REG - Harvest Minerals Ltd - Half-year Report
30/09/2024 08:00
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RNS Number : 2035G Harvest Minerals Limited 30 September 2024
Harvest Minerals Limited / Index: LSE / Epic: HMI / Sector: Mining
30 September 2024
Harvest Minerals Limited ('Harvest' or the 'Company')
Interim Results
Harvest Minerals Limited (AIM: HMI), a producer of organic fertiliser,
announces its interims results for the six months ended 30 June 2024.
REVIEW OF OPERATIONS
Arapuá Project ("Arapuá")
We have implemented a dual strategy at the Arapuá Project in Brazil. The
first focus is on the production and sale of our established organic
fertiliser, KP Fértil®. The second is on progressing the development of the
project's Rare Earth Elements ("REE") potential. By diversifying into two
business lines, we've broadened our commodity exposure and expanded our future
opportunities.
Fertiliser
Sales continue to be negatively affected as the fertiliser sector faces a
challenging period, driven by both macroeconomic pressures and a continuation
of local factors impacting commodity prices as noted in the Company's 2023
annual results (released on 26 June 2024). In response, we launched a new
marketing campaign for KP Fértil® during the review period, which generated
a positive initial reaction. Unfortunately, this has not continued, and sales
have subsequently been below expectations. As a result, the period under
review has been very disappointing and the Company forecasts no near-term
respite to the difficult trading conditions.
Total sales for the 6 month period to 30 June 2024 were 17,007 tonnes, which
included 2,271 tonnes of orders placed in 2023 and 14,736 tonnes of orders
placed in 2024, respectively, but only delivered, and therefore recognised as
revenue, in H1 2024. As the Company continues to experience a volatile trading
environment, expectations for the remainder of the year have been reduced and
the Company is now forecasting total annual sales of 35,000Kt.
We are positioned for timely order fulfilment at relatively low cost. However
the primary challenge remains converting sales, and we are continuously
assessing customer feedback to adjust our strategies going forward.
Rare Earth Elements
The REE potential at Arapuá is looking promising, albeit we are at an early
stage in the exploration programme. Laboratory analysis of rock samples has
confirmed REE concentrations ranging from 1,176 ppm to 1,860 ppm of total rare
earth oxides ("TREO"), while historical analyses have shown even higher
values, ranging from 1,837 ppm to 4,117 ppm TREO (see RNS dated 10 April
2024).
Accordingly, we have launched a fully funded, two-stage REE-focused programme.
The first stage involves reviewing historical data and samples from previous
drill holes, along with conducting new auger drill holes to clarify and
confirm resources. The second stage will expand drilling efforts, conduct a
detailed analysis of the optimal beneficiation process, and evaluate both the
resource volume and concentration within the deposit. Crucially, this work is
supported by Arapuá's existing infrastructure, including on-site teams,
laboratories, and equipment.
The REE potential at Arapuá has been further highlighted through a Technical
Cooperation Agreement signed post period end with PVW Resources Limited (ASX:
PVW), an Australian company specialising in REE projects in Brazil and beyond.
PVW has recognised the prospectivity of Arapuá, particularly the potential
for REE association with ionic clays. The collaboration aims to facilitate a
transaction on the asset, contingent on continued positive results from the
current work programmes. PVW's proven expertise will be invaluable in
reviewing historical data, identifying new resource targets, and offering
technical guidance.
RESULTS
The loss after tax recorded in the Condensed Consolidated Statement of
Comprehensive Income for the half-year ended 30 June 2024 was $1,780,082
(2023: $1,645,945).
Net cash outflow from operating activities in the Condensed Consolidated
Statement of Cashflows for the half year ended 30 June 2024 was $877,023
(2023: $2,634,226).
SUBSEQUENT EVENTS
Post period end, we completed an equity raising which was the first time we
have utilised the capital markets in over six years. In addition to new
investment, there was a significant conversion of directors' fees. This not
only improved Harvest's balance sheet position but underlined the Board's
commitment to the Company. The majority of the funds are being utilised to
conduct the exploration work to prove up the prospectivity of REE potential.
