Harvest Minerals : Half Year Report 30 June 2021

HARVEST MINERALS LIMITED

ABN 12 143 303 388

Half-Year Financial Report

30 June 2021

	Harvest Minerals Limited
CORPORATE DIRECTORY
Directors	Broker
Mr Brian McMaster (Executive Chairman)	Shard Capital Partners LLP
Mr Luis Azevedo (Executive Director)	20 Fenchurch St
Mr Jack James (Non-Executive Director)	London EC3M 3BY
Mr Alex Penha (Non-Executive Director)	United Kingdom
Company Secretary	Registered Office and Principal Place of Business
Mr Jack James	22 Lindsay Street
	Perth WA 6000 Australia
	Telephone: + 61 8 9200 1847
Share Registry	Facsimile: + 61 8 9227 6390
Computershare Investor Services LLC
The Pavilions	Stock Exchange
Bridgewater Road	The Company's securities are quoted on
Bristol BS99 6ZZ	the AIM market of the London Stock Exchange.
United Kingdom	AIM Code: HMI
Telephone: [phone]
Auditors
HLB Mann Judd
Level 4
130 Stirling Street
Perth WA 6000
Nominated & Financial Adviser
Strand Hanson Limited
26 Mount Row
London W1K 3SQ
United Kingdom

	Harvest Minerals Limited
Contents	Page
Directors' Report	1
Auditor's Independence Declaration	4
Condensed Consolidated Statement of Comprehensive Income	5
Condensed Consolidated Statement of Financial Position	6
Condensed Consolidated Statement of Changes in Equity	7
Condensed Consolidated Statement of Cash Flows	8
Notes to the Condensed Consolidated Financial Statements	9
Directors' Declaration	17
Independent Auditor's Review Report	18

Harvest Minerals Limited

DIRECTORS' REPORT

The Directors of Harvest Minerals Limited and its subsidiaries ('Harvest', or 'the Company') submit the financial report of the Company for the half-year ended 30 June 2021. In order to comply with the provisions of the Corporations Act

2001, the Directors report as follows:

Directors

The names of Directors who held office during or since the end of the half-year and until the date of this report are as below. Directors were in office for this entire period unless otherwise stated.

Mr Brian McMaster	Executive Chairman
Mr Luis Azevedo	Executive Director
Mr Jack James	Non-Executive Director
Mr Alex Penha	Non-Executive Director (appointed 19 July 2021)

Results

The loss after tax recorded in the Condensed Consolidated Statement of Comprehensive Income for the half-year ended 30 June 2021 was $1,067,707 (30 June 2020: $1,843,743).

Review of Operations

Arapua Fertiliser Project

During the half-year ended 30 June 2021, Harvest sold 26,726 tonnes of its KP Fértil®, representing a 171% increase over the sales realised in the same period of 2020, and despite the continuing challenges imposed by the COVID-19 pandemic. Historically, the period July to December each year is where the majority of annual sales are achieved. In 2020, 82% of the total sales were placed in the second half of the year. With this in mind, the Company is maintaining its 2021 year-end sales target of 80,000 tonnes of KP Fértil®.

The Company's team includes 12 associates/agronomists split into two regional teams, which is supported by its third- party network comprising 20 resales' centres. In May 2021, a new marketing campaign was launched for coffee, sugarcane, and other crops, and boosted the Company's efforts towards the new marketing channels opened since it added the higher margin 25kg bag option that targets small to medium sized farmers and resellers. The Company has also started to actively market its KP Fértil® in other regions beyond its immediate market in Minas Gerais and Sao Paulo.

In terms of market fundamentals, notwithstanding the impacts of the COVID-19 (discussed further below), the performance of the Brazilian agriculture sector continued to be robust over the half-year and several sector associations forecast double digit growth in most of the crops targeted by Harvest.

Sergi Potash Project & Mandacaru Phosphate Project

Given the scale of activity currently being undertaken at Arapua and the impact of COVID-19, the Company did not materially advance either of its Sergi Potash Project or its Mandacaru Phosphate Project during the half-year to 30 June 2021.

Capela Potash Project

On 11 February 2021, the Company relinquished its exploration license over its 51% interest in the Capela Project in Brazil, to dedicate its resources and to ensure the continued growth trajectory at its 100% owned revenue generating

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Harvest Minerals Limited

Arapua Project. Capitalised exploration and evaluation costs relating to the Capela project were fully written-off at 31 December 2020.

Impact of COVID-19

On 31 January 2020, the World Health Organisation ('WHO') announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (COVID-19 outbreak) and the risks to the international community as the virus spread globally beyond its point of origin. Because of the rapid increase in exposure globally, on 11 March 2020, the WHO classified the COVID-19 outbreak as a pandemic.

The full impact of the COVID-19 outbreak continues to evolve and at the date of this report, the current Delta variant of COVID-19 has resulted in border travel restrictions, lockdowns, and mask mandates within Australia. Management is actively monitoring the global situation and its impact on the Group's financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Group continues to monitor the situation very closely, with a primary focus on the health, wellbeing, and safety of all employees. The Group has implemented extensive business continuity procedures to ensure ongoing operations with minimal disruptions. To date there has been minimal impact to the Group.

Notwithstanding, sales for the half-year ended 30 June 2021 exceeded budget, it is expected that a robust performance will be achieved over the second half of the year, which is seasonally the strongest period for the business.

Other Developments

In June 2021, Harvest acquired at nominal value the mineral rights over an area highly prospective for the exploration of agriculture limestone, a critical soil input used by regional producers of different crops to neutralise soil acidity by raising its pH levels. Located in the municipality of Iguatama, Minas Gerais, the limestone project is approximately 168km from Harvest's Arapuá Fertiliser Project. The acquisition continues Harvest's strategy to build its profile in the region with an increased portfolio of products while leveraging its commercial channels, facilities and regional market knowledge. Harvest plans to undertake a preliminary assessment of the geological potential of the limestone project to establish the best approach for a cost-effective exploration programme, following the same strategy used to define and advance the now producing Arapua deposit.

In May 2021, Harvest received the London Stock Exchange's Green Economy Mark. The Green Economy Mark recognises companies that derive 50% or more of their total annual revenues from products and services that contribute to the global green economy. The underlying methodology incorporates the Green Revenues data model developed by FTSE Russell, which helps investors understand the global industrial transition to a green and low carbon economy with consistent, transparent data and indexes.

Auditor's Independence Declaration

Section 307C of the Corporations Act 2001 requires our auditors, HLB Mann Judd, to provide the Directors of the company with an Independence Declaration in relation to the review of the half-year financial report. This Independence Declaration is set out on the Page 4 and forms part of the Directors' Report for the half-year ended 30 June 2021.

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