Harvest Minerals (LSE:HMI) — Investor Presentation

0:01 Good morning, and welcome to the HARVEST MINERALS investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the Q and A tab situated in the right hand corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll, and we are now going to play a short five minute video. Since HARVEST was founded in 2015,

4:12 our number one goal has to become a producer of high quality pure organic fertilizer. And now just a few years later, due to the hard work and dedication of our team, we've become recognized as one of Brazil's producers of a high quality fertilizer. And we're looking forward to many more years of growing as part of the community with our team, our customers, and our suppliers.

6:33 I would now like to hand you over to the executive chairman of HARVEST MINERALS, Brian McMaster. Good morning, Shuster. Good morning, and good morning, everybody. Thank you for your time this morning, and thank you for participating in this q and a session. I hope you enjoyed the the video, which I'm sure many of you have seen already. It's proposed that we start this session with a a run through of our corporate presentation, which we recently released. And, again, I'm I'm sure that many of you many of you have seen this already. So I I don't intend to dwell on it. I I think the purpose of this forum really is a a q and a session. People have specific things that they'd like to know the answers to, and I hope to be able to address those this morning.

7:26 In terms of our presentation, which, as I say, I hope you've seen, I mean, effectively, you know, the the business that HARVEST has at the moment is a really, really simple business. It's a proven high margin product. It's an organically certified non GMO multi nutrient fertilizer. We have a simpler cost effective production, and we are situated in in an ideal location in the middle of the breadbasket of Brazil. To date, we have recorded growing sales at approximately 46% compound annual growth rate over the last three years. We have a strong commitment to being to our ESG responsibilities. And as it says here, we are the first Brazilian company to be awarded the London Stock Exchange green economy market.

8:14 If we can just skip through the next page to the opportunity. I mean, effectively, and and we've talked about this publicly quite extensively, but we are situated in the MINERALS state in the Southeastern portion of Brazil. It's a a state that is very heavily focused on agriculture. All around us is agriculture. As we can see, there's in excess of 3,000,000 tonnes per annum of coffee produced within a 300 kilometer radius of us. 83% of all fertilizer used in Brazil is applied is applied to soybean, sugarcane, maize, and coffee, which are the major crops that are grown close to where we are. So there's a ready made market at our doorstep.

9:00 The next slide which talks about feeding an increasing population is one I'm sure you're all familiar with that just speaks of the the high level basics of the rapid growth of population, which obviously feeds into the need to to feed people, which brings in this the importance of Brazil's fertilizer market, which is as we discussed on slide seven. So at the moment, agriculture represents approximately 8% of Brazil's GDP. It's the largest contributor to the country's GDP. In excess of 30% of the world's coffee beans are produced in Brazil, the country is a top four consumer of fertilizer or, you know, over 80% of all of its fertilizer currently is imported, and those importation levels have reached record heights.

9:49 We've talked about this previously, but the government has some, you know, very grandiose ambitions of becoming more independent of the importation of fertilizer. And whilst that's going to be a a hard road to hoe, it speaks to the significance that nationally the country is placing on the inputs of the agricultural sector, and it just sort of helps give a little bit of context to the significance of the market that we're participating in. So if we slip across to slide eight, we talk about some of the key reasons why KP Fertile is important, and these are the types of things that we talk to our customers about. We're a 100% organic product with no chemicals.

10:36 We are organically certified. We can be used across both organic and nonorganic farms. We are a slow release source of potassium, calcium, magnesium, and other micronutrients. We rebalance the pH levels in the soil. We have minimal losses via leaching. We have no salt chloride or other contaminants. And as a consequence of all these things, improve crop yield and quality.

11:12 I think this is something that we're all familiar with. We have, at the moment, three marketing channels. We have a 25 kilogram bag, a one time large bag, which is what you can see that the tractor lifting into the back of the truck, and then we have bulk, which is just effectively us putting the product directly into the back of back of trucks. And all of that, you know, is is a very simple path to market. There is no additional beneficiation that's required for any of those products. It's all the same product coming out of the same place. It's just different to whether it goes straight into the truck or into a bag first.

11:55 I think we've talked about the 46% CRGA already, but you can see there there's a a calendar which identifies the peak buying periods for fertilizer based on the different crops. We we are seeing a slight distortion to that starting to trend in this year, which is we're putting it down to a little bit of FOMO. That is, you know, farmers are are are bringing forward their buying decisions a little bit in order to make sure that they get allocations, and that's been driven by the the broader fertilizer market where we are seeing globally there are shortages. And so rather than miss out altogether, farmers are starting to, you know, front end their buying decisions a little bit. So there there may be a slight variation to this, but you can see there for the crops that we are servicing at the moment, there is, you know, somewhat of a bell curve in terms of how traditionally or ordinarily we would expect customers to to purchase the crops.

