HIGHFIELD RESOURCES DRILL HOLE LIKELY TO INCREASE RESOURCE SIZE AND LIFE OF MINE AT MUGA PROJECT

ASX Release 18 December 2015 HIGHFIELD RESOURCES DRILL HOLE LIKELY TO INCREASE RESOURCE SIZE AND LIFE OF MINE AT MUGA PROJECT Highlights Getechnical drill hle J15-02 intersected 31 metres f ptash mineralisatin with an average grade f 10.8% K2O, intersecting all three seams within this area f the mine plan including: Capa 0 4.5 metres at 15.7% K 2O frm 503 metres belw surface; Capa A 2.4 metres at 17.3% K 2O frm 509 metres belw surface; and Capa B 3.6 metres at 16.8% K 2O frm 514 metres belw surface. Drill hle lcated at the previusly defined bundary f the current Mineral Resurce Estimate, Muga Optimisatin Study Mine Plan and Muga Mine Reserve areas Secnd, wedged, deviatin hle frm J15-02 drill cllar als encuntered strng ptash mineralisatin ver brad widths Results likely t increase size f Mineral Resurce Estimate fr Muga as well as increase mine and reserve life Muga Resurce remains pen t the suth Spanish ptash develper, Highfield Resurces (ASX: HFR) ( Highfield r the Cmpany ), is pleased t annunce an additinal explratin result frm its 100%-wned flagship Muga Ptash Prject. The Cmpany cmpleted the J15-02 drill hle n 20 Nvember 2015 and als used the J15-02 drill cllar t drill an additinal hle (J15-02D) fr getechnical purpses. The primary drill hle intersected 31 metres f ptash mineralisatin cmmencing at a depth belw surface f 493 metres. J15-02D als encuntered brad znes f strng ptash mineralisatin. Encuntering such brad znes f mineralisatin in bth J15-02 and J15-02D indicates gd cntinuity f the ptash bearing evaprite, as well as a significant thickening f the ptash hrizn. The Cmpany believes this will add significantly t the mineable resurce in the area surrunding the drill cllar, which is lcated n the periphery f the previusly released Mineral Resurce Estimate and f the current Muga Optimisatin Study Mine Plan (refer ASX release 17 Nvember 2015). Highfield s Managing Directr, Anthny Hall, cmmented This is a great result fr the Muga Mine, well-timed ahead f final permitting and cnstructin planned in H1 2016. It is likely t increase the size f the Resurce and the mine life, especially given that we nw believe the depsit is pen t the suth. The result adds weight t the additinal expenditure we elected t incur in rder t ensure that expansin ptins were built int ur ptimised Muga Mine. There is n dubt we have a wrld class glbal ptash asset, which we are steadily cnverting int a cmpelling prject with majr gelgical and lcatinal advantages ver mst ther ptash mines and prducers. Highfield Resurces Ltd. ACN 153 918 257 ASX: HFR Issued Capital 310.6 millin shares 51.5 millin perfrmance shares 52.8 millin ptins Registered Office C/ HLB Mann Judd 169 Fullartn Rad Dulwich, SA 5065 Australia Ph. +61 8 8133 5098 F. +61 8 8431 3502 Head Office Avenida Carls III, 13-1 B, 31002 Pamplna, Spain Ph. +34 948 050 577 F. +34 948 050 578 Directrs Derek Carter Pauline Carr Richard Crkes Jim Dietz Anthny Hall Owen Hegarty Pedr Rdriguez Cmpany Secretary Dnald Stephens

Muga Ptash Prject Overview The Cmpany s flagship Muga Ptash Prject is targeting the relatively shallw sylvinite beds in the Muga Prject area that cver abut 80km 2. Mineralisatin cmmences at depths frm surface f less than 200 metres and appears ideal fr a relatively lw-cst cnventinal mine accessed via a dual decline, as demnstrated in the Cmpany s DFS cmpleted in March 2015 (refer t ASX annuncement dated 30 March 2015) and the Cmpany s mine ptimisatin study cmpleted in Nvember 2015 (refer t ASX annuncement dated 17 Nvember 2015). Drill Hle J15-02 The Cmpany recently cmpleted drill hle J15-02, which intersected 31 metres f ptash mineralisatin (dwnhle) frm a depth t surface f 493 metres (refer figure 2 belw fr lcatin f drill hle J15-02). Figure 1: Map f Muga shwing the lcatin f drill hle J15-02 2

