Well, good afternoon, everybody, to the Highfield Resources Annual General Meeting. It's now well past the half hour. It's 3:37. My name's Paul Harris. I'm the chairman of Highfield Resources, and will be chairing the meeting today. I apologize I can't be with you there in Adelaide, I'm under doctor's orders. I advise that we, in accordance with the company's constitution, a quorum is present, and accordingly, I declare the annual general meeting open. Firstly, I'd just like to introduce us, introduce you all to our board. I think most of you know each, but with us is Ignacio Salazar, who's based in Pamplona now, this morning. Pauline Carr, non-exec director, who's chair of Rem and Nom, also, chair of our Audit and Risk. Roger Davey, who I think is on.
He's a experienced mining engineer, Chair of Atalaya, is based in London. Brian Jamieson, our EMR rep and very experienced mining and legal and accounting executive, who's in Melbourne today. We're in all different parts of the globe this afternoon, but we're all on board here. Also joining us today online is Olivia Badillo, who is head of our Investor Relations and Business Development and is attending online. I think Javier Aguado, our CFO, is also with us. We also have present in the room with you there in Adelaide, Katelyn Adams, who's our esteemed co-sec. Joining us online as well, is Julian McCarthy, our lead engagement partner from PwC, who's the company's auditor, is joining us via video link as well.
Any questions in relation to the financial report, you're welcome to direct them Julian's way. If we can move now just to some administration. Today we firstly cover the formal items of business and any shareholder questions relating to those resolutions. I'll just remind you, when we are going to pose a question, please relate them to the resolution. Otherwise, please hold off your question to the back of the meeting after Ignacio and Olivia's presentation. Before we start with the formal business of the meeting, I've a couple of quick housekeeping points. Questions to the board or auditors regarding the financial report or specific to the resolutions being presented today will be addressed throughout the formal section of the meeting. All other general questions will be addressed after the chairman's address and presentation.
When submitting questions, please state the registered shareholding name and, if appropriate, the specific resolution the question is relating to. If you require any technical assistance during the meeting, please click on the Help function on this webcast. I note there's no formal apologies, what I'll now do is address the formal chairman's address, which is I think it's been lodged with the ASX just recently. Good afternoon, and good morning, everyone around the globe, 'cause we obviously have some participants and shareholders around the globe and our executive team in Pamplona. I'd like to welcome you all to the 2023 Highfield Resources Annual General Meeting.
It gives me great pleasure in addressing this forum to outline the significant and exciting progress made by your company over the last 12 months towards the licensing, financing, and construction of our 100% owned Muga mine. The significant progress includes receiving the key licenses to move the Muga project ahead, including the most recent final construction license from the Sanguesa Town Hall to build a processing plant. Also, during the year, two other key licenses were issued. The construction license for the electricity line was granted by the Sanguesa authorities, and the construction license for the mine gate was issued by the Undués Town Hall.
After many years of regulatory process, it was particularly satisfying to see construction works for the mine gate and decline start in mid-2022, and to finally receive the plant construction license, which has enabled the company to progress the Muga financing to its final stages in 2023. I personally can't thank the executive enough for achieving those milestones. On the back of the Sanguesa construction license, the company recently announced significant financing from its major long-term supportive shareholder, EMR Capital, along with investment manager Tectonic, in the form of a AUD 25 million convertible bond. This is a very attractive form of funding for the company, as it mandatorily converts to equity on first drawdown of the debt. That's the project finance debt from the banks, and enables the company to continue progressing the project whilst finalizing discussions with financial investors.
Within the past year, Highfield has executed also the EUR 320 million debt facility with the leading European banks, while also bringing in a key local Spanish bank, Caja Rural de Navarra, along with HSBC Continental Europe. In addition to the senior debt financing, the company recently announced credit approval for the EUR 25 million equipment operating lease with Macquarie Group, on top of raising the AUD 13 million of equity capital from new and existing shareholders in late 2022. In addition to focusing on project approvals and financing, the Highfield team continued to remain extremely proactive on ESG matters. The company made significant progress over the year and was recognized internationally for its environmental work and sustainability activities. Under our mine plan, we backfill all residue underground, leaving no residue on surface post-mining, which is very unusual.
We also remain focused on our communities. One example this year was our successful rebuild and restoration of the foundations of the municipal cemetery in the historic village of Javier. We continue to work closely with all the town halls of the region, assisting them with their local priorities. Once operational, the Muga project is expected to provide employment and business opportunities for locals, and will be a key contributor in stemming one of the key concerns of the region: the depopulation of the region's rural villages. Despite weak and volatile capital markets in 2022, and that continued uncertainty in 2023, the ongoing Russian occupation conflict in Ukraine has created a strong tailwind for the potash sector.
In particular, there is now global recognition of the strategic value in potash assets, with security of supply located in politically stable jurisdictions such as Muga. This geopolitical backdrop has heightened awareness and has been particularly notable in Europe, given that close to 40% of muriate of potash has been produced from Belarus and Russia prior to the start of 2022. This dramatic shift in regional supply lines has been very much in favor, and has accompanied a groundswell of support for the project from a broad spectrum of stakeholders, including regional and national governments in Spain, financing groups, and other key partners. We feel privileged to be in a position to be able to bring Europe's next potash mine into production, and in turn, alleviate a significant pain point for the European and African agricultural sectors.
Delivering on the Muga project presents a tremendous opportunity. I would like to take this opportunity to thank my fellow board members, the management team led by Ignacio, and our dedicated employees for all their efforts over the year. I would very much like to thank all our shareholders for their loyalty and continued support over this past challenging year, in particular, EMR. We're now at the junction of a very exciting stage in Highfield's development. I look forward to Highfield continuing its trajectory to become a successful and sustainable long life producer of potash. That concludes the Chair address. We'll now move to the formal business of the meeting. The notice of meeting was made available to all shareholders on the 28th of April, in accordance with the Corps Act.
If there's no objections, I propose that the notice of meeting be taken as read. I advise that there's no notice of any other items for today's agenda has been received, and therefore declare that the only matters for our meeting today that can be dealt with are those set out in the notice of meeting. Just in relation to voting, given this meeting is being held in a hybrid fashion, as we're all used to now, we'll be conducting votes on each resolution by way of poll. Shareholders attending virtually should access the URL as shown on the slide. You'll also need your meeting ID and shareholder ID, which is available on the proxy form, or email you received for the notice of meeting.
When I shortly open the poll, click on Poll to be taken to the voting screen, and then confirm to submit your vote. You'll be able to amend your vote... You will be able to amend your vote until I close the poll. For those attending in person, you should have received a voting card on which you can record your voting preferences. Please complete your voting at the appropriate time, and then submit your voting card in the ballot box that will be circulated. We should have that somewhere there for you. Once the poll voting has been tallied, the results will be posted as an ASX announcement following the conclusion of the meeting. Any directed proxies given to you by the shareholder will automatically be cast as directed when the poll is closed.
I note any undirected votes available to me, as Chairman, I intend to vote in favor of each of the items of business. In relation to the proxies, the proxy votes submitted by the due date for the lodgement of proxies for each resolution will be set out on the slides that will be shown for each resolution. You'll see them up there in front of you. Any shareholders attending virtually are encouraged to submit your questions through the Ask a Question box. Please include your registered shareholding, name, and specific resolution or item of business it pertains to. The poll will remain open for a few minutes after the conclusion of the final item of business to allow votes to be submitted. I now declare the poll open on all of the resolutions.
