Half-year Report

Harvest Minerals Limited
21 September 2023
 

21 September 2023

Harvest Minerals Limited

("Harvest" or the "Company")

 

Interim Results

 

Harvest Minerals Limited, the AIM listed fertiliser producer, announces its interim results for the six months ended 30 June 2023.

 

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.

 

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.

 

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.

 

 

 

Condensed Consolidated Statement of Comprehensive Income

for the half-year ended 30 June 2023

 

 

            Consolidated

 

 

 


6 months ended 30 June

2023

$

 

6 months ended

30 June

2022

$






Revenue from fertiliser sales

3

931,608


2,735,590

Cost of goods sold

4

(707,044)


(1,153,441)

Gross profit


224,564


1,582,149






Interest income


18,592


9,857

Other income


-


513

Gain on sale of motor vehicle


15,171


8,185

Foreign exchange gain/(loss)


(1,919)


(54,401)

Accounting fees


(91,734)


(61,876)

Audit and tax fees


(85,942)


(19,255)

Advertising fees


(196,790)


(146,877)

Consultants' fees


(76,689)


(52,383)

Directors' fees


(395,391)


(390,705)

Depreciation


(38,985)


(4,685)

Legal fees


(8,036)


(6,423)

Wages & Salaries


(309,161)


(427,713)

Interest expense


(80,217)


(44,808)

Public company costs


(103,082)


(117,474)

Travel expenses


(126,437)


(306,748)

Impairment exploration expense


-


(491,500)

Other expenses


(352,786)


(359,412)

Loss from continuing operations before income tax


(1,608,842)

 

(883,556)



 


 

Income tax expense


(37,103)


-

Loss from continuing operations after income tax

5

(1,645,945)

 

(883,556)

 


 


 

Other comprehensive income





Item that may be reclassified subsequently to profit or loss





Foreign currency translation


1,040,306


964,215

Other comprehensive income for the half-year


1,040,306

 

964,215

Total comprehensive income/(loss) for the half-year


(605,639)

 

80,659






Loss per share





Basic and diluted loss per share (cents per share)


(0.87)


(0.48)

 

 

 

 

Condensed Consolidated Statement of Financial Position

as at 30 June 2023

 

 

 

             Consolidated

 

 

Notes

 

30 June

2023

$


 

31 December

2022

$

Assets





Current Assets





Cash and cash equivalents

5

423,982


2,723,509

Trade and other receivables

6

710,944


514,724

Inventories

7

1,396,515


195,882

Total Current Assets


2,531,441

 

3,434,115






Non-Current Assets





Trade and other receivables


477,406


320,025

Investments


321,069


-

Plant and equipment

8

3,728,703


2,891,499

Mine properties

9

4,644,548


4,055,486

Deferred exploration and evaluation expenditure


54,045


48,118

Total Non-Current Assets


9,225,771

 

7,315,128

 



 


Total Assets

 

11,757,212

 

10,749,243






Current Liabilities





Trade and other payables

10

533,982


513,389

Borrowings

11

511,748


53,270

Total Current Liabilities


1,045,730

 

566,659

 

 


 


Non-Current Liabilities

 


 


Provision for rehabilitation

 

308,304

 

276,435

Borrowings

11

1,295,075

 

192,407

Total Non-Current Liabilities

 

1,603,379

 

468,842

 

 


 


Total Liabilities

 

2,649,109

 

1,035,501



 


 

Net Assets

 

9,108,103

 

9,713,742






Equity





Contributed equity

12

43,328,219


43,328,219

Reserves


2,002,717


962,411

Accumulated losses


(36,222,833)


(34,576,888)

Total Equity


9,108,103

 

9,713,742


Condensed Consolidated Statement of Changes in Equity

for the half-year ended 30 June 2023

 

 

 

Consolidated

 

Notes

 

Contributed equity

$

 

Accumulated losses

$

 

Foreign currency translation reserve

$

 

 

Option reserve

$

 

 

Total

$

Balance as at 1 January 2023

12

43,328,219

(34,576,888)

