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Harvest Minerals shares sprout over 9% after distribution deal
Fertiliser producer Harvest Minerals saw its share price shoot up on Wednesday after the company signed a deal with a Brazilian distributor.
Agrocerrado Produtos Agrícolas e Assistência Técnica LTDA, a major distributor of fertiliser and agriproducts in one of Brazil's main agricultural belts, signed a contract for an initial supply of 36Kt of KPfértil which is Harvest's multi-nutrient, slow release organic fertiliser.
The two companies have agreed on a sales price of 200 Brazilian real (£45/$62) per tonne for the product, with delivery set to begin in early May and further sales discussions on-going.
Brian McMaster, Harvest's executive chairman, said: "Agrocerrado is one of the largest established fertiliser and agribusiness distributors in the region; this agreement not only underpins the opportunity in the local market for Harvest, but fully justifies our decision to expand our production capacity, which will stand at 320,000 tonnes annually by early Q2."
The planned expansion, announced by the company in January, is underway at Harvest's wholly owned 14,946 hectare Arapua Project in the northern Brazilian state of Minas Gerais where it produces KPfértil fertiliser.
The project is a shallow, low cost mine with "an indicated and inferred resource of 13.07Mt at 3.1% K2O and 2.49% P2O5," based on drilling under 7% of the known mineralization and is expected to support over 100 years of production, according to Harvest.
"As we stated at the start of the year, with the de-risking of our project over the past two years, the focus is now on sales and revenue growth as we transform Harvest into a profitable business with the aim of providing significant returns to all our shareholders," said McMaster.
As well as expanding sales, the company has submitted an application to certify KPfértil as a remineraliser to the Brazilian ministry of agriculture, livestock and supply, which McMaster said would confirm the "efficacy of our completely natural product and its recognised potential".
As of 0836 GMT, Harvest Minerals' shares were up 9.50% at 19.30p.