Harvest Mi (di) Regulatory News (HMI)

THIS ANNOUNCEMENT AND THE INFORMATION CONTAINED HEREIN IS RESTRICTED AND IS NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY, IN, INTO OR FROM THE UNITED STATES, CANADA, JAPAN, SOUTH AFRICA OR ANY OTHER JURISDICTION IN WHICH SUCH RELEASE, PUBLICATION OR DISTRIBUTION WOULD BE UNLAWFUL.

To view the press release with the photographs, please use the following link:

http://www.rns-pdf.londonstockexchange.com/rns/3761T_-2017-10-11.pdf

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

12 October 2017

Harvest Minerals Limited

("Harvest" or the "Company")

Infrastructure Finalisation, First Sales & Placing

Harvest Minerals Limited, the AIM listed fertiliser development company, is pleased to provide an update highlighting progress and initial sales at its Arapua Fertiliser Project ('Arapua') in Brazil located in the heart of the Brazilian agriculture belt in Minas Gerais. In order to support the building of the sales pipeline, the Company is pleased to announce it has completed a placing for £1.2m.

Highlights

· First sales achieved pre remineraliser registration with customers including coffee growers, orchard and broad acre crop farmers 

· Robust order book standing at over 20 direct consumers, distributers, blenders and co-operatives

· Modular processing plant fabricated and installed, completing low-cost production chain whereby KPfértil is milled and loaded into 1 tonne "big-bags" and picked up by the customer

· Number and size of orders expected to increase once KPfértil has been registered as a remineraliser by the Brazilian Ministry of Agriculture, Livestock and Supply ('MAPA') - expected by end of Q4 2017

· Successfully completed an oversubscribed placing of shares to raise £1.2m at 10p per share

Harvest's Executive Chairman, Brian McMaster, said, "Completing the first sales of KPfértil prior to the certification by MAPA, is a testament to the market's recognition of its capabilities. The sales team in Brazil has been working hard to develop multiple sales channels and that hard work is now generating returns. There may be additional sales ahead of certification but it is anticipated that the bulk of our robust potential order book, currently standing at over 20 independent farmers and corporations, will cross the line quickly after certification.

"We are also delighted with the response to the fundraise, which was oversubscribed, and have once again received longstanding and ongoing support from a family office shareholder in increasing its stake to 29.9% of the Company. The funds raised will be used to progress the full mining licence and application, further develop our rapidly growing sales channels, process additional stockpile, explore acquisition opportunities as well as for general working capital purposes. With the transition from explorer to developer and now producer complete, we look forward to the future with confidence."

Further Details on Infrastructure Finalisation & First Sales

In response to feedback from customers, Harvest has installed a modular processing plant comprising a knife mill and feeder to pack the product into 1 tonne "big-bags", along with the associated infrastructure. The plant has been designed so that a second knife mill and a further crusher can be added to increase production capacity as the volume of orders increase over the coming months. The plant is now fully operational and has commenced processing product for first deliveries before the end of October 2017. In addition, MAPA requested that Harvest provide a covered facility for its run-of-mine pad; accordingly, a covered shed is being installed and will be finished later this month to store the finished product prior to collection.

With the continuing excellent test results (as announced on 5 September 2017) and progress with registering KPfértil as a remineraliser, the sales team has focused on developing a broad distribution network through which to sell the product. The sales team is in discussion with numerous potential customers, including large fertiliser consumers, distributors, blenders and co-operatives. Some of these groups have been conducting their own internal test work on the products' physical and chemical characteristics. Feedback from these tests, to date, has been positive.

Even though KPfértil is yet to been certified by MAPA, Harvest has achieved a modest level of sales with further modest quantities likely to be sold in the coming weeks. The order book for pre-registration sales currently stands at approximately USD80,000, including sales made to date. In addition, the Company is building a substantial order book of post-registration sales, details of which will be provided in due course.

Please see the PDF attached to view Figure 1: Knife Mill processing material for packing and distribution.

Please see the PDF attached to view Figure 2: Feeder filling 1t "Big Bag".

Further details on the Placing

The Company is also pleased to announce that it has conditionally raised £1.2 million gross via an oversubscribed placing of 12,000,000 new ordinary shares of no par value in the capital of the Company ("Ordinary Shares") (the "Placing Shares") at a price of 10 pence per Placing Share (the "Placing Price") (the "Placing") with new and existing investors. 