(2,578,637)

3,541,048

9,713,742

Total comprehensive gain for the half-year

 

 

 

 

 

 

Loss for the half-year 30 June 2023


-

(1,645,945)

-

-

(1,645,945)

Other comprehensive income


-

-

1,040,306

-

1,040,306

Total comprehensive income for the half-year

 

-

(1,645,945)

1,040,306

-

(605,639)

Balance at 30 June 2023

 

43,328,219

(36,222,833)

(1,538,331)

3,541,048

9,108,103

 

 

 

 

 

 

 

Balance as at 1 January 2022

 

43,328,219

(34,774,685)

(3,482,302)

3,541,048

8,612,280

Total comprehensive loss for the half-year

 

 

 

 

 

 

Loss for the half-year 30 June 2022


-

(883,556)

-

-

(883,556)

Other comprehensive income


-

-

964,215

-

964,215

Total comprehensive loss for the half-year

 

-

(883,556)

964,215

-

80,659

Balance at 30 June 2022

12

43,328,219

(35,658,241)

(2,518,087)

3,541,048

8,692,939

 

 

 

 

 


Condensed Consolidated Statement of Cash Flows

for the half-year ended 30 June 2023



Consolidated


6 months ended

30 June

2023

$

 

6 months ended

30 June

2022

$

 



Cash flows from operating activities





Receipts from customers


962,276


2,999,821

Payments to suppliers and employees


(3,534,877)


(2,271,663)

Interest received


18,592


9,857

Interest paid


(80,217)


(44,808)

Net cash outflow / inflow from operating activities

5

(2,634,226)


693,207





 

Cash flows from investing activities




 

Purchase of plant and equipment


(638,218)


(941,621)

Payments for mine properties


(204,683)


(351,413)

Payments for exploration and evaluation expenditure


-


(37,063)

Proceeds from sale of motor vehicle


60,536


8,185

Payments for investments - loan collateral


(306,732)


-

Net cash outflow from investing activities


(1,089,097)


(1,321,912)





 

Cash flows from financing activities

 




 

Proceeds from borrowings


1,436,381


1,274,816

Repayment of borrowings


(106,222)


(29,637)

Net cash inflow from financing activities


1,330,159

 

1,245,179





 

Net (decrease) / increase in cash and cash equivalents


(2,393,164)


616,474

Cash and cash equivalents at beginning of period


2,723,509

 

1,708,001

Effect of exchange rate fluctuations on cash held


93,637

 

89,564

Cash and cash equivalents at the end of the period

5

423,982

 

2,414,039

 


 

 

 


 

 

Notes to the Condensed Consolidated Financial Statements
for the half-year ended 30 June 2023

NOTE 1: STATEMENT OF SIGNIFICANT ACCOUNTING POLICIES

Corporate Information

This general purpose half-year financial report of Harvest Minerals Limited (the "Company") and its subsidiaries (the "Group") for the half-year ended 30 June 2023 was authorised for issue in accordance with a resolution of the Directors on 21 September 2023.

Harvest Minerals Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the AIM market of the London Stock Exchange.

The nature of the operations and principal activities of the Group are described in the Directors' Report.

Basis of Preparation

This financial report for the half-year ended 30 June 2023 has been prepared in accordance with the requirements of the Corporations Act 2001, applicable accounting standards including AASB 134 Interim Financial Reporting, Accounting Interpretations, and other authoritative pronouncements of the Australian Accounting Standards Board ("AASB").  Compliance with AASB 134 ensures compliance with IAS 134 "Interim Financial Reporting". The Group is a for profit entity for financial reporting purposes under Australian Accounting Standards.

These half-year financial statements do not include all notes of the type normally included within the annual financial statements and therefore cannot be expected to provide as full an understanding of the financial performance, financial position and financing and investing activities of the group as the full financial statements.

It is recommended that the half-year financial statements be read in conjunction with the annual report for the year ended 31 December 2022 and considered together with any public announcements made by Harvest Minerals Limited during the half-year ended 30 June 2023 in accordance with the continuous disclosure obligations of the AIM market.