I appoint Richard Han, of Advanced Share Registry, as the Returning Officer for all resolutions. Those in attendance in person should have received an attendee card on entry. If you've not done so, Richard should assist you. Those holding pink or green cards are entitled to vote. Today's resolution will be voted on by poll. Each shareholder, whether voting in person, by proxy, or by representative, is entitled to one vote for every share held by that member. Your voting paper is on the reverse side of your pink or green card. Please complete your voting paper and submit it in the ballot box that will be circulated at the conclusion of the items of business.
For those who are attending the meeting virtually, to vote electronically, you will need to minimize the webcast on your device to access these voting options by selecting the arrow in the broadcast bar and visiting the URL that is again shown on the screen. First, ordinary business, the Financial Report, Directors' Report, and Independent Auditor's Report. The first item of business is to receive and consider the Financial Report, Directors' Report, Independent Auditor's Report for the financial period ended 31 December 2022, after which we'll continue to the formal resolutions to be addressed in today's meeting. Please note that Julie McCarthy from PwC, the company's auditor, is available today if you have any questions. We're not required to formally adopt these documents, however, I invite discussions on the financial statements.
If you have any questions on the financial statements per se, that's not relevant to a particular resolution, you are welcome to raise those questions now. I inform the meeting that a copy of the company's annual report for the period ended 31 December 2022 was lodged with the ASX on the 31st of March and sent to those shareholders who requested a hard copy. A copy of the company's 2022 annual report is available for download from the company's website. If there are no questions, I don't have any questions online. I can't see any questions there from the room. We'll keep moving to the next item of business, which is Resolution 1: Adoption of the remuneration report.
I inform the meeting that the explanatory notes accompanying the notice of meeting, and the company's financial statements, provides a background and details of the remuneration report. Please note that the key management personnel of the company, including the directors and their closely related parties, are excluded from voting on this resolution, as set out in the notice of meeting. I now move the motion: to consider, and if thought fit to pass, without amendment, the resolution contained on the slide as an ordinary resolution. I now invite discussion of that motion and allow time to submit some questions. While we're doing that, I will state that the directors unanimously recommend that shareholders vote in favor of adopting the remuneration report. The proxies received for this resolution are displayed, as you can see, which is fairly resounding.
The resolution is currently open to vote by conducting a poll. For those attending virtually, if you haven't done so already, please now electronically cast your vote on this resolution. For members in physical attendance, please complete your voting papers, which will be collected after all the other items of business have been considered. Are there any questions from the room? I can't see any, and there's none online. I'll now move to the next item, being Resolution 2: Re-election of our fellow Director, Mr. Brian Jamieson. I inform the meeting that the explanatory notes accompanying the notice of meeting provides the background and details of this item.
I refer the resolution as presented to you on the slide, I now move the motion to consider, and if thought fit, to pass, with or without amendment, that Brian Jamieson, having voluntarily retired in accordance with Clause 12 11 1 of the Constitution, and being eligible and offering himself for re-election, is re-elected as a director with effect immediately following the conclusion of the meeting as an ordinary resolution. I now invite discussion of that motion and will allow time to submit questions. Just while we're doing that, I will note that each of the directors, obviously without Brian abstaining, strongly recommend shareholders vote in favor of this resolution. The proxy votes received for this resolution are displayed, as you can see on the screen, which are resounding. The resolution is currently open for vote by conducting a poll.
For those attending virtually, if you haven't done so, please now electronically cast your vote on this resolution. For the members in physical attendance, please complete your voting papers, which will be collected at the end of the meeting. You know that, I won't keep going over that. Are there any questions in relation to the re-election of Mr. Jamieson? Doesn't look like it, thank you and congratulations, Brian. Resolution 3, issue of options to the Managing Director, Ignacio Salazar. I inform the meeting that the explanatory notes accompanying The notes of meeting provides a background and details to this item. I refer to the resolution as presented to you on the slide, I now move the motion to consider, and if thought fit, to pass, with or without amendment, that the following resolution is an ordinary resolution.
That for the purpose of ASX Listing Rule 10.14, and for all other purposes, approval is given to the issue by the company of 2,639,296 options to Mr. Ignacio Salazar, under the employee incentive scheme known as the Highfield Resources Limited Employee Long Term Incentive Plan, on the terms and conditions set out in the explanatory memorandum. I now invite discussion on that motion and will allow time to submit questions. Whilst we're waiting on those, I do note that each of the directors, with Ignacio abstaining, recommend shareholders vote in favor of this resolution. The proxy votes received for this resolution are displayed. This resolution is currently open to vote by conducting a poll.
You know the drill, those attending virtually, if you haven't already done so, please cast your vote, and those in physical attendance also, please cast your vote. Are there any questions in relation to the options? No. We'll keep moving to Resolution 4: Approval of previous issue of shares. I apologize for the dryness of this whole process, as you know, when you attend an AGM, you do have to go through these motions, and it's important business that the company does get approval for each of these items, in particular, the next ones as we move forward. Approval for the previous issue of shares. I inform that the meeting that the explanatory notes accompanying the notice of meeting provides a background and details of this item.
I refer the resolutions presented to you on the slide, and I now move the motion: to consider, and if thought fit, pass with or without amendment, the following resolution as an ordinary resolution, that for the purpose of ASX Listing Rule 7.4, and for all other purposes, approval is given to the previous issue by the company of 2,119,425 shares under ASX Listing Rule 7.1, on the terms and conditions described in the explanatory memorandum, which is attached to Sorry, the explanatory statement, not a memorandum, which is attached to and forms part of the notice of meeting. I now invite discussion of that motion and will allow time to submit questions. Each of the directors recommend shareholders vote in favor of this resolution.
Proxy votes received for this resolution are displayed. The resolution is currently open to vote by conducting a poll. Those attending virtually, please vote, those members attending physically, please vote. Can I ask if there's any question in relation to that resolution? Okay, doesn't seem to be, we'll keep moving, we'll move to resolution 5, which is a similar approval of a different issue of shares, which was the shares under the placement December 22. I inform the meeting that the explanatory notes accompanying the notice of meeting provides the background and details of this item.
I refer to the resolution as presented to you on the slide, and I now move the motion to consider, and if thought fit, pass, with or without amendment, the following resolutions as an ordinary resolution, that for the purpose of ASX Listing Rule 7.4, and for all other purposes, approval is given to the previous issue by the company of 21,612,904 shares under ASX Listing Rule 7.1, on the terms and conditions described in the explanatory statement, which is attained to and forms part of the notice of meeting. I now invite discussion of that motion and will allow time to submit questions. Each of the directors recommend shareholders vote in favor of the resolution. The proxy votes received for this resolution are displayed.
This resolution is currently open to vote by conducting a poll. For those attending virtually, please cast your vote, and also those in physical attendance, please cast your vote. Are there any questions in relation to this resolution? Okay, thank you. Yeah. Yes.
What the reason? Thank you. I'm sure there's a reason.
Yeah, sure. No, no problem at all. These resolutions are in relation to the previous issue of shares. This particular resolution five, is in relation to the placement that was done on the 12th of December 2022, where the company placed 21 million shares at a price of AUD 0.62 to raise AUD 13 million to new and existing shareholders.