The equity issue was announced to AIM on 2 July 2024, consisting of a placing
raised gross proceeds of £422,634 (AUD 801,389), and the settlement of
£577,366 (AUD $1,094,788) of director / company secretary fees, through the
issue of, in aggregate, 100,000,000 new ordinary shares of no par value at a
price of 1p.
There have been no other known significant events subsequent to the end of the
period that require disclosure in this report.
OUTLOOK
We have a dual strategy at Arapuá, a project spanning a substantial 14,481
hectares. Initial results for the REE component have been positive and
notably, all of our historical data has been gathered from just 6.7% of the
total license area, leaving significant potential for further exploration. We
remain committed to the success of Harvest, underlined by our fee conversion
and I look forward to updating the market as we progress the opportunity.
Brian McMaster
Executive Chairman
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 2024
Consolidated
6 months ended 30 June 6 months ended
Notes 2024 30 June
$ 2023
$
Revenue from fertiliser sales 3 1,226,412 931,608
Cost of goods sold 4 (1,243,202) (707,044)
Gross (loss)/profit (16,790) 224,564
Interest income 17,196 18,592
Other income - -
Gain on sale of motor vehicle - 15,171
Foreign exchange gain/(loss) 3,756 (1,919)
Accounting fees (83,675) (91,734)
Audit and tax fees (56,466) (85,942)
Advertising fees (64,517) (196,790)
Consultants' fees (3,442) (76,689)
Directors' fees (391,574) (395,391)
Depreciation (119,743) (38,985)
Legal fees (2,399) (8,036)
Wages & Salaries (194,651) (309,161)
Interest expense (219,079) (80,217)
Public company costs (107,930) (103,082)
Travel expenses (127,492) (126,437)
Impairment exploration expense (106,276) -
Other expenses (306,120) (352,786)
Loss from continuing operations before income tax (1,779,202) (1,608,842)
Income tax expense (880) (37,103)
Loss from continuing operations after income tax (1,780,082) (1,645,945)
Other comprehensive income
Item that may be reclassified subsequently to profit or loss
Foreign currency translation (776,779) 1,040,306
Other comprehensive income for the half-year (776,779) 1,040,306
Total comprehensive income/(loss) for the half-year (2,556,861) (605,639)
Loss per share
Basic and diluted loss per share (cents per share) (0.94) (0.87)
Condensed Consolidated Statement of Financial Position
as at 30 June 2024
Consolidated
Notes 30 June 31 December
2024 2023
$ $
Assets
Current Assets
Cash and cash equivalents 5 450,149 795,554
Trade and other receivables 6 889,093 281,700
Inventories 7 1,287,014 1,789,297
Total Current Assets 2,626,256 2,866,551
Non-Current Assets
Trade and other receivables 411,424 457,303
Investments 304,910 329,019
Plant and equipment 8 3,035,522 3,682,001
Mine properties 9 3,550,434 4,162,685
Deferred exploration and evaluation expenditure - 111,901
Total Non-Current Assets 7,302,290 8,742,909
Total Assets 9,928,546 11,609,460
Current Liabilities
Trade and other payables 10 1,668,585 974,521
Borrowings 11 1,057,995 654,474
Total Current Liabilities 2,726,580 1,628,995
Non-Current Liabilities
Provision for rehabilitation 461,429 517,162
Borrowings 11 1,964,834 2,130,739
Total Non-Current Liabilities 2,426,263 2,647,901
Total Liabilities 5,152,843 4,276,896
Net Assets 4,775,703 7,332,564
Equity
Contributed equity 12 43,328,219 43,328,219
Reserves 985,059 1,761,838
Accumulated losses (39,537,575) (37,757,493)
Total Equity 4,775,703 7,332,564
Condensed Consolidated Statement of Changes in Equity
for the half-year ended 30 June 2024
Notes Contributed equity Accumulated losses Foreign currency translation reserve
Consolidated $ $ $ Option reserve Total
$ $
Balance as at 1 January 2024 12 43,328,219 (37,757,493) (1,779,210) 3,541,048 7,332,564
Total comprehensive gain for the half-year
Loss for the half-year 30 June 2024 - (1,780,082) - - (1,780,082)
Other comprehensive income - - (776,779) - (776,779)
Total comprehensive income for the half-year - (1,780,082) (776,779) - (2,556,861)
Balance at 30 June 2024 43,328,219 (39,537,575) (2,555,989) 3,541,048 4,775,703
