HARVEST MINERALS LIMITED Harvest Minerals Limited / Index: LSE / Epic: HMI / Sector: Mining
29 June 2021
Harvest Minerals Limited ('Harvest' or the 'Company')
2020 Annual Report & Accounts
Harvest Minerals Limited, the AIM listed remineraliser producer, is pleased to announce its final audited results for the year ended 31 December 2020. The Company's Annual Report & Accounts will today be uploaded to Harvest's website, and the accounts posted to shareholders, where appropriate.
REVIEW OF OPERATIONS
Arapua Fertiliser Project (Arapua)
Arapua is the Company's principal business unit and the currently the sole source of the Company's revenue. The Company's focus throughout the period (and prior periods) has been substantially on developing Arapua and progressing it to commercial production and revenue generation. 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 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 78,894m2, 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.
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 during the calendar year 2020, the Company commercialised 54,155 tonnes of KP Fértil®, 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®, accordingly, having sold 54,000 tonnes represents Harvest achieving its maiden profit on a cash accounting basis. Note, however, that these financial statements are prepared on an accrual accounting basis.
Over the course of 2020, Harvest continuously received positive agronomic results proving the effectiveness of KP Fértil® 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® 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® 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 larger coffee cherries and yield.
Agronomic tests using KP Fértil® 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 the current 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.
Sergi, Capela & Mandacaru Projects
Given the scale of activity currently being undertaken at Arapua, the Company did not materially advance either of its Sergi, Capela or Mandacaru projects during the period to 31 December 2020. In February 2021, the Company relinquished its exploration license over its 51% interest in the Capela Potash Project ("Capela") in Brazil as it was deemed non-core to the Company's current strategy.
Impact of COVID-19
On 31 January 2020, the World Health Organisation ('WHO') announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (COVID-19 outbreak) and the risks to the international community as the virus spread globally beyond its point of origin. Because of the rapid increase in exposure globally, on 11 March 2020, the WHO classified the COVID-19 outbreak as a pandemic.
The full impact of the COVID-19 outbreak continues to evolve at the date of this report. Management is actively monitoring the global situation and its impact on the Group's financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Group continues to monitor the situation very closely, with a primary focus on the health, wellbeing and safety of all employees. The Group has implemented extensive business continuity procedures to ensure ongoing operations with minimal disruptions. To date there has been minimal impact to the Group.
Notwithstanding, sales for the year ended 31 December 2020 exceeded budget, with 82% of sales achieved in the second half of the year.
Consolidated Statement of Comprehensive Income for the year ended 31 December 2020
Consolidated | |||
Notes | 12 months ended | 6 months ended | |
31 December 2020 | 31 December 2019 | ||
$ | $ | ||
Revenue from fertiliser sales | 4 | 1,952,159 | 1,443,281 |
Cost of goods sold | 5 | (710,639) | (813,254) |
Gross profit | 1,241,520 | 630,027 | |
Interest income | 1,953 | 649 | |
Other income | 1,249 | 606 | |
Foreign exchange gain | (27,447) | 322,732 | |
Accounting and audit fees | (151,583) | (71,000) | |
Advertising fees | (245,825) | (90,623) | |
Consultants fees | (516,469) | (356,927) | |