Thanks very much.
Okay, Katelyn, if there's no further questions, I'll keep moving, we'll now move-.
Yes, let's move, Paul.
We'll now move to resolution 6, which relates to the options that were attached to those placement shares. The approval of issue of options, I inform at the meeting that the explanatory notes accompanying the notice of meeting provides the background and details of this item. I refer to the resolutions as presented to you on the slide, and I now move the motion: to consider, and if thought fit, pass, with or without amendment, the following resolutions as an ordinary resolution, that for the purpose of ASX Listing Rule 7.4, and for all other purposes, approval is given to the previous issue by the company of 10.8 million options under ASX Listing Rule 7.1, on the terms and conditions described in the explanatory statement, which is attached to, and forms part of the notice of meeting.
I now invite discussion of that motion and will allow time to submit questions. While I'm doing that, I'll just finish the resolution. Each of the directors recommend shareholders vote in favor of that resolution. The proxies votes received for this resolution are displayed on the screen, and I ask those attending virtually and physically to please complete their votes now. Are there any questions in relation to Resolution 6? We'll keep moving to Resolution 7, which is approval of the Employee Long Term Incentive Plan. I inform the meeting that the explanatory notes accompanying the Notice of Meeting provides the background and details of this item.
I refer to the resolution as presented to you on the slide. I now move the motion: to consider, and if thought fit, pass, with or without amendment, the following resolutions as an ordinary resolution, that for the purpose of Listing Rule 7.2 Exception 13(b), and for all other purposes, approval is given for the issue of securities under the employee incentive scheme, known as the Highfield Resources Limited Employee Long Term Incentive Plan, and the rules of which are annexed as Annexure C to the explanatory memorandum as an exception to Listing Rule 7.1. I now invite discussion of that motion. I will allow time to submit questions. The proxy votes received for this resolution are displayed. This resolution is currently open to vote by conducting a poll. I ask those attending virtually and also physically to cast your votes.
Are there any questions?
We have a question on the floor, Paul.
Yes?
Yeah, I have a question, please, Jeff Day. What would be the price of exercising those options?
... The options in relation, every option is, has a different exercise price. However, in relation to, the Pauline.
Yes, I can probably help out here. Obviously this is for a particular year. This is, for these share plans are required to be renewed by, under the ASX Listing Rules every 3 years. This is just a renewal of the existing plan.
Plan, yeah.
What we do here is that the options, we work out the weighted average price of the December month, which is the month preceding the start of our financial year. We then add a 25% premium to the exercise price of those options. In order for those options to vest, they vest over three years, various performance hurdles must be met. In particular, the current hurdles relate to the retention of employees, and they must be employees as at the date that each of those three tranches are assessed. In effect, the pricing is the December BWAP, plus a 25% premium.
My question is this: that if the valuation of Highfield, and I've seen various broker reports, $1.50, $1.70, what's the company doing issuing options at such ridiculously cheap prices? I don't think that's a particularly good incentive. It's just a big free kick to the new executive coming in. You know, if these options were with a strike price of close to valuation, and the incentive is to get the valuation of a company up from its current levels, then the executive is gonna be working damn hard.
If you're issuing them at AUD 0.50, AUD 0.60, AUD 0.70, and you've got a valuation of a business of AUD 1.70, I can't see what that person has to do to get the share price up, because the share valuation is already extremely high, much higher than the current price. I think the company should be reviewing this because my personal view is, and this does go on a lot, is that the strike price of these options should relate to the valuation of business. And one might argue that the share price at Highfield is a reflection on the management and the board today, and it's an incentive which I don't think should be out there at these prices. Thank you.
Thanks, Jeff. Appreciate the question. It's a good question. It's a very valid question. I just... For example, the options that were issued to Ignacio, which has previously by poll been approved, those options have an exercise price of AUD 0.79. You referred to the valuation, broker valuations in the market a lot higher than that, which we all agree that the company should be trading at those levels. Unfortunately, supply and demand forces don't necessarily agree with those valuations and the share price is certainly not trading anywhere near those levels. We as many companies do, use our STIP, our short-term incentive plan, and our long-term incentive plan, as a variable portion of our remuneration to incentivize our executive.
I'm not sure I agree with you in relation to these options not incentivizing our executive. I think that it does highly incentivize our executive, because they only participate in the share price above the strike, so it's got to go above AUD 0.79, and then they start participating in the upside. At AUD 1.80, there's a lot of money to be made there, and I'm sure Ignacio and the rest of the executive team will be working their butts off to get it up there, as are the rest of the board. I do appreciate your comments, as would the rest of the board, and it is a difficult.
It's always a contentious, issue in terms of executive remuneration, and how to structure it correctly, and how to structure it to ensure that our executive is motivated and also rewarded on their performance. We're very cognizant of that, and Pauline, who is chair of our Rem and Nom, and the rest of the board who sits on the Rem and Nom, are very focused on the way that the executive is remunerated. We'll certainly take that into consideration. It's a valid point. There's many other things that we need to take into consideration.
I can assure you that there's no person that works harder in this company than Ignacio, and we're very happy to be able to reward him with a variable remuneration plan, like this long-term incentive plan, that enables him to participate at a share price participation at certainly a level that is well above the current share price. I do appreciate your points, so thank you. Caitlin, were there any other questions from the room? I don't have any further online.
No other questions from the floor.
Thanks very much. What we might move then is to Resolution 8, which is the approval of the 10% placement facility. I inform the meeting that the explanatory notes accompanying the notice of meeting, provides the background details of this item. As the approval of the 10% placement facility is a special resolution, I note that this requires approval of 75% of the votes cast by shareholders on this resolution. I now move the motion: to consider, if thought fit, to pass, with or without amendment, the following resolution as a special resolution, pursuant to, and in accordance with Listing Rule 7.1A, and for other purposes, shareholders approve the issue of equity securities up to 10% of the issued capital of the company.
at the time of the issue, calculated in accordance with the formula prescribed in Listing Rule 7.1A.2, and on the terms and conditions set out in the explanatory memorandum. I now invite discussion of that motion and will allow time to submit questions. Whilst we're waiting on those questions, each of the directors recommend shareholders vote in favor of the resolution. The proxy votes received for this resolution are displayed. This resolution is currently open for vote by conducting a poll for those attending virtually and also physically, please cast your vote now. Are there any questions from the floor in relation to this resolution? We don't have any online. If there's no further questions, I'll now move to the next item, which I think is the final resolution, which is constitutional amendments.
There's a couple of final constitutional amendments which are more housekeeping than anything else. I inform the meeting that the explanatory notes accompanying the notice of meeting provides a background and details of this item. As the approval of the constitution amendments is a special resolution, I note that this requires the approval, again, of 75% of the votes cast by shareholders of this resolution. I now move the motion to consider, and if thought fit, to pass, with or without amendment, the following resolution as a special resolution. That for the purposes of Section 136(2) of the Corporations Act. For all other purposes, the constitution of the company be amended in the manner described in the explanatory memorandum accompanying the notice convening this meeting, with effect from the close of this meeting.