For the purpose of preparing the interim report, the half-year has been treated as a discrete reporting period. The accounting policies and methods of computation adopted are consistent with those of the previous financial year and corresponding interim reporting period.  These accounting policies are consistent with Australian Accounting Standards and with International Financial Reporting Standards.

New and amending Accounting Standards and Interpretations

In the half-year ended 30 June 2023, the Directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to the Group's operations and effective for current reporting periods beginning on or after 1 January 2023. The Directors have also reviewed all new Standards and Interpretations that have been issued but are not yet effective for the half-year ended 30 June 2023. As a result of this review the Directors have determined that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on the Group's business and, therefore, no change is necessary to the Group accounting policies.

New and amended accounting standards and interpretations have been published but are not mandatory. The Group has decided against early adoptions of these standards and has determined the potential impact on the financial statements from the adoption of these standards and interpretations is not material to the Group.

Going concern

For the half-year ended 30 June 2023 the Group recorded a loss after tax of $1,645,945 (Half-year to 30 June 2022: $883,556) and had net cash outflows from operating and investing activities of $3,723,323 (Half-year to 30 June 2022: $628,705). These conditions indicate a material uncertainty that may cast doubt about the Group's ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business. In the absence of an improvement in sales volumes and pricing, the ability of the Group to continue as a going concern will be dependent on securing additional funding and/or from asset sales in order for the Group to continue to fund its operational activities in the longer term.

The half-year financial report has been prepared on the basis that the Group is a going concern, which contemplates the continuity of normal business activity, realisation of assets and settlement of liabilities in the normal course of business for the following reasons:

·    Management have considered the future capital requirements of the entity and will consider all funding options as required, including asset sales;

·    The level of the Group's expenditure can be managed;

·    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;

·    The Group has historically demonstrated its ability to raise funds to satisfy its immediate cash requirements.

As at the date of this report, the Board and Management believe there are sufficient funds to meet the Group's working capital requirements in the near term and that sufficient funds will become available, through certain of the above actions, if and when needed, to finance the operations of the Group in the longer term. Should the Group not be able to continue as a going concern, it may be required to realise its assets and discharge its liabilities other than in the ordinary course of business, and at amounts that differ from those stated in the half-year financial report. The half-year financial report does not include any adjustments relating to the recoverability and classification of recorded asset amounts or liabilities that might be necessary should the Group not continue as a going concern.

Significant Accounting Policies

Deferred Exploration and Evaluation Expenditure

Exploration and evaluation expenditure incurred by or on behalf of the Group is accumulated separately for each area of interest.  Such expenditure comprises net direct costs and an appropriate portion of related overhead expenditure but does not include general overheads or administrative expenditure not having a specific nexus with a particular area of interest.

 

Each area of interest is limited to a size related to a known or probable mineral resource capable of supporting a mining operation.  Exploration and evaluation expenditure for each area of interest is carried forward as an asset provided that one of the following conditions is met:

 

·    such costs are expected to be recouped through successful development and exploitation of the area of interest or, alternatively, by its sale; or

·    exploration and evaluation activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in relation to the area are continuing.

 

Expenditure which fails to meet the conditions outlined above is written off. Furthermore, the directors regularly review the carrying value of exploration and evaluation expenditure and make write downs if the values are not expected to be recoverable.

 

Identifiable exploration assets acquired are recognised as assets at their cost of acquisition, as determined by the requirements of AASB 6 Exploration for and Evaluation of Mineral Resources. Exploration assets acquired are reassessed on a regular basis and these costs are carried forward provided that at least one of the conditions referred to in AASB 6 is met.

 

Exploration and evaluation expenditure incurred subsequent to acquisition in respect of an exploration asset acquired is accounted for in accordance with the policy outlined above for exploration expenditure incurred by or on behalf of the entity.

