Corporate and Operational Update

RNS Number : 5457L

Harvest Minerals Limited

20 April 2018

 

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

20^th April 2018

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

Corporate and Operational Update

Harvest Minerals Limited, the AIM listed natural fertiliser producer, is pleased to provide an update on activities at its producing Arapua Fertiliser Project ('the Project') in Brazil.   A version of this announcement, including pictures, is available on the company website www.harvestminerals.co.uk.

Overview

·     Excellent progress enlarging modular processing plant - equipment due to arrive on site next week and will be fully installed this quarter

·     Continued expansion of sales and marketing team and new sales office established

·     Working closely with Agrocerrado on sales strategy and providing its sales team with commercial and technical training on KPfértil

·     Submitted a further application to MAPA to register the Arapua Processing Unit as a fertiliser producer, which will potentially save time should the Company wish to register KPfértil as a fertiliser

·     Commenced work on the Environmental Report, a constituent of the Feasibility Study that will be submitted to the Brazilian Department of Mines ("DNPM") as the final part of the application for the Full Mining Licence

·     Agronomic test work ongoing, including long-term trials on coffee at the Veloso Agropecuária plantations, new trials on grass for pasture and coffee trials with two coffee co-operatives

·     Presenting at the UK Investor Show on Saturday 21 April 2018

Harvest's Executive Chairman, Brian McMaster, said, "We have continued to gain momentum through the first quarter and now into the second. The expansion to both our sales team and processing plant provides us with the capacity to continue to grow our sales and revenues, which remains a key focus for 2018. Although the confirmation of KPfértil as a remineraliser hasn't been as efficient as we would have liked, it has not impacted our ability to sell our product. I'd again like to thank all our shareholders for their continued support and we look forward to meeting many of you at the UK Investor Show tomorrow."

Sales & Marketing

Since the start of the year, Harvest has continued to expand its sales and marketing team and has established a sales office close to the Project in Carmo do Paranaíba, the local municipality. 

As previously announced on 7 March 2018, the Company signed a large sales contract with Agrocerrado Produtos Agrícolas e Assistência Técnica LTDA ('Agrocerrado'), a major distributor of fertiliser and agriproducts in the region surrounding Harvest's Arapua project.  Since then, the Company has been working closely with Agrocerrado on its sales strategy and providing its sales team with commercial and technical training on KPfértil; this was completed at the last of its 13 stores this week. 

Furthermore, in association with Agrocerrado, Harvest has produced new marketing material, some of which is available to view on the Company's website at http://www.harvestminerals.net/media.

Operations

The Company has made excellent progress enlarging its modular processing plant, which will take annual processing capacity to over 320,000 tonnes.  All necessary equipment and machinery for the new plant expansion has been fabricated and all the required civil works have now been completed.  The equipment is due to arrive on site next week and will be fully installed this quarter.  Meanwhile, the current Trial Processing Plant continues to operate.  

MAPA and Registration

All the requested information has been submitted to MAPA for the registration of KPfértil as a remineraliser and the Company is awaiting confirmation of approval.  Additionally, the Company has submitted a further application to MAPA to register the Arapua Processing Unit as a fertiliser producer.  Whilst this won't provide any immediate benefit, it will potentially save time should the Company wish to register KPfértil as a fertiliser.  

As part of this process, the Company has re-registered, with the DNPM, the ownership of the Project under Triunfo Mineracao do Brasil Ltda, following the previously announced merger of its subsidiary, Triunfo Fertilizantes & Mineracao Ltda into Triunfo Mineracao do Brasil Ltda, in September 2017.

Mining Licence

As recently announced, the Final Exploration Report has been approved by the DNPM and the Company has now commenced work on the Environmental Report, a constituent of the Feasibility Study that will be submitted to the DNPM as the final part of the application for the Full Mining Licence. Meanwhile, the Company continues to operate under the existing Environmental License for trial mining granted in December 2015 for four years.

Following the grant of the Full Mining Licence, the Company intends to consider the Project to have reached commercial production and will make a payment of US$1m and a 2% net smelter return (royalty) to the original vendors of the Project.  In the Company's AIM admission document, this payment was stated as being due to RV2 Rio Verde Mineracao Ltda, but as this company ceased trading in mid-September 2015, this payment when due shall be made directly to the original vendors, Fernando Pereira da Rocha Thomsen and Janine Tavares Camargo.

Agronomic testwork

The Company continues to conduct its programme of agronomic test work which includes:

·     Long-term trials on coffee at the Veloso Agropecuária plantations

·     New trials including on grass for pasture - notably, pasture is not usually fertilised as traditional fertilisers that are prone to leaching make ineffective economically, however, KPfértil as a slow release multi-nutrient fertiliser does not experience leaching and thus should be a suitable alternative; as ~50% of farmland is used for pasture, this could be a significant market for KPfértil

·     Coffee trials with two coffee co-operatives: the Association of coffee growers from Patos de Minas ('ASOPATOS') and the Association of coffee growers from Araguari ('ACA'), which represent 25,000ha and 30,000ha of coffee respectively

UK Investor Show

Harvest will be presenting at the UK Investor Show on Saturday 21 April 2018 and welcomes the opportunity to meet shareholders who are available to attend. The presentation which will be given at this event is available on the Company's website: http://www.harvestminerals.net/investor-presentations.

This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/2014

*ENDS*

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

Harvest Minerals Limited	Brian McMaster (Chairman)	Tel: [phone]
Strand Hanson Limited (Nominated & Financial Adviser)	James Spinney Ritchie Balmer	Tel: [phone]
Shard Capital Partners (Broker)	Damon Heath	Tel: [phone]
St Brides Partners Ltd	Isabel de Salis	Tel: [phone]
(Financial PR)	Gaby Jenner

Notes:

Harvest Minerals (HMI.L) is a Brazilian focused fertiliser producer advancing the 100% owned Arapua Fertiliser Project, which produces KPfértil, a proven, multi-nutrient, slow release, organic fertiliser and remineraliser.  KPfértil offers many economic and agronomic benefits and addresses the significant demand for locally produced fertiliser in Brazil, with its abundant agricultural land; currently, the country imports 90% of the potash it uses but has a target to be self-sufficient in fertilisers by 2020.  Covering 14,946 hectares and located in the heart of the Brazilian agriculture belt in Minas Gerais, Arapua is a shallow, low cost mine with an indicated and inferred resource of 13.07Mt at 3.1% K₂O and 2.49% P₂O₅.  This is based on drilling just 6.7% of the known mineralisation, leaving significant upside potential. This resource is equivalent to over 29 years' production and the known mineralisation expected to support 100+ years' production at 450,000 tonnes per annum.

 

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