I now invite discussion on that motion and will allow time to submit questions. Whilst we do that, I note that each of the directors recommend shareholders vote in favor of the resolution. The proxy votes received for this resolution are displayed. The resolution is currently open for conducting by poll, so those attending virtually or physically, please cast your votes. Are there any questions in relation to those constitutional amendments? No. Okay. Well, thank you for that. That now concludes the resolutions to be presented at the meeting. Please submit any votes through the online platform for those attending virtually. For those attending in person, please submit your votes in the ballot box. This concludes the formal part of the annual general meeting of the Highfield Resources.
I now formally declare, Paul, if it's okay with you, I formally declare the poll closed and appoint Richard Han as Returning Officer. The results of the meeting will be released to the ASX when tallied later today. Thank you all for attending the Highfield Resources Limited Annual General Meeting. I now declare the meeting closed. Now we get to the exciting part of the meeting, and I apologize for the dryness of these AGMs. They are very procedural. We can now get to the exciting part, and I'm gonna hand over to Ignacio and Olivia, who are sitting in Pamplona this morning. And as I mentioned before, if I can personally say, on behalf of the board, thank you enormously to the executive over the past 12 months.
The amount of effort that was required to, in particular, get the construction license from Sanguesa was enormous. There's been some voting over the weekend, in particular in the region, but we might see some change in governments in each of the town halls. Thanks to Ignacio and his team, those licenses are now issued. We're in a great spot to now finalize our financing and move Muga ahead. Thank you all for attending, and I'll hand over to Ignacio and Olivia, and then if we could just hold questions for them both until the end in relation to the presentation. Thank you.
Thanks a lot, Paul. Good afternoon, everybody. Yep, let we go through the presentation. Indeed, just referring to your last comment, the mayores of Sanguesa is no longer the mayores of Sanguesa. She retired from the town hall. As well as the party, the whole party that was supporting her is out of the Sanguesa now. We had elections, municipality and regional elections, and you may heard yesterday, the President of Spain asked for the national elections to be advanced and to be done on the 23rd of July, rather than in November, December, where they were meant to take place. A lot of shakeup in the regions and in Spain in general. Okay, we cover that later if you want to go into more detail.
Let's go through the presentation. We'll try to be brief. It's obviously, you are well aware of most of the points here, let's go through that and take any questions if you want to go in more detail. If we move to the next slides, obviously, fully permitted, shovel-ready mine, something I guess we were not allowed to put in the presentation for many years, but right now that is the case, and moving forward to construction. Market fundamentals. Well, the price has been very strong, slightly less so recently. COVID first, and after that, the war in Ukraine, pushing well, crop prices in general and potash as well. Long-term fundamentals, very strong, and you know our project very strong within a strong sector, no? With a high margin, stockwork and margin. Very, very good.
forecast for the sector and for the project. Well, arable land decreasing and population increasing, it's difficult to argue against something like that, and NOP in particular, one of the key ingredients to solve that equation, no? In the next one, I think we moved some of these. Well, obviously, with this very much a very strong topic last year, but still so, Russia, Belarus, accounting for almost 40% of worldwide production and more than half of the demand in Europe. We had here in the Pamplona office, the visit from the Ambassador of Lithuania recently. You know that Belarus only comes out to the market through Lithuania, and not anymore because that port there is closed, so they are not able to export through Lithuania.
Very much the reason for that visit, and by the way, we were told potentially the Minister of Lithuania to visit us and the government of Navarra are very interested about that visit. It looks like Navarra happens to have a lot of dealings with Lithuania. Basically, well, that is to underline the point that a very key project in Europe and from a geopolitical perspective, all the countries you can imagine, all the countries in Europe, a lot more sensitive about the war in Russia, obviously, than potentially maybe from Australia, is seen as a very much of a European topic. The countries, former Soviet Union countries or countries in the border with Russia, obviously, the sensitivity goes a lot higher, no?
In this case, Lithuania, that was their interest, to make sure projects like ours get a lot more attention than, well, potash coming from Belarus or Russia, no? That is maybe to give you a sort of recent news on that. Basically, always has been, Muga, a very strategic process, project, and only becoming more and more obvious to everybody as the world moves into a more fragmented, regional, blocks type of geopolitical, scenario and environment, no? We go to the next one to move now into the project. Well, sorry, no, there is another one before, share price. Sorry, back into the corporate snapshot. Very quickly on that.
Market cap, around AUD 230 million, EMR, 27%, well, as you know, the recent deal is based on convertible notes, so that's not going to change that number now, until that those notes are converted into equity. They, as mentioned before, they will have to be converted mandatory. It's mandatory conversion before drawdown. That's a very special feature of that deal. That will increase the participation of EMR. Basically, cash at the bank at the end of March, AUD 9 million, and obviously now with the deal with Tectonic and EMR, that will put us in another AUD 25 million extra from that, puts us in a very, very strong position going forward. No debt, and the price targets that were referred to before. Next one, please.
Management team, we've made a huge effort in the last two or three years to really work with young and new and reduced management team. I mean, very much the emphasis made. We made a significant change on the way the permitting was handled and the people that were handling the permitting, as well as the relation with the communities and the government, I mean, some of the people there. Obviously, in parallel and now taking a lot more emphasis, work on the financing side. As well, on the financing, we made a very significant difference. I go through the people very quickly. On the construction side, we kept the team to the potentially absolute minimum with the...
Now, you have heard, let me start with that one, the recruitment of Carles Aleman, probably our first step to strengthen the construction team, as you know, former president of ICL in Spain and Portugal, in Iberia, for 5 years plus. Very, very significant experience in Spain, in potash and well with ICL for many years, apart from other companies before that and in different countries, in Spain, but as well, outside Spain. Very happy to receive Carles really 2 weeks ago, and will be, well, obviously the first in, well, quite a lot of changes that we will have to go through as we move into construction.
Bear in mind, we have been, we kept, we've been reducing the team from 40 to 30 in the last couple of years. Now we have to move from 30. You know, the construction effort, obviously, including contractors, will mean involving around 1,000 people, no. In the construction of Muga. It's obviously an effort we are not taking for granted at all. It will be, I mean, a lot of companies to get it wrong in the permitting or the financing, but as well in the construction. Every step, taking very carefully. Construction team, together with Jorge Velasco, fate on the mining. Leo, we split the construction in 3 work streams. We will talk about that a bit later in the presentation. That is the starting point for that.
On the permitting, relation with the communities is maybe more on the top line of the management team. Well, Olivia Badillo is with me here on the marketing investor relations side. You know him, most of you, quite well. Susanna has been doing a lot on public affairs. Javier Ojoki and Javier Aguado, very, very well, people with a lot of experience in the region and in the industry, and also able to connect very well with the different stakeholders and to mobilize people whenever necessary through the, through the process that we've gone through in permitting, especially. Go to the next one, please. Well, the project, you know well, where we are, Pamplona, to the top left of that map, and our project, Muga, just a motorway to get there, and basically north of Spain, very close to the border with France.
The first phase, half a million tons of MOP. Second phase, will get us to 1 million conventional mining and processing methods. Next one, please. Well, we started. We are talking very much about preparing for construction, fair to say that we started last year. I mean, that was on the back with. I mean, we've taken a strategy to be, well, I think, a very clear plan and objectives, but at the same time, able to react and be extremely flexible with. I mean, obviously, trying to keep minimum resources and cash and effort, but creating maximum progress for the project. I mean, it's been a, I think, a balancing act so far working well.
