Harvest Minerals

Mining Research

10:10 11/11/16i. 11:10 11/11/16ii

Speculative Buy
Ticker
Share Price (p)
Target Price (p)
Upside (%)
12mth high/low (p)
Shares out (m)
Market Cap (m)
Enterprise Value (m)

First production next month

HMI LN
17.0
45.0
165%
24.5/3.6
99.36
16.9
16.9

25

We have revised our forecasts and valuation ahead of the companys first production,
expected later this year, from the Maximus deposit of HMIs 100%-owned Arapua direct
application natural fertiliser (DANF) project in Minas Gerais State, Brazil.

3000
2500

20

2000
15
1500
10
1000
5

500

0
7/9/15

HMI LN
7/11/15

7/1/16

FTSE AIM BASIC RESOURCES

7/3/16

7/5/16

7/7/16

Mining Analysts
Nikolas Toleris
+44 (0) 20 7866 0068
nikolas.toleris@mirabaud.co.uk
Richard Morgan
+44 (0) 20 7866 0201
richard.morgan@mirabaud.co.uk
Resources Sales

7/9/16

0
7/11/16

Following the positive results of the scoping study (see p2) the company remains on
track for first production later this year and subsequently initial sales of the first 50kt
material in H1 2017 (100kt pa), under the trial mining licence which is expected by the
end of this month. Harvest is currently test marketing its toxic-free, highly soluble
direct application multi-nutrient fertiliser to local farmers, in an effort to establish a
market for its product. As the project contains almost zero technical risk, we see the
companys focus as gaining market share in the local fertiliser market.
Once established, we then expect further upside as the company will intensify mining and
more than triple its sales (from 2019 onwards). We note that under its environmental licence
HMI could mine and sell product in batches of 50kt at a time (on a rolling basis). That could
normally increase the material mined and sold up to ~450ktpa (~9 mining cycles pa),
compared with 100ktpa initially planned. The scoping studys total cash cost (TCC) of
US$7.34/t coupled with our LT price assumption of US$52/t for Arapuas product (p6),
indicates significant operating margins (~85%), which in turn will result in >US$10m pa of
free cash flow from 2019 onwards.
Valuation and recommendation update
Our increased target price (TP) of 45p (vs. 43p previously), incorporates our updated
production profile which assumes that sales will ramp-up from 100kt in 2017 to 350kt in 2019
onwards (vs. 100ktpa flat previously). Our updated TP offers ~165% upside to the current
share price, thus we retain the stock at SPECULATIVE BUY.
Revised forecasts
Y/E-June
Production
DANF price
Revenues
Cash cost
EBITDA

Jonathan Colvile
+44 (0) 20 7878 3386
jonathan.colvile@mirabaud.co.uk
Nick Orgill
+44 (0) 20 7878 4172
nick.orgill@mirabaud.co.uk
Pav Sanghera
+44 (0) 20 7878 3380
pav.sanghera@mirabaud.co.uk

kt
US$/t
US$m
US$/t
US$m

2017F
50
39
2.0
8.1
0.3

2018F
175
48
8.5
8.4
5.7

2019F
300
52
15.6
8.4
11.6

2020F
350
52
18.2
8.4
13.8

2021F
350
52
18.2
8.4
13.8

Source: Mirabaud Securities estimates

Harry Baker
+44 (0) 20 7878 3401
harry.baker@mirabaud.co.uk
Guy Wheatley
+44 (0) 20 7878 3365
guy.wheatley@mirabaud.co.uk
Sales Trading
Lucas McHugh
+44 (0) 20 7866 0085
lucas.mchugh@mirabaud.co.uk

Source: Harvest Minerals

Sales Offices:

London: +44 20 7321 2508

Geneva: +41 58 816 86 70

Madrid: +34 91 701 57 03

Analyst: Nikolas Toleris +44 (0) 20 7866 0068 nikolas.toleris@mirabaud.co.uk Website: www.mirabaud.com

i Time/date

Zurich: +41 58 816 88 75

of production. Ii Time/date of dissemination

Harvest Minerals
Upcoming catalysts timetable
Trial mining licence
First production from Arapua
First sales from Arapua
Ramp-up to 200ktpa
Ramp-up to our long-term 350ktpa

