Local Communities
Online access through the “We want
to listen to you” tab for suggestions,
consultations and questions from citizens
and residents of the area
Daily
1
4
6
7
8
Local Communities
Events and forums
Twice a year
1
4
6
7
8
Local Communities
Monitoring Press
Daily
3
5
6
8
Town Councils
Official application process
Weekly
1
6
8
Town Councils
Regular meetings
Monthly
1
4
Town Councils
Physical suggestion boxes located in the
communities involved in the Project
Monthly
10
Suppliers
Directly involvement with relevant
department
Daily
1
4
7
Government
Organisations
Official application process and regulatory
affairs
Weekly
5
8
9
Non-Governmental
Organisations and
Local Organisations
Non-Governmental
Organisations and
Local Organisations
Non-Governmental
Organisations and
Local Organisations
Online access through the “We want
to listen to you” tab for suggestions,
consultations and questions from citizens
and residents of the area
Daily
1
Informative events
5
6
8
10
Monitoring press
Daily
1
3
5
8
Local Organisations
Regular meetings
Quarterly
4
7
Investors
Interaction with Investor Relations
Department and senior management
Weekly
1
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Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Goal Setting, Monitoring and
Disclosing
Strategic Objective
Material Aspect
Environmental SDGs
Employee / Worker SDGs
Community / Society SDGs
1
2
3
4
5
6
7
8
9
To secure all necessary environmental,
construction and operating permits
1
To build and to successfully operate the
first phase of the Muga Mine (0.5 Mtpa
MOP)
2 4 5 6
7 8
To develop the plans and financing for
the second stage of the Muga Mine (to 1
Mtpa MOP)
74
10
To build, operate and maintain a high level
of workplace health and safety
2
5
To conduct our business with regard to
all environmental regulations and best
practice
To work diligently with the various
communities close to the mine to
optimise our social performance and
thereby secure and maintain support for
Our Project
To work with the various government
departments and regulators in a
transparent and engaging manner to
secure their trust and enable them to
supervise our activities appropriately
To secure all necessary funding for the
first phase of the Muga Project and have
plans and commitments in place for the
implementation of the second phase
To comply fully with all pertinent
legislation
86
9
3 5 6 7
8 10
2 3 5 6
98
10
4
10
2 3 5 6
8 9
1 4 7 10
10
To develop plans and studies for the
potential implementation of future
projects within the Group’s current
tenement holding
11
To become the Employer of choice within
our sector and environment
2 3 4
7
10
12 To return value to our shareholders
4
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Highfield Resources Limited 31 December 2019 Annual Report to Shareholders We have incorporated international sustainability guidelines
comply with Global Compact guidelines. The results of in-
that help us assess and measure our performance and that
corporating these principles are disclosed through our sus-
have been aligned in accordance with our strategic goals.
tainability reporting commitment in the standalone version
The Company also supports and seeks to actively contribu-
of this report.
te to the achievement of the SDGs. Geoalcali has recent-
ly applied to become a signatory member of the UN Global
As a summary, the following graphic shows how the Company
has integrated its strategic objectives, aligning them with
Compact. Therefore, the Company will also incorporate
the identified material topics resulting from the stakeholder
the section Communication on Progress (COP) in order to
engagement process and its impact on the SDGs.
Strategic Objective
Material Aspect
Environmental SDGs
Employee / Worker SDGs
Community / Society SDGs
1
2
3
4
5
6
7
8
9
To secure all necessary environmental,
construction and operating permits
To build and to successfully operate the
first phase of the Muga Mine (0.5 Mtpa
MOP)
To develop the plans and financing for
the second stage of the Muga Mine (to 1
Mtpa MOP)
To build, operate and maintain a high level
of workplace health and safety
To conduct our business with regard to
all environmental regulations and best
practice
To work diligently with the various
communities close to the mine to
optimise our social performance and
thereby secure and maintain support for
Our Project
To work with the various government
departments and regulators in a
transparent and engaging manner to
secure their trust and enable them to
supervise our activities appropriately
To secure all necessary funding for the
first phase of the Muga Project and have
plans and commitments in place for the
implementation of the second phase
To comply fully with all pertinent
legislation
To develop plans and studies for the
10
potential implementation of future
projects within the Group’s current
tenement holding
To become the Employer of choice within
11
our sector and environment
12 To return value to our shareholders
21
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Performance
Highlights
Our Business
DIA Award Confirms High
Environmental Standards of
Muga Project
Geoalcali received its environmental permit approval (DIA)
in June 2019. This is one of the Company’s greatest achie-
vements after a comprehensive and rigorous process that
involved a vast number of stakeholders and entities which
analysed the Project, evaluating environmental aspects and
their impact in order to determine its compatibility with the
environment. All entities and stakeholders had the oppor-
tunity to put forward suggestions and the Project has in-
corporated optimised measures as a result of this process.
Muga Project enhancements enable a more
sustainable project
The Company continued working on the optimisation of the
operations by bringing forward the scheduled commence-
ment of the backfilling process to enhance residue mana-
gement. This has resulted in the reclassification of costs
for the backfilling equipment from sustaining capital to up-
front capital. In addition, improvements in the process plant
equipment were incorporated, as well as significant impro-
vements in recovery, bringing forward production of com-
mercial vacuum salt, and earlier commencement of residue
management and treatment of by-products. As a result, the
Muga Project will start reducing waste at a very early stage
and the by-product management and commercial plan will
increase the Project profitability.
These technical enhancements deliver a number of value
adding and improved environmental outcomes and achie-
ve improved compliance with the DIA environmental permit
issued by the Ministry for Ecological Transition (Ministerio
para la Transición Ecológica, or “MITECO”).
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Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Continuing the Development of a
Sustainable Potash Business
During this year the Company continued making progress as outlined below:
— Completion of metallurgical test work and process plant design resulting in a recovery
increase to over 90% meaning the operation will be much more efficient;
— The Company signed a Non-binding Memorandum of Understanding (MOU) with
Ameropa AG for the sale of up to 250,000 tonnes of MOP per annum from the Muga
Potash Mine;
— Continued exploration work on our Vipasca area of interest with encouraging results;
— Muga Project updated to incorporate DIA environmental enhancements that included
revised capital costs, operating costs and estimated financial outcomes resulting in
significantly improved Project economics;
— Award of a number of detailed design and construction packages;
— Continued advancing the Mining Concession and the construction permits processes
which are the next permits necessary to progress the Project into the construction
phase; and
— Continued our strong focus on ESG by engaging with multiple stakeholders to maintain
continuous communications and address in an ethical manner, any area of concern.
This work ensures that the Company will be prepared for the next steps of the Muga Project
development.
Strong Governance
The Board of Directors of Highfield Resources has established high standards for the
Company’s employees, officers and directors. It is the duty of the Board of Directors to
oversee the management of the Company’s business and to ensure the Company as a who-
le and the Company´s representatives behave in a manner that aligns with the Company´s
high standard of corporate and social responsibilities.
The Group periodically reviews its procedures and policies and suggests changes to ensure
high ethical standards are met. This year the Code of Business Conduct and Ethics included
enhancements in the Whistleblower Policy and the Continuous Disclosure Policy.
The Group publishes its corporate governance policies, Code of Business Conduct and
Ethics and its Board and committee charters on Highfield’s website at
https://www.highfieldresources.com.au/corporate-governance/
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Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Recognitions and Awards
InnovaRSE Certificate
RSA 2020 certificate
Receipt of the Reporting Award as a result of our efforts
in implementing sustainable management
Aragón Social Responsibility Seal for the fourth con-
secutive year
Bonus 2018
Industrial Foundation of Navarra Award
The Company received the Bonus 2018, a health and
The Human Resources Department of Geoalcali recei-
safety recognition for having a low accident rate
ved a recognition award by the Industrial Foundation
of Navarra for sharing their best practices in order to
achieve a ‘stronger and more competitive’ industrial
community
Association of Foundations of Navarra
Award
Award by the Association of Foundations of Navarra in the
Culture Category for the Project Roman Heritage as a Tourist
and Development Resource in Liédena, a tourism and cultu-
ral initiative aimed at discovering and publicising the weal-
th of the Roman heritage that surrounds the local area of
Navarra and that, at the same time, culturally links the peo-
ple with their neighbours from nearby Aragonese towns
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Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Partnerships for the SDGs
and Strengthen Industry
Relationships
During this year Geoalcali joined other mining companies,
mining associations and the Mines Department of the
Government of Navarra to raise awareness of how responsi-
ble mining and minerals help us achieve a more sustainable
world, by launching the MinerÉTICA forum.
MinerÉTICA was part of the celebration of European Minerals
Day, a European initiative to bring the minerals world closer
to society. As well as distribution of information materials in
Navarra, exhibitions, workshops, visits to mining activities
and conferences have been programmed.
Among the activities included in the forum was the inau-
guration of the Company´s mineral exhibition “Essential
Minerals for a Sustainable Future” in which people had the
opportunity to learn about the Sustainability Development
Goals and how they relate to the mineral resource industry.
“Essential Minerals for a Sustainable Future” was displa-
yed in the Environmental Education Museum of Pamplona
(Museo de Educación Ambiental de Pamplona). Numerous
organisations and institutions throughout Spain have shown
interest in showcasing this exhibit, which emphasises the
importance of minerals in our daily lives and the value of
sustainability as the cornerstone of mining today.
The inauguration event included a conference on the use of
minerals in daily life delivered by Esther Lasheras, chemistry
professor and head of the rock and mineral collection of the
Science Museum of the University of Navarre.
A mineral workshop also took place at the Environmental
Education Museum, as part of the MinerÉTICA forum activi-
ties. Visitors were able to learn to differentiate some of the
most used minerals, their main properties and to find out in
which products they are used, in a fun and educational way.
The Company also worked collaboratively with the
Universidad de Navarra in the organisation of the I
Sustainability Forum “Mazingira” in which members of
the World Business Council for Sustainable Development
among other sustainability leaders shared their vision about
future trends with students, mining professionals and busi-
ness representatives.
The Company also participated in the Social Innovation
forum, organised by Más Humano Foundation, La Caixa
Foundation and Caja Navarra Foundation. The Social inno-
vation objective is a “speed dating” event between compa-
nies and social associations to seek partnerships with the
aim of support the SDGs focused on reducing inequalities
and gender equality, among others.
“Essential Minerals for a Sustainable Future” exhibit
at Environmental Education Museum
Esther Lasheras with MinerÉtica organisers
Students during minerals workshop in MinerÉTICA
25
25
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Participation in Forums
Mining Metals Hall (MMH) Seville 2019
At this international event in Sevilla, Sheila Maqueda,
Geoalcali’s technical engineer of mines, presented the
Design and Planning of the Muga Mine, during the techni-
cal sessions organised by Cominroc, in a seminar entitled
“Overview of the industrial minerals sector”. Geoalcali’s
Director of External Relations, Ricardo Pérez Merino, also
participated as a speaker at a roundtable dedicated to mi-
ning and investment policies to discuss the social aspects
of the Project.
The MMH brought together more than 800 delegates, about
150 exhibitors, 70 speakers and around 6,000 visitors.
Navarra with a Future
Navarra with a Future is an intergenerational, intersectoral
and inclusive forum that seeks to present jobs of the futu-
re, that are already a reality in the most innovative compa-
nies of Navarre, Spain and across the world. Javier Olloqui,
Director of Human Resources of Geoalcali, participated in a
one-on-one talk about employment opportunities.
The Company also hosted an exhibit area for the Muga
Project, which will help address the problem of depopulation
in its local communities.
Seminar on Industrial Minerals of
Aindex (a Spanish mining association)
The Company also attended the
following conferences:
Geoalcali contributed with a presentation titled ‘The
Social Factor in the Muga Project’ to share its expe-
rience in CSR with the mining engineer students of the
Universidad Politécnica de Madrid. This educational
forum aims to bring mining companies experiences to
students throughout the different stages of the mining
value chain.
121 Mining
121 Mining
IFA
Hong Kong
London
Montreal
Argus Fertilizer Conference
Malta
IMARC
121 Mining
Mines and Money
Mining Journal Select
Melbourne
Sydney
London
London
26
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
27
27
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Our Environment
Enhancing our Environmental Consciousness
Staff training and awareness campaigns are fundamental so
In addition, and with the aim of reducing our plastic con-
that our actions are carried out under environmental pro-
sumption, a policy of ceasing to purchase single-use plastic
tection criteria, and that these criteria are also transferred
utensils was established.
to the appropriate external suppliers and consultants.
One of the measures implemented was the installation of
the avoidance of waste generation and secondly, on its
Training plays a very important role, focusing efforts on
organic waste collection on a voluntary basis, before be-
recycling.
ing legally required. This measure was implemented both in
Geoalcali’s main office and in the Company’s core sheds in
Beriain and Sangüesa.
28
28
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Staff awareness campaigns
Talks and Events
Internal Communications
Waste Management Strategy at Muga Mine.
7 communications in intranet
“World Environmental Day”, focusing on the problem of air polution.
3 awareness posters
A week long “Challenge to reduce air pollution” in which all workers
proposed daily actions throughout the week, in order to raise awareness
and make those actions become habits.
Awareness event about Climate Change given by an external guest
expert in meteorology who presents meteorological information on radio
and in newspapers and magazines, as a speaker in events for National
Geographic and the University of Barcelona and by presenting weather
information in El País Digital, Telemadrid and TVE programme “Aquí la
Tierra”. We learned the differences between climate and meteoronogy,
and what Climate Change means, and discusses the impact of human
activity as a factor in increasing natural climate change.
29
29
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Effective environmental
management
Prior to the commencement of each field work programme,
whatever
its purpose or dimensions, the Geoalcali’s
Environmental Department carries out, based on updated
official cartography, an environmental evaluation to detect
which natural elements could be affected in order to mitiga-
te any potential negative impact.
With regard to mining exploration drilling activities, a pre-
ventive measure has been the implementation of watertight
containers at the drilling site for the temporary storage of
water and drilling muds until they are removed, acting as a
reservoir to contain potential excess rainwater.
Protocols in the event of an
environmental accident
Geoalcali is committed to the prevention of envi-
ronmental accidents, by implementing preventive
measures to minimise the environmental impact in
all the Mina Muga Project phases as well as in its
headquarter office and field work during explora-
tion activities.
However, in the event of an environmental acci-
During drilling activities, platforms are prepared with wa-
dent, Geoalcali has established a protocol that
terproof sheets that allow for the collection of any acciden-
describes the steps to be taken (Contain, Warn and
tal spill of oils or saline water without these reaching the
Remedy) and a directory of contacts required for
ground or ground water.
each situation.
In addition, the earth extracted for the preparation of the
site and for the excavation of the ponds is used to build a
barrier under the ponds that will act as a protection barrier
against liquid spills.
All waste generated during the design phase and explora-
tion activities are managed in accordance with the legisla-
tion and delivered to authorised and official waste manage-
ment entities.
In the office and in its core sheds, organic waste is alre-
ady being managed. Although this is not yet a legal obliga-
tion in Navarra, it is a commitment to good environmental
practices.
30
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Intensified Environmental Protection Measures in Muga
Project
The Group understands that environmental protection is a
that its actions should go beyond the immediate vicinity of
fundamental pillar on which its entire business is based, not
its facilities. It is therefore committed to the development of
only in terms of minimising any potentially negative impacts
several initiatives that, together with the international SEO/
of its industrial activity, but also in terms of conserving the
Bird Life organisation, will be carried out in the area of the
natural environment on which it is built and its surroundings.
mine as well as more widely within the communities of in-
Geoalcali understands that the protection of the ecosystems
and habitats in which animal and plant species live requires
terest from the start of the construction phase and will be
maintained throughout the life of the mine.
Monitoring and controls
Water management
Waste management
In 2019, the Muga Mine Environ-
The Muga Mine Water Management
During the year the Mining Waste
mental Monitoring Programme was up-
System, designed under the principle
Management Plan has been updated
dated according to the requirements
of non-contamination of the water
and incorporated into the Restoration
included in the DIA. The monitoring
environment, has also been updated.
Plan, as required by the DIA. The salt
programme establishes an exhaustive
The construction plan for the ramps
waste volumes on surface during the
control over potentially contaminating
now includes specific waterproofing
production phase will be lower and
factors, the form of measurement, the
using the jet-grouting technique to
will be completely removed during the
parameters measured, and the maxi-
reduce drainage and therefore the vo-
final restoration of the mine, with no
mum thresholds established. It also
lume of water stored in the plant.
waste remaining on the surface after
the dismantling and restoration pro-
cess is finalised.
serves to verify the effectiveness of
the preventive actions adopted and,
where necessary, to improve them or
establish new measures.
The process plant is designed to use
water of variable salt concentration
and to recirculate the process water in
such a way as to minimise the use of
water.
During this year, a local company
specialising in hydrogeology has op-
timised the design of the water envi-
ronment control network, which inclu-
des surface and groundwater control
points in the area of the Muga process
plant, downstream and area of the po-
tash deposit. This network provides
information to detect any variation in
the qualitative and quantitative para-
meters of the water, ensuring appro-
priate measures can be carried out as
may be necessary.
31
31
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Our Community
Reinforcing our Community Engagement
After the DIA award, in July 2019 the Company hosted an
Later, in September 2019, the Company hosted a two-day
information session in Javier, welcoming 13 mayors and 17
Open Doors information event. The Company welcomed
other representatives from our local communities, as well as
around 400 visitors from nearby communities. The atten-
five members of public institutions. The feedback collected
dees included people from local schools, retired persons
during the event indicated that 97% of the attendees su-
clubs, local companies, local and regional suppliers, local ci-
pport the Project. Topics dealt with included water mana-
tizens, mayors, government representatives and ecologists.
gement, traffic and environmental monitoring. The Company
had the opportunity to explain these topics as well as other
queries around employment and community opportunities.
The feedback collected from the community representati-
ves was used to design an information event for others in
the community.
During the year the Company increased community partici-
pation as well as positive feedback as indicated in the chart
below.
2016
2017
2018
2019
H1
H2
H1
H2
H1
H2
H1
H2
In favour
Not in favour
No opinion but more info requested
4
0
0
0
0
0
16
54
73
31
17
97
1
3
4
25
1
4
2
5
0
0
1
7
32
32
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Zero grievances from
local communities
Grievance Mechanism
Depopulation
Exploration activities may cause issues related to
The Company participated in a Depopulation theme ra-
land access, environmental disturbances or po-
dio programme, to discuss this issue of great relevan-
tential impacts on cultural heritage or sacred sites.
ce for the local communities of Muga. The programme
Therefore, Geoalcali has set up a formal grievan-
involved local mayors, local businessmen, government
ce procedure making available, through notices in
and university experts who addressed the issue with
the local town councils and at drilling sites, a for-
the aim of raising awareness and speeding up solutions.
mal channel to address any complaint or concern.
The conclusion was that employment opportunities,
Geoalcali treats any such communications very se-
such as those that Muga will bring to the community,
riously and keeps track of the commitments it has
are a key factor, but that other socio-economic and te-
made in response to ensure proper stakeholder
chnical developments are necessary to ensure existing
engagement.
The Company has also installed suggestions boxes
in local town halls to ensure communications with
residents and newcomers remain committed to the area
for the long term. The broadcast had around 37,000 lo-
cal listeners.
local residents that do not have access to online
Also, it is worth noting that Cederna Garalur (the rural
channels.
development organisation of Sangüesa) expressed its
gratitude to Geoalcali as a company which demonstra-
tes a spirit of continuous collaboration.
Depopulation Radio Programme at Sos del Rey
Católico Town Hall
33
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Supporting the
Communities’ Initiatives
Through our Foundation, the Company continued su-
pporting local initiatives with a special focus on Quality
Education, Social Integration, Sustainable Communities
and Protection of the Environment.