Balance as at 1 January 2023 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 12 43,328,219 (36,222,833) (1,538,331) 3,541,048 9,108,103
Condensed Consolidated Statement of Cash Flows
for the half-year ended 30 June 2024
Consolidated
6 months ended 6 months ended
30 June 30 June
2024 2023
$ $
Cash flows from operating activities
Receipts from customers 649,173 962,276
Payments to suppliers and employees (1,324,313) (3,534,877)
Interest received 17,196 18,592
Interest paid (219,079) (80,217)
Net cash outflow from operating activities (877,023) (2,634,226)
Cash flows from investing activities
Purchase of plant and equipment (18,956) (638,218)
Payments for mine properties - (204,683)
Proceeds from sale of motor vehicle - 60,536
Payments for investments - loan collateral - (306,732)
Net cash outflow from investing activities (18,956) (1,089,097)
Cash flows from financing activities
Proceeds from borrowings 1,057,142 1,436,381
Repayment of borrowings (430,298) (106,222)
Net cash inflow from financing activities 626,844 1,330,159
Net decrease in cash and cash equivalents (269,135) (2,393,164)
Cash and cash equivalents at beginning of period 795,554 2,723,509
Effect of exchange rate fluctuations on cash held (76,270) 93,637
Cash and cash equivalents at the end of the period 5 450,149 423,982
Notes to the Condensed Consolidated Financial Statements
for the half-year ended 30 June 2024
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 2024 was authorised for issue in accordance with a resolution of the
Directors on 27 September 2024.
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 2024 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 2023 and
considered together with any public announcements made by Harvest Minerals
Limited during the half-year ended 30 June 2024 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 2024, 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 2024. 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 2024. 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 2024 the Group recorded a loss after tax of
$1,780,082 (Half-year to 30 June 2023: $1,645,945) and had net cash outflows
from operating and investing activities of $895,979 (Half-year to 30 June
2023: $3,723,323). These conditions indicate a material uncertainty that may
cast significant 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
through debt or equity 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;
· On 5 July 2024, the Group issued 100,000,000 new ordinary shares
of no par value at a price of 1p, raising gross proceeds of £ 422,634 (AUD $
801,389) and settling £577,366 (AUD $1,094,788) of director / company
secretary fees for the period to 30 June 2024.
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 2024.
Continuing operations
Australia Brazil Consolidated
30 June 2024 $ $ $
Segment revenue - 1,226,412 1,226,412
Segment profit/(loss) before income tax expense (607,355) (1,171,847) (1,779,202)
30 June 2024
Segment assets 145,037 9,783,509 9,928,546
Segment liabilities 1,215,474 3,937,369 5,152,843
Additions to non-current assets - 18,956 18,956
Continuing operations
Australia Brazil Consolidated
30 June 2023 $ $ $
Segment revenue - 931,608 931,608
Segment 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
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 6 months to
30 June 30 June
2024 2023
$
$
Fertiliser sales 1,226,412 931,608
Total revenue 1,226,412 931,608
NOTE 4: COST OF GOODS SOLD
Consolidated
6 months to 6 months to
30 June 30 June
2024 2023
$
$
Mine operating costs 902,167 383,059
Royalty expense 42,483 36,546
Rehabilitation expense - 7,911
Depreciation 157,989 152,717
Amortisation 140,563 126,811
Total cost of goods sold 1,243,202 707,044
NOTE 5: CASH AND CASH EQUIVALENTS
Consolidated
Reconciliation of Cash and Cash Equivalents 30 June 31 December
2024 2023
$
$
Cash comprises:
Cash at bank 450,149 795,554
450,149 795,554
NOTE 6: TRADE AND OTHER RECEIVABLES
Consolidated
30 June 31 December
2024 2023
$
$
Trade Debtors(1) 1,899,745 1,407,548
Expected credit losses (1,204,951) (1,361,231)