November 2016
December 2016
Q1 2017
CY2018
CY2019

Source: Mirabaud Securities

Scoping study
On August 10 Harvest announced the results of a scoping study for the Maximus
target, completed by independent consultants GE21 Consultoria Mineral
(established by ex-Coffey Mining personnel). The mine schedule of the scoping
study indicates that ~700kt of mineralised material (with average potash and
phosphate grades of 4.21% and 3.53% respectively) will be produced over a 7year period, under a ~100ktpa scenario.
Location and low costs drive projects
economics

HMIs main competitive advantage over other producers is its location (next to the
end-users) as well as its low operating cost, the result of the low-strip, shallow
surface mining and the very simple processing (crushing and milling only). As the
material is weathered, occurs at surface and would only require crushing to
produce a powdered product, we would expect opex to remain minimal and thus
the project should deliver significant margins.
On-site cash operating costs are estimated at US$4.77/t, comprising ~60% mining
(accounts for contract mining) and ~40% processing. Even after including selling
(US$1.14/t) and G&A (US$1.43/t) costs, this would result in a TCC of US$7.34/t,
indicating significant margins. We note that the opex estimation in the scoping
study was calculated on the basis of similar projects and thus the level of accuracy
is relatively wide. However, given the wide margins we are not overly concerned.
The mining and processing of the kamafugite rock is very simple. After the rock is
excavated it will be placed on storage pad areas and covered at all times so that it
can remain protected during the rainy season. The stockpiled ore will then be
dried, screened and milled so that it can be transformed into a powder.

View of the pad area looking southwest

The projects capex was estimated at US$0.8m, comprising US$428k for mining
equipment, and US$372k for the processing plant (~50tph) and the formation of
the surrounding area. In the meantime, HMI has outsourced mining operations to
DK Transportes thus we are now calculating a reduced initial capex of ~US$0.5m.

Source: Harvest Minerals

Sales Offices:

London: +44 20 7321 2508

Geneva: +41 58 816 86 70

Madrid: +34 91 701 57 03

Analyst: Nikolas Toleris +44 (0) 20 7866 0068 nikolas.toleris@mirabaud.co.uk

Zurich: +41 58 816 88 75

Website: www.mirabaud.com

Harvest Minerals
Model assumptions potential upside
Based on the recently awarded (8 September) environmental licence which was
granted for an initial 4-year period (which will be extended when HMI will apply for
the full mining licence), the company could mine and sell product in batches of
50kt at a time (on a rolling basis). That could supposedly increase the material
mined and sold to up to ~450ktpa (~9 times/cycles per year). That is ~4.5x higher
compared with the initial capacity of 100ktpa and is based on the assumption that
the mining contractor needs ~40 days for the mining and stockpiling for each 50kt
batch, based on the current mining fleet. If demand proves to be stronger, we
believe that HMI could further increase mining speed and thus production rate.
We assume that HMI could complete up to ~7 mining loops when accounting for
the extra time needed for the permitting procedure of each cycle. Thus, we have
established a long-term production rate of 350kt pa of product to be mined and
sold, which we believe that the company could achieve from the 3rd year onwards.
We calculate initial plant throughput at ~150kt pa, thus we assume that HMI will
need a further ~US$0.5m (in 2018) in order to achieve the 350kt pa rate.
The company expects the trial mining permit to be granted soon, the application
for which has been lodged with the National Department of Mineral Production
(DNPM). Meanwhile, Harvest has commenced site works ahead of the
commencement of production. Trial mining permit approval is expected by the end
of the month, after a required inspection by the DNPM of the mine.
DK Transportes, Demolio e Locao Eireli, has been appointed (16 September)
as the principal contractor responsible for the site preparation as well as for the
mining and stockpiling of the first 50kt. The company has begun constructing the
site access, preparing the RoM pads as well as stripping the overburden material.
This work is expected to be complete by mid-November to allow enough time for
the DNPM to visit the mine before the end of the month.
Thus the company could possibly commence mining in early December. This is
well within previously announced plans to be in production by the end of this year.
However, we do not expect any revenues from sales within CY2016, as the
company is currently testing the product with potential off-takers in the wider area
(including a major coffee producer in the region).
Summary of Mirabaud and Harvest cash-flow modelling assumptions and outputs
Item

