TIDMHMI
RNS Number : 1057I
Harvest Minerals Limited
31 March 2020
Harvest Minerals Limited / Index: LSE / Epic: HMI / Sector:
Mining
31 March 2020
Harvest Minerals Limited ('Harvest' or the 'Company')
Corporate Update
Harvest Minerals Limited, the AIM listed remineraliser producer,
is pleased to provide an update on corporate and operational
developments, as well as an update in response to the COVID-19
pandemic ('COVID-19' or 'the pandemic').
To view the announcement with the illustrative maps and diagrams
please use the following link:
http://www.rns-pdf.londonstockexchange.com/rns/1057I_1-2020-3-30.pdf
Highlights
-- COVID-19
o No impact yet on Harvest's operations, but continue to monitor
closely
o Series of measures implemented to keep staff, customers and
local community safe
-- Financials
o Debt free, positive working capital position of AUD$9.7
million as at 31 December 2019 - a strong balance sheet
o Annual Financial Results to 31 December 2019 now expected in
late Q2 2020 - delay due to the pandemic
-- Sales and Marketing
o Sales and Marketing teams expanded to provide coverage in two
new geographical areas
o Orders up 150% to the end of February 2020 compared to the
same period last year
-- Operations and Sustainability
o Expansion of both footprint of the operating mine and product
storage facility underway
o Planting 18,000 native trees during 2020 to become a carbon
free company
Brian McMaster, Executive Chairman of Harvest stated, " We are
currently in the wet season in Brazil, a traditionally quieter
period for us, and so our operations have not yet been directly
impacted by the global pandemic. However, we do know that Brazilian
farmers are taking advantage of the weaker Reais, which has fallen
by 17% this year against the US$, and that they have already
pre-sold 20% of this year's soybean harvest. Naturally, this is
driving an increased demand for fertilisers; forecasts suggest a 3%
growth in fertilisers this year. The weaker Reais also means that
imported fertiliser prices are higher and that the supply chain is
currently disrupted; this may strengthen our proposition as a local
producer.
"However, we are living in unprecedented times and whilst there
have been no reported cases of COVID-19 near the Arapua Project, we
cannot afford to be complacent. We place the safety of our staff,
customers and community as the highest priority and have therefore
implemented a series of measures to help protect our team and
community as best we can. We would like to take this opportunity to
send our thoughts and best wishes to all at this difficult time and
will continue to monitor updates on the COVID-19 pandemic closely
and update shareholders as the situation evolves."
Details
COVID-19
The Company understands from public information that the
pandemic in Brazil is developing with the majority of cases
reported to date occurring in Sao Paulo and Rio de Janeiro. To
date, as far as the Company is aware, there have been no cases
reported near the Arapua Project ('Arapua') and consequently there
has been no material impact on the Company's operations.
Based on the spread of the virus in other parts of the world, it
is likely that Harvest will be impacted at some point and the
Company is currently planning for that eventuality. The global
demand for food products has increased, not decreased and other
macro factors, such as the depreciating Brazilian Reais,
potentially offer opportunities for the Company. Harvest will
continue to monitor the situation closely and report any material
impact on the Company as they become known.
In the interim, the Company has implemented a series of measures
to keep its staff, customers and local community safe, including
increasing the provision of hand washing facilities at all sites
and offices, providing COVID-19 training to all employees in small
groups and distributing flyers to raise awareness of how the virus
is spread. Harvest has also made a series of steps to prevent
infections occurring, including restricting the number of visitors
to site to essential personnel, such as drivers, and keeping them
at a social distance from the operational team.
Financial Results as at 31 December 2019
Harvest's audited annual financial results are currently being
reviewed by its auditors. The Company has been advised that the
current environment will result in a delay in the commencement of
the auditor's fieldwork, which will in turn delay the issuance of
the audited accounts. At this time, Harvest does not have an
accurate estimate for when the results will be published but
expects it to be in late Q2 2020. The Company will keep
shareholders appraised as timing becomes more certain.
Financial position
In the interim, the Company can report that as at 31 December
2019, the unaudited cash balance was AUD$8,057,000, accounts
receivable totalled AUD$1,855,000 and accounts payable totalled
AUD$180,000, meaning it had a positive working capital position of
approximately AUD$9,732,000.
Assuming business as usual on a go forward basis, and continued
investment into the business, this position is sufficient to
sustain Harvest for over two years. If the Company was required to
go into care and maintenance, it has sufficient reserves for in
excess of four years.
