Harvest Minerals Share Discussion Threads

[vilage_idoit] 04/3/2018 07:22

#HMI Harvest Minerals £17.72m mc @ 13.75p


COMPANY AND CONTEXT


Harvest Minerals Limited is a mineral production company and of key interest is its Arapua fertiliser project, which covers almost 15,000 hectares. They have three other projects too but the board’s focus is now on ramping up production in Arapua to 400k tonnes which would give them $20m pa of profit. This is expected to be achieved over the next eighteen months.


Arapua produces HMI’s unique product KPFertil, which is superior to all other conventional sources of potassium used in fertilisation. Results indicate that only 0.07% of the contained potassium ('K') provided by KPFertil was lost from the soil due to leaching compared to 20.8% of the contained K lost due to leaching from conventional sources such as potassium chloride. This means that conventional sources are of nowhere near the same quality as KPFertil; KPFertil is also cheaper than conventional fertiliser such as potassium. This gives them a huge advantage when it comes to selling the product.


These results are part of the ongoing certification process of KPFertil as a remineraliser by the Brazilian Ministry of Agriculture, Livestock, and Supply (MAPA).


MAPA certification is the gold standard, providing HMI customers a guarantee that they are buying product of the highest quality and despite ongoing pre-certification sales going well, the MAPA approval is expected to open the floodgates to sales.


Brazil imports 90% of its fertiliser and the government wants to become self-sufficient by 2020 – this means they are very supportive of local produce and Harvest’s fertiliser is organic. They are one of the few companies in the country who have managed to bring organic, domestic fertiliser into the marketplace. Brazil is one of the largest users of fertiliser on the planet.


Harvest gave a presentation to MAPA and were urged to start the process of registration immediately as they were impressed by the results of the physical, chemical, and agronomic tests concluded to date. MAPA certification is believed to be due by the end of the calendar year.




ECONOMICS


Brazil reduced royalty rates of domestic fertiliser projects from 3% to 0.2% to support domestic market growth. This provides significant cost savings of ~US$1.46/t where in the scoping study $1.58% was assumed – a saving of 92%.


All in costs before this reduction were assumed to be around $7.34, with current sales around $60. Assuming this would be $50 gross profit on a conservative basis, then 100,000 tonnes would give $5m profit per year.


Harvest intend to ramp up production to at least 400,000 tonnes of sales within the next eighteen months, which would give them $20m of profit per year. On a conservative PE ratio of 10, this would give them a market cap of $200m, or ~£150m, compared to the current cap of £17m.


There is a 100 year mine life on Arapua, and the demand is there. The exploration and early stage risk has been removed as Harvest are already selling KPFertil, and are in advanced discussions with a large number of potential customers ranging from consumers, co-operatives, agricultural distributors and trade bodies.




BOARD


Brian McMaster has 20 years’ experience the mining industry. His experience includes founding Highfield Resources (A$346.18M), an ASX listed potash, and the recapitalisation and listing of 12 Australian companies. Career to date includes significant working periods in the United States, South America, Asia and India. Mr McMaster was a founding director in venture capital and advisory firm, Garrison Capital Pty Ltd, which has been very successful to date.




CONCLUSION


In my opinion, Harvest offers huge upside as 1) there is a clear demand for the product due to Brazil's goal of self-sufficiency on fertiliser by 2020; 2) KPFertil is both cheaper and far superior to conventional fertiliser; 3) the product is there and just needs digging up, refined, and sold – there is nothing to stop them achieving their 400k tonnes pa goal if the demand is there; 4) Brian McMaster has experience in founding companies and scaling them up hugely creating massive value for shareholders.


These notes are the opinion of @vilage_idoit only and not intended (nor to be taken as such) as investment advice. Please do your own research when buying.

[kreature] 03/3/2018 23:27

What's the 60 days thing about for 831.275/2010 from jan 2018?


Is there a strategic sales black-out on the KP Fertil? Would such a black-out last for the full 100 years ?

[kreature] 03/3/2018 23:21

?:

RNS Aug 2016
‘We are able to sell our products without registering with MAPA...’


————

MAPA ‘MINISTÉ;RIO DA AGRICULTURA’:
‘Establishments that produce, import, export and market inputs must be registered with the Ministry of Agriculture, as well as products manufactured or imported.'

[whl2] 03/3/2018 21:34

Thanks bud, you've just made my weekend! (290,000 fully paid for shares unlike the directors!)

[hungary16] 03/3/2018 21:03

I’m not 100% sure , of course , but reliable source says it’s happening !

[amunro] 03/3/2018 16:01

Funny how price goes up when Beauford goes bust. Rumours of them shorting their own shares and various shenanigans. Check out AAU threads and others.

[whl2] 03/3/2018 12:44

hungary16 - 23 Feb 2018 - 09:36:03 - 3940 of 4008 Harvest Minerals (Potash Exploration in Brazil) - HMI

"So the certificate will be received by Thursday 29th March - zero chance !"


Presumably, you've changed your opinion hungary!

[whl2] 03/3/2018 08:59

Certainly looking forward to next week!

[hungary16] 03/3/2018 00:08

Mapa coming and a +30p valuation - Harvest Minerals will know what I’m talking about !

[andy] 02/3/2018 22:16

yp,

Beaufort nominees locked in as they cannot trade, let's hope it's all good news until that situation is played out.

[whl2] 02/3/2018 21:33

Cheers Nicky. Guy on the lse thread says Brian is away in Brazil and expecting MAPA early next week. Let's hope so!

[naughtynicky72] 02/3/2018 21:22

Nice 12.4% Rise makes a change off late good luck all you longs !

[whl2] 02/3/2018 13:07

Damn! - cheers yp

[whl2] 02/3/2018 12:56

do beaufort still hold 6 million shares ?

[whl2] 02/3/2018 12:18

Is that a new brokers note today parisv ?

[parisv] 02/3/2018 12:09

Beaufort issues giving market confidence. Will be good to get rid of them.

[whl2] 02/3/2018 12:05

Then again!

[whl2] 02/3/2018 11:45

Small volume. Could be T-10ers taking a position with a view to announcement of MAPA or possibly shorters closing positions as Easter approaches (when we will have MAPA apparently!)

[saucepan] 02/3/2018 11:41

Interesting price action on a weak market day. News leaking?