The drill hle was cmpleted fr getechnical purpses and entered the evaprite hrizn in an area near the base f the prpsed eastern decline. The drill hle is apprximately 1km nrth f bth the histrical Undues de Lerda drill hle and mdern drill hle J13-04. Figure 2: Pht f ptash cre samples frm drill hle J15-02 The Undues de Lerda drill hle is knwn t have intersected 11 metres f ptash, but the Cmpany has nt been able t lcate any assay infrmatin frm this histrical drill hle. As such, it was nt included in the current Resurce, mine plan r Reserve. The J13-04 drill hle did nt intersect ptash, ging directly frm hanging t ftwall salt. This was interpreted as a nrmal fault that bisects the depsit in the suthern area. It was nt interpreted as the edge f the re depsit and the Cmpetent Persns had expected ptash mineralisatin t be present t the suth f this drill hle. Assay Results J15-02 Drill hle J15-02 encuntered thick znes f ptash mineralisatin. Given its lcatin n the periphery f the current Mineral Resurce Estimate, it is likely t have psitive implicatins n the existing mineral resurce fr the Muga Mine. The mineralised zne cmmences at 493 metres belw surface and extends ver 31 metres acrss multiple interbedded and flded sylvinite and halite seams, with an average grade f 10.8% ptassium xide ( K20 ). The brader mineralised zne huses a number f thick znes f very high grade mineralisatin including: - 4.5 metres at an average grade f 15.7% K20 within the Capa 0; - 2.4 metres at an average grade f 17.3% K20 within the Capa A; and - 3.6 metres at an average grade f 16.8% K20 within the Capa B. A full summary f the drill hle assays n a seam by seam basis can be seen in Table 1. Lithlgy J15-02 The drill hle crssed all f the lithlgical units present within the Muga Prject area at the expected depths. Frm surface t 355 metres belw surface the drilling traversed the Oligcene unit, which cnsists primarily f marls and sandstnes. This is fllwed by the Detritic Unit thrugh until 436 metres, which is cmprised mstly f sandstnes and calcarenites. Frm 436 metres t 450 metres, the lithlgy mves t banded marls befre the cntact f the hanging wall salt (Sal de Tech), which ccurs at 450 metres and cntinues t 493 metres belw surface. The mineralised zne extends frm 493 metres t 524 metres belw surface and cmprises strng ptash mineralisatin interbedded with halite and minr levels f insluble. This unit is fllwed by the ftwall salt (Sal de Mur), which extends frm 524 metres t 621 metres and finally the Pamplna Marls frm 621 metres t the end f hle. 3

J15-02D Deviatin Hle Using the same drill cllar as J15-02, the Cmpany drilled a secnd getechnical hle with nmenclature J15-02D, which als encuntered brad znes f strng ptash mineralisatin. Lgging is still underway, and Cmpany estimates indicate that J15-02D has intersected 30 metres f ptash mineralisatin cmmencing frm 502 metres belw surface. Visual analysis indicates that the mineralisatin is f similar strength seen in J15-02. The majrity f the cre will be used fr getechnical and metallurgical purpses and the Cmpany des nt expect t receive assays fr this hle. Figure 3: Pht f ptash cre samples frm drill hle J15-02D Cmpetent Persns Statement This ASX release was prepared by Mr. Anthny Hall, Managing Directr f Highfield Resurces. The infrmatin in this release that relates t Ore Reserves, Mineral Resurces, Explratin Results and Explratin Targets is based n infrmatin prepared by Mr. Jsé Antni Zuaz Osinaga, Technical Directr f CRN, S.A.; Mr. Jesús Fernández Carrasc. Managing Directr f CRN, S.A. and Mr Manuel Jesus Gnzalez Rldan, Gelgist f CRN, S.A. Mr. Jsé Antni Zuaz and Mr. Jesús Fernández, are licensed prfessinal gelgists in Spain, and are registered members f the Eurpean Federatin f Gelgists, an accredited rganisatin t which the Cmpetent Persn (CP) under JORC Cde Reprting Standards must belng in rder t reprt Explratin Results, Mineral Resurces, Ore Reserves r Explratin Targets thrugh the ASX. Mr. Jsé Antni Zuaz-Osinaga has sufficient experience which is relevant t the style f mineralisatin and type f depsit under cnsideratin and t the activity which they are undertaking t qualify as a CP as defined in the 2012 Editin f the JORC Australasian Cde fr Reprting f Explratin Results, Mineral Resurces and Ore Reserves. Fr mre infrmatin: Cmpany Anthny Hall Managing Directr Ph: + 34 617 872 100 Hayden Lcke Head f Crprate Develpment Ph: +34 609 811 257 Investr Relatins Executives Simn Hinsley APAC Investr Relatins Ph: +61 401 809 653 Nuala Gallagher / Simn Hudsn UK Investr Relatins Ph: +44 207 920 3150 4

