Member Info for Slift

Plenty of stock available today.

Q4 update will likely be last week of December/first week of Jan.

ALL IMO. GLA.

John4242,

For your own mental wellbeing, I suggest you sell and move on. It seems like you're emotionally attached to this company.
You're still clinging to the past. The company has changed. I definitely would not have invested here in the past due to the cash burn and the need for cash raise.

I would also suggest going through past presentations. The company had a vision and everything that they have said has been fulfilled with KP Fertil. Only thing remaining is sales which are also improving.

Things are different now, and whilst it's still uncertain, Q4 trading update will provide more clarity.

John4242,

It was a rhetorical question. I really don't care how well you're doing and whether you predicted the crash or not. This isn't a competition.

I've done my due diligence to learn the history of this company thanks, including Geociclo.

I don't believe there have been any false promises.

Only thing that I'm concerned about here is the huge cash burn which I hope will improve following the upcoming trading update. I'll make my own investment decision regarding this company following the update, thanks.

Good luck with your investments.

Jubileey,

I hope you forget the password for this new account too :)

Another successful partnership - C3 Consultoria e Pesquisa.
http://c3consultoriaepesquisa.com.br/

They offer agronomic consultancy.
They also have a list of partners with rural producers and farm managers.

Looking good.

uselessinvester,

Not quite as simple as that as we're long way before all cars are electric worldwide. I mean over 100+ years until 100% conversion to electric cars.

You underestimate the need for oil. Oil is pretty much used in almost everything, whether that's manufacturing, plastics, fuel, etc.
But obviously majority of the oil usage comes from transport. But again we're quite some way off before the use in transport is diminishes significantly. Transport is:
- Cars for general use
- Vans
- Diesel HGVs
- Flights
- Ships
- etc.

Now ofcourse a lot of fuel we use is used in general use cars. But you'd be surprised at the amount of fuel used for shipping, flights and diesel HGVs. I think we are still quite a long way before these types of transport are developed to suit the economy.

As an example:
Crude oil produces approx 10.4% jet fuel through refining without further processing. At 159l/barrel, this amounts to approx. 16.5l/barrel of jet fuel.
A standard Boeing 737 aircraft burns approx 2840 L of fuel an hour.

At the end of the day, it all comes down to supply and demand. And with demand forecast to drop over the next 10-20 years, the oil and gas industry will become much more competitive and those that are able to stay in the market will have to look at low cost production.
There is also the lack of investment in the oil and gas industry, which may lead to serious shortages of oil in the near future.

Good luck with your investment and hope that there is no cash raise/rights issue involved in the restructuring of the credit facility at Enquest.

ALL IMO. GLA.

Although for some reason, I'm starting to think this payment was due for the product that wasn't sold by Agrocerrado (out of their 50kt and 36kt orders).
I.e. 12,776 t left over when the contract was terminated?

quisad,

These notes are dated 11th February 2019.
I don't see any relevance here..? If anything, this provides proof of sales.

CFEM R$ = 51,107 according to those judicial notes.
CFEM is paid at 2%
So total sales = R$ 2.555m = 12,776 t total sales by Agrocerrado (in 2018 --> Feb 2019???)

Feel free to provide your opinions as i'm lost in translation :)

I'm still convinced that the CFEM is only paid when the product is sold.
Product is not "sold" to distributor, but rather transported to distributor for sales on behalf of Harvest.

I think the figures add up if you consider the sales made directly by Harvest in 2019 and the amount received from "Agrocerrado Produtos Agricolas" via legal proceedings and other distributors.
According to ANM, sales by Harvest: 24,050 t
According to accounts Dec 2019, amount receivable from Agrocerrado Productos Agricolas and other distributors = $1,685,515 = approx 4.75m BRL at the time = 23,765 t (approx 200 BRL/t)

So in total = 47,815 t

This is more or less (minus the fluctuations in calculations/currency movements) the same as stated in the trading update on Mon 2nd Dec 2019 of 47.5kt sales.