13:01 The next slide, slide 11, is just a a snapshot of what the mine face looks like. And as you can see, it's a very simple and clean operation. It basically is a case of, you know, we are digging through that kamafumaturgide, sorry for the pronunciation, layer. It varies in-depth across the the resource from eight to 24 meters, and then below that, there is an oxide layer which we, you know, haven't tested to any great consideration at the moment. And the reason we haven't is because sorry, a hard rock layer because the oxide layer is, you know, a mine life of more than a 100 years. So so quite literally, all we do is come along and and strip this with a loader, put it into our crushing plant, and then put it in the back of the truck either directly or through a bag.

13:51 The next photograph on page 12 is just simply a photo of our processing facility. So in effect, inside that very large shed, roughly in the middle where the tooth the colors of the roof change, roughly in the middle there is is the the processing plant, and either side of that is storage facilities. Now we've talked about this in the past, but just to remind people that, you know, storage is a a key element to our success in that during the this time of year, is very common for there to be extensive rainfall. It's it is the wet season. So for example, in the month of January just gone, there was over 600 millimeters of rain for the month recorded at the mine. And we can't process in the wet, so it's important that when it's dry, we we do process adequately, and we have the ability to store it. And you can see to the left of the shed there, we are storing extra product under tarps, which is not ideal, but it's a compromised

14:52 position to help accelerate the processing of of product during the wet. Slide 13 is a timeline from resources to production. It just I won't go into the detail there, but, basically, you know, it's roughly two thousand sixteen, seventeen. So roughly four, five years ago, we came up with the idea of pursuing this avenue. We came up with the idea of our being something that was worth pursuing, and and here we sit sort of four years later with a fully operational profitable mind. And I think in anybody's language, that's a that's quite a remarkable phase. It's a very short path to to to the cash flow.

15:39 Slide 14, we talk about our showcase farm. This is something we established in '20 yeah. 2018, and it was effectively us sort of leading the charge and demonstrating to farmers how product works. We've got a small farm there where we grow select crops, and we plant some crops with our fertilizer and some without, and it just gives the farmers an opportunity to identify how well our fertilizer works. It's done under strict sort of strict I'm trying to think of the right words. The strict conditions in terms of making sure that, you know, there there is some sort of sensibility around understanding what is applied to the to the crops and not so that we can explain it to the farmers. And, you know, pleasingly, last year, just as a bit of a a side effect, we we put some of the coffee beans that were grown at our farm into a local competition, and we came sixth.

16:32 And we received a score of 87 out of a 100, which put us into the category of specialty coffee. On page fifteen and sixteen, we talk about two new projects that we have and the significance that they may have in in the future. So they are both relatively early projects. The work that we need to do on them for the foreseeable future is not expensive. It's stuff that we're all capable of doing in house for for very little cost. And we expect these both of these projects to emulate HARVEST MINERALS both in terms of timeline and in terms of contribution to the company.

17:18 So the first, the phosphate project, is a similar project to our appearance, just in a different geographical location, a few 100 kilometers away from where we are. And so it gives us the opportunity to effectively repeat what we've done to date, but in a different geographical location. And the the other project, which is a limestone project, is much closer to Arapira. It's a slightly different commodity, but it has very many similarities to KP Fertile. And as a consequence, you know, it's it's a sensible addition to the portfolio in terms of the people who are buying KP Fertile are also buying Lyme. Lyme has many qualities similar to KP Fertile terms of the way it's mined, the way it's processed, the way it's transported, the way it's applied by the customers, the way it's sold, etcetera, etcetera. So it really is a case of if we're sending a salesman to a customer and we're sending a truck to a customer for us to include limestone along k p alongside k p fertile is just a sensible addition, we believe.

18:28 Pay on slide 17, we talk about our ESG credentials, which, yeah, I think everybody's quite aware of. We are an organic an organic product which speaks for itself. We've recently announced that we've installed a solar facility. We are trying very hard to reduce our carbon emissions. At the moment, the only emissions we have are in our mobile fleet. And as a way of countering the effects of that, we have, last year, planted 18,000 trees, and we will continue to do initiatives such as that to to help bring us to a position of zero carbon. That leaves us to the last slide, which is our investment case. And quite simply, you can see the headlines there to long life flagship project in the heart of Brazil's agricultural market. We're rapidly building brand awareness and geographical reach with a strengthening balance sheet of focus on growth, robust ESG credentials, and some would say a good quality team, and some may say otherwise.

19:32 So that I do apologize. It's a it's a very fast track run through of the presentation, but I did that on purpose because you can read that at your own leisure. And I'm sure people have questions which I'd rather hear the answers to at the moment. And if you do read that and you subsequently have some questions, feel free to contact us, and we'll we'll do our best to answer them. So I'm happy to answer questions at this stage. Brian, thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions using the q and a tab situated in the top right hand corner of your screen. But just for the company to take few moments to review those questions submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard. Brian, we've received a number of presynaptic questions from investors, and I want to start off the q and a session with these. The first one reads as follows.

20:24 Thank you, Arapua, for KP Fertil. Is there a price raise planned?

