TIDMHMI
RNS Number : 8720N
Harvest Minerals Limited
03 February 2021
Harvest Minerals Limited / Index: LSE / Epic: HMI / Sector:
Mining
3 February 2021
Harvest Minerals Limited ('Harvest' or the 'Company')
Review of 2020 and Outlook for 2021
Harvest Minerals Limited, the AIM listed remineraliser producer,
is pleased to provide shareholders with a recap of its activities
during 2020 and outlook for what is expected to come in 2021 as it
continues to make strides at its 100% owned revenue generating
Arapua Fertiliser Project in Brazil ('Arapua').
2020 / Outlook Highlights:
-- Total sales orders of 54,155 tonnes of KP Fértil(R), beating
our previously stated 50,000 tonnes target for the year
o 2021 sales guidance targeted at 80,000 tonnes
-- Awarded full mining and environmental permits to mine and
process up to 400Ktpa of KP Fértil(R)
-- Product storage capacity expanded by 300% to a total of 30,000 tonnes of product
-- Mining area increased four-fold to 78,894m(2) providing
greater production flexibility according to demand and reducing
operating costs
-- Completed a series of agronomic tests
o Coffee - outstanding results based on long-term trials carried
out at a large producing farm
o Sugarcane plantation areas and carrot crops - superior yield
performance when using KP Fértil(R) compared to more traditional
fertilisers
-- Planted 18,000 native trees during 2020 to offset emissions
generated by the diesel used in our operations
-- Agreement with Banco do Brasil whereby Harvest's clients can
access the bank's rural line of credit to fund its product
orders
-- Protocol of Intentions signed with the Institute for
Integrated Development of Minas Gerais ('INDI') for assistance in
areas such as business matchmaking with local suppliers, permitting
and licences, tax planning, and funding options, as it may be
required
Brian McMaster, Chairman of Harvest, said: "This past year was
one of consolidation of our operational platform ensuring the
necessary scalability to meet market demand as the effectiveness of
our KP Fértil(R) product becomes more widely known across the
regions covered by our sales team. After the onset of the Covid-19
pandemic, the team we adjusted our sales estimates to 50,000
tonnes, which represents a maiden profit, and it is extremely
encouraging to sell in excess of that target. There is now little
doubt, Harvest has a real, profitable business with a multi-decade
life of mine.
"We are particularly pleased to have also completed a series of
very critical agronomical tests, which have delivered exceptional
results and can therefore be used as our flagship tool to expand
our client portfolio from small to large crops, improving the
reputation and distribution of our product. As expected, demand was
stronger towards the end of the year and entering 2021 and we
expect that we will reap the benefits of the solid platform we have
built over the past two years as we continue to progress throughout
the year.
While we are proud of our achievements in such short period of
time, we have barely tapped the immediate market potential of the
agriculture regions surrounding our operations. We now believe we
have the appropriate platform from which to deliver increased
growth and I look forward to updating shareholders as we progress
in due course."
Review of Operations
2020 was a landmark year for operations at the Company's Arapua
Fertiliser Project. A key turning point was in February 2020 when
Harvest was awarded with the full mining and environmental permits,
granting the Company full tenure over the asset and allowing it to
mine and process up to 400Ktpa of ore. This is above the current
processing capacity; however, both the environmental permit
capacity and production capacity can be increased as demand
requires.
Over the 2020-year, Harvest also successfully executed the
expansion of its Product Storage Facility to 30,000 tonnes, a
three-fold increase in finished product storage capacity, along
with the expansion of the Mining Area to 78,894m(2) , a four-fold
increase. These expansions, which were self-funded and completed
approximately 30% under budget, provide the flexibility to increase
production, dry ore and allow for additional run of mine at times
of peak demand for the Company's product.
Soon after the expansion was concluded, Harvest started to
operate on a 24-hour, three-shift production scale to meet peak
demand.
Marketing, Sales & Product Development
The unexpected onset of the Covid-19 pandemic created a
significant period of volatility for Harvest and its customers.
Despite this, given the strength of our product and the team's
determination, Harvest boosted its sales efforts by adding further
to its experienced sales workforce, which is now comprised of 7
associates/agronomists split into two regional teams. It also
includes a third-party network of 20 resale centres. In total, the
Company commercialised 54,155 tonnes of KP Fértil(R), 82% placed in
the second half of the year, and superior to our previously stated
target of 50,000 tonnes. While Harvest expects to reach
significantly higher sales targets overtime, the Company is very
encouraged by the distribution of its product and repeat orders
from key clients in such short period of time since
commercialisation less than two years ago.
Harvest has previously stated that in broad terms, "breakeven"
is represented by sales of approximately 40,000 tonnes of KP
Fértil(R), accordingly, having sold 54,000 tonnes represents
Harvest achieving its maiden profit on a cash accounting basis.
However, due to IFRS accounting rules, this profit won't be
recorded in the audited financial statements until this financial
year is completed.
Over the course of 2020, Harvest continuously received positive
agronomic results proving the effectiveness of KP Fértil(R) when
compared to competitors' products. The agronomical tests are a
critical component in the growth of the Company's product
development and market outreach.