Unit

Annual mill throughput LoM

Mineable resource
Life-of-mine
Long-term fertilizer price
On-site cash operating costs
Total cash costs (incl transport, marketing and royalties)
Initial capex (incl working capital)
Post-tax NPV**
Post-tax IRR
Payback period

Mirabaud - based on
Scoping study (new)

Harvest - Scoping
study

100-350*
2,100
7
52
4.8
8.4
0.6
46.8
487
0.4

100
700
7
15-120
4.8
7.3
0.9
1.1-42.8
44-1,129
2.3-0.1

kt
kt
years
US$/t
US$/t
US$/t
US$m
US$m
%
years

Source: Mirabaud Securities estimates

**We currently use a discount rate of 8% up from 7.5% previously vs. HMIs 10%
Sales Offices:

London: +44 20 7321 2508

Mirabaud - previous
model assumptions
25-100
1,450
15
65
5.0
7.5
1.8
30.7
138
1.5

*(ramping up from 100kt in year 1 up to 350kt from year 3 onwards)

Geneva: +41 58 816 86 70

Madrid: +34 91 701 57 03

Analyst: Nikolas Toleris +44 (0) 20 7866 0068 nikolas.toleris@mirabaud.co.uk

Zurich: +41 58 816 88 75

Website: www.mirabaud.com

Harvest Minerals
Maiden resource
Harvest at end-July published a maiden JORC (2012)-compliant resource
(indicated category) for its Arapua project, of 883kt at 4.21% K2O (potash - at a
3.5% K2O cut-off) and 3.53% P2O5 (phosphate), of which 202kt (higher-grade
potash material) is reported at 5.24% K2O (and 3.29% P2O5) and 160kt (highergrade phosphate material) at 4.62% P2O5 (and 4.01% K2O).
The estimate was completed by independent consultants GE21 Consultoria
Mineral (established by ex-Coffey Mining personnel).The results demonstrate that
the main target, kamafugite (potassium-rich in K2O form), from which the DANF
product will be sourced, extends over an area large enough to support a
commercial-size operation over a very long life as it was mapped over a surface
extent of ~1,691km2.
We note that the company has only targeted the weathered mineralisation (easier
and more cost efficient to extract) and thus drilling ceased when intersecting
unweathered material. The company advises that the drilled area contains an
exploration potential of 3.0-3.5Mt of additional phosphate ore at a K2O grade of
2.7-3.5% (assuming a lower cut-off grade compared with that of the resources of
3.5% K2O).
The current drilled area covers only ~3% of the known mineralisation, with the
resource remaining open along strike in multiple directions, and thus we believe
that Arapua could ultimately support much bigger production levels (>1Mtpa of
product) which would mean acquiring a full mining permit while producing between
100-350ktpa under the trial permit.
We note that the mineralisation is low in other contaminants (such as Na 2O) as
well as in silica, which makes the product soluble and thus the effective grade of
the product to the farmer is likely to be high compared with other existing similar
products. We understand that solubility would be a key driver which will determine
the products price. A recent petrographic analysis also confirmed that there is no
free silica in the product, which would be regarded as a potential health hazard.
We also highlight the high grades of calcium oxide (6.34%) and magnesium oxide
(5.95%) which could potentially further increase the value of the DANF product as
a multi-nutrient fertilizer (see DANF prices assumptions on p6).
The 39-hole (771m) drill programme at the Maximus target which commenced in
mid-October has been completed and results are expected in January 2017. The
aim of the second drill programme is to increase Arapuas resource base and thus
mine-life and potentially support higher production rates. However, we believe that
the ultimate size of the operation will depend on the market demand for Arapua's
product rather than the resource.
Arapuas (Maximus target) maiden resources (JORC-compliant) as at July 2016
Layer
LG_sap
HG K2O
HG P2O5
Total indicated

Tonnage (kt)
521
202
160
883

K2O %
3.88
5.24
4.01
4.21

P2O5 %
3.28
3.29
4.62
3.53

CaO %
6.48
5.56
6.85
6.34

MgO %
6.30
5.45
5.44
5.95

MnO %
0.33
0.34
0.33
0.33

SiO2 %
34.28
35.77
33.75
34.52

LOI %
5.95
4.74
5.48
5.59

Source: Mirabaud Securities

Sales Offices:

London: +44 20 7321 2508

Geneva: +41 58 816 86 70

Madrid: +34 91 701 57 03

Analyst: Nikolas Toleris +44 (0) 20 7866 0068 nikolas.toleris@mirabaud.co.uk

Zurich: +41 58 816 88 75

Website: www.mirabaud.com

Harvest Minerals
Product certification met test results
In late-August Harvest announced the results of test work on product samples
from Arapua which were completed by the Campo Agronomic Lab in Brazil, in
accordance with fertiliser testing guidelines from the Brazilian Ministry of
Agriculture, Livestock and Supply (MAPA).
The samples showed excellent solubility (the ability of the product to be absorbed
by the soil) for the phosphate and potash content (50.4-53.4% and 91-95%,
respectively), which means that the usable content of the DANF product could be
the highest in comparison with competing products (eg. EKOSIL a potassium only
product which sells for ~US$70/t has a solubility of just 1%). The solubility tests
were made in a 2% citric acid which is close to the natural acidity levels of the
Cerrado area in which the product market is located.
HMI could produce a ~50x more effective
product than the local competition

In other words, for every 1t of fertilizer applied to the field, Harvests product
releases ~38kg of K2O which compares with just 0.8kg of K2O from the EKOSIL
product. Thus, Harvest will produce a ~50x more effective product (Arapuas
effective rate of ~3.8% vs. EKOSILs ~0.1%).
Meanwhile, metallurgical test work carried out by ALS Global laboratory in
Australia and SGS Geosol laboratory in Brazil indicates that the higher-grade
potash material from Maximus can be significantly upgraded using simple, lowcost wet sieving, creating two lines of fertiliser product. Two of the higher-grade
potash samples (>4.6% K2O) showed that wet sieving would divide them into two
products: roughly a quarter (by mass) at a ~30% higher potash grade and three
quarters at a ~10% lower potash grade.
These test results are clearly positive, and give us further reassurance that Arapua
will yield a saleable product. Although Harvest is not currently planning to upgrade
its product (initial sales will focus only on dry product), the metallurgical work
shows that a low-cost and almost capex-free upgrade is possible, enhancing the
flexibility of the operation in producing a range of products attractive to local
markets. Equally important Harvest has the necessary resources to support such
an initiative.
Additionally, HMI has decided to apply to have its DANF products classified as a
soil remineraliser by MAPA. This is not compulsory in order to sell product, but
the company believes it will have long-term marketing benefits. The analysis
showed the samples were within all of the parameters required for a soil
remineraliser, and in particular contain no free silica (SiO2 - should be <25% by
volume) as well as no toxic heavy metals present (another key requirement).
Furthermore, Arapuas product due to its nearly neutral ph (6.7) could act as a
soil neutraliser.
A further test programme of product quality (testing agronomic efficiency) is being
finalised with MAPA and the Campo Agronomic Lab for starting late next month.
This programme will be designed to help product classified as a potassium and
phosphorous fertiliser and optimisation for commercial production.
HMI plans to obtain an initial classification for its products as a remineraliser,
which is quicker than the process of classification, though the company expects to
move to the latter classification later.

Sales Offices:

London: +44 20 7321 2508

Geneva: +41 58 816 86 70

Madrid: +34 91 701 57 03

Analyst: Nikolas Toleris +44 (0) 20 7866 0068 nikolas.toleris@mirabaud.co.uk

Zurich: +41 58 816 88 75

Website: www.mirabaud.com

Harvest Minerals
DANF pricing
The main unknown is the likely achievable prices for the product. In the absence of
in-depth market research, the sale price of the product cannot be accurately
identified yet. As is normal with a scoping study, the product price assumptions
used are indicative. Moreover, as a direct ship product with minimal processing (at
least initially), the price received for Arapua product may vary not only with the
prevailing market but with the grades and quality of the ore mined.
In our view the companys preferred price scenarios (over the scoping studys in
which the consultants used a wide price range of $15/t to $120/t of product sold) of
US$50/t and US$65/t represent realistic average assumptions. On the basis of the
US$50/t and US$65/t price scenarios the project yields IRRs of 409% and 563%,
respectively, and NPVs10% of US$15m and US$21m, with a very low pay-back
period of 2-4 months from first production.
However, even when stress tested at the lowest price scenario in the scoping
study of US$15/t, Arapua offers compelling returns (post-tax IRR of 44%). Even at
this extreme price assumption Arapua could return significant margins of >50%
and pay back its capex in 2.3 years.
Pricing will become clearer as work progresses and, ultimately, the first test sales
are made, but given the very low opex shown by the scoping study (US$7.34/t
including marketing) we believe the question is really the size of the margins.
We understand that the marketing of the product remains the key driver of the
projects success. Clearly, market testing of potential products is required for a
more accurate price assumption, as the (wide ranging) price assumptions in the
study are essentially based on a read-across of the likely overall efficiency of the
potential product as a soil reconditioner.
We are modelling Arapua on a long-term
fertiliser price assumption of US$52/t