20:34 I think people have I I I believe people are very familiar with the the general uptick in prices across the fertilizer market, And we have been at pains to date to to not publicly talk about our prices in details. And we don't talk about our prices, and we don't talk about our margins, and we don't talk about our customers. And the obvious reason for that being that we do have competitors. Simply lifting our skirt and explaining to them all of the things that make our business our business would not be a a very smart business decision, we believe. So, you know, we we we keep those things confidential, but I can say that, you know, the the rising tide has lifted the market of all fertilizer products globally, and we're not immune to that. So as of one January this year, we have implemented a material price rise, and our customers have accepted that that is the way going forward. So, yeah, it's looking like that's that's that's working out for us.

21:39 That was great. Just turning on to the next question. Given the cost rise of ammonia and potash, what's the challenges which preventing this flying off the shelves, and if what's the plan to overcome overcome them?

21:54 Well, the the product is flying off the shelves, I think, would be a better interpretation of how things are going. I mean, we've come from zero to hero rather quickly. I mean, at the moment, a 150,000 tons is our target for this year, and and that would represent a substantial increase on last year, and it would continue our trend of, you know, near 150% compound annual growth rate. So we don't see any broad economy challenges. We don't see any market challenges. It's just a continuation of more of the same for us in terms of just continuing to build our business sensibly, organically, and strategically. And, you know, at the moment, we are servicing all the customers' demand. And if demand improves increases, increase production to meet it. So I think, you know, a better interpretation would be to say that the product is running off the shelves.

22:54 That's great. The next question is regarding Paraguay and reads as follows. Are we still supplying Paraguay? If so, how much and at what sales price? And is the market and is the market growing? Well, we announced at the very tail end of 2021 that we received a license to sell the product in Paraguay. So that is, quote, unquote, new business for us. So, you know, that question the context of that question reads that it's it's something that's been ongoing for quite a long time. Well, it hasn't. It's something that's new for us. It's something that we're we're dipping our toe in the water. The volumes that have been making their way to Paraguay at the moment are are not material by any stretch of imagination. There is obviously a freight challenge, and that challenge can only be overcome through backloading, and we are working our way through that at the moment. But it was an avenue that was open to us led by consumer interest, so we're responding to consumer interest.

23:55 But at this stage, it's not a material factor in our business, and it's something that we've got on the table to to try and grow this year and beyond. Thanks very much indeed. Management has quoted this as a hundred year mine. What's a three, five, and ten year plan for the company? Well, the the hundred year mine is is simple arithmetic. I mean, we've basically we've issued a a job resource, and if you divide that by nameplate capacity on the plant, you come up with a number of more than a hundred hundred years. So that's where that comes from. But in terms of what is our strategy, first strategy has always been to bring our repure to profitability, which we've reached, and then to bring our repure to nameplate capacity, which we are doing.

24:46 We've announced some of our growth strategies, which include things like Paraguay, which include the limestone and the the other phosphate business that or asset acquisition. And so, yeah, over the course of the next if you look back sorry. Just to take a step back. If you look back at the timeline, took us to bring our to to cash flow positive and and stem to that timeline over the new acquisitions, you can see, well, that pretty much accounts for the next three to five years. In terms of ten years, we're I think that's probably a little bit far down the track for us at this stage. That was great. Just turning to the next question. Do we control all of the KP camouflage it lava rock resource in the area, or is the resource freely available in the region?

25:34 No. We pretty much control it. Mean, we ever since we identified this asset, we have been desperately looking for more, and we've really struggled to find it. There are a couple of other examples in Brazil that we have been able to locate, but we haven't been able to acquire. They're not close to us. So in terms of a product that does what our product does, the way our product does it, we pretty much have a a monopoly on that market in our region. I know some investors are familiar with companies that sort of, you know, look similar to us and you know? But they're not. They have different characteristics. They have different mining methods. They have different constituencies of chemical components to their product, etcetera, etcetera. So they're not like for like comparisons.

26:25 So in terms of something that does what we do and has all the particular characteristics of KP fertile, are the only people in in the region with that at the moment. That's great. The next question is sort of three questions in one regarding sales and and customers, and it really just follows. What percentage of sales are repeat orders? What percentage of customers have increased their orders year after year? And how many customers do we have currently, and what is our largest customer worth to us? Yep. In terms of the number of customers and and the the the value of product that they buy, I mean, that that's something we'd we'd like to keep under wraps for the reasons I spoke about before. Mean, there has to be a balance between us being a public company and explaining to shareholders how we're traveling and revealing all of our state secrets to to all in sundry. Mean, we have to have some sensibility around that. So they're not things that we we publicly disclose.

27:25 In terms of repeat customers and that sort of thing, the answer is I don't have an exact percentage, but, you know, almost all of the customers who buy from us, it would be a number very close to a 100, back up and buy again, and they buy again in larger volumes. And the business is being grown at the moment through a combination of repeat customers buying larger volumes year on year and new customers being introduced to the product. And

27:55 as I say, if if that theory holds true, then those new customers will continue to buy into the future at at large quantities. So but at the moment, a a large the majority of our business is existing customers coming back for more, which is which is fantastic. I mean, there's no better complement or no better credential to the quality of your product than having a return customer. Thanks very much indeed. The next question relates to the 25 kilogram bags and asks, what is the selling price and the margins on the 25 kilogram bags? As we are seeing increased growth in sales, is there a way to hedge against our currency fluctuations?