Quality education
Donation of sound equipment to the Luis Gil Public
School
Donation of Digital white board to the Isidoro Gil
de Jaz Public School
February 2019
February 2019
The Association of Fathers and Mothers of the Luis Gil
The Geoalcali Foundation contributed to the acquisition
School, carrying out the idea of the school’s management
of a digital white board for the Isidoro Gil de Jaz Public
of providing the centre with sound equipment for the
School of Sos del Rey Católico.
subjects of physical education, psychomotor skills, dance
and body expression, conveyed this idea to the Geoalcali
Foundation which supported the initiative. This initiative
will aid in improving the development of classes and in-
crease the number of activities carried out by the centre.
The Luis Gil Public School of Sangüesa is a regional cen-
tre that welcomes students not only from Sangüesa but
also from nearby towns including Liédena, Yesa, Eslava,
Gallipienzo, Javier, Aibar and Cáseda. Subsequently, most
of the students continue their studies at the Sangüesa
Institute and the IES Sierra de Leyre.
The Isidoro Gil de Jaz School is located in the municipality
of Sos del Rey Católico in the northwest region of the pro-
vince of Zaragoza in Aragón. This area is called Altas Cinco
Villas and is very close to the border with Navarra and is
currently one of the most depopulated regions in Spain.
34
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders School transport service in Undués de Lerda
September 2019
Donation of school supplies for the Babyteca
October 2019
The Geoalcali Foundation maintained its support for the
transportation service for children in the town of Undués
de Lerda who study at the Sangüesa Institute, thus im-
proving the quality of life of residents and helping working
parents with children who need to travel to school.
The service is also open to all residents of the town, es-
pecially those of older age, in order to facilitate their daily
transportation needs.
Located at an altitude of 633 meters, with just over 50
registered residents, Undués de Lerda continues fighting
tirelessly against depopulation, a great peril that afflicts
The Geoalcali Foundation understands that the integra-
tion of rural women into the workforce is a fundamental
pillar for sustainable development in the region. Therefore,
it continues to actively support the maintenance of the
Babyteca facilities of Sos del Rey Católico, by contributing
part of the costs of the school supplies which are needed
to provide a proper service.
The Babyteca of Sos welcomes children everyday be-
tween the ages of 0 and 3 years old. There is no other
service provided in the region for this age range. With 400
residents and a notably aged population, Sos seeks to
maintain its own service in order to attract young families
most of the towns and villages of the region.
to the town.
35
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Social integration
Sponsorship of the Conference on the Hospital
Order of Saint John of Jerusalem
Sponsorship of the Project Convivium Yesa
August 2019
September 2019
In an effort to support local traditions and healthy habits,
The Geoalcali Foundation supported this conference
the Geoalcali Foundation worked jointly on the organisa-
which focused on the era of splendour of the Order, its
tion of training activities aimed at prevention of disease
beneficial work and its military activities.
and bad health and promotion of equality, creativity and
This conference was organised by the City Council of
imagination in the town of Yesa.
Castiliscar, the Association of Friends of the Museum of
The Convivium Yesa, named after the town that gives
the Order of Saint John of Jerusalem, and the Castilliscar
its name to the reservoir located between Navarra and
“Encomienda”, historic association and was hosted by the
Aragon, offers activities such as the restoration of utensils
president of the Royal Academy of Fine Arts of San Luis,
with great tradition and reception such as the Zezenzusko
Domingo Buesa.
The conference, whose attendance provided university
credits to the students, featured several presentations
given by experts and was inaugurated and closed, res-
pectively, by the University and Culture Council of the
Government of Aragón .This type of activity raises aware-
ness of Aragonese heritage, as well as attracting tourism
and students to a region with highly depopulation rates.
or “Torico de Fuego”, a metal framework in the shape of a
bull, on whose spine a frame with pyrotechnic elements
is placed and in front of which children and adults run,
usually during the celebration of local festivities.
Financial support to the VII Edition of the Roman Festival
October 2019
The Geoalcali Foundation, in its commitment to boost cultural assets in the local communities, supported the City Council of
Liédena in the dissemination of its Roman heritage, including guided visits to the Museum of Santa Criz de Eslava and the
Musas de Orellano.
During its Roman Festival event, Liédena and its Roman villa were transformed into a stage for theatre, music, artisans, and
street entertainment in a Roman ambience setting.
36
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Sustainable Communities
Donation of exercise equipment to the elderly
May 2019
With the help of the Geoalcali Foundation, the Liédena City
Council started a series of activities during the year aimed
at the physical wellbeing and health care of its residents.
The Geoalcali Foundation contributed to the acquisition
of exercise equipment suitable for the elderly of the town.
Workshops on memory and how to age in a healthy way,
as well as zumba or yoga classes, make up the majority of
the activities offered and promoted by the Liédena town
hall.
Financial support to build a playground in
Rocaforte
May 2019
The Geoalcali Foundation has contributed to the cons-
truction of a small playground where children can enjoy
their free time, with modern swings and a slide, on a rub-
ber floor which creates a safe environment for games and
entertainment in this small village in the surroundings of
Sangüesa.
37
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Protection of the Environment
Sponsorship of the Juan Migueliz Leyre Trail Race
in aid of the reclamation of local trails
October 2019
The Geoalcali Foundation collaborated with the Trotecuto
Mountain Club in the recovery of two trails, which in ad-
dition to being used in the Juan Migueliz Leyre Mountain
Trail sports event, will be kept clear and marked for the
use and enjoyment of neighbours and tourists throughout
the year.
The sporting event is organised by the Trotecuto Mountain
Club, and takes place in a privileged landscape and cul-
tural environment, as it runs through enclaves such as
the Sierra de Leyre, the Foz de Arbayun and the Yesa
Reservoir. With a start and finish at the Monastery of
Leyre, it goes through places such as the Cañada Real
de los Roncaleses, Paso del Oso and the top of Arangoiti,
among others. This is one of the most popular events
that bring together most of the communities of interest
of Muga Mine.
38
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Volunteer Programme: I Commit (Me Comprometo)
The Group considers that fostering good relations with the community is one of the key
elements to the success of its business project, but it is also aware that participating in
experiences that involve helping others has a positive impact on the personal growth of
each staff member. For this reason, as part of its social responsibility policy, this initiative
is not only part of a purely philanthropic activity but also an initiative that generates shared
value for the employee, the Company and the community. The programme was launched in
December 2019 with several initiatives available to all staff throughout the year.
Community Day
Employees from Geoalcali and Bovis,
the Company’s project management
partner for the Muga Mine, voluntee-
red in the decoration of a Christmas
Tree of Undués de Lerda access
roundabout and donated articles for
the Social Services entity of Cinco
Villas region of Aragón.
39
39
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Our People
Upholding Highest Standards
in Ethical Performance in the
Workplace
During the year the Company launched its “Living Values”
programme with the objective that our core values of
Commitment, Respect, Excellence and Attitude will become
ever more present in the daily work of all staff members, as
guiding principles in their decisions and actions.
All members of the staff were divided into groups and tas-
ked to prepare different activities to raise awareness on
how each of the values should be incorporated in our daily
work. These activities included hosting talks by inspirational
speakers that are living examples of each of these values:
COMMITMENT
Jesus Cia, founder of Josenea, an organic producer located in the Muga area that employs
workers at risk of social exclusion with the aim of reincorporating them into the workforce.
RESPECT
self-control and respectful attitude under stressful situations even in the highest profile
Alberto Undiano, a famous Spanish football referee that is publicly acknowledged for his
matches.
EXCELLENCE
Maider Esparza, is a former olympic gymnast who faced demanding training from a very young
age which successfully led her to the olympic games with the Spanish national team.
ATTITUDE
David Ruiz and Daniel Oteiza, local firemen helped us understand the importance of maintai-
ning a positive attitude even in the most dangerous and demanding situations.
The programme also included a team building day during
which staff members put into practice the CREA values
by interacting with team members in outdoor and indoor
activities.
The experiences and learnings from the Living Values pro-
gramme have been included as part of the Company’s an-
nual employee performance review, reflecting the importan-
ce of the values in everything we do.
40
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Striving for excellence in Work-Life Balance and Diversity
Inclusion
The Association of Women Entrepreneurs and Managers
of Navarra (AMEDNA) held a working session in November
2019 to exchange good practices in the field of work-life
balance. Geoalcali was chosen as a “Good Practice
Example”. Estíbaliz García, from the Human Resources de-
partment, was the guest speaker who explained the policies
implemented by Geoalcali to 17 companies and entities of
Navarra, including the Regional Government.
Geoalcali is aware of the importance of diversity inclusion.
Several activities were undertaken to raise awareness during
International Women´s Day , notably hosting a video confe-
rence talk by Anna Tudela, former Vice President of Diversity,
Regulatory Affairs and Corporate Secretary of GoldCorp, a
large Canadian gold producer and an active role model in the
defence of good corporate governance practices, especially
in diversity issues.
The Company also contributed to #MiningTogether initiati-
ve, a three-month video storytelling campaign, sponsored
by Anglo American and De Beers Group to promote gender
equality and inclusion in the mining sector.
The Company is committed to implement initiatives to at-
tract and retain female talent which currently represents
37% of the staff.
“I have a very strong
belief that the more
balanced the gender
ratio, the better the
conversations we
have and the better
decisions we make as
a team.”
Number of Employees
Year
Female
Male
2019
2018
13
12
22
21
Employee hire and turnover
Two employees left the Company (1 male and 2 female)
and 5 people have joined over 2019 (3 female and 2 male).
A Healthier Workplace
As part of integrating our core values CREA in our dai-
ly work, the Company has implemented a Healthy Living
programme, making fresh fruit available in the office and
providing mindfulness sessions to encourage healthy life
habits for a healthy workplace.
The Company also supports employees who have sporting
hobbies by sponsoring contests and races with a special
focus on those sport events that are held in the commu-
nities near Muga.
An example is the “Javierada” pilgrimage, a popular
Navarran tradition that is celebrated every year by parti-
cipants trekking or cycling to the village of Javier. A group
of Geoalcali staff took part in this initiative that is part of
the cultural heritage of this region in Spain.
Richard Crookes
Chairman, Highfield Resources
The Company has in place an Employee Benefit Programme
that gives access to an extensive health insurance plan at
a beneficial rate.
41
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Building a Strong Safety Culture
Health and safety at work are a top priority, as well as a
The event highlighted the importance of the experience
legal and social obligation. The Group is aware that taking
and knowledge accumulated by the Central Mining Rescue
its health and safety obligations seriously and promoting
Brigade of Asturias, and the selflessness and social com-
best practice in these aspects, at all levels, is not only key to
mitment of this professional body.
preventing injuries but also contributes to the development
of a responsible and healthier society.
The Company is also making efforts to promote a health
and safety culture in the Muga communities. Several talks
As part of the celebration of the World Day for Safety and
in local schools were organised in order to engage with the
Health at Work, Geoalcali invited the Central Mining Rescue
future generations.
Brigade of Asturias, a prestigious rescue group with 107
years´ experience, to address its employees.
The Company and the Geoalcali Foundation also organised
a Health and Safety contest titled “Are you Safe?” where all
The event, under the heading of Safety Belongs to Everyone,
schools in the region entered in a competition to design a
But It Is My Responsibility, was attended by all the Geoalcali
Health and Safety Awareness campaign. The winning school
staff, as well as by former potash miners of Navarra from
received financial support to invest in preventative measu-
the Santa Bárbara Brotherhood in Beriain, members of the
res to guarantee safe conditions in their facilities. Promoting
Navarra Civil Guard Command, mining technicians from the
a Health and Safety culture in our local communities is not
Government of Navarra, other mining and related compa-
only key to prevent injuries and illnesses, but it also contri-
nies, representatives from AEMINA (Business Association of
butes to the development of a more conscious and healthier
Miners in Navarra), as well as representatives from munici-
society for everyone.
palities close to the Muga Mine Project.
Mining Rescue Brigade of Asturias visits Geoalcali
Health and Safety Manager, Pelayo Iglesias, in the
local school of Sangüesa.
42
42
Sangüesa students participated in the Company´s contest “Are you safe?”
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders H&S Training
First Aid Course (Mutua Navarra)
10 Hours training
for new employees on H&S manual
(2hrs. 5 employees)
+ 3 Hours training
in H&S manual for fieldwork works to one employee
Safe driving course (tecdrive)
8HRS. 13 EMPLOYEES
2HRS. 5 EMPLOYEES
Programme for the improvement of the preventive culture
based on “Human and Organisational Performance (HOP)”
delivered by Prevencontrol.
Several modules:
1. Leadership management
11hrs. 16 Employees
2. Awareness middle management 3hrs. 11 Employees
3. Workers’ awareness
6hrs. 15 Employees
4. Workshop hop
3hrs. 9 Employees
5. Operational learning workshop
6hrs. 7 Employees
6. Workshop “design thinking”
3hrs. 6 Employees
*Two minor incidents were registered of employees that were either travelling to or from work
ZERO ACCIDENTS*
A step further in Health and Safety management
During 2019, Geoalcali engaged Audinor, a specialised
The audit analysed both the procedures and systems in pla-
health and safety auditor with the aim of ensuring that all
ce today and also assessed areas of improvements in the
health and safety management systems and protocols are
future protocols that will be put in place in the next phases
being considered. This audit was a voluntary measure the
of the development of Muga.
Company established in order to achieve best practices in
an area which is key for the Company´s success today and
in the future.
43
43
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
The Directors present their report for Highfield Resources Limited (“Highfield Resources”,
“Highfield”, or “the Company”) and its subsidiaries (“the Group”) for the financial year
ended 31 December 2019.
44
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
Directors’ Report
Directors
Board Committees
Interests in the Securities of the Company
Results of Operations
Dividends
Corporate Structure
Nature of Operations and Principal Activities
Review of Operations
Geoalcali Foundation
Corporate
Annual Review of Ore Reserves and Mineral Resources
Corporate Governance – Resources and Reserve Calculations
Significant Changes in the State of Affairs
Significant Events After the Reporting Date
Likely Developments and Expected Results of Operations
Environmental Regulations and Performance
Share Options
Indemnification and Insurance of Directors and Officers
Directors’ Meetings
Proceedings on Behalf of Company
Corporate Governance
Auditor Independence and Non-Audit Services
Audited Remuneration Report
End of Audited Remuneration Report
45
Directors
The names, qualifications and experience of the Company’s Directors in office during the period and until the date of this
report are as follows. Directors were in office for the entire period unless otherwise stated.
Mr. Richard Crookes
Non-Executive Chairman (effective 23 May 2019, previously Non-Executive
Director) and Acting Chief Executive Officer, BSc (Geology), Grad Dip Applied
Finance
Mr. Crookes has over 30 years’ expe-
rience in the resources and invest-
ments industries. He is a geologist
by training having worked in the in-
dustry most recently as the Chief
Geologist and Mining Manager of Er-
nest Henry Mining in Australia (now
Glencore). Mr. Crookes most recently
spent six years with EMR Capital as
an Investment Director and prior to
that, 12 years as an Executive Di-
rector in Macquarie Bank’s Metals
Energy Capital (MEC) Division where
he managed all aspects of the Bank’s
principal investments in mining and
metals companies as well as the
origination of numerous project Fi-
nance transactions. Mr. Crookes has
extensive experience in Funds Ma-
nagement, deal origination, evalua-
tion, structuring, and execution of
investment entry and exits for both
private and public resources compa-
nies in Australia and overseas. In the
three years immediately before the
end of the financial year, Mr. Crookes
held two other directorships of lis-
ted companies (Chairman Black Rock
Mining Ltd BKT:ASX, since October
2017; Executive Director Lithium
Power International Ltd LPI:ASX, sin-
ce October 2018).
Mr. Peter Albert
Managing Director and Chief Executive Officer, BSc (Hons), EMBA, FAusIMM,
MIOM3, CEng (resigned 31 January 2020)
Mr. Albert has over 30 years’ expe-
rience in project management, ge-
neral management and operations
management in mining and minerals
processing in Australia, Africa and
Asia. Mr. Albert is a metallurgist and
holds an Executive MBA degree. He
is a Member of the Institute of Ma-
terials, Minerals and Mining (London),
a Fellow of the Australasian Institute
of Mining and Metallurgy (“AusIMM”)
and a Chartered Engineer. Mr. Albert
was awarded the “Mining CEO of the
Year” at the 2012 Asia Mining Con-
gress. Mr. Albert was also awarded
the “Mining Executive of the Year” at
the 2013 Asia Mining Congress.
Before joining the Company, Mr. Al-
bert held CEO roles with two Hong
Kong listed organisations, Jinchuan
Group International Resources Com-
pany and G-Resources Group. He has
held leadership and senior executive
roles with OZ Minerals Limited, Oxia-
na Limited, Shell-Billiton (Australia),
Aker Kvaerner (Australia) and Johan-
nesburg Consolidated Investments
(South Africa). In the three years im-
mediately before the end of the six
months financial period, Mr. Albert
held no other directorships of any
listed companies.
46
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Ms. Pauline Carr
Independent Non-Executive Director, BEcon, MBA, FAICD, FCIS, FGIA
oil and gas sector with Exxon Mobil.
She sits on several Boards and is
Chancellor of the University of South
Australia. She is also Chairman of the
South Australian Minerals and Energy
Advisory Council. In the three years
immediately before the end of the fi-
nancial year, Ms. Carr held no other
directorships of any listed compa-
nies.
Ms. Carr has over 30 years’ commer-
cial experience in management, cor-
porate governance and compliance,
mergers and acquisitions, investor
and stakeholder relations and corpo-
rate restructures. She currently pro-
vides business improvement, com-
pliance, risk management, project
management and corporate gover-
nance solutions to executive mana-
gement teams internationally. Prior
to this, Ms. Carr held senior positions
with Newmont Asia Pacific and ASX
listed Normandy Mining Limited and
worked for a number of years in the
Mr. Roger Davey
Independent Non-Executive Director, ACSM, MSc., C.Eng., Eur.Ing., MIMMM
Mr. Davey is currently a Non-Execu-
tive Director of a number of mining
companies in the junior mining sec-
tor.
He is a Chartered Mining Engineer
with over 45 years’ experience in the
international mining industry. Up to
December 2010, he was an Assistant
Director and the Senior Mining Engi-
neer at N M Rothschild (London) in
the Mining and Metals project finan-
ce team, where for 13 years he was
responsible for the assessment of
the technical risk associated with all
the current and prospective project
loans. Prior to this his experience
covered the financing, development
and operation of both underground
and surface mining operations in
gold and base metals at senior ma-
nagement and Director level in South
America, Africa and the United King-
dom. He is fluent in Spanish.
His previous positions include Di-
rector, Vice president and General
Manager of Minorco
(AngloGold)
subsidiaries in Argentina (1994 -
1997), where he had responsibili-
ty for the development of the Cerro
Vanguardia, open pit gold-silver mine
in Patagonia; Operations Director of
Greenwich Resources plc, London
(1984 - 1992), with gold interests in
Venezuela, Sudan, Egypt and Austra-
lia; Production Manager for Blue Cir-
cle Industries in Chile (1979 - 1984);
and various production roles from
graduate trainee to mine manager, in
Gold Fields of South Africa (1971 -
1978).
Mr Davey is a graduate of the Cam-
borne School of Mines, England and
holds a Master of Science degree
in Mineral Production Management
from Imperial College, London Uni-
versity. He is a Chartered Engineer
(C.Eng.), a European Engineer (Eur.
Ing.) and a Member of the Institute of
Materials, Minerals and Mining (MIM-
MM).