Abut Highfield Resurces Highfield Resurces is an ASX-listed ptash cmpany with five 100%-wned prjects lcated in Spain. Highfield s Muga, Vipasca, Pintan, Izaga and Sierra del Perdón ptash prjects are lcated in the Ebr ptash prducing basin in Nrthern Spain, cvering a prject area f mre than 550km 2. The Sierra del Perdón prject includes tw frmer perating ptash mines. The Cmpany cmpleted a Definitive Feasibility Study fr its flagship Muga Prject in March 2015, which was ptimised in Nvember 2015 t enhance peratinal efficiencies, sales and marketing activities and the life f mine. Highfield expects t receive a psitive envirnmental declaratin in February 2016 t enable it cmmence cnstructin f the Mine. Figure 4: Lcatin f Highfield s Muga, Vipasca, Pintan, Izaga and Sierra del Perdón Prjects in Nrthern Spain 5

Table 1: Summary f Drill Hle J15-02 6

Sectin 1 Sampling Techniques and Data Criteria JORC Cde explanatin Cmmentary Sampling techniques Drilling techniques Drill sample recvery Nature and quality f sampling (e.g. cut channels, randm chips, r specific specialised industry standard measurement tls apprpriate t the minerals under investigatin, such as dwn hle gamma sndes, r handheld XRF instruments, etc.). These examples shuld nt be taken as limiting the brad meaning f sampling. Include reference t measures taken t ensure sample representivity and the apprpriate calibratin f any measurement tls r systems used. Aspects f the determinatin f mineralisatin that are Material t the Public Reprt. In cases where industry standard wrk has been dne this wuld be relatively simple (e.g. reverse circulatin drilling was used t btain 1 m samples frm which 3 kg was pulverised t prduce a 30 g charge fr fire assay ). In ther cases mre explanatin may be required, such as where there is carse gld that has inherent sampling prblems. Unusual cmmdities r mineralisatin types (e.g. submarine ndules) may warrant disclsure f detailed infrmatin. Drill type (e.g., cre, reverse circulatin, pen-hle hammer, rtary air blast, auger, Bangka, snic, etc.) and details (e.g., cre diameter, triple r standard tube, depth f diamnd tails, facesampling bit r ther type, whether cre is riented and if s, by what methd, etc.). Methd f recrding and assessing cre and chip sample recveries and results assessed. Measures taken t maximise sample recvery and ensure representative nature f the samples Whether a relatinship exists between sample recvery and grade and whether sample bias may have ccurred due t preferential lss/gain f fine/carse material. Lgging Whether cre and chip samples have been gelgically and getechnically Explratin Diamnd Cre (DD) drilling was cmpleted. Cre was recvered and sampled n 0.3 metre dwnhle intervals. Each segment f cre was lgged, phtgraphed and, fllwing being marked and number, each sample was halved, with a quarter cre sent t be assayed. Drilling was cmpleted using a saturated brine t limit cre lss as a result f water based fluid cntact with the salt hrizns. Drill hle lcatins were surveyed using GPS, and by a prfessinal surveyr prir t cmmencement and pst the cmpletin f drilling. Certified Reference Materials (CRM) are inserted n a rati f 1:20 and blanks are inserted n a rati f 1:50 int sample streams t assess the accuracy, precisin and methdlgy f the external labratries used. In additin, duplicate samples were inserted n a rati f 1:20 fr Quality Assurance purpses. ALS labratries undertk their wn duplicate, CRM and blank sample insertin. Examinatin f the QA/QC sample data indicates satisfactry perfrmance f field sampling prtcls and assay labratries prviding acceptable levels f precisin and accuracy. Cre is sawed using hydraulic il as the lubricating agent t minimise cre lss. Half cre is retained and shrink wrapped t ensure it is well preserved shuld further assaying be required. Quarter cre fr assaying was bagged and secured with plastic ties fr shipping t external labratry fr assaying. Samples were crushed, grund and split in Seville, Spain prir t being shipped t ALS Labs in Galway, Ireland. Cred samples were assayed using inductively cupled plasma-ptical emissin spectrmetry and X-ray flurescence (XRF). Drilling was cmpleted by DD methd. Cre was bxed at the rig and transprted t the cre shed at Beriain fr lgging, phtgraphing, halving and shrink wrapping. Sample quality and recvery were cnsidered t be suitable. The drilling was cmpleted using HQ cre t maximise cre recvery. Drilling thrugh the evaprite hrizn was cnducted with a saturated brine drilling mud, which aims t minimise disslutin due t the use f water based drilling fluids. The cre recvery is f an acceptable level and n bias is expected frm any sample lsses. Cre has been lgged fr lithlgy, alteratin, mineral assemblage and structure. 7