28:40 Yeah. The just repeating my earlier comments. We we don't talk about margins on specific products for for the reasons we've we've discussed, but and the hedging of currency, know what mean? We we do that to the to the extent possible. I mean, at the moment, we we sell our product in reais, and the majority of our expenses are in reais. So that sort of is a natural hedge to the extent that there are expenses that are not in reals. I mean, all we can do is be mindful of that and and and, you know, where possible, minimize the effects of that, but there's there's not a lot that can be done, and it it's not a material number in the overall scheme of things. Don't think so.

29:27 You know, it's something that we actively work on, but, you know, it's it's it's not sort of something that we can avoid easily. That's great. Verde are current is currently selling their product on Amazon. Does the company think there are any possibilities of shipping the 25 kg bags to outlets in other countries for this kind of localized selling?

29:55 Well, I mean, certainly, there's a possibility of doing it, but it it's not on our not on our agenda to do that. And the reason being, I mean, we have reached a situation where all of the product that we produce at the moment is being sold. I mean, if we want to sell more product, we can just simply do that locally. We don't have to engage in a foreign market or enter into grandiose marketing expenses, employee expenses, and other related costs. We don't have to introduce the complexities of foreign markets and international trade and all that kind of thing to grow our business. Our business is growing at a very rapid rate based on our our business model of simply servicing the customers within a 300 kilometer radius of where we are. So it it doesn't it doesn't stack up for us. It's in in any way as a business proposition that that we would want to pursue an avenue such as Amazon.

31:02 You know, the the duties, the freight, the marketing, the placement fees in Amazon, and all kinds of expenses, you know, the the product just doesn't lend itself to that. That's perfect. The next question reads as follows. I was surprised by the recent addition of the limestone license, especially giving up Sergipe and Capella to focus on Arapua and sales of KP Fertil. I see there seem to be synergies with existing customers needing LIMITED too, but why was it worth management diverting attention away from sales growth to do so now?

31:41 Well, we we haven't diverted attention away from sales growth. It's it's actually quite the opposite with it's it is an attention to sales growth that has caused us to make these acquisitions. And and by that, I mean, simply as I explained earlier that if we are sending a salesperson to a customer who wants KAP FIRTURE, that same customer is going to want limestone. So by bringing a limestone asset onto our portfolio, we are simply just, you know, giving ourselves two shots at the apple or, you know, two bites of the cherry or whichever analogy you want to use. And similarly with the new phosphate acid, I mean, that, again, is simply saying, well, we've done it once. We know how to do it. We're going to do the exact same thing, but just simply in a different geographical location. We're going to penetrate a new market, which we don't service already.

32:33 So, again, that's a focus on sales growth. In contrast, Sujupi and Capella are quite contrary assets. I mean, firstly, it was only Capella that we we gave up. We still have Sujupi. But Sergipe is a is a traditional potash asset. It's very deep. It has very significant exploration expenditure requirements. You know, the cost to bring that into production are hundreds of millions of dollars.

33:00 Even just the exploration cost to bring it to a stage of understanding whether production is a possibility are tens of millions of dollars. And whilst we think it's strategically an important asset, at some levels, it's, you know, it's well beyond the capabilities of HARVEST at the moment to to do substantial work on that. So continuing to carry those assets forward. And Capella as an example, it's a silver night asset at which we, you know, we would argue will almost never be brought into production. There's no processing facility nearby. There's no there's no light products being mined in the region or anything like that. So, you know, that that was, at the time, a great opportunity for us to get a foothold, but, you know, further work shows that it's as a opportunity versus these low CapEx quick run to profitability assets that we are acquiring, it it just doesn't stack up. So I think a proper interpretation of the strategy is we're we're dismissing things that are, you know, just a a bridge too far for us in terms of expense, and we are across the board focusing on growing our business. I mean, nothing that we're doing in terms of the limestone or the new phosphate business will detract from HARVEST MINERALS now on a trajectory almost all of its own. So, yeah, we have got sufficient capabilities, sufficient time, and sufficient resources to pursue these other these other assets

34:31 without in any way being detrimental to our. That was great. Thank you. The next question asks what the company's future forecast for the sale of limestone are, and can we have cost estimates and sales price? Well, I think sorry. Could you repeat the question? No problem at all. The question asks, what are the company's future forecast for the sale of limestone, and can we have cost estimates and sales price? Oh, sorry. Yeah. Okay. I was sorry. I was just reading a a question when you read. Well, I we talk about it, and we actually allude to it, I think, in the in the presentation. We just skimmed through it, but we we are we have commissioned independent studies in relation to that project.

35:20 It would be premature, I think, for me to to guess what those studies would say. But the short answer is we are finding out the answer to those questions, and and we'll announce those as soon as the studies are completed, which, you know, we'll I'm expecting will be sometime in in in the next couple of quarters. So without sounding silly, I don't know the answer, but I am endeavoring to find out the answer. Thank you very much. Just moving on to some more financial questions. What is the cash position? Could you give us an EBITDA and EPS forecast for sales of 150,000? Could they please break down in detail how they get to that? Yep. The company doesn't doesn't make financial forecasts.