47
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Mr. Jim Dietz
Independent Non-Executive Director, B.Eng (Chem), M.Eng (Chem)
industries, primarily
Mr. Dietz has over 42 years’ expe-
rience in the fertiliser, chemical and
petroleum
in
senior operational roles. From 2000
until 2010, he was Chief Operating
Officer of Potash Corporation of
Saskatchewan
(“PotashCorp”), the
world’s largest fertiliser company.
Prior to that position, Mr. Dietz held a
variety of other senior management
roles, including President of Nitro-
gen, during his 17 year career with
PotashCorp. During that time, Mr.
Dietz was responsible for global ope-
rations as well as Safety, Health, and
Mr. Brian Jamieson
Non-Executive Director, FCA, FAICD
Mr. Jamieson has over 40 years’ ex-
perience in the advisory, manufac-
turing, resources and technology
industries in Australia and offshore.
He is presently Non-Executive Chair-
man of ASX listed companies Meso-
blast Limited and Sigma Healthcare
Limited.
Mr. Jamieson was a Non-Executi-
ve Director of ASX listed Oxiana/OZ
Minerals Limited from 2005 to 2015
and served as Chairman of Audit Risk
and Compliance, Nomination and Re-
muneration, and Due Diligence Com-
mittees. He was a Non-Executive
Director of Tatts Group Limited from
2005 to December 2017 and served
as the Chairman of Audit and Risk
Committee, Chairman of the Due Dili-
gence Committee and member of the
Remuneration Committee. He was
also a Non-Executive Director of ASX
listed Tigers Realm Coal from 2010
to 2015 and chaired various commi-
ttees. Mr Jamieson retired from the
board of Mesoblast Limited on 31
Environment performance and Pro-
curement. Mr. Dietz also represented
PotashCorp on the Board of Directors
of Arab Potash Company. Mr. Dietz is
a Chemical Engineer and holds both
a Masters and Bachelors designation
from the Ohio State University. In the
three years immediately before the
end of the financial year, Mr. Dietz
held no other directorships of any
listed companies.
March 2019.
Mr. Jamieson was Chief Executive of
Minter Ellison Melbourne from 2002-
2005. Prior to joining Minter Ellison,
Mr. Jamieson was Chief Executive
Officer at KPMG Australia from 1998-
2000, Managing Partner of KPMG
Melbourne and Southern Regions
from 1993-1998 and Chairman of
KPMG Melbourne from 2001-2002.
Prior to the merger of Touche Ross
& Co and Peat Marwick Hungerfords
to form KPMG, Mr. Jamieson was the
Managing Partner for Australia for
Touche Ross & Co.
He has over 30 years’ experience in
providing advisory and audit services
to a diverse range of public and lar-
ge private companies. He is also a
Fellow of the Institute of Chartered
Accountants in Australia and New
Zealand and a Fellow of the Austra-
lian Institute of Company Directors.
48
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Mr. Isaac Querub
Independent Non-Executive Director
Mr Querub, Master of Law and Bu-
siness Administration (ICADE / Uni-
versidad Pontificia de Comillas), has
extensive experience in the primary
sector. He was CEO of Glencore Es-
paña, a company dedicated to the
trading of crude oil, refined petro-
leum products, nonferrous metals
and minerals, coal and cereals from
1989 to 2003. He was also a member
of the Asturiana de Zinc Council, CEO
of Emed Mining (currently Atalaya Mi-
ning) from 2012 to 2014 and is cu-
rrently a partner and member of the
board of Unimot in Poland, partner
of Bluequest Resources AG in Swit-
zerland, partner of Moka Consulting
SL and partner of Andria Real Estate
Investment in Spain. He is the patron
of many organisations and a member
of the Governing Council at the Uni-
versity of Tel Aviv.
COMPANY SECRETARY
Mr. Donald Stephens, BA (Acc), CA
(resigned February 2018), Mithril Re-
sources Ltd (resigned May 2019) and
Gooroo Ventures Limited (resigned
January 2020).
Mr. Stephens has over 25 years’ ex-
perience in the accounting, mining
and services industries, including 14
years as a partner of HLB Mann Judd
(SA), a firm of Chartered Accoun-
tants. He is a Chartered Accountant
and corporate adviser specialising in
small cap ASX listed entities.
Mr. Stephens is a director of G Pe-
tratherm Limited. Additionally, he is
Company Secretary of Petratherm
Limited and various other unlisted
public companies. Mr. Stephens is a
former director of Odin Metals Limi-
ted (formerly Lawson Gold Limited)
49
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Board Committees
Remuneration and
Nomination Committee
Audit, Business Risk and
Compliance Committee
The principal purpose of the Committee is to assist the
The principle purpose of the Committee is to assist the
Board in fulfilling its governance and oversight responsibili-
Board in fulfilling its governance and oversight responsibi-
ties in relation to remuneration practices so that they:
lities relating to:
— Link rewards to the creation of value for shareholders;
— The integrity of financial accounting practices and
— Facilitate operational excellence by attracting and re-
taining talent;
reporting;
— Risk management;
— Fairly and responsibly reward individuals having regard
— Internal control framework and internal audit;
to individual and Highfield targets and performance as
well as industry remuneration conditions; and
— External audit function; and
— Comply with applicable regulatory obligations.
— Compliance with the Corporations Act, ASX Listing
Rules and the ASX Corporate Governance and
In addition, the Committee oversees selected nomination
Principles.
activities so that boards within the Highfield Group compri-
se individuals who are best able to discharge the responsi-
bilities of directors having regard to the law and excellence
in governance standards.
The members of the Audit, Business Risk and Compliance
Committee are Ms. Pauline Carr (Chairman), Mr. Brian
Jamieson and Mr. Roger Davey. Mr. Roger Davey joined
the Committee effective 1 July 2019 following Mr. Richard
The members of the Remuneration and Nomination
Crookes’s appointment as Chairman on 23 May 2019.
Committee are Ms. Pauline Carr (Chairman), Mr. Richard
Crookes and Mr. Jim Dietz.
50
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Interests in the Securities of the
Company
As at the date of this report, the interests of the Directors in the securities of Highfield Resources Limited are:
Director
Richard Crookes
Pauline Carr
Roger Davey
Jim Dietz
Brian Jamieson
Isaac Querub
Ordinary Shares
Options – exercisable at $0.83
each on or before 30 Jun 2022
Options – exercisable at $1.29
each on or before 30 Jun 2021
-
30,000
-
50,000
-
-
1,000,000
-
-
-
-
-
-
-
1,000,000
-
1,000,000
1,000,000
Results of Operations
The Company’s net loss after taxation attributable to the members of Highfield Resources Limited for the financial year ended
31 December 2019 was $7,526,084 (year ended 31 December 2018: $4,229,832).
Dividends
No dividend was paid or declared by the Company during the financial year and up to the date of this report.
Corporate Structure
Highfield Resources Limited is a company limited by shares, which is incorporated and domiciled in Australia. Through its
100% owned subsidiary, KCL Resources Limited, Highfield owns 100% of Geoalcali SLU (“Geoalcali”), a Spanish incorporated
company which hold the Group’s three exploration projects.
Nature of Operations and Principal
Activities
The principal activity of the Company during the financial year was mineral exploration and progressing its flagship Muga
Project.
51
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Review of Operations
Highfield Resources Limited is a potash company listed on the Australian Securities Exchange with three 100% owned potash
projects located in Spain´s potash producing Ebro Basin.
Muga Project and Vipasca Project
The Company’s flagship Muga Project is targeting the rela-
confirmed the presence of potash at good grades, identif-
tively shallow sylvinite beds in the Muga Project area that
covers about 60km2. Mining is planned to commence at a
ying the anticipated potash seams in the area and confir-
ming the extension of the deposit towards the north west
depth of approximately 350 metres from surface and is the-
of Vipasca. V18-02 confirmed the continuity of the Vipasca
refore ideal for a relatively low cost conventional mine ac-
cessed via a dual decline.
The Muga Project Update in October 2018 also confirmed
the strategic importance of Vipasca as a potential exten-
sion of the Muga Project. The Vipasca Project previously
included the Vipasca permit area and the Borneau permit
area to the west of the Vipasca permit. In February 2019
the Company relinquished the less prospective tenement
of Borneau to focus on the higher potential Vipasca permit
located adjacent to the Muga Project. Following this change
the Vipasca permit, which covers approximately 27km2, is
now reported with the Muga Project. The Vipasca permit is
highly prospective for economic potash mineralisation, with
deposit and that the mineralisation remains open towards
the West. Specifically, V18-02 intersected a total of 37 me-
tres of potash mineralisation including:
— 4.8 metres at an average grade of 15.25% K2O from
996 metres;
— 2.4 metres at an average grade of 14.18% K2O from
1119 metres; and
— 8.1 metres at an average grade of 12.95% K2O from
1139 metres.
V18-01 intersected a total of 1.8 metres of potash minera-
lization at 9.32% K2O, confirming the continuity of the mi-
neralisation towards the north-eastern edge of the Vipasca
a primary focus on the deeper, higher grade, P1 and P2 po-
investigation permit.
tash horizons.
As reported in its September Quarterly Activities Report of
quarter ended 31 December 2019, with the completion of
the 14 October 2019, the Company released assay analysis
for holes V18-01, V18-02 and V18-041 at Vipasca. The as-
drill hole V18-05. Initial visual inspection of the core from
this drill hole indicates continuity of the evaporite sequence
say results for holes V18-01 and V18-02 were positive and
between the Muga Project and Vipasca Permit.
The drilling programme at Vipasca continued during the
1Refer to relevant ASX announcement 10 October 2019, “Encouraging drill hole completed at Vipasca”. The Company confirms that it is not aware of any new
information or data that materially affects the information included in the relevant market announcement.
52
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
53
Muga Project Approvals Process
Muga Project Technical Update
As reported on 6 June 2019, the Company received a posi-
In its March 2019 Quarterly Activities Report the Company
tive Declaración de Impacto Ambiental (“DIA”) in respect of
reported an updated Ore Reserves estimate for Muga,
the Muga Project. This positive DIA means the Company has
providing additional certainty to the Muga Project Update
received the key environmental permit required to move the
and confirming the technical and economic validity of the
Muga Project forward.
The Company continues to have constructive discussions
with the authorities with regards to the Mining Concession,
following the Company’s submission on 13 March 2020 of
the required documentation, which was announced on 16
March 2020. The timing for the receipt of the three Mining
Project. The Proved and Probable Ore Reserve was derived
from the Measured and Indicated Mineral Resource relea-
sed on 10 October 20181 and comprises 108.7 million ton-
nes at 10.2% K2O, with a Proved Ore Reserve of 42.9 million
tonnes at 10.2% K2O and a Probable Ore Reserve of 65.8
million tonnes at 10.2% K2O.
Concessions from the Madrid, Navarra and Aragon mining
In its Quarterly Activities Report for the quarter ended
authorities cannot be confirmed with a definitive date,
30 September 2019, as well as the further clarifying in-
although the positive working relationship between the
formation in relation to the Muga Project released on 21
Company and the three mining authorities should assist in
November 2019, the Company provided an update on the
expediting these approvals.
The work on other permits for construction commencement
continues in parallel with the Mining Concession process.
In the fourth quarter of 2019 the Company submitted its
application for the relevant permits to the local water au-
thority the Confederación Hidrográfica del Ebro (“CHE”).
These permits are related to deviation of small rivers and
other preliminary construction work associated with water
improvements in terms of better technical and commer-
cial outcomes, resulting from detailed test work and basic
design undertaken by German engineering specialists GEA
Messo GmbH and K-UTEC. Barcelona-based Grupo IDP has
commenced detailed design engineering for the process
plant and will work closely with engineering specialists, GEA
Messo GmbH and K-UTEC, to similarly develop the enginee-
ring for a timely construction start.
supply to the mine site. In addition, in the same quarter
As reported, engineering development continued to ad-
the Company submitted all relevant power supply permit
vance in line with the Project programme during the fourth
documentation to the Ministries of Industry and is progres-
quarter, meaning the bulk of the detailed engineering work
sing the permitting and authorisations required for both
is now awarded. K-Utec AG Salt Technologies continues to
the temporary and permanent site electrical supplies. The
progress the design for the backfilling storage and place-
Company is now awaiting the issue of the administrative
ment systems and will perform further test work to aid in
approvals for the power supply prior to applying for the ne-
the optimisation of these systems prior to design work be-
cessary construction permits.
ing carried out.
1Refer to relevant ASX announcement 10 October 2018, “Updated Mineral Resource Estimate – Muga Project”. The Company confirms that it is not aware of any
new information or data that materially affects the information included in the relevant market announcement and that all material assumptions and technical
parameters underpinning the estimate in the relevant market announcement continue to apply and have not materially changed.
54
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Sales and Marketing Update
Project Financing
On 11 September 2019 the Company announced the sig-
The Company has continued to update its project finan-
ning of a MOU for offtake from the Muga Mine with Ameropa
ce syndicate with respect to the financing facility for Muga
AG for the sale of up to 250,000 tonnes per annum of MOP.
since receipt of the positive DIA. Highfield remains confi-
Ameropa is a Swiss based agri-business highly experienced
dent of securing the necessary debt and equity financing in
in global production, logistics, marketing and distribution.
due course, to support a final investment decision and the
commencement of construction.
After the end of 2019 but before the release of this report
the Company also released on 6 February 2020 the sig-
ning of a MOU for the offtake of a further 300,000 tonnes
per annum of MOP with Keytrade AG. Keytrade is a large
Swiss based agri-trader that was first established in 1997.
Keytrade has substantial experience working with all types
of suppliers, distributors, retailers and end-users across all
fertiliser products and is active across the globe.
Both MOUs will provide Highfield with an enhanced unders-
tanding of the MOP market and logistical expertise.
55
55
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Pintanos Project
Highfield´s 100% owned Pintanos Project abuts the Muga
Project to the east and covers an area of 65km2. Depths
In its Quarterly Activities Report for the quarter ended 30
September 2019 released on 14 October 2020, the Company
from surface to mineralisation commence at around 500
reported that it had responded to all comments received
metres. The Company is building on substantial historical
during the consultation period for the award of the drilling
potash exploration information which includes seven drill
permit for Molineras 2, and is now waiting for the award of
holes and ten seismic profiles completed in the late 1980s.
the permit.
56
56
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
57
57
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Sierra del Perdón Project
Highfield´s 100% owned Sierra del Perdón (“SdP”) Project is
been reached. Substantive expenditure on further explo-
located south east of Pamplona and covers approximately
120km2. Sierra del Perdón is a brownfield project which pre-
ration for and evaluation of mineral resources in the Adiós
and Quiñones permits is planned subsequent to a positive
viously hosted two potash mines operating from the 1960s
outcome to the appeal.
until the late 1990s producing nearly 500,000 tonnes of K60
MOP per annum. The evaporite was historically mined pri-
marily for sylvinite but also for carnallite, before the mine
closure in 1996 due to relatively low potash prices of around
US$100/tonne. There is potential for potash exploitation in
new, unmined areas in the Sierra del Perdón Project area.
The Company has carefully considered the facts and cir-
cumstances pertaining to the rejection, its discussions with
the authorities, and the legal advice received. It has con-
cluded that the continued lack of a resolution to the appeal
is not a reflection on the merits of the appeal, nor does it
represent a significant change with an adverse effect on
The Company was advised in the fourth quarter of 2018 that
the entity. The Company has concluded that the Adiós and
the second three year extension application for the Adiós
Quiñones permits are expected to be renewed, in the form
and Quiñones permits within the Sierra del Perdón tenement
of an extension, on the basis that it has strong arguments
area had been rejected by the mining department of the
that will result in a positive outcome to the appeal lodged
Government of Navarra. The Company has obtained legal
on 16 November 2018.
advice and is progressing an appeal process with regards
to this decision.
The drill hole AA-01 carried out during the fourth quarter
at Ampliación de Adiós Investigation Permit reached 422
The timing of the appeal process continues to remain un-
meters. The drill hole intersected the typical potash se-
certain, nonetheless, the Company remains confident of a
quence of the Sierra del Perdón area. The drill hole crossed
positive resolution in due course. During ongoing discus-
the Carnallite member on the top of the sequence and the
sions the authorities have confirmed that they are conti-
Sylvinite member at the bottom. The assay result of this drill
nuing to consider the appeal, but no conclusion has yet
hole will be released to the market when available.
58
58
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
5959
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Izaga Project
In February 2019 the Company relinquished the less pros-
reported that a drill hole in that quarter was less prospecti-
pective areas of Girardo to the north of the Osquia permit
ve than expected. The Company has therefore relinquished
and Palero to the west of the Osquia permit in order to focus
the permit and has recorded an impairment of $0.5m in its
on the more prospective Osquia permit.
financial statements for the year ended 31 December 2019
In its Quarterly Activities Report for the quarter ended 31
December 2019 released on 22 January 2020, the Company
in respect of deferred exploration costs.
6060
60
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Geoalcali
Foundation
Corporate
The Geoalcali Foundation is a not-for-profit Spanish foun-
Directors
dation, funded exclusively by Geoalcali. It was established to
Mr. Peter Albert stepped down from his role as Chief
Executive and Managing Director, and from the Board, on
31 January 2020. The Company engaged a global search
firm and is well advanced in its international recruitment
process. Board Chairman, Mr. Richard Crookes, is the
Company’s Acting CEO until a new CEO commences.
support projects in the communities in which the Company
will operate its mines.
Projects
The Company’s community engagement programme conti-
nues to be well received. The Geoalcali Foundation supports
and finances projects related to its four pillars: Quality
Education, Social Integration, Sustainable Communities, and
Protection of the Environment.
The Geoalcali Foundation currently provides ongoing support
to over 10 community projects and since its establishment in
September 2014 has been involved in more than 150 diffe-
rent projects with town halls, social associations, foundations
and scientific/agricultural organisations. The activities of the
Foundation are very well known and appreciated by the local
community.
61
61
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Annual Review of Ore Reserves and
Mineral Resources
In accordance with ASX Listing Rule 5, the Company has performed an annual review of all JORC-compliant ore reserves and
mineral resources as at 31 December 2019. Rounding differences may occur.
Muga Project
A maiden Ore Reserve for the Muga Project was calculated as part of the Definitive Feasibility Study as released to the ASX
on 30 March 2015.
An updated Ore Reserve for the Muga Project was calculated as at December 2018 and released to the ASX on 22 January
20191. The Company considers this Ore Reserve to be accurate as at 31 December 2019.
Table 1: Muga Ore Reserves Summary
31 December 2019
31 December 2018
31 December 2017
Tonnes In Place
(Mt)
Grade
K2O (%)
Tonnes In Place
(Mt)
Grade
K2O (%)
Tonnes In Place
(Mt)
Proved
Probable
Total Proved & Probable
42.9
65.8
108.7
10.2%
10.2%
10.2%
42.9
65.8
108.7
10.2%
10.2%
10.2%
81.6
172.1
253.7
Grade
K2O (%)
11.7%
11.4%
11.5%
Highfield released an updated JORC-compliant Mineral Resource Estimate (“MRE”) to the ASX on 10 October 20182. The
Company considers this MRE to be accurate as at 31 December 2019. The MRE includes all Ore Reserves shown above in
Table 1.
Table 2: Muga Mineral Resources Summary
31 December 2019
31 December 2018
31 December 2017
Tonnes In Place
(Mt)
Grade
K2O (%)
Tonnes In Place
(Mt)
Grade
K2O (%)
Tonnes In Place
(Mt)
Grade
K2O (%)
Measured
Indicated
Total Measured & Indicated
Inferred
Total
91.8
143.0
234.8
32.6
267.4
12.4%
12.1%
12.3%
12.9%
12.4%
91.8
143.0
234.8
32.6
267.4
12.4%
12.1%
12.3%
12.9%
12.4%
75.1
149.4
224.5
39.2
263.7
13.6%
13.3%
13.4%
13.8%
13.5%
1Refer to relevant ASX announcement 22 January 2019, “Updated Ore Reserve Estimate – Muga Project”. The Company confirms that it is not aware of any new
information or data that materially affects the information included in the relevant market announcement and that all material assumptions and technical para-
meters underpinning the estimate in the relevant market announcement continue to apply and have not materially changed.