Slift

From lexology:

"CFEM
This is a royalty payment serving the purpose of compensating the states and municipalities for the economic use of the mineral resources in their territory, similar to a tax. It is owed by the legal entities that exploit or extract mineral resources, payable upon sale of the mining product from the mine or other mining deposit or beneficiation of the mining product or its consumption by the mining entity. It varies as a percentage of the net revenue from the sale of mineral products, depending on its type. In general, the rates vary from 0.2 per cent to 3 per cent depending on the kind of mineral product. Upon the calculation of CFEM, transport, sales, tax and insurance costs are deducted."

Note in the above:
"payable upon sale of the mining product from the mine or other mining deposit or beneficiation of the mining product or its consumption by the mining entity."

Where the product is sold indirectly, the 3rd party distributor will be the one "selling" the product onto customers. Therefore, the CFEM payments is taken away from the revenue of these sales BY THE DISTRIBUTOR. The sales revenue (minus CFEM, distributor commission and any other costs under contract terms with distributor) will then be received by HMI as "Trades and Other Receivables".

That's how I understand it.

Slift.

quisad,

Out of interest, can you tell me what the CFEM payments are?
Are these just royalties based on sales?

I wonder if the discrepancy in between CFEM payments and the sales figures is due to direct and indirect sales?
Direct being sold directly to customers via KP Fertil sales team. Indirect being sold indirectly to customers via a 3rd party distributor (whereby 3rd party distributor pays CFEM payments?).
This would make more sense as to why there is a lower amount recorded for CFEM payments (Especially for 2018).

I haven't dismissed the discrepancy and just trying to figure out why there is a discrepancy.
I don't believe that either figures are wrong. The company would not publicly state incorrect figures in RNS - especially on the london markets.
Afterall, RNS' are "Regulatory" news announcements. Not to mention that the accounts are audited.

Furthermore, HMI clarify in a Q&A that the ACCURATE source of information is from the company directly (RNS'):
"The only accurate source of information is from the Company directly. We would caution readers to be sceptical of any information published from sources other than the Company."

Look forward to everyone's thoughts.

Slift.

john4242,

"been ignorant of the news we ve had over several years"
You invest based on past performances of the company? Lol, no wonder you're in the state you are. Bitter towards the company. Do sell and move on.
I'm perfectly happy with my investment here, positive for the time being. And i'm happy to add should this fall further.

"but the shares you have been supporting/ramping have done pretty badly overall"
Please state these.
Again are you looking at performance over several years? Is that how you tell if a company has done badly?

You seriously need to gain some analytical skills, rather than worrying about other investors.
I'm doing perfectly fine, on track for early retirement thank you :)

Another one of your post adding 0 value, nice.

Okay, well future is looking bright as sales have been growing?

That link to sales from 2017/2018/2019 clearly shows that "Valor da Operacao" is growing.

I'm happy with that and look forward to the upcoming trading update!

Thanks quisad,

Could you provide link to CFEM payments?
Struggling to navigate through anm haha

CaptainSwag,

There is only really one way to create value here IMO to overcome the financial risks.
That is to increase production to over 25-30k+.

There are currently modifications ongoing on the AM. The water processing capability has been increased to 55k bwpd. I also "suspect" that oil processing capacity will also be modified on the AM to increase total processing capacity. But at what cost and is this factored into the estimated $70-80m water injection budget?

Potential ways to increase TOTAL production to 25-30k bopd:
- Water injection at Lancaster to to continue producing from Well 6 (and 7 maybe if feasible?)
- Lincoln tie-back
- Another drill in Lancaster if well 7 can't be used (Cost needs to be factored in)

Also need to factor in the c. $20m GWA commitment well into finances and the $6m P&A for Lincoln if no tie-back.

For all the above, HUR had c. $85m free cash as at Oct 2020. So considering all that, even with 25-30k bopd at estimated oil prices, $230m bond payback in 2022 is not likely and also there are risks to the forward activity programme.
Shareholders will have to contribute to some aspect of the foward work programme (to manage risks for bondholders) AND the bond needs to be refinanced, IMO.

"We will be engaging with all our key stakeholders regarding our forward work programme and financing arrangements and updating the market on these efforts in due course."

Money tree?
Cash raise via shareholders?
Farm down?
Dilution?