36:08 So, you know, I think, you know, that that's so clearly, you know, an an EBITDA and EPS forecast is something that, you know, we we haven't explained to the market in any way, shape, or form. So, unfortunately, we're not in a position to answer that question. In terms of existing cash, we have somewhere in the order of about $2,000,000. Thank you very much. What is the latest figures on debt? So on debt over thirty one days, three months, six months rewritten off, and how does that compare with the previous period? Have we recovered all the monies due from AGRA Serrado, or are we still pursuing this money? In terms of the aging of the payables oh, sorry. The receivables, I mean, that's, you know, that's that's a number that changes on a daily basis. And, you know, it it gets brought out in the in the annual accounts and the half yearly audit, and and I I don't want to get into that detail. It doesn't add any value to anybody's analysis of where the company's going.

37:08 And we you know, right now, as we sit today, I I actually don't know the answer because it's it's a moving phase, and it changes on a daily basis. But we don't have any debts that we're worried about or that any concerns about customers paying. So if that's what the question's getting to, we we don't have any concerns in that regard. In terms of the agro sejada debt, which was a debt that went bad a couple of years ago, we are in the hands of the Brazilian courts at the moment. We have been given a judgment in our favor, and we're trying to execute that judgment. But, unfortunately, due to COVID, the court system in Brazil is quite bogged up, and we are we're just in the line, and we're waiting for our turn. And I have no idea, frankly, when that turn will come other than to say, right now, as we sit here today, we we hold a judgment in our favor, and the judgment says that the total amount that we claim from is due to us.

38:02 And so, yeah, we're we're just working through that process as best we can. Thank you very much. The next question asked, can previously high consulting management cost be reduced to better protect the business growth stages? Sure. I think, you know, there's two aspects of that, and one is that management costs are independently verified by our by our nomad. So, you know, whilst some may say they're high, they are within the boundaries of what is considered to be acceptable for a company of our stature. So they are within the norms of normality, I guess, or the boundaries of normality.

38:54 You know, we had, in the past, brought on consultants and others to help us, you know, bring the business to us to the state of. Where possible, those consultants have been let go because, you know, they they usually retain for a finite period of time for a specific purpose. And if that purpose has ended, we we don't carry people on for for any particular reason. So I think I think we have been mindful of that in terms of how we reduce the cost from here. I mean, the only way to do that would be to start eliminating executives and, you know, not sure if that's what the question's driving at, but if it is, then we might have a bigger problem. Thanks very much for that. Would the company be prepared to initiate a share buyback if a large disconnect between share price and fundamentals remains?

39:48 Yeah. I mean, I've heard this question asked a few times over the last the last sort of while. And Yeah. Whilst I'm not close to the idea of anything that brings value to shareholders, I'm not sure I fully understand the rationale behind it. I mean, at the end of the day, my immediate response to that is, well, that's what the stock market is there for. If people are unhappy with their investment, they can sell on the market. And if people are happy with their investment, they can buy on the market. I'm not sure exactly why the company would sit in the market to to facilitate that market mechanism. You know, I was actually thinking about this a little bit more detail this morning, and, you know, I think the only sort of reasonable reason you would initiate a share buyback would be to say, well, we can't think of any better way to to expend our cash than to buy our by ourself.

40:41 Where at the moment, we have got growth opportunities which, you know, if executed properly, should be value accretive to shareholders. And so I think, you know, the the better course probably is to pursue those growth opportunities first rather than worry about a share buyback. We, you know, we have been very mindful over the course of a very long time around dilution. We we've raised money only on several occasions. You know, the bulk of the money we raised was at an all time high in the price of the company. We've got you know, we've been very strict in trying to keep the number of shares on issue as as tight as possible. So, you know, I'm not a 100% sure how much more we can do on that right now. Thank you very much. The next question asks, what is current price per ton in BRL?

41:31 What price rises are planned, and what is the forecast cost price of 100,000,200,000,300,000,400,000 tons per annum in BRL? I think the the point around current price, that's something we're we're we've covered off already. I mean, the the part about what is the cost price of 100,200, and what I actually don't quite understand what that's asking, to be honest, so I'm not sure I'm gonna be able to help very much in regard to that. No worries at all. The next question asked, can we have a percentage sold via resellers and margin being achieved? What's the expected level for operating overheads for the year ending 2022? I don't know the exact percentage that's being sold by the resellers. It's it's not as significant as what we are doing by our own resources and our in house team.

42:27 Our in house team account for the majority of ourselves. The margin, again, I mean, we've we've so it's going to go in circles a little bit here, but we we don't disclose our margin for those commercial reasons. What was the second part of that question, please? The second part was what is expected level for operating overheads for the year ending 2022? Yeah. And we've we've talked about that in broad terms to try and give people some perspective that, you know, 40,000 tons is is basically a breakeven point for the company. So if we if we sell in excess of 40,000 tons, you know, sell invoice and bank, then we're we're into cash profit. So, yeah, it it it's we expect it to be, you know, there or thereabouts this year as well. There's no material change on the horizon.