2Refer to relevant ASX announcement 10 October 2018, “Updated Mineral Resource Estimate – Muga Project”. The Company confirms that it is not aware of any
new information or data that materially affects the information included in the relevant market announcement and that all material assumptions and technical
parameters underpinning the estimate in the relevant market announcement continue to apply and have not materially changed.
62
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Sierra del Perdón Project
Highfield released a maiden MRE for the Sierra del Perdón Project to the ASX on 7 April 20151. The Company considers this
MRE to be accurate as at 31 December 2019.
Table 3: Sierra del Perdón Mineral Resources Summary
31 December 2019
31 December 2018
31 December 2017
Tonnes In Place
(Mt)
Grade
K2O (%)
Tonnes In Place
(Mt)
Grade
K2O (%)
Tonnes In Place
(Mt)
Grade
K2O (%)
Measured
Indicated
Total Measured & Indicated
Inferred
Total
-
41.8
41.8
40.3
82.1
-
10.7%
10.7%
10.5%
10.6%
-
41.8
41.8
40.3
82.1
-
10.7%
10.7%
10.5%
10.6%
-
41.8
41.8
40.3
82.1
-
10.7%
10.7%
10.5%
10.6%
Pintanos Project
Highfield released a maiden MRE for the Pintanos Project to the ASX on 20 November 2013. During the year ended 30 June
2017, two drill holes were completed at the Pintanos Project (see the Company’s ASX Quarterly Activities Report released
on 24 April 2017). The results of both holes were unfavourable compared with the block model which informed the maiden
Mineral Resource Estimate released on 20 November 2013 and therefore adversely impacted the tonnage available to be
classified as inferred resources. As a result, a revised MRE was prepared and reported in the ASX Additional Information
section of the Company’s annual report for the year ended 30 June 20172, as summarised in Table 4 below. The Company
continues to believe the exploration potential for Pintanos remains strong and will continue exploration of the Project.
The Company considers this MRE to be accurate as at 31 December 2019.
Table 4: Pintanos Mineral Resources Summary
31 December 2019
31 December 2018
31 December 2017
Tonnes In Place
(Mt)
Grade
K2O (%)
Tonnes In Place
(Mt)
Grade
K2O (%)
Tonnes In Place
(Mt)
Grade
K2O (%)
Measured
Indicated
Total Measured & Indicated
Inferred
Total
-
-
-
70.7
70.7
-
-
-
11.9%
11.9%
-
-
-
70.7
70.7
-
-
-
11.9%
11.9%
-
-
-
70.7
70.7
-
-
-
11.9%
11.9%
1Refer to relevant ASX announcement 7 April 2015, “Maiden Resource Estimate for Second Project”. The Company confirms that it is not aware of any new inform-
ation or data that materially affects the information included in the relevant market announcement and that all material assumptions and technical parameters
underpinning the estimate in the relevant market announcement continue to apply and have not materially changed.
2Refer to relevant ASX announcement 28 September 2017, “Annual Report 2017”. The Company confirms that it is not aware of any new information or data that
materially affects the information included in the relevant market announcement and that all material assumptions and technical parameters underpinning the
estimate in the relevant market announcement continue to apply and have not materially changed
63
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Summary
A summary of Highfield’s total Ore Reserves and Mineral Resources is shown below.
Table 5: Highfield Total Ore Reserves Summary (all projects)
31 December 2019
31 December 2018
31 December 2017
Tonnes In Place
(Mt)
Grade
K2O (%)
Tonnes In Place
(Mt)
Grade
K2O (%)
Tonnes In Place
(Mt)
Grade
K2O (%)
Proved
Probable
Total Proved & Probable
42.9
65.8
108,7
10.2%
10.2%
10.2%
42.9
65.8
108.7
10.2%
10.2%
10.2%
81.6
172.1
253.7
11.7%
11.4%
11.5%
Table 6: Highfield Total Mineral Resources Summary (all projects)
The MRE includes all Ore Reserves shown above in Table 5.
31 December 2019
31 December 2018
31 December 2017
Tonnes In Place
(Mt)
Grade
K2O (%)
Tonnes In Place
(Mt)
Grade
K2O (%)
Tonnes In Place
(Mt)
Grade
K2O (%)
Measured
Indicated
Total Measured & Indicated
Inferred
Total
91.8
184.8
276.6
143.6
420.2
12.4%
11.9%
12.0%
11.7%
11.9%
91.8
184.8
276.6
143.6
420.2
12.4%
11.9%
12.0%
11.7%
11.9%
75.1
191.2
266.3
150.2
416.5
13.6%
12.7%
13.0%
12.0%
12.6%
64
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Corporate Governance – Mineral
Resources and Ore Reserves
Calculations
Due to the nature, stage and size of the Company’s existing
calculations. However, the establishment of such a commit-
operations, the Company has historically concluded that
tee, at an appropriate time, remains under consideration. In
there would be insufficient efficiencies or additional gover-
the meantime, the Company continues to ensure that all drill
nance benefits gained by establishing a separate mineral
results and Mineral Resource calculations are validated by
resources and ore reserves committee responsible for re-
a competent, senior geologist and are reviewed and verified
viewing and monitoring the Company’s processes for calcu-
independently by a qualified person. In addition, the existing
lating mineral resources and ore reserves and for ensuring
composition of the Highfield Board of Directors includes a
that the appropriate internal controls are applied to such
qualified geologist.
Significant
Changes in the
State of Affairs
Significant
Events After the
Reporting Date
There have been no significant changes in the state of
An outbreak of a new strain of coronavirus, Covid-19, emer-
affairs of the Group during the financial year, other than as
ged after the end of the reporting period and has caused
set out in this report.
Likely
Developments
and Expected
Results of
Operations
The Directors have excluded from this report any further in-
formation on the likely developments in the operations of
the Company and the expected results of those operations
in future financial periods, as the Directors believe that it
would be speculative and prejudicial to the interests of the
Company.
considerable challenges and disruption to global equity
markets. While there was no material effect on the Financial
Statements for the year ended 31 December 2019, the co-
ronavirus outbreak is still evolving and potential future im-
pacts are unable to be quantified. The Group is in the ex-
ploration and evaluation phase and has not yet commenced
development activities.
Environmental
Regulations and
Performance
The operations of the Company are presently sub-
ject to Environmental Regulation under the laws of the
Commonwealth of Australia and of Spain. The Company has
been at all times in full environmental compliance with the
conditions of its licences.
65
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Share Options
As at the date of this report there were 22,836,150 unissued ordinary shares under options. The details of the options are as
follows:
Number
3,000,000
1,000,000
3,221,170
1,818,171
1,622,191
4,832,221
7,342,397
22,836,150
Exercise Price $
$1.29
$0.83
$0.83
$0.83
$0.83
$1.34
$1.29
Expiry Date
30 June 2021
30 June 2022
31 December 2022
31 December 2023
31 December 2024
30 June 2025
31 December 2025
No option holder has any right under the options to participate in any other share issue of the Company or any other entity.
The following options were issued during the financial year:
— 1,000,000 options with an exercise price of $0.83, expiring on 30 June 2022
— 3,221,170 options with an exercise price of $0.83, expiring on 31 December 2022
— 2,779,471 options with an exercise price of $0.83, expiring on 31 December 2023
— 2,479,867 options with an exercise price of $0.83, expiring on 31 December 2024
The following options lapsed during the financial year:
— 6,850,000 options with an exercise price of $1.85, expiring on 30 June 2024
— 4,550,000 options with an exercise price of $2.50, expiring on 30 June 2019
— 17,175,000 options with an exercise price of $2.00, expiring on 30 June 2019
The following options were cancelled during the financial year:
— 961,300 options with an exercise price of $0.83, expiring on 31 December 2023
— 857,676 options with an exercise price of $0.83, expiring on 31 December 2024
66
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
Indemnification and Insurance of
Directors and Officers
The Company has made an agreement indemnifying all the
current Directors and officers of the Company and of the
Directors and officers of the Company against all losses or
Company’s controlled entities. The liabilities insured are
liabilities incurred by each Director or officer in their capaci-
damages and legal costs that may be incurred in defending
ty as Directors or officers of the Company to the extent per-
civil or criminal proceedings that may be brought against
mitted by the Corporations Act 2001. The indemnification
the officers in their capacity as officers of entities in the
specifically excludes willful acts of negligence.
Group. The total amount of insurance premiums paid has
The Company entered into insurance policies in respect
of Directors’ and Officers’ Liability Insurance contracts for
not been disclosed due to confidentiality reasons.
Directors’ Meetings
The numbers of meetings of Directors and Committees held during the financial year and the number of meetings attended
by each Director were as follows:
Directors’ Meetings
Remuneration and Nomination
Committee
Audit, Business Risk and
Compliance Committee
Director
Derek Carter
Peter Albert
Pauline Carr
Richard Crookes
Roger Davey
Jim Dietz
Owen Hegarty
Brian Jamieson
Isaac Querub
A
5
10
10
10
10
10
5
10
10
B
5
10
9
10
9
10
3
9
9
A
3
5
5
5
5
5
3
5
5
B
2*
4*
5
5
2*
5
1*
3*
-
A
2
6
6
6
6
6
2
6
6
A number of meetings held during the time the Director held office.
B number of meetings attended. Note that Directors may attend Committee Meetings without being a member of that Committee.
* Attendance at meeting by invitation.
B
1
6*
6
5
5
3*
1*
5
1*
67
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
Proceedings
on Behalf of
Company
No person has applied for leave of the Court to bring
proceedings on behalf of the Company or intervene in any
proceedings to which the Company is a party for the purpose
of taking responsibility on behalf of the Company for all or
any part of those proceedings. The Company was not a
party to any such proceedings during the financial year.
Corporate
Governance
In recognising the need for robust standards of corporate
behaviour and accountability, the Directors of Highfield su-
pport and adhere to the principles of sound corporate go-
vernance. The Board recognises the recommendations of
the Australian Securities Exchange Corporate Governance
Council and considers that Highfield is in compliance to the
extent possible with those recommendations which are of
importance and add value to the commercial operation of
a listed exploration and resources development company.
The Company has established a set of corporate governance
policies and procedures and these can be found, together
with the Company’s Code of Business Ethics and Conduct,
on the Company’s website: www.highfieldresources.com.au.
68
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Auditor Independence and
Non-Audit Services
Section 307C of the Corporations Act 2001 requires the Company’s auditor to provide the
Directors of Highfield with an Independence Declaration in relation to the audit of the finan-
cial report. A copy of that declaration is included at page 112 of the annual report. As shown
in note 4, non-audit services totaling $6,000 were provided by the Company’s auditor.
Audited Remuneration
Report
This report, which forms part of the Directors’ report, outlines the remuneration arrange-
ments in place for the key management personnel (KMP) of Highfield Resources Limited for
the year ended 31 December 2019. The information provided in this remuneration report
has been audited as required by Section 308(3C) of the Corporations Act 2001.
The remuneration report details the remuneration arrangements for KMP who are defined
as those persons having authority and responsibility for planning, directing and controlling
the major activities of the Group, directly or indirectly, including any Director (whether exe-
cutive or otherwise) of the Group.
Details of Directors and Other Key
Management Personnel
Directors
Derek Carter
Independent Non-Executive Chairman (resigned 23 May 2019)
Peter Albert
Pauline Carr
Richard Crookes
Managing Director and Chief Executive Officer (resigned 31 January 2020)
Independent Non-Executive Director
Non-Executive Chairman (appointed 23 May 2019) and Acting Chief Executive
Officer
Roger Davey
Independent Non-Executive Director
Jim Dietz
Independent Non-Executive Director
Owen Hegarthy
Non-Executive Director (resigned 23 May 2019)
Brian Jamieson
Non-Executive Director
Isaac Querub
Independent Non-Executive Director
Key Management
Mike Norris
Chief Financial Officer
69
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Remuneration Policy
The Board is responsible for determining and reviewing compensation arrangements for the
Directors and senior executives reporting to the Managing Director. The broad policy is to
ensure that remuneration properly reflects the individuals’ duties and responsibilities and
that remuneration is fair and competitive in attracting, retaining and motivating quality peo-
ple with appropriate skills and experience. At the time of determining remuneration, con-
sideration is given by the Board to the Group’s financial circumstances and performance.
As part of its suite of corporate governance policies and procedures, the Board has adopted
a formal Remuneration and Nomination Committee Charter and Remuneration Policy.
The Committee and Board have established the following parameters as part of the remu-
neration framework for executives:
Level
Short Term Incentive
Long Term Incentive1
Managing Director
Up to 80% of fixed remuneration
100% Corporate KPIs
Up to 100% of fixed remuneration in the
form of options subject to performance
hurdles or vesting conditions
Senior executives
Up to 60% of fixed remuneration
(of which up to 60% is Corporate KPIs
and the remainder Personal KPIs)
Up to 75% of fixed remuneration in the
form of options subject to performance
hurdles or vesting conditions
1 The exercise price of options is set at a premium to the share price at the date of grant, in order to
provide an incentive linked to the longer term performance of the Company relative to the market. The
premium for options granted during the year was 25%. In general, the participant must remain emplo-
yed with the Company at the vesting assessment date of the options.
Remuneration Philosophy
The Company and its controlled entities aim to position themselves so that the total re-
muneration paid to employees will be competitive relative to the relevant market. The
Remuneration and Nomination Committee will undertake a market benchmarking review of
executive positions at least once every three years to ensure that the Company’s remune-
ration offerings remain competitive with its contemporary peer group.
70
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Use of Remuneration
Consultants
The Board and the Remuneration and Nomination
Committee seek and consider advice from independent
remuneration consultants to ensure that they have re-
levant information to the determination of all facets of
remuneration relating to the KMP and senior executives.
The engagement of remuneration consultants is governed
by the Remuneration and Nomination Committee Charter
which sets the protocols and restrictions around the inte-
raction between management and the consultants with a
view to minimising the risk of any undue influence occu-
rring and ensuring compliance with the Corporations Act
2001 requirements.
The advice and recommendations of consultants are
used by the Board and Committee as a guide in formula-
ting remuneration and policy. Decisions are made by the
Board after its own consideration of the issues but having
regard to the advice of the Committee and consultants.
Review of KMP
Remuneration
To ensure that the KMP remuneration remains consistent
with the Company’s remuneration policy, KMP and senior
executive remuneration is reviewed annually by the Board
with the assistance of the Remuneration and Nomination
Committee and, as required, external remuneration con-
sultants. When performing the remuneration review, the
Board considers:
— the Company’s remuneration policy and practices;
— relevant market benchmarks;
— the skills and experience required of each role in
order to grade positions accurately and attract high
calibre people; and
— strategy, business plans and budgets.
71
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Components of Remuneration of Other KMP and Senior
Executives
Total Fixed Remuneration
(“TFR”)
Base remuneration that
reflects the job size,
role, responsibilities and
professional competence of
each executive, according to
their knowledge, experience
and accountabilities and
considering external market
relativities.
At-risk remuneration
Short Term Incentive (“STI”)
Long Term Incentive (“LTI”)
Variable, performance based, annual cash incentive
plan designed to reward high performance against
challenging, clearly defined and measurable objectives
that are based on a mix of Corporate and Personal KPI
targets that are set to incentivise superior performance.
The Board has the flexibility to pay the STI in shares if it
deems this is a more appropriate mechanism as befits
the Company’s status at different junctures in time.
The equity component of the
at-risk reward opportunity,
linked to the creation of
shareholder value and
retention.
The mix of fixed and at-risk remuneration varies depending on the role and level of executive, and also depends on the perfor-
mance of the Company and individual. Compared with other employees, senior positions have a greater proportion of at-risk
remuneration and have a higher proportion of their at-risk remuneration assessed on Company performance KPIs.
Non-Executive Director (“NED”) Remuneration
On appointment to the Board, each NED enters into a service agreement with the Group in the form of a letter of appointment.
The letter summarises the Board policies and terms, including compensation, relevant to the Director.
NED remuneration is reviewed periodically by the Board. NEDs receive a fixed fee remuneration consisting of an annual base
Board fee with additional fees for any committee positions they hold. From time to time and in accordance with the Constitution
the Board may also award non-recurring extra exertion amounts where it determines such payments are warranted. The Board
has determined that Mr. Crookes receive an extra exertion amount of $30,000 per month as Acting Chief Executive Officer.
The aggregate remuneration for NEDs has been set at an amount not to exceed $1,000,000 per annum after the Shareholders’
approval at the general meeting held on 24 May 2018. This amount may only be increased with the approval of Shareholders
at a general meeting.
72
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Details of NED Remuneration
Fees
Board
Remuneration and Nomination Committee
Audit, Business Risk and Compliance Committee
Chairman per annum
$
Member per annum
$
120,000
18,000
18,000
60,000
9,000
9,000
All NEDs (including the Chairman) are entitled to be reimbursed for travelling and other expenses properly incurred by them in
attending any meeting or otherwise in connection with the business or affairs of the Company.
Key Performance Indicators for Short Term Incentives
Key Performance Indicators (“KPIs”) are aligned to reflect corporate and strategic objectives. KPIs are reviewed by the
Company’s Remuneration and Nomination Committee and approved by the Board. The KPIs of the Managing Director and the
senior executives reporting directly to him are also reviewed by the Committee and approved by the Board. They typically
cover targets in respect of safety, permitting, finance, project delivery, investor relations and social responsibility. In addition
the senior executives also have personal KPIs appropriate to their areas of responsibility.
The KPIs for the year ended 31 December 2019 were assessed in accordance with the parameters set out in the Remuneration
Policy section above. The STI for the Managing Director was based on 100% for corporate and strategic KPIs. The STIs for other
senior executives were based on a weighting of up to 60% for corporate and strategic KPIs and the remaining percentage for
personal KPIs.
The level of achievement of KPIs is assessed as Threshold, Target or Stretch, whereby the KPI weighting is multiplied by 85%,
100% or 115% respectively. As a result, the KPI outcome may exceed the KPI weighting.
Summary Corporate and Strategic KPI Performance
For the year ended 31 December 2019 the STI corporate and strategic KPI performance outcomes for KMPs were assessed
as follows:
KPI Category
Safety, Health, Environmental and Community
Financials
Project Progress
Approvals
Total
Short Term Incentive Award
Weighting for 2019
%
2019 Outcome
%
10
25
25
40
100
10
-
-
-
10
The remuneration of the Managing Director, Peter Albert, and the Chief Financial Officer, Mike Norris, for the financial year
included cash bonuses in respect of meeting STI KPIs agreed by the Board. The STI awards relate to the achievement of KPIs
for the year ended 31 December 2019 for which the bonus cost was approved by the Board for payment in April 2020. The
cost of the achievements of KPIs for the year ended 31 December 2019 is included as an expense in the financial statements
for the year ended 31 December 2019.
73
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders LTI Performance and Outcomes for 2019
Awards granted under the Highfield Resources Limited LTI Plan consist of share options which are granted for no considera-
tion and carry no dividend or voting rights. Following vesting and subsequent exercise of the options one ordinary share in the
Company will be allocated per option.
The exercise price of options is set at a premium to the share price at the date of grant, in order to provide an incentive linked
to the longer term performance of the Company relative to the market. The premium for options granted during the year was
25%.
In general, the KMP must also remain employed with the Company at the vesting assessment date of the options.