John4242,

Your posts add 0 value here.
Why not worry about your investment rather than other investors?

Regarding your comments about me:
I'm in a position where either a "lousy" update or a great update works for me.
What about you?

whl2,

In that case, bopd is being harsh on Harvest.
As per the Q&A, the company firstly provided the updates based on requests by shareholders and will continue to provide sales updates quarterly:
"13. Putting aside the disappointing sales figures (within a unique and difficult environment), as an investor it was beneficial to see the Company's targets for Q1 and Q2, alongside the respective sales figures. Is there any reason why the Company cannot provide a quarterly sales update as an RNS shortly after each period end? In addition, it would be useful to have comparative figures for the previous period included within these updates, rather than having to trawl through previous updates.

We are glad you found these helpful and as per the trading update announced on 30 September 2020, we are committed to continuing to provide trading updates in this manner. We hope to continue to provide similar updates quarterly."

I know that they haven't provided this in the past, but at the same time, they have had issues with distributors.

Regarding my holding, I'm already holding a significant amount, imo.
Like you, I am somewhat uncertain for Q4 (or at least at current price). However, I will be willing to add (possibly even double my holding) should the share price drop in the future.
There is always risk to investing, and i'm just not prepared to take further risk at current share price especially when the company has had a high cash outflow this year.

Nonetheless, i'm optimistic with my current holding.

ALL IMO. GLA.

magical_trevor,

If you bother to read RNS', they have set targets.
The original target for this year was 75kt.
But this was reduced to 50kt due to COVID19.

Also, I hope you realise that Harvest's previous trial mining license was a permit only for 50kt per year.
The full mining permit has been provided to Harvest this year for up to 400kt per year.

Previous year sales:
12 months ending June 2018 accounts: Approx 5kt based on accounts
12 months ending June 2019: Approx 55-60kt based on accounts
6 months ending Dec 2019: Approx 35kt based on accounts
12 months ending Dec 2020: Expected 50kt

I agree that they did burn some cash, but these are one off costs such as expansion and mining permit. However, these add value to the business and therefore contributing to a profit on the balance sheet.

Harvest will provide Q4 sales update in the next 3 weeks and hopefully they also provide a sales target for 2021. For me, this update will make me decide whether i'll be holding onto my current shares here or not.

If you believe that they'll be a placing in March-April, please sell your shares!
I'm still hoping to add to my holding here at lower share price (should the opportunity come).

ALL IMO. GLA.

KP Fertil targeted crops are all forecast to grow in demand and production in Brazil according to both conab and USDA for next year.

Soybean-
Conab: 7% increase in production to 133.51 MMT, 3% increase in cultivated area to 37.859 MHa.
https://www.conab.gov.br/perspectivas-para-a-agropecuaria/item/download/33022_e88d249f1ec0e874cdfd1ac8b6361099
USDA: 4.3% increase in production to 131 MMT, 4.3% increase in cultivated area to 38.5 MHa.
https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Oilseeds%20and%20Products%20Update_Brasilia_Brazil_10-01-2020

Coffee-
USDA: 12.2% increase in production to 67.9 million 60kg bags, 1.2% increase in cultivated area to 2.42 MHa.
https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Coffee%20Semi-annual_Sao%20Paulo%20ATO_Brazil_11-15-2020

Sugarcane-
USDA: approx. 1-2% increase in production, no change in cultivated area FOR CURRENT YEAR.
https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Sugar%20Semi-annual_Sao%20Paulo%20ATO_Brazil_10-01-2020

Corn-
Conab: 11% increase in production to 112.9 MMT, 7% increase in cultivated area to 19.776 MHa.
https://www.conab.gov.br/perspectivas-para-a-agropecuaria/item/download/33022_e88d249f1ec0e874cdfd1ac8b6361099
USDA: 3.9% increase in production to 107 MMT, 3.8% increase in cultivated area to 19.2 MHa.
https://apps.fas.usda.gov/newgainapi/api/Report/DownloadReportByFileName?fileName=Grain%20and%20Feed%20Update_Brasilia_Brazil_09-27-2020

ALL IMO. GLA.