Harvest Minerals : Half Year Report 30 June 202

Harvest Minerals Limited

DIRECTORS' REPORT

The Directors of Harvest Minerals Limited and its subsidiaries ('Harvest', or 'the Company') submit the financial report of the Company for the half-year ended 30 June 2023. In order to comply with the provisions of the Corporations Act

2001, the Directors report as follows:

Directors

The names of Directors who held office during or since the end of the half-year and until the date of this report are as below. Directors were in office for this entire period unless otherwise stated.

Results

The loss after tax recorded in the Condensed Consolidated Statement of Comprehensive Income for the half-year ended 30 June 2023 was $1,645,945 (Half year to 30 June 2022: $883,556) which is attributable to lower demand and lower pricing for the Company's product in the period.

Net cash outflow from operating activities in the Condensed Consolidated Statement of Cashflows for the half year ended 30 June 2023 was $2,634,226 (Half year to 30 June 2022: net cash inflow $693,207). Please refer to note 5 in the financial statements for further detail on reconciling the net loss to net cash inflows from operating activities.

Review of Operations

Arapua Fertiliser Project

During the half-year ended 30 June 2023, Harvest sold 7,280 tonnes of its organic fertiliser, KP Fértil®, representing a 74% decrease over the 28,104 tonnes sold in the same period of 2022. While historically the majority of Harvest's annual sales have been achieved in the second half of the year, sales to date in 2023 have remained below internal expectations. This is attributable to a reduction in volume demand by farmers who are less incentivised to boost production whilst crop prices are low and energy prices are high. Accordingly, the Company's 2023 full year invoiced sales target is now 70,000 tonnes of KP Fértil®. Furthermore, the impact on Harvest's financial results has been exacerbated by a reduction in the price of its product, which it has lowered to follow the market and try to encourage farmers to recommence buying.

Short-term visibility remains low for the Company due to numerous national and international geopolitical and macroeconomic challenges which are affecting the Company's business. However, Harvest remains optimistic about the medium and long-term future, with megatrends such as a growing world population likely to accelerate the increased use of fertilisers. Another trend likely to boost interest in organic products such as KP Fértil® is the increased focus on organic farming initiatives to reverse the loss of biodiversity and support Brazil's climate change strategies and objectives.

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Harvest Minerals Limited

With its team of 12 associates/agronomists split into two regional teams, supported by a third-party network comprising of 20 resales centres, Harvest continues to advance its marketing initiatives to offer its product for coffee, sugarcane, and other crops, targeting a cross section of producers and resellers. It is also maintaining its R&D efforts at its development farm next to the mine where testwork is ongoing to demonstrate the continued superiority of KP Fértil® and expand its client base.

As and when the market improves, the Company is positioned to support higher sales volumes and rebuild profitability at its low cost and high margin Arapua operation. In order to reduce the Company's cash burn rate, the Directors agreed to temporarily pause drawing their remuneration due from the Company during Q2 2023 until such point as the Company is in a better position to pay.

Sergi Potash Project & Mandacaru Phosphate Project

Given the scale of activity currently being undertaken at Arapua, the Company did not materially advance either its Sergi Potash Project or its Mandacaru Phosphate Project during the half-year to 30 June 2023.

Auditor's Independence Declaration

Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the Directors of the company with an Independence Declaration in relation to the review of the half-year financial report. This Independence Declaration is set out on the Page 3 and forms part of the Directors' Report for the half-year ended 30 June 2023.

This report is signed in accordance with a resolution of the Board of Directors.

Brian McMaster

Executive Chairman

21 September 2023

Competent Person Statement

The technical information in this report is based on complied and reviewed data by Mr Paulo Brito BSc(geol), MAusIMM, MAIG. Mr Brito is a consulting geologist for Harvest Minerals Limited and is a Member of AusIMM - The Minerals Institute, as well as, a Member of Australian Institute of Geoscientists. Mr Brito has sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which is being undertaken to qualify as a Competent Person as defined in the 2012 Edition of the "Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves". Mr Brito also meets the requirements of a qualified person under the AIM Note for Mining, Oil and Gas Companies and consents to the inclusion in this report of the matters based on his information in the form and context in which it appears. Mr Brito accepts responsibility for the accuracy of the statements disclosed in this report.

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