Details of Remuneration
Details of the nature and amount of each element of the remuneration of each Director and other key management personnel
of the Group for the year ended 31 December 2019 are as below:
Short term
Options
Post-employment
Base
Salary
$
Fees
$
STI
Awards1
$
Other
Benefits2
$
Share-
based
Payments
$
Super-
annuation
$
Prescribed
Benefits
$
Performance
related
%
Total
$
Year ended 31 December 2019
Directors
Derek Carter (resigned 23 May 2019)
-
49,087
-
-
-
4,663
-
53,750
-
Peter Albert (resigned 31 January 2020)
716,147
-
57,512
274,904
282,527
Pauline Carr
Richard Crookes
Roger Davey
Jim Dietz
Owen Hegarty (resigned 23 May 2019)
Brian Jamieson
Isaac Querub
Key Management
Mike Norris
-
-
-
-
-
-
-
96,000
102,500
64,500
69,000
25,000
63,014
60,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
232,200
-
-
-
-
-
430,532
-
91,370
123,959
596,871
-
-
-
-
-
-
5,986
-
-
- 1,331,090
21%
96,000
-
334,700
69%
-
-
-
-
-
-
-
64,500
69,000
25,000
69,000
60,000
- 1,242,732
-
-
-
-
-
48%
33%
1,146,679
529,101
148,882
398,863 1,111,598
10,649
- 3,345,772
1 The STI awards relate to the achievement of KPIs for the year ended 31 December 2019 for which the bonus cost was approved by the
Board for payment in April 2020. The cost of the STI award is included in the financial statements for the year ended 31 December 2019.
2 Benefits relate to paid private accommodation and in-country residency allowance.
74
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
Details of remuneration for the year ended 31 December 2018 are shown below:
Short term
Options
Post-employment
Year ended 31 December 2018
Base
Salary
$
Fees
$
STI
Awards1
$
Other
Benefits
$
Share-based
Payments
$
Super-
annuation
$
Prescribed
Benefits
$
Performance
related
%
Total
$
Directors
Derek Carter
Peter Albert
Pauline Carr
Richard Crookes
Roger Davey
Jim Dietz
Owen Hegarty
Brian Jamieson
Isaac Querub
Key Management
Mike Norris
-
117,808
-
-
-
11,192
-
129,000
-
686,655
-
235,083
229,0612
186,906
- 1,337,705
14%
-
-
-
-
-
-
-
126,0003
78,000
36,167
69,000
60,000
36,758
43,218
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
158,004
-
-
158,004
158,004
3,492
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
126,000
78,000
-
-
194,171
81%
69,000
60,000
198,254
201,222
-
-
80%
79%
12%
24%
410,540
-
138,748
63,7404
83,814
-
696,842
1,097,195
566,951
373,831
292,801
744,732
14,684
- 3,090,194
1 The STI awards relate to the achievement of KPIs for the year ended 31 December 2018 for which the bonus cost was approved by the Board
and paid in March 2019. The cost of the STI award is included in the financial statements for the year ended 31 December 2018.
2 Benefits relate to paid private accommodation and in-country residency allowance.
3 Includes a non-recurring extra exertion payment of $30,000 awarded by the Board.
4 Benefit relates to paid private accommodation.
75
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
Shareholdings of Directors and Other Key Management
Personnel
The number of shares in the Company held by Directors and other key management personnel of the Group, including their per-
sonally related parties, is set out below. There were no shares granted as compensation during the year ended 31 December
2019.
Year ended 31 December 2019
Directors
Balance at the start
of the period
Granted as
compensation
during the period
On exercise of share
options
Other changes
during the period1
Balance at the end
of the period
Derek Carter (resigned 23 May 2019)
9,221,504
Peter Albert (resigned 31 January 2020)
Pauline Carr
Richard Crookes
Roger Davey
Jim Dietz
Owen Hegarty (resigned 23 May 2019)
Brian Jamieson
Isaac Querub
Key Management
Mike Norris
78,000
30,000
-
-
50,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(9,221,504)
-
-
-
-
-
-
-
-
-
-
78,000
30,000
-
-
50,000
-
-
-
-
1 The other change during the period represents an adjustment to exclude shares held by Derek Carter as he was not a Director at the end
of the period.
All equity transactions with Directors and other key management personnel other than those arising from the exercise of re-
muneration options have been entered into under terms and conditions no more favourable than those the Company would
have adopted if dealing at arm’s length.
76
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
Option holdings of Directors and Other Key Management
Personnel
The number of options over ordinary shares in the Company held by each Director and other key management personnel of
the Group, including their personally related parties, is set out below:
Balance at the
start
of the period
Granted as
compensation
during the
period
Exercised
during the
period
Other changes
during the
period1
Balance at
the end
of the period
Cancelled2
Exercisable
Not
exercisable
Year ended 31 December 2019
Directors
Derek Carter (resigned 23 May 2019)
1,000,000
-
Peter Albert (resigned 31 January 2020)
7,812,941
2,933,040
1,000,000
-
-
1,000,000
1,000,000
1,000,000
1,000,000
2,000,000
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1,000,000)
-
-
-
-
(3,000,000)
(1,818,976)
5,927,005
1,114,064
4,812,941
(1,000,000)
-
-
(1,000,000)
-
-
-
-
-
-
-
-
1,000,000
1,000,000
1,000,000
1,000,000
-
-
-
-
-1,000,000
1,000,000
(1,000,000)
-
1,000,000
1,000,000
-
-
-
-
-
-
-
4,592,481
1,360,737
-
(2,450,000)
-
3,503,218
516,852
2,986,366
Pauline Carr
Richard Crookes
Roger Davey
Jim Dietz
Brian Jamieson
Isaac Querub
Key Management
Mike Norris
Owen Hegarty (resigned 23 May 2019)
-
1 Other changes during the period represent expiry of options.
2 Options cancelled reflect the cancellation of options granted to Mr. Albert during the period which had a vesting condition of continuing
employment on 31 December 2020 and 31 December 2021. Mr. Albert’s resignation on 31 January 2020 means that this vesting condition
will not be fulfilled.
No option holder has any right under the options to participate in any other share issue of the Company.
Options granted as part of remuneration have been valued using the binomial method (which is derived from the Black-
Scholes option pricing model but is considered more suitable for companies which do not pay dividends) taking into account
the exercise price, the term of the option, the impact of dilution, the share price at grant date and expected price volatility of
the underlying share and the risk free interest rate for the term of the option.
Options granted under the Company’s employee share option plan carry no dividend or voting rights. For details on the valua-
tion of options, including models and assumptions used, please refer to note 18.
Transactions with Directors and Other Key Management
Personnel
Transactions with key management personnel were made at arm’s length at normal market prices and normal commercial
terms. There were no transactions with key management personnel for the year ended 31 December 2019 other than those
disclosed above.
77
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
Options Affecting Remuneration
The terms and conditions of options granted during the year ended 31 December 2019 affecting remuneration in the current
or future reporting periods are as follows:
Grant date
Number
granted
Expiry
date/last
exercise
date
Fair value
per option
at grant
date
Exercise
price per
option
Value of
options at
grant date1
Number
of options
vested
Vested
Max value
yet to vest
Directors
Derek Carter (resigned 23 May 2019)
-
-
-
-
-
-
-
-
Peter Albert (resigned 31 January 2020)
23/05/19 1,114,064
31/12/22
$0.2536
$0.83 $282,527 1,114,064
$282,527
Pauline Carr
Richard Crookes
Roger Davey
Jim Dietz
Owen Hegarty (resigned 23 May 2019)
Brian Jamieson
Isaac Querub
Key Management
Mike Norris
23/05/19
961,300
31/12/23
$0.2940
$0.83 $282,622
23/05/19
857,676
31/12/24
$0.3219
$0.83 $276,086
-
-
-
-
-
-
-
-
-
-
-
-
23/05/19 1,000,000
30/06/22
$0.2322
$0.83 $232,200 1,000,000
$232,200
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
21/06/19
516,852
31/12/22
$0.4011
$0.83 $207,309
516,852
$207,239
-
-
-2
-2
-
-
-
-
-
-
-
-
21/06/19
445,980
31/12/23
$0.4439
$0.83 $197,971
21/06/19
397,905
31/12/24
$0.4815
$0.83 $191,591
-
-
-
-
$197,971
$191,591
5,293,777
$1,670,306 2,630,916 $721,966 $389,562
1 The value at grant date has been calculated in accordance with the models and assumptions as disclosed in note 18.
2 These options were cancelled after the end of the period because Mr. Albert’s resignation on 31 January 2020 means their vesting condition
of continuing employment on 31 December 2020 and 31 December 2021 will not be fulfilled.
78
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
KMP employment arrangements
The remuneration arrangements for KMP are formalised in employment agreements. These agreements provide for the pay-
ment of fixed remuneration, performance related STI bonuses, other short term benefits, and participation, where eligible, in
the Company’s LTI Plan.
Executive Director
Mr. Albert was employed under an employment agreement which had no fixed term. The notice period was three months.
Depending on the reason for a termination of his employment, Mr. Albert may have been entitled to severance benefits of up to
12 months’ cash remuneration (based on an average of his previous annual fixed remuneration), or other minimum severance
benefits set by Spanish law, as applicable. Mr. Albert was not entitled to severance benefits nor were any paid as a result of
his resignation from the Company.
With effect from 1 January 2018 the weighting of Mr. Albert’s STI was changed from 75% for corporate and strategic KPIs
and 25% for personal KPIs to 100% for corporate and strategic KPIs. During the year ended 31 December 2019 Mr. Albert’s
total fixed remuneration was €444,834 ($716,147). During the year Mr. Albert’s base salary increased by 2.5% from €434,868
($686,655) to €445,740, equal to $713,789 at the year end exchange rate. No changes were made to Mr. Albert’s short term
or long term variable performance based incentives during the year ended 31 December 2019.
Non-Executive Directors
On appointment to the Board, each Non-Executive Director enters into a service agreement with the Group in the form of a le-
tter of appointment. The letter summarises the Board policies and terms, including compensation, relevant to the Director. The
aggregate remuneration for Non-Executive Directors is set at an amount not to exceed $1,000,000 per annum. This amount
may only be increased with the approval of Shareholders at a general meeting. The period of appointment is in accordance
with the Company’s Constitution and the Corporations Act 2001, including the provisions of the constitution which relate to
the rotation of Directors.
Other Key Management Personnel
Mr. Norris is employed under an employment agreement which has no fixed term. The notice period is three months. Depending
on the reason for a termination of his employment, Mr. Norris may be entitled to a payment equal to three months of his an-
nual fixed salary. During the year ended 31 December 2019 Mr. Norris’s base salary increased from €260,000 ($410,540)
to €269,000 ($430,532). In addition, the Board determined that Mr. Norris be provided with a €5,000 per month in-country
residency allowance, effective 1 June 2019. No other changes were made to Mr. Norris’s short term or long term variable per-
formance based incentives during the year ended 31 December 2019.
79
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Loans to Directors and Other Key Management Personnel
There were no loans to Directors or other key management personnel during the year ended 31 December 2019 (year ended
31 December 2018: nil).
Voting and Comments Made at the Company’s May 2019
Annual General Meeting
Highfield Resources Limited received more than 87.65% of “yes” votes on its remuneration report for the financial year ended
31 December 2018. The Company did not receive any specific feedback at the AGM or during the current period on its remu-
neration practices.
Performance Measured by Loss per Share
The table below shows the performance of the Company measured by loss per share:
Year ended
31 December
2019
Year ended
31 December
2018
Six months
ended 31
December
2017
Year ended
30 June
2017
Year ended
30 June
2016
Year ended
30 June
2015
Loss per share (cents)
Share price (at period end)
Share price High for the reporting period
Share price Low for the reporting period
(2.28)
$0.68
$1.01
$0.57
(1.28)
$0.64
$1.13
$0.48
(0.14)
$1.03
$1.20
$0.82
(2.22)
$0.96
$1.49
$0.90
(3.42)
$1.38
$2.04
$1.03
(4.38)
$1.48
$2.08
$0.52
80
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders End of Audited Remuneration Report
Signed on behalf of the Board in accordance with a resolution of the Directors.
Richard Crookes
Chairman and Acting Chief Executive Officer
27 March 2020
81
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
82
82
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
Financial Report
Consolidated Statement of Profit or Loss and Other
Comprehensive Income
Consolidated Statement of Financial Position
Consolidated Statement of Changes in Equity
Consolidated Statement of Cash Flows
Notes to the Consolidated Financial Statements
Directors’ Declaration
Auditor’s Independence Declaration
Independent Auditor’s Report
83
83
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Consolidated Statement of Profit
or Loss and Other Comprehensive
Income
for the year ended 31 December 2019
Note
31 December 2019
$
31 December 2018
$
Continuing Operations
Gain on foreign exchange
Listing and share registry expenses
Professional and consultants’ fees
Director and employee costs
Share-based payments expense
Travel and accommodation
Donations
Depreciation
Impairment of deferred exploration and evaluation expenditure
Other expenses
Interest paid
Loss on foreign exchange
Loss before income tax
Income tax expense
Net loss for the period
Other comprehensive income
Items that may be reclassified to profit and loss
Exchange differences on translation of foreign operations
Other comprehensive (loss)/ income for the period net of tax
Total comprehensive loss for the period
Loss per share
3
18
9
10
19
-
3,239,906
(98,700)
(385,351)
(3,038,678)
(2,334,854)
(66,404)
(92,464)
(55,203)
(493,503)
(767,753)
(59,452)
(133,722)
(76,612)
(396,829)
(2,435,614)
(1,200,804)
(74,257)
(190,391)
(90,095)
(2,785,316)
(110,379)
(109,441)
-
(7,526,084)
(4,229,832)
-
-
(7,526,084)
(4,229,832)
(988,618)
(988,618)
(8,514,702)
3,955,046
3,955,046
(274,786)
Basic and diluted loss per share (cents)
6
(2.28)
(1.28)
The above Consolidated Statement of Profit or Loss and Other Comprehensive Income should be read in conjunction with
the accompanying notes.
84
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
Consolidated Statement of Financial
Position
as at 31 December 2019
Current Assets
Cash and cash equivalents
Other receivables
Total Current Assets
Non-Current Assets
Other receivables
Property, plant and equipment
Deferred exploration and evaluation expenditure
Total Non-Current Assets
Total Assets
Current Liabilities
Trade and other payables
Total Current Liabilities
Total Liabilities
Net Assets
Equity
Issued capital
Reserves
Accumulated losses
Total Equity
Note
31 December 2019
$
31 December 2018
$
7
8
8
9
10
11
12
13
14
39,980,018
738,552
40,718,570
55,157,707
1,042,187
56,199,894
516,733
116,726
69,076
121,566
116,966,324
105,421,745
117,599,783
105,612,387
158,318,353
161,812,281
5,339,651
5,339,651
5,339,651
2,653,731
2,653,731
2,653,731
152,978,702
159,158,550
172,618,930
172,618,930
29,130,221
27,783,985
(48,770,449)
(41,244,365)
152,978,702
159,158,550
The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes.
85
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
Consolidated Statement of Changes
in Equity
for the year ended 31 December 2019
Year ended 31 December 2018
Issued
capital
$
Accumulated
losses
$
Share-based
payments
reserve
$
Foreign
exchange
translation
reserve
$
Option
premium
reserve
$
Total
$
Balance at 1 January 2018
172,399,841 (37,014,533)
19,809,466
2,817,669
1,000 158,013,443
Total comprehensive loss for the period
Loss for the period
Other comprehensive income - foreign currency translation
Total comprehensive loss for the period
Transactions with owners in their capacity as owners
Conversion of options
Cost of issue
Share-based payment
-
-
-
(4,229,832)
-
(4,229,832)
225,000
(5,911)
-
-
-
-
-
-
-
-
1,200,804
-
3,955,046
3,955,046
-
-
-
-
-
-
-
-
-
(4,229,832)
3,955,046
(274,786)
225,000
(5,911)
1,200,804
Balance at 31 December 2018
172,618,930 (41,244,365)
21,010,270
6,772,715
1,000 159,158,550
Year ended 31 December 2019
Balance at 1 January 2019
Total comprehensive loss for the period
Loss for the period
Other comprehensive loss - foreign currency translation
Total comprehensive loss for the period
Transactions with owners in their capacity as owners
Conversion of options
Cost of issue
Share-based payment
172,618,930 (41,244,365)
21,010,270
6,772,715
1,000 159,158,550
-
-
-
-
-
-
(7,526,084)
-
(7,526,084)
-
-
-
-
-
-
-
2,334,854
-
(988,618)
(988,618)
-
-
-
-
-
-
-
-
-
(7,526,084)
(988,618)
(8,514,702)
-
-
2,334,854
Balance at 31 December 2019
172,618,930 (48,770,449)
23,345,124
5,784,097
1,000 152,978,702
The above Consolidated Statement of Changes in Equity should be read in conjunction with the accompanying notes.
86
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
Consolidated Statement of Cash
Flows
for the year ended 31 December 2019
Cash flows from operating activities
Payments to suppliers and employees
Interest paid
Other receipts including GST/VAT received
Net cash used in operating activities
Cash flows from investing activities
Purchase of plant and equipment
Payments for exploration and evaluation expenditure
Net cash used in investing activities
Cash flows from financing activities
Proceeds from conversion of options
Payments for share issue costs
Net cash provided by financing activities
Note
31 December 2019
$
31 December 2018
$
(4,124,221)
(3,125,453)
(59,452)
1,048,745
(109,443)
740,234
7
(3,134,928)
(2,494,662)
(49,361)
(57,130)
(11,398,108)
(11,449,984)
(11,447,469)
(11,507,114)
-
-
-
225,000
(5,911)
219,089
Net decrease in cash and cash equivalents
(14,582,397)
(13,782,687)
Cash and cash equivalents at the beginning of the period
Effect of exchange rate fluctuations on cash
Cash and cash equivalents at the end of the period
7
55,157,707
(595,292)
39,980,018
65,576,728
3,363,666
55,157,707
The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes.
87
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
Notes to the
Consolidated
Financial
Statements
for the year ended 31 December 2019
1. Corporate Information
The financial report of Highfield Resources Limited
(“Highfield Resources”, “Highfield” or “the Company”)
for the year ended 31 December 2019 was authori-
sed for issue in accordance with a resolution of the
Directors on 27 March 2020.
Highfield is a company limited by shares domiciled and
incorporated in Australia whose shares are publicly
traded on the Australian Securities Exchange. The na-
ture of the operations and the principal activities of the
Company are described in the Directors’ Report.
88
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders 2. Summary of Significant Accounting
Policies
a) Basis of Preparation
These general purpose financial statements have been prepared in accordance
with Australian Accounting Standards and Interpretations issued by the Australian
Accounting Standards Board and the Corporations Act 2001. Highfield Resources
Limited is a for-profit entity for the purpose of preparing the financial statements.
The financial statements have also been prepared on a historical cost basis. The
presentation currency is Australian dollars.
b) Compliance Statement
The financial report also complies with International Financial Reporting Standards
(IFRS) as issued by the International Accounting Standards Board (IASB).
c) Basis of Consolidation
The consolidated financial statements comprise the financial statements of the
Company and its subsidiaries (“the Group”) at 31 December 2019 and at 31
December 2018 in the comparative period.
Subsidiaries are those entities over which the Company has the power to govern
the financial and operating policies so as to obtain benefits from their activities.
The existence and effect of potential voting rights that are currently exercisable or
convertible are considered when assessing whether a Company controls another
entity.
