Last checked at 9 Jul 2020 10:00
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) Dr Mark Heyhoe (COO) | Tel: +44 (0) 203 940 6625 |
Strand Hanson Limited Nominated & Financial Adviser | James Spinney Ritchie Balmer Jack Botros | Tel: +44 (0) 20 7409 3494 |
Shard Capital Partners Broker | Damon Heath | Tel: +44 (0) 20 7186 9900 |
St Brides Partners Ltd Financial PR | Charlotte Page Beth Melluish | Tel: +44 (0) 20 7236 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