A revised mine plan for Highfield Resources Ltd.'s Muga potash project in Spain defined a posttax net present value of €1.16 billion, at an 8% discount, with a 23% internal rate of return and a 27-year mine life.

CapEx is set at €342 million, including contingency, to achieve phase-one production of approximately 500,000 tonnes per year. The amount includes improvements to the mine design, a reconfigured process plant, a review of marketing and sales strategy, and a reassessment of supporting logistics and infrastructure requirements.

Highfield expects to start construction about one year after receiving the environmental permit; first potash production is anticipated three years after. A further €199 million is needed to reach its full operating capacity of about 1 million t/y.

Operating cost at full capacity is estimated at €104/t, including a salt byproduct credit of €12/t. EBITDA at full production is pegged at approximately €300 million per year.

Highfield said Oct. 15 that the primary market of the mine's product is likely to be southern Europe, with exports outside the continent targeted once Muga achieves its full capacity.

The project update was based on Muga's total measured, indicated and inferred resources of 267.4 million tonnes grading 12.36% potassium oxide and a portion of the Vipasca exploration target, which has a tonnage range of between 127 million and 255 million tonnes with a grade range of between 12% and 16% potassium oxide.