In preparing the consolidated financial statements, all intercompany balances and
transactions, income and expenses and profit and losses resulting from intercom-
pany transactions have been eliminated in full. Unrealised losses are also elimina-
ted unless costs cannot be recovered.
d) Foreign Currency Translation
i) Functional currency
The functional currency for each entity in the Group is the currency of the pri-
mary economic environment in which that entity operates. For the Australian
entities, including Highfield Resources Limited, this is Australian dollars. For the
Spanish subsidiary this is Euros.
ii) Transactions and balances
Transactions denominated in other currencies are translated into the functional
currency at the exchange rate prevailing at the date of the transaction or valua-
tion where items are re-measured. Monetary assets and liabilities denominated
in foreign currency are retranslated at year end exchange rates.
Foreign exchange gains and losses resulting from the settlement of such tran-
sactions and from the translation at period end exchange rates of monetary
assets and liabilities denominated in foreign currencies are recognised in the
Consolidated Statement of Profit or Loss and Other Comprehensive Income.
89
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders iii) Presentation currency
The Group’s financial statements are presented in
Australian dollars. On consolidation, income statement
items for each entity are translated from the functio-
nal currency into Australian dollars at average rates of
and amortisation of assets used in exploration and eva-
luation activities. General and administrative costs are
only included in the measurement of exploration and
evaluation costs where they are related directly to ope-
rational activities in a particular area of interest.
exchange where the average is a reasonable approxi-
Exploration and evaluation assets are assessed for im-
mation of rates prevailing on the transaction date. The
pairment when facts and circumstances suggest that
Consolidated Statement of Financial Position items
the carrying amount of an exploration and evaluation
are translated into Australian dollars at period end ex-
asset may exceed its recoverable amount. The recove-
change rates.
e) Segment Reporting
Operating segments are reported in a manner consis-
tent with the internal reporting provided to the chief
operating decision maker. The chief operating decision
maker, who is responsible for allocating resources and
assessing performance of the operating segments, has
been identified as the Managing Director. The Group has
identified a single segment focused on development of
potash mines in Spain. All of the Group’s activities are
rable amount of the exploration and evaluation asset (for
the cash generating unit(s) to which it has been alloca-
ted being no larger than the relevant area of interest)
is estimated to determine the extent of the impairment
loss (if any).
Where an impairment loss subsequently reverses, the
carrying amount of the asset is increased to the revi-
sed estimate of its recoverable amount, but only to the
extent that the increased carrying amount does not ex-
ceed the carrying amount that would have been deter-
mined had no impairment loss been recognised for the
interrelated and financial information is reported to the
asset in previous periods.
Managing Director in this manner.
f) Exploration and evaluation expenditure
Exploration and evaluation expenditures in relation to
each separate area of interest are recognised as an ex-
ploration and evaluation asset in the period in which they
are incurred where the following conditions are satisfied:
Where a decision has been made to proceed with de-
velopment in respect of a particular area of interest,
the relevant exploration and evaluation asset is tested
for impairment and the balance is then reclassified to
development.
Where an area of interest is abandoned, any expenditure
carried forward in respect of that area is written off.
i) the rights to tenure of the area of interest are current;
and
g) Income Tax
ii) at least one of the following conditions is also met:
a) the exploration and evaluation expenditures are
expected to be recouped through successful de-
velopment and exploitation of the area of interest,
or alternatively, by its sale; or
b) exploration and evaluation activities in the area of
interest have not at the balance date reached a
stage which permits a reasonable assessment of
the existence or otherwise of economically reco-
verable reserves, and active and significant ope-
rations in, or in relation to, the area of interest are
continuing.
The income tax expense or benefit for the period is the
tax payable or receivable on the current period’s taxable
income or loss based on the applicable income tax rate
for each jurisdiction adjusted by changes in deferred tax
assets and liabilities attributable to temporary differen-
ces and to unused tax losses.
The current income tax charge is calculated on the basis
of the tax laws enacted or substantively enacted at the
end of the reporting period. Management periodically
evaluates positions taken in tax returns with respect to
situations in which applicable tax regulation is subject
to interpretation. It establishes provisions where appro-
priate on the basis of amounts expected to be paid to
Exploration and evaluation assets are initially measu-
the tax authorities.
red at cost and include acquisition of rights to explore,
studies, exploratory drilling, trenching and sampling and
associated activities and an allocation of depreciation
Current tax assets and liabilities for the current and prior
periods are measured at the amount expected to be
recovered from or paid to the taxation authorities. The
90
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders tax rates and tax laws used to compute the amount are
Unrecognised deferred income tax assets are reasses-
those that are enacted or substantively enacted by the
sed at each balance date and are recognised to the
balance date.
extent that it has become probable that future taxable
profit will allow the deferred tax asset to be recovered.
Deferred income tax is provided on all temporary diffe-
rences at the balance date between the tax bases of
Deferred income tax assets and liabilities are measured
assets and liabilities and their carrying amounts for fi-
at the tax rates that are expected to apply to the period
nancial reporting purposes.
Deferred income tax liabilities are recognised for all ta-
xable temporary differences except when:
— the deferred income tax liability arises from the initial
recognition of goodwill or of an asset or liability in a
transaction that is not a business combination and
that, at the time of the transaction, affects neither
the accounting profit nor taxable profit or loss; or
when the asset is recognised or the liability is settled,
based on tax rates (and tax laws) that have been enac-
ted or substantively enacted at the balance date.
Income taxes relating to items recognised directly in
equity are recognised in equity and not in profit or loss.
Deferred tax assets and deferred tax liabilities are offset
only if a legally enforceable right exists to set off current
tax assets against current tax liabilities and the deferred
tax assets and liabilities relate to the same taxable enti-
— the taxable temporary difference is associated with
ty and the same taxation authority.
investments in subsidiaries, associates or interests
in joint ventures, and the timing of the reversal of the
h) Other taxes
temporary difference can be controlled and it is pro-
bable that the temporary difference will not reverse
in the foreseeable future.
Deferred income tax assets are recognised for all de-
ductible temporary differences and the carry-forward of
unused tax assets and unused tax losses, to the extent
that it is probable that taxable profit will be available
against which the deductible temporary differences and
the carry-forward of unused tax credits and unused tax
losses can be utilised, except when:
— the deferred income tax asset relating to the deduc-
tible temporary difference arises from the initial re-
cognition of an asset or liability in a transaction that
is not a business combination and, at the time of the
transaction, affects neither the accounting profit nor
taxable profit or loss; or
Revenues, expenses and assets are recognised net of
the amount of GST/VAT, except where the amount of
GST/VAT incurred is not recoverable from the taxation
authority. In these circumstances the GST/VAT is recog-
nised as part of the cost of acquisition of the asset or
as part of an item of the expense. Receivables and pa-
yables in the statement of financial position are shown
inclusive of GST/VAT.
The net amount of GST/VAT recoverable from, or paya-
ble to, the government is included as part of receivables
or payables in the statement of financial position. Cash
flows are presented in the statement of cash flows on a
gross basis, except that the GST/VAT component of in-
vesting and financing activities, which is receivable from
or payable to the government, is disclosed as operating
cash flows.
— the deductible temporary difference is associated
i) Impairment of assets
with investments in subsidiaries, associates or in-
terests in joint ventures, in which case a deferred
tax asset is only recognised to the extent that it is
probable that the temporary difference will reverse
in the foreseeable future and taxable profit will be
Goodwill and intangible assets that have an indefinite
useful life are not subject to amortisation and are tested
annually for impairment, or more frequently if events
or changes in circumstances indicate that they might
be impaired. Other assets are tested for impairment
available against which the temporary difference can
whenever events or changes in circumstances indicate
be recognised. The carrying amount of deferred in-
that the carrying amount may not be recoverable. An
come tax assets is reviewed at each balance date
impairment loss is recognised for the amount by which
and reduced to the extent that it is no longer proba-
the asset’s carrying amount exceeds its recoverable
ble that sufficient taxable profit will be available to
amount. The recoverable amount is the higher of an
allow all or part of the deferred income tax asset to
asset’s fair value less costs of disposal and value in
be recognised.
use. For the purposes of assessing impairment, assets
91
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders are grouped at the lowest levels for which there are
Provisions are measured at the present value or mana-
separately identifiable cash inflows which are largely
gement’s best estimate of the expenditure required to
independent of the cash inflows from other assets or
settle the present obligation at the end of the reporting
groups of assets (cash-generating units). Non-financial
period.
assets other than goodwill that suffer an impairment are
reviewed for possible reversal of the impairment at the
end of each reporting period.
j) Cash and cash equivalents
If the effect of the time value of money is material, pro-
visions are discounted using a current pre-tax rate that
reflects the risks specific to the liability. When discoun-
ting is used, the increase in the provision due to the pas-
sage of time is recognised as an interest expense.
Cash comprises cash at bank and in hand. Cash equiva-
lents are short term, highly liquid investments that are
m) Issued capital
readily convertible to known amounts of cash and which
are subject to an insignificant risk of changes in value.
Bank overdrafts are shown within borrowings in current
liabilities in the statement of financial position.
Ordinary shares are classified as equity. Incremental
costs directly attributable to the issue of new shares or
options are shown in equity as a deduction, net of tax,
from the proceeds. Incremental costs directly attributa-
For the purposes of the statement of cash flows, cash
ble to the issue of new shares or options for the acqui-
and cash equivalents consist of cash and cash equi-
sition of a new business are not included in the cost of
valents as defined above, net of outstanding bank
acquisition as part of the purchase consideration.
overdrafts.
k) Trade and other payables
Trade payables and other payables are carried at amor-
tised cost and represent liabilities for goods and servi-
ces provided to the Group prior to the end of the period
that are unpaid and arise when the Group becomes obli-
ged to make future payments in respect of the purchase
of these goods and services.
Trade and other payables are presented as current liabi-
lities unless payment is not due within 12 months after
the reporting period. They are recognised initially at their
fair value and subsequently measured at amortised cost
using the effective interest method.
l) Provisions
Provisions are recognised when the Group has a present
obligation (legal or constructive) as a result of a past
event, it is probable that an outflow of resources em-
bodying economic benefits will be required to settle the
obligation and a reliable estimate can be made of the
amount of the obligation. Provisions are not recognised
for future operating losses.
When the Group expects some or all of a provision to
be reimbursed, for example under an insurance con-
tract, the reimbursement is recognised as a separate
asset but only when the reimbursement is virtually cer-
tain. The expense relating to any provision is presented
in the statement of comprehensive income net of any
reimbursement.
92
n) Revenue
The Group currently has no contracts with customers.
Interest income is recorded using the effective interest
method.
o) Earnings per share
Basic earnings/loss per share is calculated as net profit/
loss attributable to members, adjusted to exclude any
costs of servicing equity (other than dividends) and pre-
ference share dividends, divided by the weighted ave-
rage number of ordinary shares, adjusted for any bonus
element.
Diluted earnings per share is calculated as net profit/
loss attributable to members, adjusted for:
— costs of servicing equity (other than dividends) and
preference share dividends;
— the after tax effect of dividends and interest asso-
ciated with dilutive potential ordinary shares that
have been recognised as expenses; and
— other non-discretionary changes in revenues or ex-
penses during the period that would result from the
dilution of potential ordinary shares;
divided by the weighted average number of ordinary
shares and dilutive potential ordinary shares, adjusted
for any bonus element.
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders p) Share-based payment transactions
i) Equity settled transactions:
The Company provides benefits to individuals acting
as, and providing services similar to, employees (in-
cluding Directors) of the Company in the form of sha-
re-based payment transactions, whereby individuals
render services in exchange for shares or rights over
No expense is recognised for awards that do not ulti-
mately vest, except for awards where vesting is con-
ditional upon a market condition. Where the terms of
an equity settled award are modified, as a minimum
an expense is recognised as if the terms had not been
modified. In addition, an expense is recognised for
any increase in the value of the transaction as a result
of the modification, as measured at the date of the
shares (“equity settled transactions”). There is cu-
modification.
rrently an Employee Share Option Plan (ESOP) in place,
which provides benefits to Directors and individuals
providing services similar to those provided by an
employee.
The cost of these equity settled transactions with em-
ployees is measured by reference to the fair value at
the date at which they are granted. The fair value is
determined by using the binomial method (which is
derived from the Black-Scholes option pricing model
but is considered more suitable for companies which
do not pay dividends) taking into account the ter-
ms and conditions upon which the instruments were
granted, as discussed in note 18. The expected pri-
ce volatility is based on the historic volatility of the
Company’s share price on the ASX.
In valuing equity settled transactions, no account is
taken of any performance conditions, other than con-
ditions linked to the price of the shares of Highfield
Resources Limited (“market conditions”).
The cost of the equity settled transactions is recogni-
sed, together with a corresponding increase in equity,
over the period in which the performance conditions
are fulfilled, ending on the date on which the relevant
employees become fully entitled to the award (“ves-
ting date”).
The cumulative expense recognised for equity sett-
led transactions at each reporting date until vesting
date reflects (i) the extent to which the vesting period
has expired and (ii) the number of awards that, in the
opinion of the Directors of the Company, will ultima-
tely vest. This opinion is formed based on the best
available information at balance date. No adjustment
is made for the likelihood of the market performance
conditions being met as the effect of these conditions
is included in the determination of fair value at grant
date. The charge or credit to profit or loss for a period
represents the movement in cumulative expense re-
cognised at the beginning and end of the period.
Where an equity settled award is cancelled, it is trea-
ted as if it had vested on the date of the cancellation,
and any expense not yet recognised for the award is
recognised immediately. However, if a new award is
substituted for the cancelled award, and designated
as a replacement award on the date that it is granted,
the cancelled and new award are treated as if they
were a modification of the original award, as described
in the previous paragraph.
The cost of equity-settled transactions with non-em-
ployees is measured by reference to the fair value of
goods and services received unless this cannot be
measured reliably, in which case the cost is measured
by reference to the fair value of the equity instruments
granted. The dilutive effect, if any, of outstanding op-
tions is reflected in the computation of earnings/loss
per share (refer to note 6).
ii) Cash settled transactions:
The Company may also provide benefits to employees
in the form of cash-settled share-based payments,
whereby employees render services in exchange for
cash, the amounts of which are determined by refe-
rence to movements in the price of the shares of the
Company.
The cost of cash-settled transactions is measured ini-
tially at fair value at the grant date using the binomial
method taking into account the terms and conditions
upon which the instruments were granted. This fair
value is expensed over the period until vesting with
recognition of a corresponding liability. The liability is
remeasured to fair value at each balance date up to
and including the settlement date with changes in fair
value recognised in profit or loss.
93
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders q) Critical accounting estimates and judgements
directly impact the point of deferral of exploration and
The application of accounting policies requires the use
of judgements, estimates and assumptions about carr-
ying values of assets and liabilities that are not readily
apparent from other sources. The estimates and asso-
ciated assumptions are based on historical experience
and other factors that are considered to be relevant.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed
evaluation expenditure. The deferral policy requires
management to make certain estimates and assumptions
about future events or circumstances, in particular
whether an economically viable extraction operation can
be established. Estimates and assumptions made may
change if new information becomes available.
r) New and amended standards adopted by the
Group
on an ongoing basis. Revisions are recognised in the
The Group adopted the following new or revised accoun-
period in which the estimate is revised if it affects only
ting standards in the period.
that financial period, or in the period of the revision and
future periods if the revision affects both current and
future periods.
Exploration and evaluation expenditure
— AASB 16 Leases was adopted by the Group with effect
from 1 January 2019. However, as the Group currently
has no long term leases (more than 12 months), and
as short term leases (less than 12 months), leases of
a low value, and mineral leases are exempt from the
The application of the Group’s accounting policy
lease accounting requirements, there was no material
for exploration and evaluation expenditure requires
impact on the Group’s current period results nor any
judgement in determining whether future economic
restatement of previously reported financial results.
benefits are likely either from future development or
sale or where activities have not reached a stage which
s) New standards and interpretations not yet adopted
permits a reasonable assessment of the existence of
reserves. The determination of a Joint Ore Reserves
Committee (JORC) resource is itself an estimation
process that requires varying degrees of uncertainty
depending on sub-classification and these estimates
There are no other standards that are not yet effective
and that would be expected to have a material impact on
the Group in the current or future reporting periods and
on foreseeable future transactions.
94
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders 3. Expenses
Professional and consultants’ fees
Corporate advisory fees
Legal fees
Other
31 December 2019
$
31 December 2018
$
(280,451)
(27,838)
(77,062)
(385,351)
(237,934)
(52,004)
(106,891)
(396,829)
For the year ended 31 December 2019, Director costs are reported within Director and employee costs in the Consolidated
Statement of Profit or Loss and Other Comprehensive Income. In the comparative period Director costs of $581,635
have therefore been reclassified from Professional and consultants’ fees to Director and employee costs.
4. Auditors’ Remuneration
The auditor of Highfield Resources Limited is PricewaterhouseCoopers Australia “PwC”
Amounts received or due and receivable by the parent auditor for:
- an audit or review of the financial report
- other services
Remuneration of other related entities of “PwC”
Amounts received or due and receivable by the subsidiary auditor for:
- an audit or review of the financial report
51,276
6,000
38,000
-
29,632
86,908
29,062
67,062
95
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
5. Income Tax
a) Income tax expense
Major component of tax expense for the period:
Current tax
Deferred tax
31 December 2019
$
31 December 2018
$
-
-
-
-
-
-
b) Numerical reconciliation between aggregate tax expense recognised in the statement of profit or loss
and other comprehensive income and tax expense calculated per the statutory income tax rate
The tax on the Group’s loss before tax differs from the theoretical amount that would arise using the applicable tax
rate prevailing in the countries in which the Group operates as follows:
Loss from continuing operations before income tax expense
(7,526,084)
(4,229,832)
Tax calculated at domestic tax rates applicable to profit/(losses) in the respective
countries
(2,282,815)
(1,268,950)
Share-based payments
Non-deductible expenses
Net income tax benefit not brought to account
Income tax expense
86,676
1,975,790
220,349
-
170,807
117,232
980,911
-
c) Deferred tax
The following deferred tax balances have not been brought to account:
Losses available to offset against future taxable income
Net deferred tax asset not recognised
14,317,912
14,317,912
13,335,397
13,335,397
d) Unused tax losses
Unused tax losses
Potential tax benefit not recognised at the domestic tax rate in the respective
countries
The benefit for tax losses will only be obtained if:
50,269,259
44,451,323
14,317,912
13,335,397
i) the Company derives future assessable income of a nature and of an amount sufficient to enable the benefit
from the deductions for the losses to be realised;
ii) the Company continues to comply with the conditions for deductibility imposed by tax legislation; and
iii) no changes in tax legislation adversely affect the Company in realising the benefit from the deductions for the
losses.
The balances in notes 5(c) and 5(d) for the current period include the losses available to offset against future taxable
income for the Company’s Spanish subsidiary as well as for the Company itself.
96
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
6. Loss per Share
31 December 2019
$
31 December 2018
$
Loss used in calculating basic and diluted EPS
(7,526,084)
(4,229,832)
Weighted average number of ordinary shares used in calculating basic loss per share
329,525,003
329,399,387
Number of Shares
Effect of dilution:
Share options
-
-
Adjusted weighted average number of ordinary shares used in calculating diluted loss per share
329,525,003
329,399,387
Basic and diluted loss per share (cents)
(2.28)
(1.28)
There is no impact from the 22,836,150 options outstanding at 31 December 2019 (31 December 2018: 43,749,618) on
the earnings per share calculation because they are anti-dilutive. These options could potentially dilute basic EPS in the
future. There have been no transactions involving ordinary shares or potential ordinary shares that would significantly
change the number of ordinary shares or potential ordinary shares outstanding between 31 December 2019 and the date
of completion of these financial statements.