43:19 Thank you for that. The next question is relating to dividends. What is your dividend policy, and at what profit level do you envisage paying a dividend? That's I think the answer to that would have to be considered in the context of, you know, what else is available and what else is on the what else is on the Apologies for that. Somebody just came into the room. The answer to that question is it depends what else is on the table in terms of what's gonna be requiring resources and and where are we at. So we've we've obviously identified. We have a long stone asset and another phosphate asset that we wanna bring for to fruition. You know, where we are on the curve of developing those assets and what capital requirements they have, etcetera, etcetera, will be have to be considered in the context of, you know, what surplus cash we have available for dividends. And the only thing I can say to shareholders to give them some comfort around that at this point is that, you know, I am a material shareholder.

44:21 And, you know, like everybody, I'm anxious to see that shares be returned to a proper value and that where possible, a yield to shareholders be be paid. So on behalf of shareholders, I can assure them I sit as motivated as anybody to to accelerate that path. Thank you very much. From previous years, the revenue is lumpy and the bulk is achieved in the second half of the year. Are you looking at ways to smooth out the revenue stream? Yeah. Well, I think we we covered that off a little bit in the presentation. We've put a calendar in there explaining what the normalized buying periods for various commodities are. And so the way, excuse me, that we can streamline that or take out that perceived lumpiness is simply by expanding the portfolio of commodities that we service.

45:11 Although, curiously, this year, for example, we have seen a distortion to that, which has been that because of the the overall market and the shortages and the difficulty people are having in getting fertilizer, Some farmers are bringing their their buying decisions forward. So that, you know, that could change the shape of the bell curve. It could potentially eliminate the bell curve. We don't know. We'll have to see how that plays out. But the answer the simple answer is by expanding our our reach into different commodities, we'll we'll certainly take that bump in this out. Thank you very much indeed. In your December interview, you mentioned aiming to fund works and future works from revenue and not the need to call on new equity raises.

45:56 Are you still seeing the expansion of the business organically? Yeah. We are. Absolutely. Yep. I mean, there's I think, you know, this wouldn't help answer one of the questions that's come through while we've been talking, which was, you know, what was the reason for changing broker recently? Know, it was absolutely not in anticipation of replacement. So we we have no plans to raise money through an equity raise. We haven't so it's just simply not on the cards. And so, yeah, we intend to to grow the business organically. It you know, it's a high margin profitable business. It generates cash. At the risk of repeating myself. You know, we anticipate that the growth opportunities we have for the future won't be massively cash draining. And where possible, we will look to to finance them on our balance sheet.

46:52 It gets back to the same point, which is, you know, that myself and Luis Azerito are material shareholders. And and just like everybody else, we're we're looking to protect shareholders' positions. That's great. The next question we just follow is, are you starting to see any institutional interest in the business? No. The answer is no. I mean, not really. And the reason being is because our market cap is so low. We just simply don't fit on their radar. I mean, we we have we have reached a little bit of a a point where, you know, we're we're kind of shooting ourselves in the foot. We have, you know, an amazing business, but, you know, and the light's being hidden under a bushel. And, you know, until that breakout occurs and we start to get a market cap that looks a little bit more reflective of what the business is doing, a little bit more sensible, you know, institutions won't have their mandates just simply won't allow them to invest in us. You know, we we go and talk to them, and we present to them, and they say to us, you know, this is a great business. We love it.

47:52 There's so many positives about it, and there's so many things to enjoy and tick tick tick tick tick, except you don't meet our mandate criteria for minimum market cap. So as much as we love you, we'll have to leave you. And that's just a shame of where we sit at the moment. Thank you very much. Will the business be carrying out more investor presentations to highlight the business and hopefully increase the low value attributed to the company and share price? Yeah. We've we said at the end of last year that, you know, we've once we reached a point of profitability and at that point, we felt that all of the sins of the past that the business had been punished for were behind us and that, you know, those questions have been answered by our conduct and by achieving an objective that, you know, we had a lot to say in terms of good things and lots to say in terms of demonstrating to people that the business is strong and robust and it's something that's worthy of investment. So we we we said at the end of last year that we would we intended to up our up our game on communications.

49:01 And I think, since then, we have done so, and we will continue to do so. Someone asked, in the presentation, it's flagged that Ricardo Bartholow used KP fertile on his award winning coffee And I was has that news and the marketing opportunity led to a material increase of increase of interest in the product? Well, I mean, it's hard to say. Mean, certainly, you know, it doesn't hurt. I mean, that's the reason why we have the presentation farm is to to demonstrate to farmers what what's happening. And every time somebody else who uses our product achieves some sort of great success, obviously, it's another tick in the box of showing farmers a credential now whether that one act on its own has led to a material increase in sales, who knows? I mean, I don't know. I don't think that would be a reasonable assumption, but it certainly is, you know, a very commendable achievement on his part, and it's, you know, certainly another tick in the box of people helping to understand just how good KP fertile is.