 

Acquired exploration assets are not written down below acquisition cost until such time as the acquisition cost is not expected to be recovered. When an area of interest is abandoned, any expenditure carried forward in respect of that area is written off. Expenditure is not carried forward in respect of any area of interest/mineral resource unless the Group's rights of tenure to that area of interest are current.

 

Mine Properties

Mine properties represent the accumulation of all exploration, evaluation and development expenditure incurred in respect of areas of interest in which mining has commenced or is in the process of commencing. When further development expenditure is incurred in respect of mine property after the commencement of production, such expenditure is carried forward as part of the mine property only when substantial future economic benefits are thereby established, otherwise such expenditure is classified as part of the cost of production.

 

Amortisation is provided on a unit of production basis which results in a write off of the cost proportional to the depletion of the proven and probable mineral reserves.

 

The net carrying value of each area of interest is reviewed regularly and to the extent to which this value exceeds its recoverable amount, the excess is either fully provided against or written off in the financial year in which this is determined.

 

The Group provides for environmental restoration and rehabilitation at site which includes any costs to dismantle and remove certain items of plant and equipment. The cost of an item includes the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the obligation for which an entity incurs when an item is acquired or as a consequence of having used the item during that period. This asset is depreciated on the basis of the current estimate of the useful life of the asset. In accordance with AASB 137 Provisions, Contingent Liabilities and Contingent Assets the Group is also required to recognise as a provision the best estimate of the present value of expenditure required to settle this obligation. The present value of estimated future cash flows is measured using a current market discount rate.

 

Stripping costs

Costs associated with material stripping activity, which is the process of removing mine waste materials to gain access to the mineral deposits underneath, during the production phase of surface mining are accounted for as either inventory or a non-current asset (non-current asset is also referred to as a 'stripping activity asset').

 

To the extent that the benefit from the stripping activity is realised in the form of inventory produced, the Group accounts for the costs of that stripping activity in accordance with the principles of AASB 102 Inventories. To the extent the benefit is improved access to ore, the Group recognises these costs as a non-current asset provided that:

·    it is probable that the future economic benefit (improved access to the ore body) associated with the stripping activity will flow to the Group;

·    the Group can identify the component of the ore body for which access has been improved; and

·    the costs relating to the stripping activity associated with that component can be measured reliably.

 

Stripping activity assets are initially measured at cost, being the accumulation of costs directly incurred to perform the stripping activity that improves access to the identified component of ore plus an allocation of directly attributable overhead costs. In addition, stripping activity assets are accounted for as an addition to, or as an enhancement to, an existing asset.

Accordingly, the nature of the existing asset determines:

·    whether the Group classifies the stripping activity asset as tangible or intangible; and

·    the basis on which the stripping activity asset is measured subsequent to initial recognition.

 

In circumstances where the costs of the stripping activity asset and the inventory produced are not separately identifiable, the Group allocates the production stripping costs between the inventory produced and the stripping activity asset by using an allocation basis that is based on volume of waste extracted compared with expected volume, for a given volume of ore production.

 

Borrowings

Borrowings are initially recognised at fair value, net of transaction costs incurred. Borrowings are subsequently measured at amortised cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognised in profit or loss over the period of the borrowing using the effective interest method. Fees paid on the establishment of loan facilities are recognised as transaction costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates.

 

Revenue

Revenue arises mainly from the sale of fertiliser. The Group generates revenue in Brazil. To determine whether to recognise revenue, the Group follows a 5-step process:

1.    Identifying the contract with a customer

2.    Identifying the performance obligations

3.    Determining the transaction price

4.    Allocating the transaction price to the performance obligations

5.    Recognising revenue when/as performance obligation(s) are satisfied.

The revenue and profits recognised in any period are based on the delivery of performance obligations and an assessment of when control is transferred to the customer.

In determining the amount of revenue and profits to record, and related statement of financial position items (such as contract fulfilment assets, capitalisation of costs to obtain a contract, trade receivables, accrued income and deferred income) to recognise in the period, management is required to form a number of key judgements and assumptions. This includes an assessment of the costs the Group incurs to deliver the contractual commitments and whether such costs should be expensed as incurred or capitalised.

