EST MINE HARVEST MINERALS Developing Fertiliser Projects DEVELOPING FERTILISER PROJECTS TO MEET THE GROWING DEMAND IN BRAZIL AND THE WORLD Corporate advisor: Investor Presentation July 2015 ASX: HMI www.harvestminerals.net
Disclaimer The information in this presentation is an overview and does not contain all information necessary for investment decisions. In making investment decisions in connection with any acquisition of securities, investors should rely on their own examination of Harvest Minerals Limited (HMI or the Company) and consult their own legal, business and/ or financial advisers. The information contained in this presentation has been prepared in good faith by Harvest Minerals Limited, however no representation or warranty expressed or implied is made as to the accuracy, correctness, completeness or adequacy of any statements, estimates, opinions or other information contained in this presentation. To the maximum extent permitted by law, Harvest Minerals Limited, its directors, officers, employees and agents disclaim liability for any loss or damage which may be suffered by any person through the use or reliance on anything contained in or omitted from this presentation. Certain information in this presentation refers to the intentions of Harvest Minerals Limited, but these are not intended to be forecasts, forward looking statements or statements about future matters for the purposes of the Corporations Act or any other applicable law. The occurrence of events in the future are subject to risks, uncertainties and other factors that may cause Harvest Minerals Limited s actual results, performance or achievements to differ from those referred to in this presentation. Accordingly, Harvest Minerals Limited, its directors, officers, employees and agents do not give any assurance or guarantee that the occurrence of the events referred to in the presentation will actually occur as contemplated.
Introduction - A tale of two opportunities Potash and Phosphate unique combination of fertiliser projects requiring low capex and near term development horizons. SERGIPE POTASH PROJECT / SERGI AND CAPELA Strategically located next to the only producing potash mine in Brazil, Vale s Taquari-vassouras mine. Existing plant means low CAPEX and OPEX. Recently completed JORC Inferred Mineral Resource modeling and Preliminary Economic Scope Study indicated a robust project. Vale s mine is scheduled for closure in 2017. Leaving the Sergipe potash project ideally positioned for low capex startup. ARAPUA PHOSPHATE PROJECT Flotation test work on weathered kamafugite rocks has delivered a mass recovery of 20.4% with an average grade of 25.2% P 2 O 5. VALE S POTASH MINE ARAPUA PHOSPHATE PROJECT SERGIPE POTASH PROJECT
Right commodities and Right location EXCITING OPPORTUNITY JORC Inferred Mineral Resource of 62.0 Mt of Sylvinite grading 25.0% KCl. Current Exploration Target of a further 28 to 38Mt at 22% to 28% KCl 1. Initial drilling programme planned with the aim of upgrading the JORC Inferred Mineral Resource to Indicated status. Preliminary Economic Scoping Study completed 2. - Annual production of 600,000t of K60 - Initial mine life of 10.7 years with significant upside potential - Mineable resource of 27.4 Mt of sylvinite - Life of Mine average EBITDA of ~ US$140m per annum - OPEX estimated at US$38.95/t ROM and plant costs assumed at US$45/t - CAPEX estimated at US$ 427 million - Pre-tax NPV10 is $469m and an IRR 31.2% PROVEN MANAGEMENT TEAM WITH TRACK RECORD IN BRAZIL AND FERTILISERS Cautionary Statement 1. The potential quantity and grade of the Exploration Target is conceptual in nature, there has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource. 2. The Preliminary Scoping Study referred to in this announcement is based on low-level technical and economic assessments, and is insufficient to support estimation of Ore Reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Preliminary Scoping Study will be realised.
Right commodities and Right location IDEAL LOCATION Brazil is the largest potash importer and the third largest potash consumer in the world. 90% of potash is imported and the remaining 10% is produced by Vale on adjacent block to the Company s Sergipe Potash Project. Fertiliser demand in Brazil is estimated to grow twice as fast as overall global demand from now until 2025. All projects are ideally situated close to existing infrastructure and demand. Location drives low OPEX and CAPEX forecasts.