7. Cash and Cash Equivalents
Reconciliation of cash
Cash at bank
39,980,018
55,157,707
Reconciliation of operating loss after tax to net cash flow from operations
Loss after tax
(7,526,084)
(4,229,832)
Non-cash and non-operating items in operating loss after tax:
Share-based payments
Net (loss)/gain on foreign exchange
Impairment of deferred exploration and evaluation expenditure
Depreciation
Change in assets and liabilities
Decrease in trade and other receivables
Increase in trade and other payables
Net cash used in operating activities
2,334,854
133,722
493,503
55,203
(65,524)
1,439,398
1,200,804
(3,239,906)
2,785,316
90,095
537,759
361,102
(3,134,928)
(2,494,662)
97
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
8. Other Receivables
Current
GST receivable
VAT receivable
Guarantees
Deposits
Non-current
Guarantees
31 December 2019
$
31 December 2018
$
47,443
653,338
-
37,771
738,552
516,733
516,733
43,629
367,744
601,836
28,978
1,042,187
69,076
69,076
GST/VAT receivable and other receivables are non-interest bearing and generally receivable on terms between 30 and
45 days. They are neither past due nor impaired. The amount is fully collectible. Due to the short term nature of these
receivables, their carrying value is assumed to approximate their fair value. Guarantees and deposits represent amounts
provided to third parties. At 31 December 2019 guarantees totaling $460,686 have been reclassified from current
receivables to non-current receivables
9. Property, Plant and Equipment
Cost
Accumulated depreciation and impairment
Net carrying amount
Movements in Property, Plant and Equipment
Opening balance
Additions
Net exchange differences on translation
Depreciation charge for the period
Closing balance
658,279
(541,553)
116,726
121,566
51,959
(1,596)
(55,203)
116,726
614,213
(492,647)
121,566
154,996
49,125
7,540
(90,095)
121,566
98
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
10. Deferred Exploration and Evaluation Expenditure
31 December 2019
$
31 December 2018
$
Exploration and Evaluation phase - at cost
Opening balance
Exploration and evaluation expenditure incurred during the period
Net exchange differences on translation
Impairments
Closing balance
105,421,745
13,115,579
(1,077,497)
(493,503)
94,090,220
10,408,122
3,708,719
(2,785,316)
116,966,324
105,421,745
The Company was advised in the fourth quarter of 2018 that the second three year extension application for the Adiós
and Quiñones permits within the Sierra del Perdón tenement area had been rejected by the mining department of the
Government of Navarra. The Company has obtained legal advice and is progressing an appeal process with regards
to this decision. The timing of the appeal process continues to remain uncertain, nonetheless, the Company remains
confident of a positive resolution in due course. During ongoing discussions the authorities have confirmed that they
are continuing to consider the appeal, but no conclusion has yet been reached. Substantive expenditure on further
exploration for and evaluation of mineral resources in the Adiós and Quiñones permits is planned in 2020 subsequent
to a positive outcome to the appeal.
The Company has carefully considered the facts and circumstances pertaining to the rejection, its discussions with
the authorities, and the legal advice received. It has concluded that the continued lack of a resolution to the appeal
is not a reflection on the merits of the appeal, nor does it represent a significant change with an adverse effect on
the entity. The Company has concluded that the Adiós and Quiñones permits are expected to be renewed, in the
form of an extension, on the basis that it has strong arguments that will result in a positive outcome to the appeal
lodged on 16 November 2018. The Company’s assessment was therefore that no circumstances in accordance with
paragraph 20 of AASB 6 had occurred that would indicate that the carrying amount of the exploration and evaluation
expenditure for the Sierra del Perdón tenement area may exceed its recoverable amount. As indicated the Company
is confident its appeal will be successful. While not its expectation, the Company believes an impairment of $13m
would be appropriate in the event that the appeal were not successful. An impairment expense of $493,503 (2018:
$2,785,316) was recorded in the current period in relation to the Izaga area of interest, which has been relinquished,
and represents expenses previously deferred in relation to this project.
The ultimate recoupment of costs carried forward for exploration and evaluation expenditure is dependent on the
successful development and commercial exploitation or sale of the respective mining areas.
11. Trade and Other Payables
Trade payables
Other payables
Accruals
2,046,145
27,196
3,266,310
5,339,651
1,214,314
40,135
1,399,282
2,653,731
Trade payables, other payables and accruals are non-interest bearing and generally payable on terms between 30
and 45 days. Due to the short term nature of these payables, their carrying value is assumed to approximate their fair
value.
99
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
12. Issued Capital
a) Issued and paid up capital
31 December 2019
$
31 December 2018
$
Issued and fully paid
172,618,930
172,618,930
b) Movements in ordinary shares on issue
31 December 2019
31 December 2018
Number of shares
$
Number of shares
$
Opening Balance
329,525,003
172,618,930
329,225,003
172,399,841
Shares issued upon conversion of unlisted options1
Transaction costs on share issue
-
-
-
-
300,000
-
225,000
(5,911)
329,525,003
172,618,930
329,525,003
172,618,930
1 December 2019
— No shares were issued during the year ended 31 December 2019.
December 2018
— 250,000 shares were issued upon conversion of unlisted options exercisable at $0.75, expiring on 30 June
2018.
— 50,000 shares were issued upon conversion of unlisted options exercisable at $0.75, expiring on 11 September
2018.
c) Ordinary shares
The Company does not have authorised capital nor par value in respect of its issued capital. Ordinary shares have
the right to receive dividends as declared and, in the event of a winding up of the Company, to participate in the
proceeds from sale of all surplus assets in proportion to the number of and amounts paid up on shares held.
Ordinary shares entitle their holder to one vote, either in person or proxy, at a meeting of the Company.
d) Capital risk management
The Company’s capital comprises share capital and reserves less accumulated losses amounting to a net equity of
$152,978,702 at 31 December 2019. The Company manages its capital to ensure its ability to continue as a going
concern and ultimately to optimise returns to its shareholders. The Company was ungeared at period end and not
subject to any externally imposed capital requirements. Refer to note 17 for further information on the Company’s
financial risk management policies.
100
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
e) Share Options
As at the date of this report there were 22,836,150 unissued ordinary shares under options. The details of the options are
as follows:
Number
3,000,000
1,000,000
3,221,170
1,818,171
1,622,191
4,832,221
7,342,397
22,836,150
Exercise Price $
$1.29
$0.83
$0.83
$0.83
$0.83
$1.34
$1.29
Expiry Date
30 June 2021
30 June 2022
31 December 2022
31 December 2023
31 December 2024
30 June 2025
31 December 2025
No option holder has any right under the options to participate in any other share issue of the Company.
The following options were issued during the financial year:
— 1,000,000 options with an exercise price of $0.83, expiring on 30 June 2022
— 3,221,170 options with an exercise price of $0.83, expiring on 31 December 2022
— 2,779,471 options with an exercise price of $0.83, expiring on 31 December 2023
— 2,479,867 options with an exercise price of $0.83, expiring on 31 December 2024
The following options lapsed during the financial year:
— 6,850,000 options with an exercise price of $1.85, expiring on 30 June 2024
— 4,550,000 options with an exercise price of $2.50, expiring on 30 June 2019
— 17,175,000 options with an exercise price of $2.00, expiring on 30 June 2019
The following options were cancelled during the financial year:
— 961,300 options with an exercise price of $0.83, expiring on 31 December 2023
— 857,676 options with an exercise price of $0.83, expiring on 31 December 2024
No options were exercised during the financial year ended 31 December 2019.
For full details refer to note 18.
101
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
f) Summary of options granted under the Long Term Incentive (LTI) Plan
Opening Balance
Granted
Exercised
Cancelled
Lapsed
31 December 2019
31 December 2018
Average exercise
price per share option
Number of options
Average exercise
price per share option
Number of options
$1.81
$0.83
-
$0.83
$2.04
$1.19
43,749,618
9,480,508
-
(1,818,976)
(28,575,000)
22,836,150
$1.57
$1.29
$0.75
-
$0.82
$1.81
51,007,221
10,342,397
(300,000)
-
(17,300,000)
43,749,618
Vested and exercisable at year end
$1.02
7,221,170
$1.68
31,975,000
13. Reserves
Share-based payments reserve
Foreign exchange translation reserve
Option premium reserve
Movements in Reserves
Share-based payments reserve
Opening balance
Share-based payments expense
Closing balance
31 December 2019
$
31 December 2018
$
23,345,124
5,784,097
1,000
21,010,270
6,772,715
1,000
29,130,221
27,783,985
21,010,270
2,334,854
23,345,124
19,809,466
1,200,804
21,010,270
The share-based payment reserve is used to record the value of equity benefits provided to Directors and executives
as part of their remuneration and non-employees for their goods and services. Refer to note 18 for further details of
the securities issued during the year ended 31 December 2019.
Foreign exchange translation reserve
Opening balance
Foreign exchange translation difference
Closing balance
6,772,715
(988,618)
5,784,097
2,817,669
3,955,046
6,772,715
The foreign exchange differences arising on translation of foreign controlled entities are taken to the foreign
exchange translation reserve.
Option premium reserve
Opening balance
Issue of unlisted options
Closing balance
1,000
-
1,000
1,000
-
1,000
The option premium reserve is used to record the amount received on the issue of unlisted options.
102
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
14. Accumulated Losses
Movements in accumulated losses were as follows
Opening balance
Loss for the period
Closing balance
31 December 2019
$
31 December 2018
$
(41,244,365)
(7,526,084)
(37,014,533)
(4,229,832)
(48,770,449)
(41,244,365)
15. Directors and Other Key Management Personnel
Disclosures
Remuneration of Directors and Other Key Management Personnel
Details of the emoluments of the Directors and other key management personnel of the Company for the period are
as follows:
Short term employee benefits
Share-based payments
Post-employment
2,223,525
1,111,598
10,649
3,345,772
2,330,778
744,732
14,684
3,090,194
Key management personnel are defined as those persons having authority and responsibility for planning, directing
and controlling the major activities of the Group, directly or indirectly, including any Director (whether executive or
otherwise) of the Group.
16. Related Party Disclosures
a) Key management personnel
Please refer to note 15 Directors and Other Key Management Personnel Disclosures.
b) Subsidiaries
The consolidated financial statements include the financial statements of Highfield Resources Limited and the
subsidiaries listed in the following table:
Name of Entity
KCL Resources Limited
Geoalcali SLU
Equity Holding
Country of Incorporation
31 December
2019
31 December
2018
Australia
Spain
100%
100%
100%
100%
103
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
17. Financial Risk Management
Exposure to foreign currency risk, credit risk, liquidity risk and interest rate risk arises in the normal course of the
Company’s business. The Company uses different methods as discussed below to manage these risks that arise from
these financial instruments. The objective is to support the delivery of the financial targets while protecting future
financial security.
a) Liquidity Risk
Liquidity risk is the risk that the Company will encounter difficulty in meeting obligations associated with financial
liabilities. The Company manages liquidity risk by maintaining sufficient cash facilities to meet the operating
requirements of the business and where appropriate investing excess funds in highly liquid short term investments.
The responsibility for liquidity risk management rests with the Board of Directors.
Alternatives for sourcing future capital needs include the Company’s cash position and the issue of equity
instruments, as well as debt financing. These alternatives are evaluated to determine the optimal mix of capital
resources for capital needs. The Directors expect that present levels of liquidity along with future capital raising will
be adequate to meet expected capital needs.
Maturity analysis for financial liabilities
Financial liabilities of the Company comprise trade and other payables. The contractual maturities of all trade and
other payables are less than 6 months.
b) Interest Rate Risk
Interest rate risk arises from the possibility that changes in interest rates will affect future cash flows or the fair
value of financial instruments. The Company’s exposure to market risk for changes to interest rate risk relates
primarily to its earnings on cash and term deposits. The Company manages the risk by investing in short term
deposits where appropriate.
The Company holds substantially all of its cash and cash equivalents in Euros, being the primary currency in which
it expects to make expenditure for the development of the Muga Mine. In the year ended 31 December 2019 $566
were earned on Australian dollar balances and $60,018 were charged on Euro balances, reflecting the fact that
interest rates on Euro balances are negative In 2018 interest earned on Australian dollar balances totalled $6,665
and charges on Euro balances were $116,106. During the year ended 31 December 2019 the Company moved its
Euro balances to banks that do not charge negative interest.
Interest rate sensitivity
The following table demonstrates the sensitivity of the Company’s statement of profit or loss and other comprehensive
income to a reasonably possible change in interest rates, with all other variables constant.
Effect on Post Tax Loss ($)
(Increase)/decrease
Effect on Equity incl. accumulated losses ($)
Increase/(decrease)
31 December 2019
31 December 2018
31 December 2019
31 December 2018
Increase 75 basis points
Decrease 75 basis points
933
(566)
6,567
(6,567)
933
(566)
6,567
(6,567)
A sensitivity of 75 basis points has been used as this is considered reasonable given the current level of both short
term and long term Australian dollar interest rates. The change in basis points is derived from a review of historical
movements and management’s judgement of future trends.
104
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders c) Credit Risk Exposures
Credit risk represents the risk that the counterparty to the financial instrument will fail to discharge an obligation and
cause the Company to incur a financial loss. The Company’s maximum credit exposure is the carrying amounts on the
statement of financial position. The Company holds financial instruments with credit worthy third parties. At 31 December
2019, 99% of the Company’s cash and cash equivalents were held in financial institutions with a rating from Standard &
Poors of BBB+ or above (long term). The Company had no past due or impaired debtors as at 31 December 2019.
d) Foreign Currency Risk
The Company undertakes certain transactions denominated in foreign currencies, hence exposures to exchange rate
fluctuations arise. Exchange rate exposures are managed within approved policy parameters utilising forward foreign
exchange contracts. The carrying amounts of the Group’s foreign currency denominated monetary assets and monetary
liabilities at the balance date expressed in Australian dollars were as follows:
Euro
US dollars
GB pounds
Canadian dollars
Total
Liabilities ($)
Assets ($)
31 December 2019
31 December 2018
31 December 2019
31 December 2018
5,223,706
2,994,965
40,494,872
54,635,744
23,240
14,590
-
87,537
55,243
1,621
14,111
14,047
-
-
-
-
5,261,536
3,139,366
40,508,983
54,649,791
The monetary assets and liabilities in the table above for the current period include the balances of the Company’s
Spanish subsidiary as well as for the Company itself.
Foreign currency sensitivity analysis
The Company is exposed to Euro currency fluctuations. The following table details the Group’s sensitivity to a 10%
increase and decrease in the Euro against the Australian dollar on the above foreign currency denominated monetary
assets and liabilities, expressed in Australian dollars.
31 December 2019
Profit or loss
Other equity
31 December 2018
Profit or loss
Other equity
e) Fair Value
Euro Movement
Increase ($)
Decrease ($)
3,916,384
3,916,384
5,723,381
5,723,381
(3,204,313)
(3,204,313)
(4,682,766)
(4,682,766)
The carrying amounts of current receivables and current payables are considered to be a reasonable approximation of
their fair value. The Company did not hold any derivative instruments measured at fair value at 31 December 2018 or 31
December 2019.
105
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders 18. Share-Based Payments
Share-based payment transactions recognised as operational expenses in the Consolidated Statement of Profit or
Loss and Other Comprehensive Income during the period were as follows:
Options granted during the period
Options granted in prior periods
31 December 2019
$
31 December 2018
$
1,803,299
531,555
2,334,854
626,887
573,917
1,200,804
The Company operates an equity incentive plan known as ´Highfield Resources Limited Employee Long Term Incentive
Plan’ (“ELTIP”). Subject to the attainment of performance hurdles and vesting conditions participants in this plan may
receive options. The objective of this plan is to assist in the recruitment, reward, retention and motivation of senior
managers. The fair value at grant date of options granted during the period was determined using the binomial me-
thod, as described in note 2(p), taking into account the exercise price, the term of the option, the share price at grant
date, the expected price volatility of the underlying share and the risk free interest rate for the term of the option.
The table below summarises options granted during the year ended 31 December 2019:
Grant Date
Expiry date
Exercise price
23/05/2019
30/06/2022
21/06/2019
31/12/2022
21/06/2019
31/12/2023
21/06/2019
31/12/2024
$0.83
$0.83
$0.83
$0.83
Number at
start of the
period
Granted
during the
period
Exercised
during the
period
Cancelled
during the
period
Number at
end of the
period
Exercisable
at end of the
period
-
-
-
-
1,000,0001
3,221,1702
2,779,4713
2,479,8674
9,480,508
-
-
-
-
-
-
-
1,000,000
1,000,000
3,221,170
3,221,000
(961,300)5
1,818,171
(857,676)5
1,622,191
-
-
(1,818,976)
7,661,532
4,221,000
1 Options granted to the new Non-Executive Chairman appointed at the Company’s AGM on 23 May 2019. There are
no service vesting or performance vesting conditions in respect of these options.
2 Options granted to the Managing Director, Chief Financial Officer and other employees. The options vested on sati
faction of the recipient’s continued employment vesting condition at 31 December 2019.
3 Options granted to the Managing Director, Chief Financial Officer and other employees. The options will vest on
satisfaction of the recipient’s continued employment vesting condition at 31 December 2020.
4 Options granted to the Managing Director, Chief Financial Officer and other employees. The options will vest on
satisfaction of the recipient’s continued employment vesting condition at 31 December 2021.
5 Options cancelled relate to options granted to the Managing Director Mr. Albert during the period which had a vesting con-
dition of continuing employment on 31 December 2020 and 31 December 2021. Mr. Albert’s resignation on 31
January 2020, which was announced on 6 December 2019, means that this vesting condition would not be fulfilled.
The model inputs for options granted during the year ended 31 December 2019 included:
a) options were granted for no consideration;
b) expected lives of the options range from 3.1 to 5.5 years;
c) share price at grant date ranged from $0.685 to $0.900;
d) expected volatility of 58%;
e) expected dividend yield of Nil; and
f) a risk free interest rate of 0.89%.
106
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
The table below summarises options granted during the year ended 31 December 2018:
Grant Date
Expiry date
Exercise price
08/06/2018
30/06/2021
08/06/2018
31/12/2025
$1.29
$1.29
Number at
start of the
period
Granted during
the period
Exercised
during the
period
Lapsed or
cancelled
during the
period
Number at end
of the period
Exercisable
at end of the
period
-
-
3,000,0001
7,342,3972
10,342,397
-
-
-
-
-
-
3,000,000
3,000,000
7,342,397
-
10,342,397
3,000,000
1 Comprises 1,000,000 options granted to each of the three Non-executive Directors appointed during 2018 as confirmed
at the AGM on 24 May 2018. There are no service vesting or performance vesting conditions in respect of these options.
2 Represents options granted to the Manager Director, Chief Financial Officer and other employees. The options will vest on
satisfaction of the following Vesting Conditions during the three year vesting period commencing on 1 January 2018 and
ending on 31 December 2020:
a) Market Based Performance:
50% of the options will be assessed for vesting based upon the Company’s relative share price performance at the start of
the vesting period, being the 20 day Volume Weighted Average Price (VWAP) of the Company’s shares immediately prece-
ding 1 January each year, to the closing price of the Company’s shares at the conclusion of the vesting period, being the
20 day VWAP immediately preceding 31 December 2020, versus the performance of the S&P/ASX 300 Resources Index
(XKR) for the same period, in accordance with a defined scale as follows:
— Below 10% of index performance = nil vesting;
— Between -10% and 0% of index performance = vests 2.5% per 1% so “at index” 25% vests; and
— Above index performance = vests at 3% per 1% so at 25% above index 100% vests;
b) Total Shareholder Return (TSR):
50% of the options will be assessed for the vesting based upon the Company’s TSR from the opening price of the
Company’s shares at the start of the Vesting Period to the closing price of the Company’s shares at the conclusion of the
vesting period. The performance measure is absolute performance based on compound annual growth rate achieved in
TSR. The proportion of the TSR Options that vests into shares will be determined in accordance with the following vesting
scale:
— Zero to 10% = vests at 3% per 1% so at 10% TSR 30% vests;
— Above 10% = vests at 7% per 1% so at 20% TSR 100% vests.