Net Debtors 694,794 46,317
Prepayments 11,523 4,540
Cash advances 138,626 168,194
GST receivable 9,625 7,188
Other 34,525 55,461
Total trade and other receivables 889,093 281,700
NOTE 6: TRADE AND OTHER RECEIVABLES
(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 31 December
2024 2023
$
$
Raw materials at cost 356,856 403,139
Finished goods at cost 930,158 1,386,158
1,287,014 1,789,297
NOTE 8: PLANT AND EQUIPMENT
Consolidated
6 months to 12 months to
30 June 31 December
2023
2024
$
$
At beginning of the period 3,682,001 2,891,499
Additions for the period 18,956 964,055
Disposals for the period - (45,365)
Depreciation charge for the period (277,732) (488,572)
Net exchange difference on translation (387,703) 360,384
Balance at the end of the period 3,035,522 3,682,001
NOTE 9: MINE PROPERTIES
Consolidated
6 months to 12 months to
30 June 31 December
2023
2024
$
$
At beginning of the period 4,162,685 4,055,486
Amortisation charge for the period (140,563) (243,505)
Net exchange difference on translation (471,688) 350,704
Balance at the end of the period 3,550,434 4,162,685
Management identified indicators of impairment in relation to the Group's
Arapua project assets (market capitalisation is below net assets and loss
making subsidiary due to difficult market conditions) and has commenced the
process to obtain an independent valuation to determine the carrying value. At
the date of this report the independent valuation was not complete, for the
purposes of reporting its interim results Management has assessed impairment
with a management estimate of fair value (Level 3) and determined that no
impairment was required.
NOTE 10: TRADE AND OTHER PAYABLES
Consolidated
30 June 31 December
2024 2023
$
$
Trade payables 918,392 453,867
Accruals 444,948 292,036
Customer Deposits 290,046 51,605
Advances of Revenues - 145,197
Other payables 15,199 31,816
1,668,585 974,521
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 31 December 2023
2024
$ $
Current
Secured Loans payable 1,057,995 654,474
1,057,995 654,474
Non-current
Secured Loans payable 1,964,834 2,130,739
1,964,834 2,130,739
In April 2024, the Group secured a further $R2,500,000 loan with Banco
Bradesco from the borrowing facility available for drawdown, at a rate of CDI
+4.15%.
As at 30 June 2024, the Group recorded $3,022,829 (31 December 2023:
$2,785,213) of secured loans as a payable.
NOTE 12: CONTRIBUTED EQUITY
30 June 31 December
2024 2023
$ $
Contributed equity
Ordinary shares fully paid 43,328,219 43,328,219
6 months to 12 months year ended
30 June 2024 31 December 2023
No. $ No. $
Movements in ordinary shares on issue
Opening balance 189,169,217 43,328,219 189,169,217 43,328,219
Closing balance 189,169,217 43,328,219 189,169,217 43,328,219
On 2 July 2024, the Company announced an equity issue package consisting of a
placing that raised gross proceeds of £ 422,634 (AUD 801,389), and the
settlement of £577,366 (AUD $1,094,788) of director / company secretary fees,
through the issue of, in aggregate, 100,000,000 new ordinary shares of no par
value at a price of 1p.
NOTE 13: DIVIDENDS
No dividends have been paid or provided for during the half-year (half-year to
30 June 2023: $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 2 July 2024, an equity issue package consisting of a
placing raised gross proceeds of £422,634 (AUD 801,389), and the
settlement of £577,366 (AUD $1,094,788) of director / company secretary
fees, through the issue of, in aggregate, 100,000,000 new ordinary shares of
no par value at a price of 1p.
There have been no other known significant events subsequent to the end of the
period that require disclosure in this report.
**ENDS**
For further information, please visit www.harvestminerals.net
(http://www.harvestminerals.net/) or contact:
Harvest Minerals Limited Tel: +44 (0) 203 940 6625
Brian McMaster, Chairman
Strand Hanson Limited, Nominated & Financial Adviser Tel: +44 (0) 20 7409 3494
Ritchie Balmer, James Spinney
Tavira Securities, Broker Tel: +44 (0) 20 3192 1733
Jonathan Evans
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