Revenue is recognised either when the performance obligation in the contract has been performed, so 'point in time' recognition or 'over time' as control of the performance obligation is transferred to the customer. For contracts with multiple components to be delivered such as fertiliser, management applies judgement to consider whether those promised goods and services are (i) distinct - to be accounted for as separate performance obligations; (ii) not distinct - to be combined with other promised goods or services until a bundle is identified that is distinct or (iii) part of a series of distinct goods and services that are substantially the same and have the same pattern of transfer to the customer.

 

Transaction price

At contract inception the total transaction price is estimated, being the amount to which the Group expects to be entitled and has rights to under the present contract. The transaction price does not include estimates of consideration resulting from change orders for additional goods and services unless these are agreed. Once the total transaction price is determined, the Group allocates this to the identified performance obligations in proportion to their relative stand-alone selling prices and recognises revenue when (or as) those performance obligations are satisfied.

 

For each performance obligation, the Group determines if revenue will be recognised over time or at a point in time. Where the Group recognises revenue over time for long term contracts, this is in general due to the Group performing and the customer simultaneously receiving and consuming the benefits provided over the life of the contract.

For each performance obligation to be recognised over time, the Group applies a revenue recognition method that faithfully depicts the Group's performance in transferring control of the goods or services to the customer. This decision requires assessment of the real nature of the goods or services that the Group has promised to transfer to the customer. The Group applies the relevant output or input method consistently to similar performance obligations in other contracts.

When using the output method the Group recognises revenue on the basis of direct measurements of the value to the customer of the goods and services transferred to date relative to the remaining goods and services under the contract. Where the output method is used, in particular for long term service contracts where the series guidance is applied, the Group often uses a method of time elapsed which requires minimal estimation. Certain long term contracts use output methods based upon estimation of number of users, level of service activity or fees collected.

If performance obligations in a contract do not meet the over time criteria, the Group recognises revenue at a point in time. This may be at the point of physical delivery of goods and acceptance by a customer or when the customer obtains control of an asset or service in a contract with customer-specified acceptance criteria.

 

Disaggregation of revenue

The Group disaggregates revenue from contracts with customers by contract type, which includes only fertiliser as management believes this best depicts how the nature, amount, timing and uncertainty of the Group's revenue and cash flows.

 

Performance obligations

Performance obligations categorised within this revenue type include the debtor taking ownership of the fertiliser product.

 

Inventories

Inventories are valued at the lower of cost and net realisable value.

Costs incurred in bringing each product to its present location and condition is accounted for as follows:

·     Raw materials - purchase cost; and

·     Finished goods - cost of direct materials and labour and an appropriate proportion of variable and fixed overheads based on normal operating capacity.

Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale.

 

Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

Where the Group expects some, or all, of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of comprehensive income net of any reimbursement.

If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money, and where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

NOTE 2:  SEGMENT REPORTING

For management purposes, the Group is organised into one main operating segment, which involves mining exploration, processing and sale of fertiliser. All of the Group's activities are interrelated, and discrete financial information is reported to the Board (Chief Operating Decision Maker) as a single segment. No revenue is derived from a single external customer.

Accordingly, all significant operating decisions are based upon analysis of the Group as one segment. The financial results from this segment are equivalent to the financial statements of the Group as a whole.  Revenue earned by the Group is generated in Brazil and all of the Group's non-current assets reside in Brazil.

The following table present revenue and loss information and certain asset and liability information regarding business segments for the half year ended 30 June 2023.