The net proceeds of the Placing will be used for full mining licence application preparatory work, developing additional sales channels, processing additional stockpile, consideration for potential acquisitions and for general working capital purposes.

Beaufort Securities Limited ("Beaufort") and Mirabaud Securities Limited ("Mirabaud") have entered into a placing agreement with the Company (the "Placing Agreement") under which Beaufort and Mirabaud has each undertaken, on the terms and subject to the conditions set out in the Placing Agreement, to use its respective reasonable endeavours to procure placees for the Placing Shares at the Placing Price. The Placing is conditional upon, inter alia, the conditions in the Placing Agreement being satisfied or (if applicable) waived, the Placing Agreement not having been terminated in accordance with its terms prior to Admission and Admission becoming effective on or before 8.00 a.m. on 25 October 2017 (or such later date as may be agreed by the Company, Beaufort and Mirabaud).

The Placing Agreement contains customary warranties given by the Company to Beaufort and Mirabaud in relation to, inter alia, the accuracy of the information in this announcement, certain financial information and other matters relating to the Company and its business.

The Placing Shares, when issued, will be fully paid and will rank pari passu in all respects with the existing ordinary shares of no par value each in the capital of the Company, including the right to receive all dividends and other distributions declared, made or paid on or in respect of such shares after the date of issue.

Beaufort and Mirabaud are acting as joint brokers on the Placing. As part consideration for their services, they have been issued, in aggregate, 600,000 warrants over Ordinary Shares, which have an exercise price of 10 pence each and a two-year term (the "Placing Warrants"). Following the issue of the Placing Warrants, the Company has a total of 3,788,125 warrants over Ordinary Shares in issue.

Related Party Transaction

Edwards Family Holdings Limited ("Edwards") currently has a 28.3 per cent. interest in the existing share capital of the Company and accordingly is classified as a substantial shareholder pursuant to the AIM Rules for Companies.

Edwards has committed to subscribe for 5,461,238 Placing Shares and accordingly the issue of such Placing Shares to Edwards constitutes a related party transaction in accordance with the AIM Rules for Companies. The Directors consider having consulted the Company's nominated adviser, Strand Hanson Limited, that the terms on which the Placing Shares will be issued to Edwards are fair and reasonable as far as its Shareholders are concerned.

Following the issue of the 5,461,238 Placing Shares to Edwards, it will have an enlarged holding of 38,522,738 Ordinary Shares, representing 29.9 per cent. of the Company's share capital as enlarged by the issue of the Placing Shares.

Admission to Trading on AIM

Application has been made for admission of the Placing Shares to trading on AIM ("Admission") and it is expected that Admission will take place at 8.00 a.m. on 25 October 2017. Following Admission, there will be a total of 128,838,589 Ordinary Shares in issue. The Company holds no shares in treasury.

Shareholders should therefore use the figure of 128,838,589 as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change to their interest in the Company, under the FCA's Disclosure and Transparency Rules.

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

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

Notes:

Harvest Minerals (HMI.L) is a Brazilian focused fertiliser Company targeting low cost, near term development projects. The Company's primary focus is the development of its 100% owned Arapua Fertiliser Project from which it produces its KPfértil product, a proven, multi-nutrient, slow release, organic fertiliser and remineraliser, which is produced from a weathered potassium and phosphate rich lava and offers many economic and agronomic benefits. 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 resource translates into a mine life of over 100 years at a rate of 450k tonnes per annum and crucially is based on drilling just 6.7% of the known mineralisation, leaving significant upside potential. With a trial mining licence in place, allowing Harvest to extract 50kt of product on a rolling basis whilst the full mining licence application process is underway, and official registration of KPfértil as a remineraliser expected by the end of 2017, Harvest is ideally placed to address the significant demand for locally produced fertiliser in Brazil; Brazil has abundant agricultural land but lacks domestic fertiliser, with the country currently importing 90% of the potash it uses. Furthermore, the Brazilian Government has set a target to be self-sufficient in fertilisers by 2020, creating significant market opportunity for Harvest and its KPfértil product. Additionally, the Company has four assets at various stages of development and continues to explore other opportunities that fit its investment criteria.