Directors fees | (788,256) | (396,831) | |
Depreciation | (15,626) | (8,854) | |
Legal fees | (43,136) | (14,961) | |
Wages & Salaries | (359,535) | (213,269) | |
Interest expense | (962) | - | |
Public company costs | (219,253) | (121,569) | |
ROU depreciation charge | (71,327) | - | |
Rent and outgoings expenses | (25,231) | (77,208) | |
Travel expenses | (485,196) | (342,015) | |
Other expenses | 6 | (658,542) | (170,801) |
Impairment expenses | 14 | (956,918) | - |
Loss from continuing operations before income | |||
(3,320,584) | (910,044) | ||
tax | |||
Income tax benefit | 7 |
Loss from continuing operations after income tax
Net loss for the year
Other comprehensive income / (loss)
Item that may be reclassified subsequently to profit or loss
Foreign currency translation
Other comprehensive income / (loss) for the year
--
(3,320,584)(910,044)
(3,320,584)(910,044)
(2,398,695)(267,894)
(2,398,695)(267,894)
Total comprehensive loss for the year | (5,719,279) | (1,177,938) | |
Basic and diluted loss per share (cents per share) | 23 | (1.79) | (0.49) |
Consolidated Statement of Financial Position
as at 31 December 2020
Consolidated
Notes | 31 December 2020 31 December 2019 |
$ | $ | ||
CURRENT ASSETS | |||
Cash and cash equivalents | 8 | 2,992,727 | 8,057,934 |
Trade and other receivables | 9 | 1,651,013 | 1,856,289 |
Inventories | 10 | 121,119 | 126,838 |
TOTAL CURRENT ASSETS | 4,764,859 | 10,041,061 | |
NON-CURRENT ASSETS | |||
Plant and equipment | 12 | 1,037,475 | 1,048,158 |
Mine properties | 13 | 4,188,916 | 3,774,444 |
Deferred exploration and evaluation expenditure | 14 | 3,317,445 | 4,116,578 |
TOTAL NON-CURRENT ASSETS | 8,543,836 | 8,939,180 | |
TOTAL ASSETS | 13,308,695 | 18,980,241 | |
CURRENT LIABILITIES | |||
Trade and other payables | 15 | 204,584 | 184,758 |
TOTAL CURRENT LIABILITIES | 204,584 | 184,758 | |
NON-CURRENT LIABILITIES | |||
Provision for rehabilitation | 59,955 | 32,048 | |
TOTAL CURRENT LIABILITIES | 59,955 | 32,048 | |
TOTAL LIABILITIES | 264,539 | 216,806 | |
NET ASSETS | 13,044,156 | 18,763,435 | |
EQUITY | |||
Issued capital | 16 | 43,048,343 | 43,048,343 |
Reserves | 17 | 602,426 | 3,001,121 |
Accumulated losses | 18 | (30,606,613) | (27,286,029) |
TOTAL EQUITY | 13,044,156 | 18,763,435 | |
T
Consolidated Statement of Changes in Equity for the year ended 31 December 2020
Foreign currency | |||||
Issued capital | Accumulated losses | translation reserve | Option reserve | Total | |
$ | $ | $ | $ | $ | |
Balance as at 1 January 2020 | 43,048,343 | (27,286,029) | (539,927) | 3,541,048 | 18,763,435 |
Total comprehensive loss for the year | |||||
Loss for the year | - | (3,320,584) | - | - | (3,320,584) |
Other comprehensive income | - | - | (2,398,695) | (2,398,695) | |
Total comprehensive loss | - | (3,320,584) | (2,398,695) | - | (5,719,279) |
Transactions with owners in their capacity as owners | |||||
Shares issued as part of Placement | - | - | - | - | - |
Warrants Issued | - | - | - | - | - |
Share issue costs | - | - | - | - | - |
At 31 December 2020 | 43,048,343 | (30,606,613) | (2,938,622) | 3,541,048 | 13,044,156 |
Balance at 1 July 2019 | 43,048,343 | (26,375,985) | (272,033) | 3,541,048 | 19,941,373 |
Total comprehensive loss for the year | |||||
Loss for the year | - | (910,044) | - | - | (910,044) |
Other comprehensive loss | - | - | (267,894) | (267,894) | |
Total comprehensive loss | - | (910,044) | (267,894) | - | (1,177,938) |
Transactions with owners in their capacity as owners | |||||
Shares issued as part of Placement | - | - | - | - | - |
Warrants Issued | - | - | - | - | - |
Share issue costs | - | - | - | - | - |
At 31 December 2019 | 43,048,343 | (27,286,029) | (539,927) | 3,541,048 | 18,763,435 |
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Harvest Minerals Limited published this content on 07 July 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 08 July 2021 16:24:59 UTC.
