Harvest Minerals Ltd (AIM:HMI, OTC:HMIFF) received a double boost following an upbeat trading update and a positive court ruling which sent shares higher.
Shares were up 21% to 9.6p in mid-afternoon trading.
According to a trading update, the AIM-listed fertiliser producer reported unaudited cash of A$2.724mln in 2022 compared to A$1.708mln in 2021.
Additionally, the group’s net working capital position grew to A$5mln compared to A$3.2mln for the same period a year earlier thanks to strong sales of its multi-nutrient fertiliser, KP Fértil, it said.
"As announced on 24 January 2023, sales of KP Fértil continue to grow as the brand gains increased recognition and trust from principally local coffee, soybean, and maize growers,” said chairman Brian McMaster.
"We maintain a strong and improving working capital position, which we expect to strengthen further as we continue to profitably build the business.”
In a separate statement, the company said it will receive US$463,000 in damages after a Brazilian court ruled in its favour.
Agrocerrado, a Brazilian company which offers agricultural solutions, agreed to buy a minimum of 18,000 tonnes of Harvest’s fertiliser over two years on March 8, 2018.
However, upon completion of the contract, it had only purchased 1,800 tonnes, a tenth of the agreed minimum amount.
In September 2020, the court ruled against Agrocerrado, which led them to present a preliminary defence to stop Harvest from enforcing the judgement.
Earlier this month, the courts once again ruled in favour of Harvest, adding Agrocerrado is required to execute the payment.
“This recent Court ruling reaffirms, again, Harvest's contention that it had a bona fide sales agreement with Agrocerrado and that Agrocerrado was obligated to pay its debt,” said McMaster, adding: “While we are disappointed that it has required extensive litigation to reach this point, we are pleased with the result of the Court ruling which protects our rights and commercial milestones.”