Operations
Ordinarily, the period from approximately +/-December to
+/-April each year is a wet season at Arapua. As was well
publicised in the press at the time, this year was exceptional with
recorded rainfall at site of 245mm in January and 346mm in February
compared to 48mm and 146mm, respectively, for last year. Brazil
experienced widespread flooding during this period, but due to
Arapua being at a high altitude and improvements to the drainage
around the storage facilities, there was no impact or flooding at
site. Furthermore, for the past week or so there has been no
rainfall, allowing Harvest to continue operations unabated.
Exploration
Harvest plans to expand the footprint of the operating mine to
allow for more efficient mine planning and increased production
during the wet season. As part of this, the Company recently
carried out an 18 auger hole drill programme to the north of the
current open pit. This has now been completed and the results
incorporated into the mine plan for this year. During Q2, Harvest
will strip this area to provide more production faces and
temporarily increase material storage until a new storage area has
been constructed.
Sales and Marketing
At the end of last year, Harvest replaced some of the existing
sales team and employed new sales staff to provide coverage in two
new geographical areas. The Company currently has nine full-time
technical sales staff plus a marketing and sales support team.
Recent activity to promote KPfértil includes:
-- January - attended the 6(th) Technical Meeting of Sustainable
Agriculture hosted by Grupo Associado de Agricultura Sustentável in
Mineiros, Goiás.
-- February - attended FEMAGRI (Agricultural Machinery,
Implements and Inputs) hosted by Cooxupé, one of the Company's
resellers and the World's largest Coffee Cooperative
-- March - attended the Feira do Cerrado in Monte Carmelo in Minas Gerais.
-- March - invited back to appear on the popular farming
programme Zebu Para o Mundo on Canal do Boi.
While the sales and marketing teams continue to advance digital
and other marketing strategies, all public events and shows are
suspended until further notice due to the pandemic.
Harvest has also been testing different packaging to deliver
KPfértil in small 25kg bags. Initially these would be used for
samples and to conduct small scale trials but could eventually
become a retail product, subject to approval by the Ministry of
Agriculture.
Orders to the end of February 2020 are up 150% compared to the
same period last year, which is an encouraging start for the
Company.
Sustainability
As the producer of an organic product, Harvest takes its
environmental responsibilities seriously. Consistent with this
responsibility, the Company signed an agreement with the Instituto
Estadual de Florestas (IEF or State Forest Institute) to plant
18,000 native trees during 2020. This is to compensate for diesel
Harvest uses in its trucks and makes it a carbon free company.
Figure 1: New trash storage facility and improved fuel storage
area as required by environmental department as part of award of
full mining permit - see PDF
Figure 2: Auger drilling to the north of the current open pit
and prepared samples ready to be sent to the lab - see PDF
Figure 3: The February Sales and Agronomics team meeting
including the new members and our agronomist Dr Eduardo Spolidorio
at our new office - see PDF
Figure 4: Some of our sales team at Feira do Cerrado 2020 and
new marketing material - see PDF
Figure 5: 25kg sample bags and our CTV Kimio appearing on Canal
do Boi - see PDF
*S*
For further information, please visit www.harvestminerals.net or
contact:
Harvest Minerals Limited Brian McMaster Tel: +44 (0) 203
(Chairman) 940 6625
Dr Mark Heyhoe
(COO)
Strand Hanson Limited James Spinney Tel: +44 (0) 20 7409
Nominated & Financial Adviser Ritchie Balmer 3494
Jack Botros
Shard Capital Partners Damon Heath Tel: +44 (0) 20 7186
Broker 9900
St Brides Partners Ltd Charlotte Page Tel: +44 (0) 20 7236
Financial PR Beth Melluish 1177
Notes
Harvest Minerals Limited (HMI.L) is an AIM-quoted low-cost and
high margin Brazilian remineraliser producer, located in the heart
of the largest and fastest growing fertilizer market in Brazil.
Our product, KPFértil, is a registered and approved organic
multi-nutrient direct application fertiliser. It contains many of
the essential nutrients and minerals required by plants and, unlike
most fertilisers, it does not require any complex processing or
chemically alteration, instead it can be applied directly to
crops.
KPFértil is produced at the wholly owned Arapua project, that
consists of a fully permitted mine, production and storage
facilities able to produce and deliver KPFértil to customers. Known
mineralisation at the Project is expected to support 100+ years'
production at 450Ktpa.
Our focus now remains on growing our business and we have the
dedicated in-country sales and marketing team with the skills,
experience and contacts to sell KPFértil into the potential
multi-Mtpa market on the doorstep of the Project.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
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