Criteria JORC Cde explanatin Cmmentary lgged t a level f detail t supprt apprpriate Mineral Resurce estimatin, mining studies and metallurgical studies. Subsampling techniques and sample preparatin Quality f assay data and labratry tests Verificatin f sampling and assaying Whether lgging is qualitative r quantitative in nature. Cre (r cstean, channel, etc.) phtgraphy The ttal length and percentage f the relevant intersectins lgged. If cre, whether cut r sawn and whether quarter, half r all cre taken. If nn-cre, whether riffled, tube sampled, rtary split, etc. and whether sampled wet r dry. Fr all sample types, the nature, quality and apprpriateness f the sample preparatin technique. Quality cntrl prcedures adpted fr all sub-sampling stages t maximise representivity f samples. Measures taken t ensure that the sampling is representative f the in situ material cllected, including fr instance results fr field duplicate/secnd-half sampling. Whether sample sizes are apprpriate t the grain size f the material being sampled. The nature, quality and apprpriateness f the assaying and labratry prcedures used and whether the technique is cnsidered partial r ttal. Fr gephysical tls, spectrmeters, handheld XRF instruments, etc., the parameters used in determining the analysis including instrument make and mdel, reading times, calibratins factrs applied and their derivatin, etc. Nature f quality cntrl prcedures adpted (e.g. standards, blanks, duplicates, external labratry checks) and whether acceptable levels f accuracy (i.e. lack f bias) and precisin have been established. The verificatin f significant intersectins by either independent r alternative cmpany persnnel. Lgging is qualitative in nature. All cre was phtgraphed and remaining half cre shrink wrapped fr preservatin. Cre was lgged and phtgraphed at 0.3 metre intervals. Half cre was shrink wrapped and retained in strage. Quarter cre was sent fr assaying. Quarter cre was retained fr metallurgical testing purpses. Nt applicable. Samples were quarter cre taken at 0.3 metre intervals dwnhle. All samples were sent t an external labratry fr preparatin and assaying. Sawing f cre was cnducted using il based lubricant t minimise disslutin. Duplicate samples were taken n a 1:20 basis and submitted t the labratry with the ther samples. These shwed acceptable levels f variatin and repeatability. Samples are apprpriate fr the mineralisatin type. Assaying was cnducted using ICP-OES and XRF, which are mdern industry standards These are cnsidered t be ttal mineral measurements. N handheld devices were used t estimate the grade r mineralgical cmpsitin f the assays fr the purpses f this release. Bth Highfield and ALS maintained independent QA/QC prgrams including the insertin f Certified Reference Material (CRM), duplicates and blanks. In additin, check samples were submitted t an umpire labratry Saskatn Research Centre (SRC) Duplicates shwed acceptable levels f internal agreement. Accuracy and precisin f the CRM, duplicate and blanks are within acceptable levels. DD cre limits ptential fr in hle cntaminatin. ALS assayed all samples using bth the ICP-OES methdlgy and XRF. These methds shwed acceptable levels f agreement t supprt the precisin f the testing prgram. The use f twinned hles. N hles were required t be twinned in this prgram. 8

