Harvest Minerals Ltd (LON:HMI) is pushing ahead confidently with its KPfertil fertiliser product and recently expanded its sales team and manufacturing plant.
The AIM-listed miner is currently anticipating a permit from the Brazilian Ministry of Agriculture, Livestock and Supply (MAPA) which, while taking longer than initially thought, will make 2018 “another real step change” according to chairman Brian McMaster.
Investing in fertiliser at Arapua
At present, the company’s focus is the Arapua fertiliser project, located about 400km south-east of Brasilia in the State of Minas Gerais, a major agro-industrial centre.
The project is composed of eight mineral properties, all with exploration licences granted, covering an area of around 14,946 hectares split into three blocks, Arapua, Pindaibas and Maxixe.
The blocks contain high concentrations of phosphate, an essential ingredient in fertiliser that is required for crops to grow in large amounts.
A 2012 JORC showed an indicated and inferred resource at the project of 13.07Mt at 3.1% potassium oxide (K2O) and 2.49% phosphorus pentoxide (P2O5).
Grab samples from the Arapua block saw grades of between 5% to 24% Phosphate P2O5, with auger drilling at Pindaibas returning values up to 14.8% P2O5.
Harvest currently has a four-year Trial Mining Permit, allowing to extract 50,000t of product on a rolling basis and deliver to existing customers.
However, the company is about to enter the final stages of an application for a full mining licence, granted by the Brazilian Department of Mines (DNPM), following the approval of a final exploration report at the Arapua project.
Big demand in Brazil
Brazil is currently one of the biggest users of phosphate, accounting for 80% of Latin American consumption.
Harvest is already seeing major interest in KPfertil, signing a major sales order in March with Agrocerrado, a substantial fertiliser distributor in Brazil.
The order is for 36,000t of KPfertil, which has a sales value of more than US$2mln according to McMaster.
A recent report by Capital Network indicated that at a product sales price of around US$60 per tonne, Arapua has a net present value at 10% of around £64.9mln, with operating costs of less than US$10 per tonne.
Exploration near Brazil’s only potash mine
Aside from Arapua, Harvest also has a 51% interest in the Capela potash project, located next to the only potash mine in Brazil, Taquari-Vassouras.
3D seismic data from the site has confirmed that the project is the possible northern extension of the Taquari-Vassouras deposit, and the company is currently preparing for a potential drilling programme, subject to available funding.
Harvest is also conducting a scoping study at its Sergi Potash project, located 40km south of Taquari-Vassouras.