A key element was as soon as we got the construction license of Undués in the Aragón region, that is obviously all the work related to the, to the mine, to the ramps, are in that region, the plant is in Navarra, is that we decided to embark on this, on these, works around the mine gate. Relatively small amount of work, but significant in the sense of, that, we were cutting the construction effort that will take place in the ramps by advancing these five, six months of work around the mine gate, you know?
It is very important effort, and it is already there, done, and everything on budget and according to plan, but is that give us a head start on that work of ramps of, as I said, these five or six months. The idea is obviously, as you can imagine, we will be running the construction of the ramps and the plant in parallel, and well, you want to have the ramps ready with the mineral ready when as, at the same time, the plant is prepared to process that mineral. Running that very much in parallel.
To have that construction license from uncertain ahead of time, I mean, it was probably very difficult to forecast which one of the construction license was going to take longer or harder, we managed to get that last year in June 2022, well, most of this work finished at the beginning of 2023. As you know, the Sangüesa license, the one for the plant, is the one we received at the end of March. We go to the next slide, I think is a bit more on the work that has been taking place.
Again, I think locally, I can imagine for investor shareholders in Australia and globally, important to see after so many years of chatting and talking, et cetera, just to see real work, and that, I think, made a huge impact, no doubt, as I said, both locally and with investor community. You see on the right side as well, some of the equipment that we started to receive recently in our warehouse. It's also just to not only has been that work around the mine gate, but also just to get some of the key equipment received in the warehouse. Initial progress in construction and obviously now preparing for what we call the construction of the bulk of facilities, no. Already this in place.
Important as well to force the construction license in some ways and get the support of every government behind us, that made a significant effect on everybody's perception of the company, just to see this these works in place, no. Next one, please. I mentioned that before when I was talking about the team. The way we are going to prepare construction is really we are thinking about three constructions, and we are aligning the team just to work along those lines. The plan itself is a typical industrial construction organization. Civil works is obviously cutting across both plant and mine, and the declines and the mine infrastructures, no. Which is a really mining operation, almost, no.
The relationship with contractors is different in each of these three work streams, as well as the type of work, but obviously that needs to run very much coordinated. Starting, as I said, with Carlos joining the team to revamp or strengthen the team significantly as it has to be, but very clear, again, path going forward in all this work that needs to take place now. Please, the next one. That's, this started a bit simpler chart, that has been growing, obviously, and luckily, I think, good to be so, with especially the ticks on the box. I mean, I think, without going through all of that, as I said, both the main difficult part has been the permitting, and that's why that the bigger tick is probably there.
On the financing side, the work with Endeavour, the work with just to get the pre-finance loan, and recently you saw some syndication of that loan, which we're striving mostly from our side, and the work with Endeavor we feel very proud of. The terms and conditions that have been achieved in that loan is something that. Well, the next element of that financing strategy, any strategic investor will want to protect that pre-finance loan, so that is, a adding to that. We have, and that has been discussed recently, got this deal recently with EMR and Tectonic, which provide us with a bit of time.
I think as soon as we've got the license in Sanguesa, the strategic investors see the company in a different light, and that allow us the license, and just to have a period with no permitting risk, allow us to have a very different discussion with strategic investors, make it a lot more competitive. It's not a matter of getting a deal. We can get a deal tomorrow, or we could have get several deals before, but the question is to get a deal that really adds value to the company and to shareholders.
That's, I think, with the permitting in place, the permitting risk behind us, and the support of this deal and the support of EMR Tectonic, puts us in a stronger position to close the deals we've been working with and are well advanced. We have said to the market already, our intention is to start construction in the second half of the year, and that is when we are moving along that plan to finalize the financing, get the team built up and strengthened. As I said a couple of weeks ago, very important, Carlos, joining the company and more will come. Finalizing the contracts with...
Acciona is one of the contractors, but some others to be fully prepared for construction and put us in the best position to get, make a success of that construction period, no. Sales and marketing, it's our strength, our main strength. Indeed, we kept, managed to get several non-binding deals, but have very much on purpose, kept those non-binding, because we think it's not something we need to manage or a problem for the company, how we get rid of our potash. On the opposite, the fact that we are in the middle of the market, we really need to push aside farmers to build a plant, and the mine is in our mind, clearly an asset we would like to materialize to get the best out of that in this moment, no.
As, as discussed before, some of the construction, the initial preliminary work was done, but the main one we are planning to start at the end of the year, beginning of 2024. Go to the next one, please. I think, why Highfield Resources? Yes, the next one, I think we will get the answers to that. As, as you know, I will go very quickly. There are three, and this, and disputable, I think, strategic competitive advantages for this project that make it different to Canadian, Russian, or any, you know, our competitors is: One is the fact that we are surrounded by very, very good infrastructure. You see the pictures of the motorway.
That is the actual motorway, substation, and well, and the port of that are next to the mine and the port of Bilbao. The fact, the second point that make this project special is the shallow mineralization compared to other mines in, that in Canada, need to build a shaft, a $2 billion shaft they are building at Jansen, or they have built in Jansen. Our case will be simply a couple of ramps to access mineralization, know what aquifers on top of our mineralization. The third and the most important asset or strategic advantage of this company is the location in the middle of the market, when typically these projects are really in the middle of nowhere, and such a high volume commodity like potash where the transportation costs are critical, no? Next one, please.
I mean, that results in. I mean, those three strategic advantages give our project a very low cost. The European prices, you can see, have traditionally for years, trading at a premium to Vancouver prices, $50-$100 per ton. I mean, that is the result of being Canada or Canadian producers, the price setters globally. The differential in transportation from Vancouver or, well, from the middle of Canada to Vancouver and to Europe is the main reason for that difference. If that tells you quite a lot, I mean, $50-$100 per ton is the differential in price when our OPEX cost, unit cost price of production is EUR 92 per ton. It's almost the same or higher.
With those better prices, lower cost is why we end up with a top quartile margin in the industry with Muga, and that has been always understood for this project. Well, I must say, the exercise with the pre-finance banks, with the strategics and Macquarie recently, are only giving us comfort that, well, it's not only our analysis, but many external diligence are confirming all these economics and the potential of this project, eh. Please, the next one. Yes, I mean, that is about margins, profitability, but on the CapEx investment as well. I mean, as I said, we don't build shafts, we don't build logistics, et cetera.
Compared to peers and other projects, Muga, in a comparable basis, for the same amount of production, we are half the cost to build a Muga mine compared to the others. With that, again, not only high margin, but low CapEx in NPV, and that is the numbers, sufficient numbers in the market now from the end of last year, of close to EUR 2 billion and IRR of 21%. EBITDA EUR 400 million, this will be a cash machine, as I said recently, once we start to be in production, and especially with phase 2, 1 million tons of MOP, this will be generating EBITDAs of more than EUR 400 million per year. Next one, please.
I mean, this is a summary of the economics from the feasibility study and some comments about the financing. I think we covered most of that. I mean, only to add that this is extremely, I mean, 30-year mine life, when, as you know, in potash, typically, you don't do much more drilling, not to sterilize the deposit. It's something that we are all very confident will increase, apart from the potential of not only the Muga or Vipasca, but some of the other projects that we have around in the belt. On the financing side, I think I mentioned all of that, as well as the AUD 25 million from Macquarie.