Criteria JORC Cde explanatin Cmmentary Dcumentatin f primary data, data entry prcedures, data verificatin, data strage (physical and electrnic) prtcls. Highfield receives all assay data directly frm the labratries in electrnic frmat (xls r csv). This is transferred t a master database and is mnitred fr QA/QC purpses. Lcatin f data pints Data spacing and distributin Orientatin f data in relatin t gelgical structure Sample security Audits reviews r Discuss any adjustment t assay data. N adjustments were made t assay data. Accuracy and quality f surveys used t lcate drill hles (cllar and dwn-hle surveys), trenches, mine wrkings and ther lcatins used in Mineral Resurce estimatin. All new lcatins were surveyed befre and after drilling by a licenced surveyr. Specificatin f the grid system used. Grid systems used were Eurpean Datum 50, updated t Eurpean Terrestrial Reference System 1989 (ETRS89) fr cmpatibility with mdern survey infrmatin. Quality and adequacy f tpgraphic cntrl. Data spacing fr reprting f Explratin Results. Whether the data spacing and distributin is sufficient t establish the degree f gelgical and grade cntinuity apprpriate fr the Mineral Resurce and Ore Reserve estimatin prcedure(s) and classificatins applied. Whether sample cmpsiting has been applied. Whether the rientatin f sampling achieves unbiased sampling f pssible structures and the extent t which this is knwn, cnsidering the depsit type. If the relatinship between the drilling rientatin and the rientatin f key mineralised structures is cnsidered t have intrduced a sampling bias, this shuld be assessed and reprted if material. The measures taken t ensure sample security. The results f any audits r reviews f sampling techniques and data. All new lcatins were surveyed befre and after drilling by a licenced surveyr. The results reprted are within 500 metres f ther drilling and are cnsidered t be infill in nature. Nt applicable. Samples have been cmpsited ver the thickness f the identified ptash bed fr reprting purpses. The general strike f gelgy in the basin is NW-SE rientatin. Drilling was cnducted vertically, lgging nted the rientatin f the structure t ensure adjustments were made t determine true thickness. Drilling was vertical. This was taken int accunt t calculate the true thicknesses f the mineralisatin intersected. Chain f custdy is managed by Highfield. Cre is bxed at the rig and transprted t a secure facility fr lgging, phtgraphing and quartering. Fllwing this, samples fr assay were bagged and secured with zip lcks t be shipped t ALS. Audits and reviews are nging. These cnsistently shw the methds applied by the Cmpany are acceptable. Sectin Reprting f Explratin Results (Criteria listed in the preceding sectin als apply t this sectin.) Criteria JORC Cde explanatin Cmmentary Mineral tenement and land tenure status Type, reference name/number, lcatin and wnership including agreements r material issues with third parties such as jint ventures, partnerships, verriding ryalties, native title interests, histrical The Muga tenement was issued as an Investigatin Permit (PI) by the Spanish authrities under reference number 3500 n 7/04/2014. Muga Sur is a pending applicatin. Highfield wns the rights 100%. There are n JVs, partnerships, ryalties r ther relating t the Investigatin Permit. 9