 


Continuing operations


Australia

Brazil

Consolidated

30 June 2023

$

$

$

Segment revenue

-

931,608

931,608

Segment profit/(loss) before income tax expense

(642,854)

(965,988)

(1,608,842)





30 June 2023




Segment assets

367,324

11,389,888

11,757,212

 




Segment liabilities

220,861

2,428,248

2,649,109

Additions to non-current assets

-

945,953

945,953

 

 


Continuing operations


Australia

Brazil

Consolidated

30 June 2022

$

$

$

Segment revenue

-

2,735,590

2,735,590

Segment loss before income tax expense

(656,104)

(227,452)

(883,556)





30 June 2022




Segment assets

822,413

10,317,216

11,139,629

 




Segment liabilities

342,633

2,104,057

2,446,690

Additions to non-current assets

-

1,330,097

1,330,097

 

 

NOTE 3:  REVENUE FROM CONTRACTS WITH CUSTOMERS

The Group derives its revenue from the sale of goods at a point in time in the major category of Fertiliser.


Consolidated

 


6 months to

30 June

2023
$

6 months to

30 June

2022
$

 

Fertiliser sales


931,608

2,735,590


Total revenue


931,608

2,735,590


 

NOTE 4:  COST OF GOODS SOLD


Consolidated

 


6 months to

30 June

2023
$

6 months to

30 June

2022
$

 

Mine operating costs


383,059

492,617


Royalty expense


36,546

108,430


Rehabilitation expense


7,911

216,272


Depreciation


152,717

146,931


Amortisation


126,811

189,191


Total cost of goods sold


707,044

1,153,441


 

 

NOTE 5: CASH AND CASH EQUIVALENTS


Consolidated

Reconciliation of Cash and Cash Equivalents

 

Cash comprises:

30 June

2023
$

31 December

2022
$

Cash at bank

423,982

2,723,509


423,982

2,723,509

 

Consolidated

Reconciliation of operating loss after tax to the cash flows from operations

6 months to

30 June

2023
$

Loss from ordinary activities after tax

(1,645,945)

(883,556)

Non cash items



Depreciation charge

191,702

151,616

Amortisation charge

126,811

189,191

Rehabilitation charge

7,911

216,272

Impairment of exploration and evaluation expenditure

-

491,500

Gain on disposal of motor vehicle

(15,171)

(8,185)

Foreign exchange gain

1,919

54,401

Change in assets and liabilities



(Increase) / Decrease in trade and other receivables

(121,413)

174,834

(Increase) / Decrease in inventories

(1,200,633)

(287,163)

Increase / (Decrease) in trade and other payables and provisions

20,593

594,297

Net cash outflow from operating activities

(2,634,226)

693,207

NOTE 6: TRADE AND OTHER RECEIVABLES


Consolidated

 


30 June

2023
$

31 December

2022
$

 

Trade Debtors1


1,819,386

1,606,440


Expected credit losses


(1,398,945)

(1,260,749)


Prepayments


31,925

-


Cash advances


203,366

161,762


GST receivable


7,170

7,271


Other tax receivables


48,042

-


Total trade and other receivables


710,944

514,724


 

(i)            Classification of trade receivables

Trade debtors, other debtors and goods and services tax are receivable on varying collection terms. Due to the short-term nature of these receivables, their carrying value is assumed to approximate their fair value. Some debtors are given industry standard longer payment terms which may cross over more than one accounting period. These trade terms are widely used in the agricultural market in Brazil and are considered industry norms.

 

(ii)           Impairment of trade receivables

The group applies the simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade receivables and contract assets. To measure the expected credit losses, trade receivables have been grouped based on shared credit risk characteristics and the days past due. The historical loss rates are adjusted to reflect current and forward information on macroeconomic factors affecting the ability of the customers to settle the receivables. Trade receivables are written off where there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan with the group, and a failure to make contractual payments for a period of greater than 120 days past due.

