Harvest Minerals : HMI 2017 Final Results

28 September 2017

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

Harvest Minerals Limited, the AIM listed fertiliser development company, is pleased to announce its final audited annual results for the year ended 30 June 2017. The Company's annual report and accounts will be posted to shareholders shortly and uploaded to the Company's website.

• Focussed on building a leading fertiliser business to take advantage of strong market fundamentals, in particular the announcement from the Brazilian Government that it has set a target to be self-sufficient in fertilisers by 2020

• Advancing the Arapua multi-nutrient direct application natural fertiliser project, located in the heart of the Brazilian agriculture belt in Minas Gerais state

• Current resource of over 13Mt, achieved from 6.7% of identified resource, giving the project a +30-year mine life at a rate of 450k tonnes per annum

• Application for a full mining concession underway - rolling four-year Trial Mining License in place, which

  facilitates the Company's current production

• Multiple agronomy trials demonstrate that KPfértil works as a fertiliser and has a positive agronomic efficiency

• Focus on gaining certification of KPfértil as a remineraliser - application submitted and a positive initial response received from the Brazilian Ministry of Agriculture, Livestock and Supply

• Strong sales team and local sales pipeline - sales expected in Q4 2017, ramping up once certification achieved

• Continue to review other projects that fit investment criteria and utilise Board's extensive experience in the sector

Harvest Minerals Limited Brian McMaster (Chairman)

Tel: +61 8 9200 1847

Strand Hanson Limited (Nominated & Financial Adviser)

James Spinney Ritchie Balmer

Tel: +44 (0)20 7409 3494

Mirabaud Securities LLP (Joint Broker)

Beaufort Securities Ltd (Joint Broker)

Rory Scott Tel: +44 (0)20 7878 3360

Jon Belliss Tel: +44 (0)20 7382 8300

St Brides Partners Ltd Isabel de Salis Tel: +44 (0)20 7236 1177

Olivia Vita

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

I am pleased to provide an update on our recent activity and outline our plans for the future. Harvest remains focussed on building a leading fertiliser business to take advantage of strong market fundamentals, given Brazil's increasing reliance on fertiliser and its stated target to be self-sufficient in fertilisers by 2020; it currently imports 90% of the potash it uses. To this end, we continue to progress the advanced Arapua multi-nutrient direct application natural fertiliser ('DANF') project ('Arapua'), located in the heart of the Brazilian agriculture belt in Minas Gerais.

Arapua has a current resource of over 13Mt at 3.1% K2O and 2.49% P2O5, achieved from only 6.7% of identified resource, which translates into a mine life of over 30 years at a rate of 450k tonnes per annum. With its established infrastructure and local market, proven sales team and product ready for delivery, the foundations are in place for a robust business.

Currently, the Company has a rolling four-year Trial Mining License allowing Harvest to extract 50kt of Arapua's product, KPfértil, on a rolling basis. However, the Company is in the process of applying for a full mining concession; as part of this process, in April 2017, the Company submitted a Final Exploration Report on Arapua to the National Department of Mineral Production ('DNPM'), which detailed all the geological, metallurgical and agronomic work completed to date. The DNPM continues to consider the report and once approved, the Company has up to a year to submit a feasibility study and environmental report as the final steps in the application process for the full mining licences. Once granted, Harvest will be obliged to pay US$1 million to the third-party vendors of the Arapua project and therefore, we intend to utilise the full period available to submit the remaining reports. For the avoidance of doubt, whilst this process is ongoing, production from Arapua can continue pursuant to the trial mining license unabated.

Our focus remains on gaining certification and developing sales channels. In line with this, the Company has submitted an application for certification of KPfértil as a remineraliser to the Brazilian Ministry of Agriculture, Livestock and Supply ('MAPA'). KPfértil is an organic, multi-nutrient, slow-release fertiliser and remineraliser produced from a weathered potassium and phosphate rich lava, which offers many economic and agronomic benefits.

As part of the certification process, the Company has undertaken multiple agronomy trials, conducted by three organisations: The Federal University of Varginha; The Institute of Agricultural Research of Cerrado; and The Federal University of Uberlandia. These tests include:

• Chemical and physical analysis - to confirm the product meets minimum specifications and that it is not hazardous;
• Kinetic studies (incubation and leaching) - to demonstrate the product is able to release nutrients into the soil and how quickly they are leached from the soil; and
• Agronomic efficiency test work (growth tests) - to demonstrate the nutrients can be utilised by plants and that the product works effectively as a remineraliser.