We had been for a bit with non-binding mandate, among non-binding term sheet that was finally signed and sealed. In fact, some of the first payment to Komatsu has been taking place as part of this equipment lease with Macquarie. Adding up the building blocks on our financing strategy, and I think in a solid way and with not only just getting the deals, but deals that make sense and add value to the project. Next one, please. This is the deal. We've discussed this quite a bit already. Probably not to say much more. Very important timing, and I think especially in the case of EMR, that has been a bit, well, maybe less present.
I think the fact that we got the final, not only to EMR, I guess, to many shareholders after, well, many especially long-term shareholders, see that the permitting is behind us after so many years, that was very important and I think a main point about getting EMR back in the company once again, together with Tectonic, no? Very important to get this cash to allow us. There are important elements to make sure the project keeps going and keeps making progress. We've gone through the exploitation process as well, and it's just making sure we secure all the land to get the project.
Obviously, all this work with the banks, et cetera, require some payments to get secure and committed the funds to get the project moving, and also to start to give us a bit of time to. I mean, it's, you cannot switch from a 30, a very lean and mean team that as we have really imposed on ourselves for the last 2 or 3 years, to transform that into, well, a lot, more, be a bigger team at the end of the day, to take care of the construction.
I think it's going to be important time as well as obviously, as we said a few times, get the discussions and put us in a better position when we talk to some of these strategic investors and in a better position to negotiate good deals for the company. Very important timing of this funding. Please, next one. ESG credentials, you, we've discussed this many times. I mean, I think, obviously, when I talk to many of the stakeholders, I mean, the fact that we are backfilling, we will be leaving absolutely no residues on surface by the time this mine is gone. That is first, leaving, I would say, globally, in this type of mines.
From the social perspective, I could be talking for hours about the work that we have been here in Navarra and Aragon. I mean, especially, the... We tend to refer to the study and what is being called by the government, a Muga Community, I think the way to do things properly, just to have that sort of framework to get the housing, the transportation, all the necessary infrastructure, so that the communities benefit from this project, is that is being worked out with everybody. That's why we got the level, among other things, the level of support that we got to get the final license, for example.
Governance, as you are well aware in, I mean, the company for a long time always setting the highest standards, you know, as we move forward in terms of governance. More important, as we move from a relatively more of desktop type of phase to a construction and operation phases of the company. Please, next one. I think we are getting probably to the end of the presentation.
Just to summarize, I mean, not to go through that again, very strong project that has always been with potentially, I think, I mean, nothing, especially if I say, a big concern about permitting and the way things would be handled with the administrations, but now behind us. We're ready to start construction and finalizing the financing of the project, and I think moving the project into a very, very interesting phase, you know, and making Muga a reality after so many years. Very excited to be in this position, building the team and making sure that we put everything in place to make a success of the construction of Muga. I think that's all from my side, and open to questions or any discussion.
Katelyn, we might hand back to you there, just to see if there's any questions from the floor. We don't have any online.
We do have a question from the floor. Thanks, Paul.
Great.
My name is Tim Harrington. I represent many clients, which have been here for many years, over 7 million shares. My first question, I do have a few questions for you, which you may be able to answer, may not answer. The first question is, you know, I think you understand that and aware of the continual disappointment in the share price of HFR over the years, despite the milestones that you've achieved. You know, just the example, we're at AUD 0.44 2 weeks ago, despite you getting a fully permitted mine. You know, the first question is: how are you guys gonna close the gap between the share price valuation and the NPV, which you just put on the slide of EUR 1.8 billion?
You know, the HFR value has not exceeded AUD 350 million since 2016, 2017. When you have a mine which is in construction, it should be 30% of NPV. We are currently sitting at 5% of NPV share price value. How are you gonna address this problem?
Yeah. Well, I mean, the best way to close the gap is to deliver, no? I mean, as you You said-
You have delivered. You're delivering in that share.
I know.
It doesn't mean it goes down.
Yeah.
My second question will follow on from that.
Yeah. No, no. But without delivery, everything else that you do is getting you nowhere, no. I think that is absolutely critical, and well, thanks for that comment. I really also believe we have delivered, but my point was about to continue delivering going forward, no? I mean, I think it's no mystery. We all know there were, and there have been shareholders that were, have been there for a while, and they were deciding to leave the stock, and you have a normal supply and demand.
When they do that, well, I think it's a matter of allowing that to happen and make sure that happens as soon as possible, so the people behind that belief and want to I mean, people that leave, not necessarily on the basis of the performance of the asset or the company or what we are doing, but on the basis of other considerations they may have, no? I think it's no secret about that. To be fundamentally delivering and progressing with the project is going to be overwhelming, no? At the end of the day, when you are working in the medium and the long term with the share price.
Aside from that, it's obviously working within our IR, with our brokers, and make sure that, as I said, these deals that we are doing now as well on the strategic and the deal that we recently do with EMR and Tectonic, all of these make sense and creates value going forward. I think it's no magic formula. It's a, it's a, it's a history that I think we've been. It takes probably a lot more to recover the share price than to lose it, no, or to recover the. I think it's a matter of keeping insisting on delivering and be very present and engaged with the market. No secrets or magic formulas about that, no.
Okay, well, my second question leads on to that. The targets, the BCI sell down, post-permit finalization, and the recent capital raising post your non-roadshow in November last year to Australia, which we met. Both of these events have caused deep stress on the share price, as you must know and must understand, as you know, as we said, AUD 0.44 on last week. Do you accept that both these events were poorly executed? I mean, how has not the board managed BCI sell down of their major holding? Why have not HFR management and the board, over the past several years, knowing they've got a large shareholder, BCI, fixed the share registry that was, you know, knowing that eventually BCI may be selling down or you weren't in the loop? On the second day, you got the permit.
millions and millions of shares got put on market and sold down whatever price. Now, that's not normal.
Well, that was a big disappointment. I mean, there's no way around that. It was a big disappointment. Obviously, we were in touch with BCI. Our understanding is that I mean, for not only the benefit of all shareholders, but including BCI themselves, this in our mind, was an understanding that this was meant to be managing in a different way, and we were in touch with them to do so.
At the end of the day, well, that is decision of every shareholder to do what they want with their shares, you know, and they decided to do it the way they did it, and that didn't help, obviously, when we were announcing the license, and at around that time, and during and after, to drop the stock the way they did it, you know. Once again, we were in touch with them, we were expecting a different outcome, but it is their decision. There's not much you can do about that.
Do you understand that, like, you do a roadshow, non-deal roadshow, then you come back, and then there's an equity raise at AUD 0.62, but the average stock was around AUD 0.86 for 12 months because of 1 seller decided to push your share price down, you did emergency raising? I mean, that doesn't put confidence in shareholders buying the stock when it continues to happen over and over again. You know, do you learn from these lessons? Why aren't the directors buying shares on the board of directors from this time down at AUD 0.44 a month in the market where it is? There's no news of that.
On the question of the directors buying share, I don't know if any of the other directors, I mean, want to mention and discuss that, but basically, I. As you can imagine, until recently, with the deal of EMR and Tectonic, we've been in a black period, and we've been in a black period for a while. I bought shares, well, a while ago, I think it's 100 thousand plus. Myself, and I am very committed with the options that I have to make them so very much aligned with the interest of shareholders, no?
