Harvest Minerals Limited Trading Update (5446S)

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RNS Number : 5446S

Harvest Minerals Limited

09 July 2020

Harvest Minerals Limited / Index: LSE / Epic: HMI / Sector: Mining

9 July 2020

Harvest Minerals Limited ('Harvest' or the 'Company')

Trading Update

Harvest Minerals Limited, the AIM listed remineraliser producer, is pleased to provide the following update on trading and the status of its 2019 Annual Report and Accounts.

Trading Update

The trading conditions throughout the first half of the calendar year at the Company's 100% owned Arapua Fertiliser Project in Brazil ('Arapua') have been mixed and have been impacted by the COVID-19 outbreak. For example, the original (pre COVID-19) targeted total sales for KPfértil, the direct application natural remineraliser produced at Arapua, was 75,000 tonnes for the 2020 calendar year, with the weighting of sales heavily skewed towards the back end of the year, the traditionally intensive buying period.

Harvest's original target for Q1 CY2020 was a total of 3,000 tonnes of sales, which is reflective of the summer season. The actual sales for the quarter were 3,334 tonnes, representing a slight increase on target. Harvest's original target for Q2 CY2020 was a total of 14,400 tonnes. The actual sales for the quarter were 6,525 tonnes, with the driver of the decrease in sales being the COVID-19 pandemic; Brazil has been reported as amongst the worst impacted countries globally and the decrease in sales volumes is directly attributed to a decrease in broader economic activity related to COVID-19 in country.

At this stage, the continuing effects of COVID-19 remain unclear. Brazil remains heavily affected by the pandemic and although there is negligible reported community transmission in the immediate proximity to Harvest's facility, the broader effects of the pandemic have restricted movement and economic activity considerably. Nonetheless, in recent weeks we have seen some increase in buyer interest, which is consistent with expectations of this time of year. As such the Company remains optimistic about the remainder of CY2020, but at this stage is unable to make a revised forecast of CY2020 sales.

Encouragingly, Harvest has been able to broadly maintain its sales price compared with CY2019. Harvest has observed that sellers of other remineraliser products have been heavily discounting prices to encourage volumes, however, based on the published trading results for one of those competitors, it appears that the discounting is not conducive to profitable trade.

Financial position

The Company can report that, as at 30 June 2020, its unaudited cash balance was AUD$4,338,705, accounts receivable totalled AUD$1,485,789 and accounts payable totalled AUD$261,266. meaning it had a positive working capital position of approximately AUD$5,563,228 The Company recorded unaudited revenue for the six months to 31 December 2019 of AUD$1,443,281 and for the six months to 30 June 2020 of AUD$595,477.

The movement in the cash balance since 31 December 2019 has comprised:

 
                                                        $AUD 
 Costs associated with acquiring and maintaining 
  licenses                                            1,742,383 
                                                     ---------- 
 Non-recurring and one off termination and 
  redundancy payments associated with cost cutting 
  initiatives                                           307.033 
                                                     ---------- 
 Capex                                                  280,119 
                                                     ---------- 
 Normal operating expenses                            1,389,694 
                                                     ---------- 
 

The annualised expenditure for normal operations is approximately USD$2million, which is consistent with advice to the market in January 2020.

Annual Report and Accounts

In the same way as a number of other companies, due to the current COVID-19 outbreak, the Company was unable to announce its Audited Annual Results and post its Annual Report to shareholders for the period ended 31 December 2019 by the 30 June 2020 deadline pursuant to AIM Rule 19. The Company will publish its Audited Annual Results and post its Annual Report for the year ended 31 December 2019 by no later than 30 September 2020.

*ENDS*

For further information, please visit www.harvestminerals.net or contact:

 
    Harvest Minerals Limited            Brian McMaster (Chairman)      Tel: [phone] 
                                         Dr Mark Heyhoe (COO)           6625 
 
    Strand Hanson Limited               James Spinney                  Tel: [phone] 
     Nominated & Financial Adviser       Ritchie Balmer                 3494 
                                         Jack Botros 
 
    Shard Capital Partners              Damon Heath                    Tel: [phone] 
     Broker                                                             9900 
 
    St Brides Partners Ltd              Charlotte Page                 Tel: [phone] 
     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 fertiliser market in Brazil.

The company's 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.

Harvest's focus now remains on growing its business and the Company 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 announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014

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 [e-mail] or visit www.rns.com.

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July 09, 2020 05:00 ET (09:00 GMT)