The model inputs for options granted during the six months ended 31 December 2018 included:
a) options were granted for no consideration;
b) expected lives of the options range from 3.0 to 7.5 years;
c) share price at grant date ranged from $0.725 to $1.005;
d) expected volatility ranged from 21% to 53%;
e) expected dividend yield of Nil; and
f) a risk free interest rate ranging from 2.09% to 2.20%.
107
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
19. Geographic Segment Analysis
a) Net interest (paid)/received
Australia
Spain
b) Non-current Assets
Australia
Spain
31 December 2019
$
31 December 2018
$
(59,452)
(109,441)
-
-
(59,452)
(109,441)
-
-
117,599,783
105,612,387
117,599,783
105,612,387
108
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
20. Significant Events after
the Reporting Period
An outbreak of a new strain of coronavirus, Covid-19,
emerged after the end of the reporting period and
has caused considerable challenges and disruption
to global equity markets. While there was no mate-
rial effect on the Financial Statements for the year
ended 31 December 2019, the coronavirus outbreak
is still evolving and potential future impacts are una-
ble to be quantified. The Group is in the exploration
and evaluation phase and has not yet commenced
development activities.
21. Contingent Assets and
Liabilities
There are no known contingent assets or liabilities
as at 31 December 2019 (December 2018: Nil).
22. Dividends
No dividend was paid or declared by the Company
in the year ended 31 December 2019 or the period
since the end of the twelve months financial period
and up to the date of this report. The Directors do
not recommend that any amount be paid by way of
dividend for the year ended 31 December 2019.
23. Geoalcali Foundation
As part of its Community Engagement Programme,
the Company established a not-for-profit Spanish
foundation called
the Geoalcali Foundation
(“Foundation”). The Foundation is supported ex-
clusively by Geoalcali and since its inauguration
in September 2014 has been involved in over 150
community projects.
24. Commitments
At 31 December 2019, the Group had entered into
a number of contracts as part of the development
of the Muga Potash Project located in Spain. The
expected payments in relation to these contracts
which were not required to be recognised as liabili-
ties at 31 December 2019 amounted to approxima-
tely $59.4m. The contracts are able to be terminated
by the Company at any point in time. The amount
payable following termination would be approxima-
tely $1.0m.
109
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders 25. Parent Entity Information
The following information relates to the parent entity, Highfield Resources Limited, at 31 December 2019 and for the
year then ended. The information presented here has been prepared using consistent accounting policies with those
presented in note 2.
Current assets
Total assets
Current liabilities
Total liabilities
Net assets
Issued capital
Reserves
Accumulated losses
Total Equity
(Loss)/profit of the parent entity
Other comprehensive income for the period
Total comprehensive (loss)/income of the parent entity
31 December 2019
$
31 December 2018
$
39,872,950
153,052,297
(308,437)
(308,437)
55,328,002
159,340,261
(225,440)
(225,440)
152,743,860
159,114,821
172,618,930
23,346,124
(43,221,195)
172,618,930
21,011,270
(34,515,379)
152,743,860
159,114,821
31 December 2019
$
31 December 2018
$
(8,705,815)
-
(8,705,815)
418,878
-
418,878
110
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Directors’ Declaration
In accordance with a resolution of the Directors of Highfield Resources Limited, I state that:
In the opinion of the Directors:
a) the financial statements and notes of Highfield Resources Limited for the year ended 31 December 2019 are in accor-
dance with the Corporations Act 2001, including:
i) complying with Accounting Standards (including the Australian Accounting Interpretations), the Corporations
Regulations 2001 and other mandatory professional reporting requirements, and
ii) giving a true and fair view of the Group’s financial position as at 31 December 2019 and of its performance for the
financial year ended on that date, and
b) There are reasonable grounds to believe that the Company will be able to pay its debts as and when they become due
and payable, and
c) the financial statements and notes also comply with International Financial Reporting Standards as disclosed in note
2(b).
This declaration has been made after receiving the declaration by the Acting Chief Executive Officer and the Chief Financial
Officer required to be made in accordance with section 295A of the Corporations Act 2001 for the year ended 31 December
2019.
On behalf of the Board
Richard Crookes
Chairman and Acting Chief Executive Officer
27 March 2020
111
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Auditor’s Independence
Declaration
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(cid:11)(cid:68)(cid:12)(cid:3)
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(cid:3)(cid:3)
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112
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Independent Auditor’s Report
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Highfield Resources Limited 31 December 2019 Annual Report to Shareholders (cid:3)
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Highfield Resources Limited 31 December 2019 Annual Report to Shareholders (cid:3)
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115
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders (cid:3)
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Highfield Resources Limited 31 December 2019 Annual Report to Shareholders (cid:3)
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(cid:85)(cid:72)(cid:80)(cid:88)(cid:81)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:3)(cid:76)(cid:81)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)(cid:86)(cid:72)(cid:70)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:22)(cid:19)(cid:19)(cid:36)(cid:3)(cid:82)(cid:73)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:38)(cid:82)(cid:85)(cid:83)(cid:82)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:86)(cid:3)(cid:36)(cid:70)(cid:87)(cid:3)(cid:21)(cid:19)(cid:19)(cid:20)(cid:17)(cid:3)(cid:50)(cid:88)(cid:85)(cid:3)(cid:85)(cid:72)(cid:86)(cid:83)(cid:82)(cid:81)(cid:86)(cid:76)(cid:69)(cid:76)(cid:79)(cid:76)(cid:87)(cid:92)(cid:3)
(cid:76)(cid:86)(cid:3)(cid:87)(cid:82)(cid:3)(cid:72)(cid:91)(cid:83)(cid:85)(cid:72)(cid:86)(cid:86)(cid:3)(cid:68)(cid:81)(cid:3)(cid:82)(cid:83)(cid:76)(cid:81)(cid:76)(cid:82)(cid:81)(cid:3)(cid:82)(cid:81)(cid:3)(cid:87)(cid:75)(cid:72)(cid:3)(cid:85)(cid:72)(cid:80)(cid:88)(cid:81)(cid:72)(cid:85)(cid:68)(cid:87)(cid:76)(cid:82)(cid:81)(cid:3)(cid:85)(cid:72)(cid:83)(cid:82)(cid:85)(cid:87)(cid:15)(cid:3)(cid:69)(cid:68)(cid:86)(cid:72)(cid:71)(cid:3)(cid:82)(cid:81)(cid:3)(cid:82)(cid:88)(cid:85)(cid:3)(cid:68)(cid:88)(cid:71)(cid:76)(cid:87)(cid:3)(cid:70)(cid:82)(cid:81)(cid:71)(cid:88)(cid:70)(cid:87)(cid:72)(cid:71)(cid:3)(cid:76)(cid:81)(cid:3)(cid:68)(cid:70)(cid:70)(cid:82)(cid:85)(cid:71)(cid:68)(cid:81)(cid:70)(cid:72)(cid:3)(cid:90)(cid:76)(cid:87)(cid:75)(cid:3)
(cid:36)(cid:88)(cid:86)(cid:87)(cid:85)(cid:68)(cid:79)(cid:76)(cid:68)(cid:81)(cid:3)(cid:36)(cid:88)(cid:71)(cid:76)(cid:87)(cid:76)(cid:81)(cid:74)(cid:3)(cid:54)(cid:87)(cid:68)(cid:81)(cid:71)(cid:68)(cid:85)(cid:71)(cid:86)(cid:17)(cid:3)(cid:3)
(cid:3)
(cid:51)(cid:85)(cid:76)(cid:70)(cid:72)(cid:90)(cid:68)(cid:87)(cid:72)(cid:85)(cid:75)(cid:82)(cid:88)(cid:86)(cid:72)(cid:38)(cid:82)(cid:82)(cid:83)(cid:72)(cid:85)(cid:86)(cid:3)
(cid:36)(cid:81)(cid:71)(cid:85)(cid:72)(cid:90)(cid:3)(cid:41)(cid:82)(cid:85)(cid:80)(cid:68)(cid:81)(cid:3)
(cid:51)(cid:68)(cid:85)(cid:87)(cid:81)(cid:72)(cid:85)(cid:3)
(cid:3)
(cid:36)(cid:71)(cid:72)(cid:79)(cid:68)(cid:76)(cid:71)(cid:72)(cid:3)
(cid:21)(cid:26)(cid:3)(cid:48)(cid:68)(cid:85)(cid:70)(cid:75)(cid:3)(cid:21)(cid:19)(cid:21)(cid:19)(cid:3)
117
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
118
118
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
ASX Additional
Information
119
119
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Additional information required by the Australian Securities Exchange Ltd and not shown elsewhere in this report is as follows.
The information is current at 26 March 2020.
Distribution of Share Holders
1 - 1,000
1,001 - 5,000
5,001 - 10,000
10,001 - 100,000
100,001- and over
Total
Ordinary Shares
Number of Holders
Number of Shares
192
381
322
868
228
1,991
82,924
1,156,932
2,641,212
30,978,010
294,665,925
329,525,003
There were 251 holders of ordinary shares holding less than a marketable parcel.
Top Twenty Share Holders
The names of the twenty largest holders of quoted equity securities are listed below:
Name
J P MORGAN NOMINEES AUSTRALIA LIMITED
WWB INVESTMENTS PTY LTD
MR. WARREN WILLIAM BROWN + MRS. MARILYN HELENA BROWN
DEREK CARTER + CARLSA CARTER
CITICORP NOMINEES PTY LTD
MR. BENJAMIN JOHN HAAN
BRING ON RETIREMENT LTD
MR. DANIEL EDDINGTON + MRS. JULIE EDDINGTON
CELTIC CAPITAL PTE LTD
MR. CRAIG PETER BALL
MR. MICHAEL ANDREW WHITING + MRS. TRACEY ANNE WHITING
JONERIC PTY LTD
PETER DAVID FERGUSON PTY LTD.
WOOTOONA INVESTMENTS PTY LTD
CRX INVESTMENTS PTY LTD
KANBAH PTY LTD
DORICA NOMINEES PTY LTD
CARINYA INVESTMENTS PTY LTD
HGT INVESTMENTS PTY LTD
GREENSLADE HOLDINGS PTY LTD
120
Number of shares
136,477,238
19,528,450
15,971,550
7,721,504
5,633,541
4,080,000
4,000,000
3,870,000
3,500,000
3,292,384
2,715,718
2,701,076
2,278,000
2,150,538
2,000,000
2,000,000
2,000,000
1,870,000
1,750,000
1,650,076
%
41.42
5.93
4.85
2.34
1.71
1.24
1.21
1.17
1.06
1.00
0.82
0.82
0.69
0.65
0.61
0.61
0.61
0.57
0.53
0.50
225,190,075
68.34
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
Substantial Shareholders
The following table shows holdings of five per cent or more of voting rights in Highfield Resources Limited’s shares as notified
to the Company under the Australian Corporations Act 2001, Section 671B as at 26 March 2020.
Title of class
Registered holder of securities
Identity of person or Group
Date of last
notice
Percentage of
total voting
rights2
Number
owned
Ordinary Shares
JP Morgan Nominees Australia Limited
EMR Capital Investment (No. 2) Pte Ltd1
15/05/2015
104,038,875
31.57%
Ordinary Shares
JP Morgan Nominees Australia Limited
Australian Super Pty Ltd1
28/07/2017
17,007,898
5.16%
Ordinary Shares
Various holders
WWB Investments Pty Ltd1
08/11/2017
35,500,000
10.77%
1 Being the Group listed and its associated entities
2 The percentages quoted are based on the total voting rights conferred by ordinary shares in the Company as at 26 March
2020 of 329,525,003
Unlisted Options
Class
Number
Holders with more than 20%
Options over ordinary shares exercisable at $1.29 on or before 30 June 2021
3,000,000
Isaac Querub 1,000,000 options;
Roger Davey 1,000,000 options; and
Brian Jamieson 1,000,000 options.
Options over ordinary shares exercisable at $0.83 on or before 30 June 2022
1,000,000 Richard Crookes 1,000,000 options;
Options over ordinary shares exercisable at $0.83 on or before 31 December 2022
3,221,170 Sonedala Albert 1,114,064 options.
Options over ordinary shares exercisable at $0.83 on or before 31 December 2023
1,818,171 Mike Norris 445,980 options.
Options over ordinary shares exercisable at $0.83 on or before 31 December 2024
1,622,191 Mike Norris 397,905 options.
Options over ordinary shares exercisable at $1.34 on or before 30 June 2025
4,832,221 Sonedala Albert 1,420,654 options.
Options over ordinary share exercisable at $1.29 on or before 31 December 2025
7,342,397 Sonedala Albert 2,192,287 options.
On-Market Buy Back
There is no current on-market buy back.
Voting Rights
All ordinary shares carry one vote per share without restriction. Options have no voting rights.
Use of Proceeds
In accordance with listing rule 4.10.19, the Company confirms that it has used cash and assets in a form readily convertible
to cash in a way consistent with its business objectives during the year ended 31 December 2019.
121
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Schedule of Tenements
Highfield’s Spanish potash projects are located in the Ebro potash producing basin in Northern Spain. Details are shown in
the table below.
Project
Region
Permit Name
Permit Type
Applied
Granted
Ref#
Area Km2 Holder
Structure
Sierra del Perdón Navarra
Quiñones
Investigation 19/07/2011
Sierra del Perdón Navarra
Adiós
Investigation 19/07/2011
Application in
process
35760
Application in
process
35770
22.88 Geoalcali SLU 100%
59.40 Geoalcali SLU 100%
Sierra del Perdón Navarra
Ampliación de Adiós
Investigation 26/10/2012
14/02/2014
35880
40.90 Geoalcali SLU 100%
Vipasca
Navarra
Vipasca
Investigation 06/11/2013
11/12/2014
35900
27.30 Geoalcali SLU 100%
Muga
Muga
Muga
Navarra
Goyo (area under
concession process)
Investigation 19/07/2011
24/12/2012
35780
14.79 Geoalcali SLU 100%
Navarra
Goyo Sur
Investigation 25/07/2014
13/12/2019
35920
8.96 Geoalcali SLU 100%
Aragón
Fronterizo (area under
concession process)
Investigation 21/06/2012
05/02/2014
Z-3502/N-3585
8.70 Geoalcali SLU 100%
27.30
123.18
Muga
Aragón
Muga
Muga
Muga
Fronterizo (area
outside concession
process)
Muga (area under
concession process)
Muga (area outside
concession process)
Investigation 21/06/2012
05/02/2014
Z-3502/N-3585
1.10 Geoalcali SLU 100%
Investigation 29/05/2013
07/04/2014
3500
15.08 Geoalcali SLU 100%
Investigation 29/05/2013
07/04/2014
3500
5.32 Geoalcali SLU 100%
Aragón
Aragón
Aragón
Muga Sur
Investigation 25/09/2014
Application in
process
3524
7.28 Geoalcali SLU 100%
61.23
Pintanos
Aragón
Molineras 10
Investigation 20/11/2012
06/03/2014
3495/10
18.20 Geoalcali SLU 100%
Pintanos
Aragón
Molineras 20
Investigation 19/02/2013
Pintanos
Aragón
Puntarrón
Investigation 08/05/2014
Application in
process
3495/20
Application in
process
3510
16.80 Geoalcali SLU 100%
30.24 Geoalcali SLU 100%
Total
65.24
276.95
122
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
Project locations are shown in the following map.
123
123
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Important Information and Disclaimers
Forward Looking Statements
This report includes certain ‘forward looking statements’.
All statements, other than statements of historical fact, are
forward looking statements that involve various risks and
uncertainties. There can be no assurances that such sta-
tements will prove accurate, and actual results and future
events could differ materially from those anticipated in such
statements.
Such information contained herein represents manage-
ment’s best judgement as of the date hereof based on infor-
mation currently available. The Company does not assume
any obligation to update any forward looking statement.
Competent Person
Statement for Muga Potash
Project
The Review of Operations contained within this annual re-
port was approved by Mr. Richard Crookes, Acting CEO and
Chairman of Highfield Resources. The information in this
report that relates to Ore Reserves is based on informa-
tion prepared by Dr. Mike Armitage, the Chairman of SRK
Consulting (UK) Limited. Dr. Mike Armitage is the Competent
Person who assumes overall professional responsibili-
ty for the Compliance Opinion. The information in this re-
port that relates to Mineral Resources, Exploration Results
and Exploration Targets is based on information prepared
by Ms. Anna Fardell, Senior Consultant at SRK Consulting
(UK) Limited, and Mr. Tim Lucks Principal Consultant at SRK
Consulting (UK) Limited.
Dr. Mike Armitage is employed by SRK Consulting (UK)
Limited. The information in this report that relates to
Exploration Results, Mineral Resources or Ore Reserves is
based on information compiled under the direction of Dr.
Mike Armitage, who is a Member the Institute of Materials,
Metals and Mining (“IMMM”) which is a ‘Recognised Overseas
Professional Organisation’ (“ROPO”) included in a list pro-
mulgated by the Australian Securities Exchange (“ASX”) from
time to time.
Dr. Mike Armitage has sufficient experience which is rele-
vant to the style of mineralisation and type of deposit under
consideration and to the activity which he is undertaking
to qualify as a Competent Person as defined in the 2012
Edition of the ‘Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves’.
Dr. Mike Armitage consents to the inclusion in this report of
the matters based on this information in the form and con-
text in which it appears.
Ms. Anna Fardell is a Resource Geologist employed by SRK
Consulting (UK) Limited, and has at least five years’ ex-
perience in estimating and reporting Mineral Resources
relevant to the style of mineralisation and type of deposit
described herein. Ms. Fardell is a registered member of the
Australian Institute of Geoscientists (6555) and considered
a Competent Person (CP) under the definitions and stan-
dards described in the JORC Code 2012. Ms. Fardell takes
responsibility for the Mineral Resource Statement presented
here.
Ms. Anna Fardell consents to the inclusion in this report of
the matters based on her information in the form and con-
text in which it appears.
124
Highfield Resources Limited 31 December 2019 Annual Report to Shareholders Highfield Resources Limited 31 December 2019 Annual Report to Shareholders
Competent Person
Statement for Mineral
Resources and Exploration
Targets other than the Muga
Potash Project
The Review of Operations contained within this annual re-
port was approved by Mr. Richard Crookes, Acting CEO and
Chairman of Highfield Resources. The information in this re-
port that relates to Mineral Resources, Exploration Results
and Exploration Targets is based on information prepared by
Mr. José Antonio Zuazo Osinaga, Technical Director of CRN,
S.A.; and Mr. Manuel Jesús Gonzalez Roldan, Geologist of
CRN, S.A.
Mr. José Antonio Zuazo Osinaga is a licensed professio-
nal geologist in Spain, and is a registered member of the
European Federation of Geologists, an accredited organi-
sation to which Competent Persons (CP) under JORC 2012
Code Reporting Standards must belong in order to report
Exploration Results, Mineral Resources, Ore Reserves or
Exploration Targets through the ASX.
Mr. José Antonio Zuazo Osinaga has sufficient experience
which is relevant to the style of mineralisation and type
of deposit under consideration and to the activity which
he is undertaking to qualify as CP as defined in the 2012
edition of the JORC Australasian Code for the Reporting of
Exploration Results, Mineral Resources and Ore Reserves.
Mr. José Antonio Zuazo Osinaga and Mr. Manuel Jesús
Gonzalez Roldan consent to the inclusion in this report of
the matters based on their information in the form and con-
text in which it appears.
125