I don't know if anybody else wants to answer on that, but I already bought quite a bit, and it has been almost impossible to buy more, and will be buying more in the future, as soon as I have the chance. Yes.
Maybe I can just add to that, Ignacio. You've had a number of questions, Tim. A number of these we've gone through with you before, but I think it's important to understand, in relation to BCI, you know, that organization, which is very much controlled by its controlling shareholder, Kerry Stokes and the Seven Group, is a, you know, a very entrepreneurial entity. We speak and have spoken to Brian O'Donnell and Carol Bradshaw a number of times and offered our assistance in any sell-down. We absolutely wanted to control that. Unfortunately, at the end of the day, you know, when you're selling shares, Tim, you don't ring us and tell us what you're doing, so they didn't either, and that was their right to conduct a sell-down how they conducted it.
It was unfortunately the way it did it. It was very disappointing. It happened on the back of the license. If you're a seller and you need cash, well, it was probably the optimum time to sell. Really unfortunate. I don't know what else we could have done. We certainly, the executive has been very active in trying to work through the, you know, that overhang, and we've had conversations with them since. We're trying to do everything, you know, we can in relation to that. You know, we certainly take your point in relation to the roadshow and the capital raise, and we've discussed that at length, and I don't think we need to go over that again.
Look, as Ignacio said, we've been in an extended period of blackout, given the relationships, given the discussions we've had, and continue to have. As I said to you in the past, and I know yourself and a number of other investors take directors buying as a signal of, you know, of the stock turning or whatever. I can tell you now that we're all absolutely motivated. We're all incentivized to get this project to happen, and you can be absolutely assured that you have the commitment of all the directors and the executive to, you know, ensure we're ticking all the boxes and taking this thing forward. Katelyn, were there any other questions from the room?
Yes, there is. My name is Keith Banfield. Thank you all for turning up, gentlemen, and Pauline. Just a simple one, is there any reason why we couldn't update the website to show the top 20 shareholders on a monthly basis?
No. You do?
Yeah.
Yeah, we can definitely do that. Yep. We can have a look.
Sure.
Okay. Now, the second one is, I raise this question every year. The question of options being given to shareholders. I think that the feeling within the board and with, and among employees is that options are a good thing. Now, the reason that the board and the, sorry, the employee regard it as a good thing is pretty obvious, and those same reasons apply to shareholders. Now, it seems to me that the incentives that are offered to employees and the board should extend to shareholders. What is the barrier in capital raising, not to invite shareholders to take up to be issued with options? Thank you.
There's no barrier. There's no barriers. In the last capital raise that we did in December, those options were actually offered to shareholders.
I beg your pardon, all shareholders?
For the shareholders that were participating in the capital raise, and also, you effectively Olivia.
I have a question there. Hang on. The shareholders that were offered the options were a very select few. I'm here as a small shareholder. I don't believe that I was offered options.
Mm.
Can you just confirm that for a start? Like, let's get the facts right.
Yeah.
Explain why I wasn't offered that.
That's correct, because those shareholders that were, that committed to invest in the company at the capital raise price were incentivized to invest at that price with an option. It wasn't the fact that the options were given to shareholders, it was the fact these weren't like bonus options or bonus shares that are a thing of the past and used to happen in the eighties and nineties. These were options attached to a share that the shareholder invested in. If you invested as a sophisticated shareholder, through your broker at the placement price, then you would have received an attached option. You would've had the chance to participate.
...
If you had spoken to your broker and arranged to invest in the capital raise at that price.
Chair, you are talking here to a meeting of shareholders. I think that what needs to be appreciated is your shareholders includes people outside that top 20 shareholders. Your role on the board is surely to look at the interests of all shareholders.
Mm-hmm.
The other thing you just mentioned was that those rights and options, what have you, are a thing of the past. That's not a reason to say that it can't be implemented in the present. There is no logical reason. The reason that used to be given to me at this meeting was, "Oh, it's a bit messy, you know, and we act in the interests of shareholders. Because there's additional costs involved in issuing options to the smaller shareholder, we're actually looking after your interests by reducing our costs of shareholder, our costs of capital raising." Let me tell you, it is messy. Hey, get your hands dirty. Get into the mess for the benefit of the shareholders who are being clearly discriminated against.
Maybe if I can. The value of the company is what it is and is what we try to obviously have to increase that value and the perception of that value and get it higher. If rather than, if simply what we do is to give away, proportionally to everybody, extra shares or extra options without changing the fundamental value of the company. I mean, that is not really. I mean, that will be reflected in the long run.
It might look to some people like we are doing something, unless you change the fundamental value of the company, splitting between more shares, the same value, or shares plus options, the same value, everybody will end up with the same value. I think this, in my mind, I mean, it's something that hasn't been discussed in detail, but some of these instruments or structures that do not create value, simply split it in a different way, are not, well, by definition, are not adding value to anybody, no? Because we are adding number of shares or more options to the same value, allocated the same value, well, the unit value of the share will decrease.
I admire your work. Let me, let me make that quite clear. In this instance, you're pushing the line that the Reagan pushed triple down economics. What you're saying to me is, "Don't give me a direct option of taking options, because it's in your interests way down the track, and when the big boys have all been involved." No, I think what you need to do, recognize that you're not there merely for those big boys, and it's unreasonable to accept, to run the theory that, "Don't worry, sonny, all will come good down the track." No, just like-
... you will get your benefit from options, the board will get their benefit from options, the major investors will get their benefits from options. Bring it down to the ordinary shareholder. Thank you. I do, let me make clear, I do admire your work, Ignacio.
Thank you.
Thanks. Yeah, thanks, Keith. We've actually got a couple or one question online. Keith, I absolutely appreciate your comments, and what I would also say is that those sophisticated shareholders that took shares in the placement and were granted an option, they do have to pay the exercise price upon if the option gets in the money. For us, that's worth a substantial amount of money that hopefully they do exercise that because I think it represents around $9 million if they end up executing it. I think the exercise price was around AUD 0.93. Again, they weren't given them. It was part of the placement price. Ignacio, I've got a question from Chris Eddings.
Chris wants to know if there was any impact from the resignation of the Mayoress of Sanguesa, on Highfield.
She, it's not that really she resigned, is that she, a bit, practically the party, is imploded there. I mean, I think they were put in a bit of a. That's why explains, to some extent, the difficulty of getting this license through. They had some people that wanted to drag the process down, other people that, well, were keen to see the mine in operation. I think they found it very hard. Anyway, what happened is that simply they withdraw. They, we had elections this last Sunday, this party, with the mayoress included, they didn't put any candidate or anybody into the election. They are completely gone. Now we have a different, potentially. Let's see what happens.
We have a sort of even results between left and right, and it's somebody in the middle that will make the decision, depending which side it goes. I think maybe what I was trying to illustrate with that point is that the process was not easy, and as a result of that, how difficult it had to be that this party has disappeared from Sangüesa.
In summary, Ignacio, just for Chris's benefit, the license has been issued, it's not like it can be revoked by a change in government.
Sorry, I thought it was really about the mayoress.
It was, but I think that's probably where he was going.
Okay, okay, no.
Yeah.
The license is the license.