Criteria JORC Cde explanatin Cmmentary Explratin dne by ther parties sites, wilderness r natinal park and envirnmental settings. The security f the tenure held at the time f reprting alng with any knwn impediments t btaining a license t perate in the area. Acknwledgment and appraisal f explratin by ther parties. Gelgy Depsit type, gelgical setting and style f mineralisatin. Drill hle infrmatin Data aggregatin methds A summary f all infrmatin material t the understanding f the explratin results including a tabulatin f the fllwing infrmatin fr all Material drill hles: easting and nrthing f the drill hle cllar elevatin r RL (Reduced Level elevatin abve sea level in metres) f the drill hle cllar dip and azimuth f the hle dwn hle length and interceptin depth hle length. If the exclusin f this infrmatin is justified n the basis that the infrmatin is nt Material and this exclusin des nt detract frm the understanding f the reprt, the Cmpetent Persn shuld clearly explain why this is the case. In reprting Explratin Results, weighting averaging techniques, maximum and/r minimum grade truncatins (e.g. cutting f high grades) and cut ff grades are usually Material and shuld be stated. Where aggregate intercepts incrprate shrt lengths f high grade results and lnger lengths f lw grade results, the prcedure used fr such aggregatin shuld be stated and sme typical examples f such aggregatins shuld be shwn in detail. Highfield has cmpleted a legal review which cncluded its tenure t be secure. Histrical explratin was cmpleted by E.N. Adar in 1989-1990, hwever, ptash was first discvered as early as 1927. Histrical prductin ccurred at the Ptasas de Subiza and Ptasas de Navarra mines, lcated clse t the Sierra del Perdón Prject. The depsit is an evaprite r chemical sedimentary type depsit. Its genesis is that f a restricted marine sedimentary basin influenced by eustacy, sea flr subsidence and/r uplift f sedimentary units. The ptash depsits are Upper Ecene, with evaprites accumulating in an elngated basin, trending NW-SE, at the suthern freland f the Pyrenean muntain range. The depsit includes thick znes f alternating claystne (marls) and evaprite with wellfrmed ftwall and hanging wall salts. Ptash mineralisatin is predminantly in the frm f sylvinite (KCl + NaCl) with sme minrity carnallite (KCL.MgCl2.6H20). It is typically funded interbedded with halite (NaCl) and insluble materials in the frm f lutite. Assay infrmatin is shwn in the bdy f this release in Table 1. J15-02: X:649809 Y:4714692, RL:543 J15-02D: X:649809, Y:4714692, RL:543 Hles are drilled at vertically Cmpsites by weighted average were made frm the gechemical data t ptimise grade and thickness f the mineralised seams in bth the new and histrical data. All grades are presented in percentage f K20 ver a selected interval, which is industry standard. 10

Criteria JORC Cde explanatin Cmmentary Relatinship between mineralisati n widths and intercept lengths The assumptins used fr any reprting f metal equivalent values shuld be clearly stated. These relatinships are particularly imprtant in the reprting f Explratin Results. If the gemetry f the mineralisatin with respect t the drill hle angle is knwn, its nature shuld be reprted. If it is nt knwn and nly the dwn hle lengths are reprted, there shuld be a clear statement t this effect (e.g. dwn hle length, true width nt knwn ). Diagrams Apprpriate maps and sectins (with scales) and tabulatins f intercepts shuld be included fr any significant discvery being reprted. These shuld include, but nt be limited t a plan view f drill hle cllar lcatins and apprpriate sectinal views. Balanced reprting Other substantive explratin data Where cmprehensive reprting f all Explratin Results is nt practicable, representative reprting f bth lw and high grades and/r widths shuld be practiced t avid misleading reprting f Explratin Results. Other explratin data, if meaningful and material, shuld be reprted including (but nt limited t): gelgical bservatins; gephysical survey results; gechemical survey results; bulk samples size and methd f treatment; metallurgical test results; bulk density, grundwater, getechnical and rck characteristics; ptential deleterius r cntaminating substances. Further wrk The nature and scale f planned further wrk (e.g. tests fr lateral extensins r depth extensins r large-scale step-ut drilling). Diagrams clearly highlighting the areas f pssible extensins, including the main gelgical interpretatins and future drilling areas, prvided this infrmatin is nt cmmercially sensitive. All drill hles are drilled vertically as this is the best rientatin t intersect the expected mineralisatin in a perpendicular manner. Data n bed angle and rientatin were incrprated int gelgical database t calculate the true thickness f the beds intersected. Apprpriate maps and diagrams are included in the bdy f this release. All results are included in the bdy f this release. Nt applicable. One further drill hle, fr getechnical purpses, that is expected t intersect the evaprite hrizn, will be cmpleted in the Prject area. Onging explratin wrk is planned fr the interpreted extensinal areas f the depsit, which are in the nrth western extent f the Muga Prject and in the Vipasca Prject area. 11