Results from tests undertaken to determine if plants could use the nutrients in KPfértil when applied to the soil and comparing these results with either no fertiliser or conventional fertilisers demonstrate that KPfértil works as a fertiliser and has a positive agronomic efficiency. Rice crops applied with KPfértil demonstrated a

substantial increase in dry matter production: no fertiliser - from 3.98g per plant; conventional source of potassium ('KCI') - from 5.03g per plant; and KPfértil - up to 59.44g per plant. Compared to conventional sources potassium ('K') and phosphate ('P'), applying the same dose of K and P as KPfértil in clayey soils produced up to 73.09% of the dry matter produced using expensive, conventional fertilisers.

Similarly, tests conducted by Santinato & Santinato Cafés Ltda ('Santinato'), a renowned agronomic consulting company in Brazil specialising in coffee cultivation, at one of the Veloso Agropecuária coffee plantations, considered one of the largest coffee producers in the Brazilian Cerrado, indicate KPfértil as effective as traditional fertilisers in supplying potassium ("K") and phosphate ("P") to coffee plants.

A second cycle of agronomic growth tests on rice and beans is underway to test KPfértil on winter crops; we anticipate that the results, expected Q4 2017, will demonstrate the long-term benefits, of using KPfértil as a slow release fertiliser, to potential customers.

In accordance with MAPA regulations, the Company recently gave a presentation to MAPA representatives on KPfértil including the results of all the chemical, physical and agronomic tests conducted to date. This was warmly received and formal application was submitted to MAPA on Thursday 25th September. As part of the process, MAPA requested that a covered storage shed be constructed, which we are duly building. Harvest will provide any further results of the current test work to MAPA as requested and the entire registration process is expected to be complete by the end of 2017. This will be before the next buying season, which will greatly benefit our sales effort.

With regards to sales, the Company continues to advance off-take agreements. Post period end, in July 2017, we appointed a new Sales Manager, Mr Lino Furia, who has over 20 years' experience in the management of crop production and the development of new products and markets in Brazil. Having worked with several major fertiliser companies including Vale Fertilisers, Yara Fertilisers and Mosaic Fertilisers, as well as phosphate miner, Rio Verde Minerals, Lino's contacts in the sector are extensive and experience second to none. Naturally, his job will be made easier once KPfértil is certified as a remineraliser, however, we are delighted with his initial progress, which has seen him advance agreements with a large number of potential customers ranging from consumers, co-operatives, agricultural distributors and trade bodies; these efforts are expected to bear fruit imminently. Following feedback from potential customers, the Company purchased a crusher, which is now operating on site. Given the expected selling price of KPfértil, the Company expects that farmers will see tangible economic benefits in introducing KPfértil to their fertiliser rotation and that sales will rapidly gain traction during 2018.

Additionally, the Company has a portfolio of other projects including: the Sergi Potash Project, where high grade and economic zones of potash have been intercepted; the Capela Potash Project, where 3D seismic has identified the potential presence of salt layers at relatively shallow depths; and the Mandacaru Phosphate Project, which has a JORC (2012) compliant total resource of 4.38Mt @ 4.55% phosphorus. Whilst our focus is on advancing Arapua to fully operational status, these projects are on hold.

Looking ahead, we remain committed to developing our business and believe that the stars are lining up for us: we have the right commodity given continued global population growth that requires increased food production

and therefore increased need for fertiliser; we are in the right location, given that Brazil, the largest agribusiness exporter, set to double by 2024, lacks domestic fertiliser and currently imports 90% of potash and 51% of its phosphate requirements; and this is the right time, given Arapua's location and its simple, low cost product with its +80% margin and excellent expansion potential.

I am confident that the foundations are in place for an extremely profitable business; subject to attaining certification, we anticipate national demand for our product to significantly increase and remain optimistic that Harvest will become a key player in the market. We also continue to review other projects that fit our investment criteria and would enable us to utilise our extensive experience in the sector. As we move forwards towards achieving our objectives, I would like to thank our entire team for their continued commitment and our shareholders for their ongoing support.

Brian McMaster Chairman

28 September 2017

Interest income 12,686 5,872

Other income 1,156 -