 

NOTE 7: INVENTORIES


Consolidated

 


30 June

2023
$

31 December

2022
$

 

Raw materials


-

9,298


Finished goods

 

1,396,515

186,584

 


 

1,396,515

195,882

 

 

NOTE 8: PLANT AND EQUIPMENT


Consolidated


6 months to

30 June

 2023
$

12 months to

31 December
 2022
$

At beginning of the period


2,891,499

1,111,314

Additions for the period


741,270

2,035,861

Disposals for the period


(45,365)

(10,874)

Depreciation charge for the period


(191,702)

(418,649)

Net exchange difference on translation


333,001

173,847

Balance at the end of the period


3,728,703

2,891,499

NOTE 9: MINE PROPERTIES


Consolidated


6 months to

30 June

 2023
$

12 months to

31 December
 2022
$





At beginning of the period


4,055,486

3,691,160

Additions for the period


204,683

-

Rehabilitation obligation


-

259,928

Amortisation charge for the period


(126,811)

(354,282)

Net exchange difference on translation


511,190

458,680

Balance at the end of the period


4,644,548

4,055,486

 

NOTE 10: TRADE AND OTHER PAYABLES


Consolidated


30 June

2023
$

31 December

2022
$

 

 

Trade payables


220,333

242,706


 

Accruals


276,391

176,895


 

Other payables

 

37,258

93,788

 

 


 

533,982

513,389

 

Trade creditors, other creditors and goods and services tax are non-interest bearing and generally payable on 60 day terms. Due to the short term nature of these payables, their carrying value is assumed to approximate their fair value.

 

NOTE 11: BORROWINGS


Consolidated


30 June

2023

31 December 2022


$

$

Current



Secured Loans payable

511,748

53,270


511,748

53,270

 

Non-current



Secured Loans payable

1,295,075

192,407


1,295,075

192,407

In March 2023, the Group secured a further $R5,000,000 loan with BDMG for purchase of equipment and machinery. The loan is repayable over a two year period with repayments commencing in April 2024 and secured against $R1,000,000 in cash as collateral. As at 30 June 2023, the Group recorded $1,806,823 (31 December 2022: $245,677) of secured loans as a payable.

 

 

NOTE 12: CONTRIBUTED EQUITY

 

30 June

2023

$

 

 31 December

2022

$

Contributed equity

Ordinary shares fully paid

43,328,219

43,328,219

 

 

 

6 months to

30 June 2023

 

  12 months year ended

31 December 2022


No.

$

 

No.

$

Movements in ordinary shares on issue

Opening balance

189,169,217

43,328,219


185,835,884

43,328,219

Shares to be issued as part an acquisition1

-

-


3,333,333

-

Closing balance

189,169,217

43,328,219

 

189,169,217

43,328,219

 

1 On 29 November 2021, the Company entered into an agreement to acquire 100% of the ordinary shares of BF Mineração Ltda for cash and shares. On 6 July 2022, the Company announced the issuance of 3,333,333 shares related to the agreement to acquire 100% of the ordinary shares of BF Mineração Ltda for the Miriri Phosphate Project.

 

NOTE 13: DIVIDENDS

No dividends have been paid or provided for during the half-year (half-year to 30 June 2022: $nil).

 

NOTE 14: CONTINGENT LIABILITIES AND COMMITMENTS

There has been no material change in contingent liabilities or commitments since the last annual reporting date.

 

NOTE 15: FINANCIAL INSTRUMENTS

The Group has a number of financial instruments which are not measured at fair value in the statement of financial position.

The Directors consider that the carrying amounts of current receivables, current payables and current borrowings are considered to be a reasonable approximation of their fair values.

 

NOTE 16: SUBSEQUENT EVENTS

As announced to AIM on 14 August 2023, the Group has revised its 2023 sales target from 120,000 tonnes to 70,000 tonnes.

 

There have been no other known significant events subsequent to the end of the period that require disclosure in this report.

 

ENDS

 

 

Harvest Minerals Limited

 

Brian McMaster (Chairman)

 

Tel: +44 (0) 203 940 6625

 

Strand Hanson Limited Nominated & Financial Adviser

 

Ritchie Balmer

James Spinney

 

Tel: +44 (0) 20 7409 3494

Tavira Securities

Broker

Jonathan Evans

Tel: +44 (0) 20 3192 1733

St Brides Partners Ltd

Financial PR

Ana Ribeiro

Isabel de Salis

harvest@stbridespartners.co.uk

 

 

 

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