50:09 Thank you very much. And the last pre submitted question reads as follows. There is a discrepancy between world fertilizer prices and KP fertile. How much room for improvement in prices do you feel there is for KP fertile, and do you think you're in a strong enough position to possibly transition the price into USD rather than BRL? I think, you know, we sort of covered off the first part of that question already. In terms of the second part about reais or USD, I mean, we we are a Brazilian business selling to Brazilians, and their currency is Brazilian reals. So, you know, at this stage, you know, that's the currency that we're trading. So I'm not sure why we would look to change that to USD or why our customers would encourage that. It just exposes all of us to some sort of currency risk. So, you know, we the majority of our expenses are incurred in reals. So, you know, to come in and out of USD just exposes us to some currency fluctuations that are probably unnecessary at this point.

51:11 Thank you very much, Brian. That concludes the pre submitted questions. As you can see, we've received a number of questions throughout today's presentation as well. And thank you to all the investors for submitting their questions. Could I please ask you to open up the q and a tab, read out the questions, and give responses where where it's appropriate for you to do so, and I will just pick up from you at the end. Yeah. Sure. Okay. So the first question was, you know, when answering questions, could you be specific about which currency you were talking about such as AUD, USD, etcetera? Thanks. I mean, hopefully, have. It it's it's painful, I know. I mean, the company is actually an Australian company registered or controlled by the Australian Corporations Act, which means we have to lodge our accounts in Australian dollars, which is painful because it's the only exposure to Australian dollars that we have in tech, which is just simply a reporting exposure.

52:05 And, you know, as I said, the majority of what we're doing is in reals. So, hopefully, I have answered that question. The next question talks about the sugar market being three times the size of the coffee market. How is the company doing in attracting more sugarcane growers? I know you've been working with the coffee market primarily since we started selling in 2018, but the sugarcane market seems like really potential strong market. The answer is, yeah, absolutely. The sugarcane market is an extremely strong market. It's a very attractive opportunity for us. It is true that we have heavy historic dominance towards coffee, and and that's partly because coffee was an early uptaker of of the product. We just continued down that line. We have, in more recent times, been working very closely with some of the largest sugar co ops and and buying, you know, ergonomist and control buying decisions and that kind of thing. And and we are doing some test work, etcetera. We're seeing some extremely solid results in the sugarcane market. And I think, you know, I I think it'd be fair to say that we will start to see some material penetration of that market very soon.

53:14 Exactly when that is, it's probably a bit hard for me to say at the moment, but all the indicators are pointing towards the sugarcane market being receptive to our product. And, you know, when they buy, I I think it's just a question of when they buy, not if they buy. So we just keep plugging away, and and we'll watch this space. But, yeah, the sugarcane market is huge, and it has the opportunity on it in itself. Just, know, one or two of these coops would be enough to change the needle dramatically for us. The next question says regarding your recent acquisitions, can you guide us as to the potential revenue scale vis a vis our appeal? And regarding gross margins, might they be comparable? If so, how is it that one can get such good margins from what is a commodity product?

54:03 But I think, you know, we've answered that question, which is, you know, we are conducting independent feasibility studies on both those products, and, you know, it would be premature for me to to talk about what those results are. I mean, truth is I actually haven't seen the results yet, so I don't even know the answers. But, you know, based on our experiences and and our expectations, we think the results were pretty good. But, you know, we we can't really answer that question in in proper detail until we get those feasibility studies. And as soon as they're released, we'll announce them. The next question reads as revenue recognition. What percentage of the sale orders are expected to be recognized as revenue in this calendar year? The answer to that is simply that we recognize them as revenue when the sale order is a delivered product and a a contract.

54:54 So if if somebody puts an order in, that's obviously just a, you know, a promise to take. Once we produce a product and deliver it to them, they become an account receivable. It's that point we recognize the revenue. I I don't know, I mean, what percentage is a very specific group. I don't know exactly what percentage. You're asking me to predict something in the future, but it would be a very, very high number. So of the 150,000 tons we expect to produce, it would be you know, I would expect, yeah, very close to that number. What was the reasoning for changing broker recently? The reasoning was simply, you know, we felt that we weren't getting proper coverage from our existing broker, the guys at Tavira, the former Brandon Hill guys. Brandon Hill has been broker. Another company I was associated with for a while. We have a very good relationship.

55:44 We like what they do. We think that they would have been they will be good for HARVEST. And we think that going forward as, you know, being two of their house companies, we would have the opportunity to get some economies which we can share with HARVEST. And so we we just thought it was a a relationship driven thing. And it was from there that we we made the decision, but just to reiterate, it was not and aligning the word not in anticipation of a of a capital raising. The next question says, are you able to bring forward the 2021 AR and A so that the investors can assess the financial position? The answer is, you know, we do that as fast as we can. We're in the hands of our auditors substantially. I mean, we we're effectively a a price taker in regards to how we interact with our auditors. They give us the timetable of when they give us the accounts back and, you know, like everybody, we don't like doing the accounting that much, so we we're happy to get it off the books as quickly as possible. So we do do it as fast as possible.