Brazil is the world s fastest growing fertiliser market Fertiliser demand in Brazil will grow twice as fast as overall global demand. Brazil is the world s largest exporter of sugar, coffee and orange juice and the 2nd largest in soybean exports. BRAZILIAN FERTILISER INDUSTRY SUPPLY Import VS Production Import Production Brazil is the world s 2nd largest importer of phosphate Brazil imports 90% of its potash and 51% of phosphate consumption. HARVEST MINERALS IS THE ONLY COMPANY WITH POTASH AND PHOSPHATE PROJECTS STRATEGICALLY LOCATED NEXT TO INFRASTRUCTURE AND MARKETS. 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0 10% 25% 27% 49% 90% 75% 73% 51% Potash Phosphate Nitrogen Total
Sergipe Potash Project / Sergi and Capela Potential to become a leading potash producer in Brazil. Consists of Sergi and Capela potash projects. Located in the Sergipe Alagoas Basin within 40km and 13km from Vale s Taquari-Vassouras mine respectively. Taquari-Vassouras is scheduled to expire in 2017 leaving both the Company s Sergi and Capela potash projects ideally positioned for a low capex development taking advantage of the existing infrastructure. The Taquari-Vassouras mine has been in production since 1985 and historically produced 400-800 thousand tonnes of K60.
Sergi Potash Project The Sergi project is located in the Sergipe Alagoas Basin and covers an area of 65 km 2. High grade zones of Potash intercepted: SYLVINITE Upper zone, 8.27m intercept averaging 20.94% KCI from 1189.38m, including 5.08m at 24.84%. Lower zone, 8.46m intercept averaging 28.98% KCI from 1221.86m, including 5.47m at 39.65%. CARNALLITE Upper zone, 12.81m intercept averaging 16.70% KCI from 1298.60m. Lower zone, 5.56m intercept averaging 21.11% KCI from 1313.90m.
Sergi Potash Project Inferred resource demostrates Economic Mine Life. Sergi Deposit: Mineral Resource Statement as at Effective Date June 10th 2015 Resource Class Lithology Mass (Mt) KCl (%) Equivalent K 2 O (%) Inferred Sylvinite 62.0 25.0 15.8 Carnallitite 43.3 15.9 10.0 Total Inferred 105.3 21.3 13.5 Notes on Resource Calculation: Triunfo Mineração do Brasil Ltd a wholly owned subsidiary company of Harvest Minerals Limited, holds 100% title to the Mineral Resources. The Mineral Resources are reported at a cut-off grade of 13% KCl. The Mineral Resources have been estimated according to general industry good practice and disclosed in compliance with the guidelines defined in the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (The JORC Code 2012 Edition). Equivalent K 2 O was calculated by the formula: Equivalent K 2 O = 0.63177 * KCl (%). Current Exploration Target of a futher 28 to 32 Mt at 22% to 28% KCl. Cautionary Statement The potential quantity and grade of the Exploration Target is conceptual in nature, there has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource.
Sergi Potash Project Scoping study points to LOW CAPEX and HIGHLY COMPELLING OPEX. CAPEX at US$427 million and sustaining CAPEX a total of $242 million. - Pre-tax NPV10 is $469m and an IRR 31.2% - Life of Mine 10.7 years - Production 600,000 tons per annum of K60 - EBITDA ~ $140m per annum The OPEX (mine) is estimated at US$37.28/t ROM and the transport costs by conveyor belt 35 km is estimated at US$1.67/t, totaling US$38.95/t ROM. Plant processing costs modelled at US$45 per ton. Vale s potash plant. The mining method proposed for the Sergi Potash Project is the Room and Pillar similar to the Vale s Taquari Vassouras mine project. The method consists in opening rooms for the removal of ore, leaving ore pillars for support. Cautionary Statement The Preliminary Scoping Study referred to in this presentation is based on low-level technical and economic assessments, and is insufficient to support estimation of Ore Reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Preliminary Scoping Study will be realised.