For the purposes of our model we are assuming a long-term price for Arapuas
product of US$52/t (towards Harvests lower price assumption). That is discounted
by 25% in the 1st year of production to US$39/t, as we believe that the company
should begin with an attractive pricing policy in order to make its product more
desirable for local farmers, thus gaining market share to start production.

Plan of initial civil and infrastructure works and open-pit area for trial mining (left) and drill holes location (right)

Source: Harvest Minerals

Sales Offices:

London: +44 20 7321 2508

Geneva: +41 58 816 86 70

Madrid: +34 91 701 57 03

Analyst: Nikolas Toleris +44 (0) 20 7866 0068 nikolas.toleris@mirabaud.co.uk

Zurich: +41 58 816 88 75

Website: www.mirabaud.com

Harvest Minerals
Our long-term price is in-line with the levels other fertiliser producers receive for
their products. We estimate that Du Solo (a Brazilian phosphate-based fertilizers
producer - DSF:TSX) receives ~US$10/t for every P2O5 percentage point in its
DANF product. However, we note that Du Solos product (phosphate rock) lacks
any K2O while it contains high levels of silica, making it less soluble.
That suggests that Harvests toxin-free and more soluble product (due to the low
levels of silica) could get >US$35/t for its P2O5 (~3.5%) content alone, with upside
expected from the high grades (>5%) of calcium oxide and magnesium oxide
(5.95%), as well as from the fact that the product is low in other contaminants
(such as Na2O).
Based on the price (~US$70/t) a potassium only product (EKOSIL) with K2O grade
of 8% and solubility of only 1% currently fetches in Brazil, we calculate that HMI
could achieve an average price of >US$37/t for its products K2O content (4.21%).
Thus, we believe that Harvest could potentially achieve above US$70/t for its
product (top-end of our price estimate), if it is sold to an off-taker that would utilise
both its potash and phosphate credits.

Local market
There is no doubt that the market exists, as Brazil is a massive fertiliser consumer
and is currently importing over 90% of its requirements. However, the elephant in
the room remains the pace of the sales ramp-up. Marketing is ongoing, and
Harvest is currently testing its product with a major local coffee producer in
anticipation of a potential off-take agreement.
In a zone of 200km around the Maximus target (see graph below) the K2O needs
alone are calculated by the company at ~125kt pa which increases to ~222kt pa
when accounting for the potential P2O5 requirements. That is the equivalent of
~3Mt pa of a plants throughput at Arapuas grades. Thus, in order for the
company to find a market for its product, Harvest would need to fulfil ~10% of the
local K2O needs, as we calculate Arapuas annual production (when in full
production under the trial mining licence) at slightly above 0.3Mt.

When in full-scale production (350kt pa),

HMI could cover ~10% of the K2O needs
of an area 200km around Arapua

Maximus prospect Brazilian Cerrado 200km buffer zone

Maximus target
200k
m

Source: Harvest Minerals

Sales Offices:

London: +44 20 7321 2508

Geneva: +41 58 816 86 70

Madrid: +34 91 701 57 03

Analyst: Nikolas Toleris +44 (0) 20 7866 0068 nikolas.toleris@mirabaud.co.uk

Zurich: +41 58 816 88 75

Website: www.mirabaud.com

Harvest Minerals
Valuation
Our 45p per share (up from 43p per share previously - post the 10-for-1 share
consolidation which took place on January 2016) sum-of-parts valuation of Harvest
is based on an NAV estimate of US$56.4m which is dominated by the companys
flagship Arapua project (~70% of our valuation), followed by the Sergi project.
We calculate an NPV8 for Arapua of US$46.8m, from ~US$31m previously. The
increase is due to our new production profile which assumes that sales will rampup from 100kt in 2017 to 350kt in 2019 onwards (vs. 100kt pa flat previously). We
have also reduced the risk-multiple we apply to the project from 50% to 15% to
reflect the fact that the project is very close to production. The remaining risk
discount is due mainly to the risk contained in our sales ramp-up profile. We thus
value the project at 85% of its NPV (US$39.8m).
We have also adjusted our Sergi valuation (we currently give no credit to Capela)
mainly by changing our models discount rate to 8% (from 7.5% previously), while
maintaining all other assumptions (we assume that just the sylvinite is mined with
only 40% of the current resources being recovered). This generates a post-tax
NPV8 of US$192m which, along with our unchanged risk-multiple of 90%, results in
a sum-of-parts project contribution of US$19.2m down from US$20.7m previously.
The recent hike in Harvests share price (>250% up since early-August) allowed
the warrant holders to exercise their warrants (~5.4m new shares), resulting in
~US$0.6m of new money for HMI. We estimate HMIs cash at end-October at
US$1.5m, while we calculate the negative NPV of the G&A expenses at US$4.7m
Sum-of-parts valuation
US$m
46.8
-7.0
191.6
-172.4
2.1
-4.7
55.7

Arapua (NPV @ 8% real discount rate)

Risk factor - discount
Sergi
Risk factor - discount
Net cash position (incl. money from exercised warrants)
G&A expenses (NPV @ 8% discount rate)
Total value
No of shares (m)
Sum-of-parts valuation (p)
Source: Mirabaud Securities estimates

m
37.1
-5.6
152.1
-136.9
1.7
-3.7
44.7
99.4
45.0
1=US$1.26

Based on the above we revise upwards our target price to 45p (from 43p
previously), which represents ~165% upside to the current share price and
thus we maintain our stance on the stock at SPECULATIVE BUY.
We have moved from a 7.5% to 8.0% real discount rate, which is marginally more
conservative and in line with our new House thresholds for recommendations,
which reduce the upside/downside thresholds for a Buy/Sell recommendation to
10% (details in p10) from 20% previously (calculated as the premium/discount of
the per-share valuation or target price to the current share price).

Project sensitivities
According to HMIs preferred product price scenarios of US$50/t and US$65/t the
project yields IRRs of 409% and 563% and NPVs10 of US$15m and US$21m,
respectively, with a very low pay-back period of 2-4 months from first production.
Sales Offices:

London: +44 20 7321 2508

Geneva: +41 58 816 86 70

Madrid: +34 91 701 57 03

Analyst: Nikolas Toleris +44 (0) 20 7866 0068 nikolas.toleris@mirabaud.co.uk

Zurich: +41 58 816 88 75

Website: www.mirabaud.com

Harvest Minerals
However, even when stress tested at the lowest price scenario, of US$15/t,
Arapua offers compelling returns (post-tax IRR of 44%) mainly due to its
advantageous cost structure, demonstrating the robustness of the project even if
the product was to be sold well-below prevailing prices.
Based on our own price assumption we calculate a project NPV of ~US$47m (at
8% discount rate) which could go up to US$62m if the company could achieve its
upper end of its price assumption of US$65/t. The table below illustrates the
sensitivity of Arapuas NPV and IRR to assumed discount rates and fertiliser prices
Sensitivity analysis of NPV only (p/sh) to gold price and discount rate
DR / DAFN price
US$15/t
US$30/t
US$52/t
US$65/t
US$80/t
US$100/t
US$120/t

4.0%
4.0
24.9
55.4
73.5
94.3
122.1
149.8

6.0%
3.6
22.8
50.8
67.4
86.5
112.1
137.6

8.0%
3.3
20.9
46.8
62.0
79.7
103.2
126.7

10.0%
3.0
19.3
43.1
57.2
73.5
95.2
116.9

12.0%
2.7
17.8
39.9
52.9
68.0
88.1
108.2

IRR
61%
256%
487%
615%
760%
949%
1136%

Source: Mirabaud Securities estimates

Arapuas production and cash flow profile

75,000

Production

US$k

Net project cash flow

Cumulative cash flow

kt

375

60,000

300

45,000

225

30,000

150

15,000

75

CY2016
CY2017
Source: Mirabaud Securities estimates

CY2018

CY2019

CY2020

CY2021

CY2022

CY2023

Production and financial forecasts summary

end-June
Production and costs summary
Total material mined
Total fertilizer production
Price assumption
Total cash cost
Profit & loss
Total revenue
Operating cost (incl. exploration)
EBITDA
EBIT
Profit for the period
Cash flow
Cash flow from operations
Cash flow from investments
Cash flow from financing
Year-end cash position
Ratio analysis
EPS
P/E
EV/EBITDA

