Fertiliser producer Harvest Minerals Limited (LON:HMI) said its Arapua project is on the cusp of reaping the benefits of significant investment as commercial production nears.
In its interim results statement covering the second half of 2017, the chairman, Brian McMaster, said all four of its main targets in 2017 were achieved: to complete all the required agronomic test work at Arapua; to apply to register its product KPfértil with the Brazilian Ministry of Agriculture (MAPA); to achieve first sales; and to commission a modular processing plant to ensure that it is easy to expand production in line with sales.
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“Looking forward, 2018 is going to be another real step change for us as we focus on increasing our sales volumes and head towards commercial production,” McMaster said.
The registration for KPfértil from MAPA is expected soon, although Harvest's customers do not appear to be waiting for this as the group we signed its first major deal this month with a key fertiliser distributor in Brazil, Agrocerrado Produtos Agrícolas e Assistência Técnica LTDA, for 36Kt of KPfértil, which has a sales value in excess of US$2mln.
Harvest has a strong order book for the year, McMaster said.
“We announced in January 2018 a significant expansion for our processing plant to 320Ktpa, which will be completed in early Q2, and are actively expanding our sales and marketing team. We will also be submitting a full feasibility study and environmental report as part of the application for a full mining licence and continuing our agronomic testing, including the ongoing long-term test work on coffee, which is the major crop within 50km of the project. In the meantime, we continue to produce product under our trial mining licence,” McMaster said.
Revenue from fertiliser sales in the six months to the end of December 2018 was just US$42,294, up from zero the year before, but is clearly poised to take off this year.
The loss before tax narrowed to US$833,508 from US$1.43mln in the same period of 2016.
Harvest ended the year with cash and cash equivalents of US$1.64mln, up from US$1.39mln a year earlier.
Shares in Harvest were down 0.3 at 21.9p in a falling market.