Yeah
...irrespective of who did it or who is going to be there or not. Absolutely, there's no discussion about that. Not because it was one mayoress, and the mayoress is gone on. It's, again, it was not that she resigned, is that not her, nor anybody in her party, were part of the elections anymore.
Yep. Okay, great. Thank you. We have one more...
Thank you.
question from Adam Sheridan, who has asked, "When will the financing be closed out for phase 1?" Do you want to handle that, and I can add to it if need be?
I mean, I that was that slide where we show the ticks on the box on the progress, and we put ourselves, and that is what we have said in a press release, that the second half is the beginning of the bulk of the construction, and obviously, that implies that the financing is down there. We see significant progress, what I like to call financial strategics. As I said, I think the license was a necessary requirement. A lot of these investors were, well, some of none of them were prepared to take a permitting risk. Many of them were not prepared even to engage or to spend the time, or, and those that engaged, probably not to put the best offer on the table.
I think, as I said, important, the timing of the deal with EMR and Tectonic to give us a few more months. We don't want to, obviously, with the permitting ready, there's no point to take longer, or any, absolutely any more time than is strictly necessary, but I think to get the proper deal is worthwhile to give ourselves a bit of time. Get the strategic, and after that, see, the financial is a lot easier to see how that develops, if we can get a business partner as well, and then let's see whatever is left, if anything, with the market, and close the financing in the second half of the year, but as soon as possible within that second half.
Okay, thanks, Ignacio. I understand we have another question from the floor, Katelyn.
Yes, Jeff.
Thank you. You've got a mine in Spain. You've got a considerable number of personnel who are Europeans. You've just made a very positive presentation today. I'm just puzzled that you hadn't been able to secure European institutional investors to take the placement, which was done on very attractive terms. In fact, all your capital raising seemed to be done on very attractive terms, when we know the share price is selling at a significant discount. There's just something that doesn't add up with this company, and I can't understand why you have not been able to attract the big European institutions to support you.
With big institutions in general, European or not, I mean, and just to be fair, and I think, the fact that we are raising interim money, no? It's not, I mean, you can imagine that many of these people, they want to see, well, the final. Just make sure there's no money left. It's not as simple to. I can accept that things can be do always better, but bear in mind, some of these big institutions, well, all of them, want to be with the last money in place and not to be hanging there, waiting for something else. The permitting risk, well, some of the previous interim raise was before all the permitting risk was gone.
As well, that was tricky for some of these big institutions compared to some of the not so big ones. In the case of European, we got in the, in the one at the end of 2022, we got a few joining and adding, putting money into that race. Well, the main reason why it's been more in Australia is because traditionally, the company has been a lot more present in Australia, and most of the effort has been taking place in Australia. We started to do, as I said, for the last interim race, there were a few Europeans.
I think as the company starts to approach construction and going forward more and more. For the big institutions, I think it's only logical and nothing, especially in our case, that they will like to be the last ones to put the money in and see the permitting done. Even if they do it at a higher price, that is the way they think. With the permitting done, a strategic investor clear, and just to be, to know that this is the last money to do get into the construction of the first phase.
Yeah, it's a good question, Jeff. Thanks very much. It's frustrating for all. I think Ignacio hit the nail on the head. They all want to be the last money in. You know, Olivier has done a great job actually marketing to some of our international investors, and that there's certainly some wind up hopefully for any capital raise that happens once our final project financing is secure. That's a good question. I don't have any further questions, Caitlin, online. Is there anything else from the floor?
There is another on the floor, Paul.
Thank you.
Hi, Ignacio. Tim.
Hi.
For the purpose of this, and I congratulate you, everything you discussed with me back in January, I congratulate you. It's all now completed. My question has to do with the future, particularly the marketing of the company, to establish a higher profile for the company, notwithstanding in this market, but perhaps the London market. I think there should be a major marketing plan which involves the physical presence of a team from paying to come here and make active calls on brokers, small institutional investors, and so on.
It may take a month of someone's time to come out here to cover the country. I think if you put this presentation in front of hundreds of brokers throughout Australia, and perhaps also in London, where people do invest in mining, I think we can move forward as with the company, and it will assist in driving the share price up. I mean, none of us like to see shares diluted. I mean, the other thing, too, with my compatriot over here, we've been offered shares, and we were not offered shares in that last capital raising, which I believe raised about AUD 13 million and wrote down the value of the company by AUD 100 million. I would have gladly purchased additional shares, we were not offered, neither were any of the other small shareholders that are sitting around here.
A lot of the people have had the patience to stay with HFR, and we've only been in 5 years versus 10 years.
Yeah.
Yeah, we are. We are, but we've been here five, six years, and I think we've got to be considered. We don't like dilution. No shareholder likes dilution, but I think put the past behind us. You're where you want to be, can you please consider a marketing plan with a physical presence in...? Also, the other thing, we've never seen HFR attend, to my knowledge, are the mining conferences that take place here in Australia. We've got NUSAR, we've got Western Australia, where we have these very significant mining conferences that take place, and in, at those conferences, you can present to thousands. This has not been done yet. I ask that perhaps Oliver could come up.
I'd hate to say maybe he'd now take his wife and children to come with him, he wouldn't have to be here for a month, would it? Okay, thank you.
I mean, as you can imagine, there is a lot of thinking behind the marketing and the IR. I take your point. You do that in a month, and potentially, yes, you are right. The share price goes up, and then the following month, what happens the following month? You have to keep doing exactly the same to keep at exactly the same place, no? I mean, if we do it one month, maybe some people can sell it of a higher price. You, once you start on that promotion, I mean, obviously, the effort and we are looking at European, Australian. I was, a couple of weeks ago, for example, I was in Barcelona, something where there is this Bank of America. We are not invited.
Still, the size of our company doesn't merit that. Obviously, in Barcelona, it was relatively simple for me. Not only I saw, many Australian investors and, but also other Canadian companies, no? That were based there. We try to run this in a smart way, with them, well, similar to everything I hopefully that we do with the minimum resources, cash, and, time, get the maximum impact, but also something that makes sense in the long run, no? Not a sort of, something very, but that is not sustainable unless you keep, talking to, well, thousands of people every month and dedicate your job to do that, you know. Point taken, all.
a lot of discussions about, IR marketing, together here with Olivier, always looking at, more opportunities. Will be easier now, the next few months are going to have a special dedication to that, but, especially as we get to the final financing. Okay, we need to be realistic that is, that is not, the fundamental value of the company is that we have to make sure that, materialize, no? As the key driver, aside from the promotion and the marketing, that is also important.
Paul's on mute, I think, he's trying to speak.
Paul, you are on mute.
Sorry about that. Caitlin, thanks very much for that question. It was a good one. Caitlin, is there anything further there from the room?
No further questions on the floor.
All right. Well, there's nothing else online. Again, thank you all for attending. We know that it has been a challenging year, and there's certainly some frustration with everyone around the share price. I also note that the executive has absolutely delivered on the key milestones. There's been many long-suffering shareholders that have been in this stock for a long time, waiting for these licenses to be issued, and they now have. It's now encompassed on the company to now, you know, get the financing and get the project built. Appreciate all the support. Sorry I couldn't be there with you today, and we look forward to hopefully another year, and we'll see you there next year, hopefully with a lot larger capitalization than we are today.
Thanks very much for your attendance, and thanks for everybody online.