2016A

2017F

2018F

2019F

2020F

2021F

kt
kt
US$/t
US$/t

50
-

125
50
39
8.1

263
175
48
8.4

431
300
52
8.4

487
350
52
8.4

487
350
52
8.4

US$m
US$m
US$m
US$m
US$m

0
-2.2
-2.2
-2.2
-2.2

2.0
-1.7
0.3
0.3
0.0

8.5
-2.8
5.7
5.6
4.0

15.6
-4.0
11.6
11.5
8.3

18.2
-4.4
13.8
13.6
9.9

18.2
-4.4
13.8
13.6
9.9

US$m
US$m
US$m
US$m

-2.0
-0.6
3.7
2.1

0.3
-0.5
0.6
2.2

5.7
-0.5
0.0
5.8

11.6
0.0
0.0
14.3

13.8
0.0
0.0
24.3

13.8
0.0
0.0
34.4

US$/share
X
X

0.04
5.3
3.8

0.08
2.6
1.8

0.10
2.2
1.5

0.10
2.2
1.5

Source: Mirabaud Securities estimates

Sales Offices:

London: +44 20 7321 2508

Geneva: +41 58 816 86 70

Madrid: +34 91 701 57 03

Analyst: Nikolas Toleris +44 (0) 20 7866 0068 nikolas.toleris@mirabaud.co.uk

Zurich: +41 58 816 88 75

Website: www.mirabaud.com

Harvest Minerals
RECOMMENDATIONS HISTORY
Harvest Minerals Ltd
Market index

AIM Basic Resources Index

Date

Market
Index

Stock Price
(p)

Valuation
(p)

Opinion

10 September 2015
11 November 2016

1,977.3
2,507.1

10.3
17.0

43
45

Speculative Buy
Speculative Buy

*FTSE AIM Basic Resources

RATINGS, CERTIFICATION AND DISCLOSURE

RATINGS SYSTEM
BUY:

The stock is expected to generate absolute positive price performance of over 10% during the next
12 months.

HOLD:

The stock is expected to generate absolute price performance of between negative 10% and positive
10% during the next 12 months.

SELL:

The stock is expected to generate absolute negative price performance of over 10% during the next
12 months.

RISK QUALIFIER:

Speculative: The stock bears significantly higher risk that typically cannot be valued by normal
fundamental criteria and investment in the stock may result in material loss.

The ratings are applicable to all research produced after 1 January 2016.

Sales Offices:

London: +44 20 7321 2508

Geneva: +41 58 816 86 70

Madrid: +34 91 701 57 03

Analyst: Nikolas Toleris +44 (0) 20 7866 0068 nikolas.toleris@mirabaud.co.uk

10

Zurich: +41 58 816 88 75

Website: www.mirabaud.com

Harvest Minerals
INVESTMENT ANALYST CERTIFICATION
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Each Investment Analyst of Mirabaud Securities LLP whose name appears as the Author of this Investment Research hereby certifies that
the recommendations and opinions expressed in the Investment Research accurately reflect the Investment Analyst's personal, independent
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Analyst's coverage universe.

INVESTMENT RESEARCH DISCLOSURES

The following disclosures relate to this document:
Harvest Minerals Ltd (HMI LN): 2, 3, 10, 11, 12
1.

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2.

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For the valuation methodology and investment risks, please contact the primary analyst directly.

Sales Offices:

London: +44 20 7321 2508

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Analyst: Nikolas Toleris +44 (0) 20 7866 0068 nikolas.toleris@mirabaud.co.uk

11

Zurich: +41 58 816 88 75

Website: www.mirabaud.com

Harvest Minerals

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Sales Offices:

London: +44 20 7321 2508

Geneva: +41 58 816 86 70

Madrid: +34 91 701 57 03

Analyst: Nikolas Toleris +44 (0) 20 7866 0068 nikolas.toleris@mirabaud.co.uk

12

Zurich: +41 58 816 88 75

Website: www.mirabaud.com