One key accomplishment was the completion and positive outcome
of the long-term agronomical tests in coffee cultivation, which
started in 2017, using KP Fértil(R) as a source of potassium ('K')
and phosphate ('P') for coffee plants at one of the Veloso
Agropecuária ('Veloso') coffee plantations in Minas Gerais state,
Brazil. The trials consisted of two years of applying a potassium
and phosphate fertiliser and a third final year of applying no
additional source of potassium and phosphate (fertiliser
suppression) to test the effectiveness of different sources of
potassium and phosphate. The results confirmed that KP Fértil(R)
can and should be used to replace conventional fertilisers as a
source of potassium and phosphate. It showed that superior results
in coffee are enhanced when used in association with coffee compost
(coffee straw), increasing the value of the coffee produced by
increasing the proportion of the largest coffee cherries and
yield.
Agronomic tests using KP Fértil(R) have also returned superior
yield performance in sugarcane plantation areas compared to the
more traditional and widely used reactive phosphate fertiliser.
Likewise, superior yield performance has been achieved in carrot
crops when compared to today's widely used standard
application.
These results, among other proven positive tests in other
cultures, reinforce the versatility of Harvest's product and its
wide application optionality and are instrumental for the Company's
commercial team in increasing its client portfolio.
Sustainability
As the producer of an organic product, Harvest takes its social
and environmental responsibilities very seriously. One of the 2020
initiatives was the signing of an agreement with the Instituto
Estadual de Florestas (IEF or State Forest Institute) for the
commitment to plant 18,000 native trees during 2020 as a measure to
offset emissions generated by the diesel used in operations, aiming
at to making Harvest a carbon free company.
Other Corporate Development Initiatives
Protocol of Intentions Signed with Minas Gerais' Investment
Agency - A Protocol of Intentions has been signed by Harvest and
the Government of Minas Gerais, through the Institute for
Integrated Development of Minas Gerais ('INDI'), an organisation
connected to the State Secretariat for Economic Development
('Sede'). The Protocol of Intentions signed by Harvest and INDI
will cover areas such as business matchmaking with local suppliers,
permitting and licenses, tax planning, and funding options, as it
may be required.
Agreement with Banco do Brasil - An agreement has been signed
with Banco do Brasil, whereby Harvest's clients will now be able to
access the bank's rural line of credit to fund their orders of KP
Fértil(R) up to a total amount of R$5.0 million per client (about
US$1.0 million). It is expected that with the continuous
relationship with Banco do Brasil, the size of the line of credit
should increase over time. Banco do Brasil is the country's largest
provider of rural credit to the giant Brazilian agriculture
industry. The benefit of the line of credit to Harvest is
threefold: not only will it assist the sales strategy of the
Company's commercial department by providing an important marketing
tool to offer clients, but it will also provide additional working
capital flexibility with a decreased credit risk profile of its
clients' portfolio.
2021 Outlook
According to the Federation of Agriculture and Livestock of the
State of Minas Gerais (Faemg), the Gross Value of Production (in
BRD) in Minas Gerais, Harvest's primary market, hit a historical
record in 2020 of R$96.1 billion (about US$18.7 billion), a 24.3%
growth compared to 2019's figures. FAEMG expects the sector to
continue to grow in 2021, highlighting the positive prospects for
the sugarcane segment.
The work completed in 2020 in product development, agronomic
tests in key crops, and increased production and storage capacity,
has positioned Harvest to reap the benefits of a strong
agribusiness sector.
In 2021 the Company will continue to take initiatives to
strengthen its sales reach and production efficiency, which, we
believe should reflect in a healthy year-on-year increase is sales
volumes.
Plans for 2021 include:
-- Expansion of Harvest's sales and marketing force with
experienced representatives who have an existing client book
-- Increased focused on sugarcane plantations given the very positive agronomic test results
-- Expansion of sales efforts into new crops
-- Registration with the Minister of Agriculture for sales of KP
Fértil(R) in smaller bags (i.e. 25Kg) to cover the gardening, small
producers, general retail markets and resales, which drive higher
margins
-- Logistics optimisation plan to enhance the price competitiveness of Harvest's product
**ENDS**
For further information, please visit www.harvestminerals.net or
contact:
Harvest Minerals Limited Brian McMaster Tel: +44 (0) 203
(Chairman) 940 6625
Strand Hanson Limited James Spinney Tel: +44 (0) 20
Nominated & Financial Ritchie Balmer 7409 3494
Adviser Jack Botros
Shard Capital Partners Damon Heath Tel: +44 (0) 20 7186
Broker 9900
St Brides Partners Ltd I sabel de Salis Tel: +44 (0) 20 7236
Financial PR Beth Melluish 117
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.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
MSCBXLFBFLLXBBZ
(END) Dow Jones Newswires
February 03, 2021 05:37 ET (10:37 GMT)
Harvest Minerals (LSE:HMI)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
Harvest Minerals (LSE:HMI)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024