Spanish potash developer Highfield Resources (ASX: HFR) ('Highfield' or 'the Company'), is pleased to announce further results from the Company's drilling program at the Sierra del Perdon ('SdP') and Vipasca ('Vipasca') prospects.

Vipasca Tenement Area

The Vipasca Permit Area is located adjacent to the Muga Project ('Muga'), covers approximately 27km2 and is highly prospective for economic potash mineralisation. The ongoing drill program at Vipasca is focused on the deeper, higher grade, P1 and P2 potash horizons.

The Muga Project Update (refer ASX release 15 October 2018 'Muga Project Update') confirmed the strategic importance of Vipasca as a potential extension of Muga to the northwest. The main aim of the current drilling campaign is to confirm and delineate the Muga deposit in its westernmost area. Notably, the results obtained to date have confirmed that the overall geological setting at Vipasca and the lithologies, seams and other geological features are similar to those previously defined by drilling at Muga.

Two new exploration drill-holes V18-03 and V18-05 have been completed. V18-03 was designed to test continuity to the west of drill-hole V18-02, situated 600 metres to the East, where significant grade was intersected in the Upper, the Intermediate and the Lower Potash Intervals. Located in the same geological context, drill-hole V18-03 intersected the entire isoclinal sedimentary overburden sequence and the complete evaporitic sequence as expected.

Drill hole V18-05 was completed between the Vipasca Investigation Permit and the western edge of Muga permit area. The objective accomplished with this exploration drill-hole was to provide a greater degree of confidence that the potash resources extend from Muga to the west, and to understand the continuity of the individual potash intervals within the Vipasca investigation permit.

V18-05 intersected the entire overburden isoclinal sedimentary sequence as expected, entering the evaporitic unit at 710 meters depth, with the development of the hanging-wall salt, the potash layers and the foot-wall salt units. In this intermediate sector, the potash layers are not well developed, therefore the results of this drill-hole were not at the grades expected. Specifically, the Upper Potash Interval yielded 0.9 metres with an average grade of 6.65% K2O, and the Middle Potash Interval yielded 1.3 metres with a mean grade of 5.79% K2O, including 0.6 metres with an average grade of 9.31% K2O. In the case of the Lower Potash Interval, it has only been possible to identify traces of potash. Given the anomalous results obtained in V18-05, a complementary study has been carried out in this sector, with the aim to obtain the structural configuration of the area, ruling out the possibility that the abnormal results obtained are due to the presence of previous unidentified geological structures, including faults and/or discordances.

The study consisted of combining the data from the latest Geoalcali drilling campaign, including V18-05 core information, with the available 2D seismic information of the area, in order to produce a structural model of the geological units at depth, guided by the seismic profile, and the field work geological study. With respect to the available data and the work completed, Highfield considers that the poor exploratory results in the area close to the V18-05 are not due to the presence of structural features, but rather reflective of a different stratigraphic part of the evaporitic basin.

Sierra del Perdon Tenement Area

Highfield's 100% owned Sierra del Perdon ('SdP') Tenement Area is located south east of Pamplona and covers an area of approximately 120km2. SdP is a brownfield target which previously hosted two potash mines, which operated from the 1960s until the late 1990s and produced nearly 500,000 tonnes of K60 Muriate of Potash 'MOP' per annum. The Company is targeting potential for potash exploitation in the other unmined and under explored, areas in the SdP Tenement Area.

The Company was advised in the fourth quarter of 2018 that the second three-year extension application for the Adios and Quinones permits had been rejected by the mining department of the Government of Navarra. The basis of the rejection of the Quinones and Adios extension application was that the Company had not completed sufficient drilling and geophysics exploration when compared with what had been committed to in the three-year work plans submitted to the authorities. The Company has obtained legal advice and is continuing an appeal process with regards to this decision. The timing of the appeal process continues to remain uncertain, nonetheless, given the reasons for not being able to perform the work outlined were due to factors outside the Company's control, 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 Adios and Quinones permits is planned 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 and 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 Adios and Quinones 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 first drill-hole AA-01 at the Ampliacion de Adios Investigation Permit has been carried out in the tenement. The drill-hole was designed to test continuity of the shallow potash mineralisation towards the south of the former potash operation of Potasas de Subiza. The drill-hole targeted both sylvinite and carnallite mineralisation seams located 375 metres below surface. After intersecting the characteristic overburden sedimentary sequence of the Sierra del Perdon area, the drill-hole intercepted potash levels at 390 metres deep as expected, intersecting the potash sequence, and importantly identifying the three different potash intervals, Upper, Middle and Lower, the last of these intervals being the least developed.

Contrary to what is observed in other areas of the Sierra del Perdon area, in which a well-developed Carnalite interval appears at the top of the Silvinite sequence, in the case of the AA-01 drill-hole, the Carnalite interval has not been intersected. Taking into account the anomalous thickness presented by the silvinitic interval, approximately 9 meters, compared with the average 3.5 meters seen in other sectors of the Sierra del Perdon area, it is believed that the Carnalite interval has been transformed into Sylvine in this area of the deposit.

The Upper Potash Interval yielded 2.1 metres with an average grade of 7.02% K2O, the Middle Potash Interval yielded 1.5 metres with a mean grade of 14.50% K2O, and the Lower Sylvinite Interval yielded 0.9 metres with a mean grade of 5.28 % K2O. The reasons for the poorly developed Lower Sylvinite Interval and the absence of the Carnallite at the top of the potash sequence are not yet well understood. Highfield plans is to drill a second drill-hole which is scheduled in 3.9km to the west of AA-01 in Q3 and Q4 of 2020, AA-02. This will provide essential information on this southern sector.

Pintanos Tenement Area

Highfield's 100% owned Pintanos Tenement Area comprising the three permits of Molineras 1, Molineras 2 and Puntarron also abuts Muga and covers an area of 65km2. The mineralisation is slightly deeper than encountered at Muga and starts at a depth of 500 metres. The Company is building on potash exploration information from seven drill holes and ten seismic profiles completed in the late 1980s. The Company has re-initiated the application process for the drilling permit at Molineras 2, following the conclusion of the public consultation period. The Company has responded to all comments received during the consultation period and is now waiting for the award of the permit.

Contact:

Richard Crookes

Tel: +34 636 758 843

About Highfield Resources

Highfield Resources is an ASX listed potash company with three 100% owned tenement areas located in Spain. Highfield's Muga-Vipasca, Pintanos, and Sierra del Perdon projects are located in the potash producing Ebro Basin in Northern Spain and together cover a project area of more than 277km2 . Following the granting of a positive environmental permit Highfield is now focusing on securing the Mining Concession and the construction permits necessary to take the Project into the construction phase

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