Highfield Resources Ltd (ASX:HFR) has fielded a A$25 million convertible note investment from boutique funders EMR Capital Management and Tectonic Investment Management, building the company’s cash runway as it prepares the low-cost, low-capex Muga potash mine in Spain for construction.
The strategic investment comes soon after Highfield secured its final construction licence for the Spanish potash play, meaning Muga is now fully permitted and ready for action. Once HFR wraps site prep work, it expects to enter fully-fledged construction in the second half of 2023.
It comes as no surprise that the funding will help bring the project through construction, providing financial leeway as Highfield wraps up discussions with other potential investors to secure full funding for Muga.
EMR Capital has agreed to invest roughly A$18 million, while Tectonic will seed the remaining A$7 million in exchange for convertible notes with a two-year maturity date.
Funds to support low-cost potash operation
Highfield managing director and CEO Ignacio Salazar said he was grateful for EMR and Tectonic’s longstanding support at this key moment in the company’s journey.
“Their recognition of the company’s achievements … is important in facilitating the commencement of construction of Muga, which is now well-placed to deliver on its potential to become a strategically located, low-cost, long-term supplier of potash, produced in an environmentally responsible manner,” he stated.
EMR Capital chairman Owen Hegarty echoed Salazar's enthusiasm: “With the development of the project imminent, EMR Capital is pleased to support Highfield to strengthen its financial capacity and flexibility ahead of finalising strategic discussions, project funding and commencing construction.
"Highfield represents a truly unique and exciting opportunity to invest in the potash sector and to support long-term fertilizer availability and food security in Europe.”
Tectonic Investment Management’s chief investment officer Benjamin Haan praised Highfield's progression and affirmed his support at this “significant juncture”.
"We look forward to Highfield commencing full-scale construction of Muga in the near term and becoming a globally significant producer in the coming years,” Haan stated.