Capela Potash Project Lies within 13 Kilometres of Taquari-Vassouras, the only Potash mine in Brazil. The Capela Potash Project consists of eight granted exploration licenses covering total area of 11,212 hectares. The project is located in the Sergipe Alagoas Basin, which hosts significant deposits of sylvinite and carnallitite. Recently completed 3D seismic has confirmed that the Capela Potash Project is the possible northern extension to Vale s Taquari-Vassouras Potash Mine to the south. The 3D seismic has identified the potential presence of salt layers at relatively shallow depths of 235 to 325 metres. Vale s Taquari-Vassouras Potash Mine
Arapua Fertiliser Project Initial test results indicate a commercial grade product can be produced. The Arapua Fertiliser Project consists of eight granted exploration licenses covering total area of 14,946 hectares. The project is divided into three blocks Arapua, Pindaibas and Maxixe blocks. Flotation test work on weathered kamafugite rocks has delivered a mass recovery of 20.4% with an average grade of 25.2% P 2 O 5. At Pindaibas block, recent auger drilling returned values up to 14.8% P 2 O 5. The apatite-rich rocks are nearly horizontal and strongly weathered providing for an easy mine operation. Arapua Fertiliser Project Pre-development studies are ongoing which are aimed at developing commericial operations, including bulk sampling, drilling and agricultural testing.
Next Steps COMPLETE TEST WORK AT ARAPUA PROJECT INITIAL DRILLING AT CAPELA PROJECT WITH A CORRESPONDING SCOPING STUDY. COMMENCEMENT OF A BFS ON THE SERGI PROJECT. COMMENCE DRILLING AT SERGI PROJECT TO ACHIEVE JORC INDICATED STATUS. LISTING ON AIM IN THE CURRENT QUARTER. July 2015 December 2015
Contact Harvest Minerals (ASX:HMI) STREET ADDRESS: POSTAL ADDRESS: CONTACT NUMBERS: Level 1, 330 Churchill Avenue PO Box 540 Tel: +61 8 9200 6264 info@harvestminerals.net SUBIACO WA 6008 SUBIACO WA 6904 Fax: +61 8 9200 4469 www.harvestminerals.net Australia Australia FORWARD-LOOKING STATEMENTS This presentation includes certain forward-looking statements. All statements, other than statements of historical fact, are forward-looking statements that involve various risks and uncertainties. There can be no assurances that such statements will prove accurate, and actual results and future events could differ materially from those anticipated in such statements. Such information contained herein represents management s best judgement as of the date hereof based on information currently available. The company does not assume the obligation to update any foward looking statement. CAUTIONARY STATEMENT The potential quantity and grade of the Exploration Target is conceptual in nature, there has been insufficient exploration to estimate a Mineral Resource and it is uncertain if further exploration will result in the estimation of a Mineral Resource. The Preliminary Scoping Study referred to in this presentation is based on low-level technical and economic assessments, and is insufficient to support estimation of Ore Reserves or to provide assurance of an economic development case at this stage, or to provide certainty that the conclusions of the Preliminary Scoping Study will be realised. COMPETENT PERSON STATEMENT Coffey provided to the Company an independent technical CP report with all the information used and results obtained. The CP Report is entitled Sergi Potash Project JORC (2012) Compliant Mineral Resource Estimate with an effective date of 10 June 2015. The primary author of the CP Report is Mr. Leonardo Soares (BSc Geo) and the secondary author is Mr. Porfírio Rodriguez (BSc Eng). Mr. Soares and Mr. Rodriguez are members of Australian Institute of Geoscientists (MAIG) and both has sufficient experience which is relevant to the style of mineralization and the type of deposit under consideration to be qualified as Competent Person as defined in the 2012 Edition of the Australasian Code for Reporting of Exploration results, Mineral Resources and Ore Reserves. Mr. Sousa and Mr. Rodriguez accept responsibility for the accuracy of the statements disclosed in this presentation.