56:42 But, you know, the the interesting thing about the accounts is, you know, whether we do them fast or whether we do them slow, it doesn't really matter. I mean, they are a little bit of a nonsense, and so we'd encourage shareholders to review the quarterly reports that we put out and the other information we give to sort of give a bit of a back of the envelope about how things are tracking. So, you know, by the time the accounts come out, they're they're so out of date that they for businesses dynamic as ours, they they kind of don't make a make us a lot of sense. The next question is, will Brian or the board be buying any more stock personally if it is so undervalued? The answer to that question is yes, except for one thing, and that is we're we're in a bit of a situation at moment. We're finding, you know, clear space to buy the stock is is not easy.

57:43 There's always information being published that, know, we're always in possession of things that the market doesn't broadly notice, you know, like sales expectations and that kind of stuff. So it it becomes a bit of a tricky one. And the second aspect of that is, you know, albeit it was a few years ago now, but when we last raised capital, I put £800,000 into that race. So I feel like I've, you know, I've done a pretty reasonable commitment to the company, you know, obviously heavily underwater. So, you know, at this stage, you know, I've got enough skin in the game to to make me motivated to wanna to to wanna improve things. Next question is when you issue the quarterly sales figures by RNS, are these figures sales, orders, or sales revenue?

58:31 They are. So last year was the only year that we've done that today, so we've issued four of them. The first three were sales orders, and the last one was a sales revenue number, which is why if you added the q three number plus the commentary around what we sold, it it didn't equal. It's because we backed out those orders that were not gonna be turned to revenue in the calendar year. I hope that makes sense. Hi, Brian. Would we ever be able to have some more coverage with some of the workers who are on the ground in Brazil such as Fred or a pre done interview on YouTube with subtitles. As a proud shareholder since 2018, I think getting some on the ground feedback and stories from farmers and workers on the ground similar to the intro video today will really help people get a better feeling for the company.

59:29 Yeah. Absolutely. I think, actually, those those interviews and and videos do exist. If you follow the KP Furr Instagram account or Twitter account, you'll you'll you'll probably find them, but there are there is quite a bit of feedback from farmers and others already. So and the guys down there are particularly avid avid users of the social media. So I think if you if you sniff around those channels, you you will find that that stuff already exists. The next question is, is the two men in the bank USD or AUD as someone who's often confused by financial reports in simple terms? Will that figure be higher this time next year? The answer is it's AUD because, as I said, you know, the audited accounts are recorded in AUD.

1:00:25 Will that figure be higher this time next year? Well, I mean, generally speaking, if a company is making profit, it means it's generating more cash than it spends. So in theory, its cash balance should be higher. So, yes, I think the expectation would be yes. There's a one further question. Based on your stated breakeven position of 40,000 tons, when will we see the first set of accounts show an actual profit and positive cash flow from Mark h? Presumably not Mark Hayha because you would hope after spending years as the CEO of the company, you'd know the answer to that. So I hope that's not Mark Hayha writing these questions, but the answer is we are obviously due to issue a set of audited accounts in the first half of this year, which will be the accounts for last year. So, yeah, watch this space.

1:01:22 Anyhow, that concludes the questions that we had pre pre today's call, and it concludes the questions that have come through during the call. So I assume that's the end. So I thank you all very much for spending some time listening to me prattle on, and I hope I've answered your questions, and I hope I've given you a bit better insight. And so I said at the outset, if you have anything else, please contact us, and we'll be short at trying to set you straight. Brian, thanks for being so generous with with your time there. I think you did actually address every pre submitted and live question that came in from investors, and we'll publish that response on the investment company platform. Just before redirecting investors to provide you with their feedback, which I know is particularly important to the company, could I just ask you for a few closing comments?

1:02:11 Well, I think, you know, the thing that puzzles me and keeps me awake at night around HARVEST is, know, back when we raised that $9,700,000, the share price was, I think, $20.21 p or something, and we raised it at in the half. And we raised based on some expectations and promises of things to be done. And then the market downgraded us and, you know, expressed its dissatisfaction because it believed those things hadn't been done. And if we look back now over those few years, everything we said we were going to do, we've done and potentially more. And, you know, the future is brighter than it was when we were at twenty p. And so in terms of, you know, expectation, I think, you know, that there is no clear reasoning why why we're not heading that way again. I mean, the business has crossed the threshold now. I mean, the market acceptability of the product is extremely strong.

1:03:06 You know, our ability to continue to generate profits, I think, is irrefutable. Now it's just a question of, you know, how big do we get, how quickly do we get there, and how do we grow, you know, to to serve a shareholder's needs. So, you know, I feel extremely comfortable and confident that that the worst is behind us, and we have a very, very bright future. And, you know, hopefully, shareholders will understand that, you know, these things take a little bit of time. They and, you know, as we go forward, we're we're just going to get bigger and stronger, and and hopefully, yeah, our share price will reflect that. Brian, thanks again for updating investors today. Could I please ask investors not to close the session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations.

1:03:58 This will only take a few moments to complete. However, I'm sure we'll be greatly valued by the company. On behalf of the management team of HARVEST MINERALS, we'd like to thank you for attending today's presentation, and good morning to you.