Can Harvest Minerals recover?
Looking for a small company that has not been impacted by coronavirus? Despite recent falls in its share price, Harvest Minerals appears to currently fit that mould. The Aim-listed remineraliser producer told its investors this week that Covid-19 is yet to effect its operations.
Harvest Minerals’ share price has been performing poorly on the stock exchange since the summer of 2018, when it was trading at more than 20p.
Today, its share price is well down at 2.5p, having fallen from around 4p earlier in the year. Bosses are likely surprised by this performance given some of the positive news they’ve pushed out recently.
On Tuesday, 31 March, Harvest Minerals provided the market with a corporate update. As well as reporting no impact from Covid-19 to date, the firm also highlighted a “strong balance sheet” and some other positive developments.
Although its annual financial results to 31 December are being delayed until late in the second quarter, due to the coronavirus pandemic, Harvest provided some encouraging news on its sales and marketing operation. Its team in this area is expanding, and it said orders were up 150 per cent year-on-year to the end of February.
Brian McMaster, the firm’s executive chairman, explained: While the company has yet to be affected by coronavirus, bosses are being cautious rather than “complacent”.
“We are currently in the wet season in Brazil, a traditionally quieter period for us, and so our operations have not yet been directly impacted by the global pandemic,” he said.
“However, we do know that Brazilian farmers are taking advantage of the weaker Reais, which has fallen by 17% this year against the US$, and that they have already pre-sold 20% of this year’s soybean harvest.
“Naturally, this is driving an increased demand for fertilisers; forecasts suggest a 3% growth in fertilisers this year.
“The weaker Reais also means that imported fertiliser prices are higher and that the supply chain is currently disrupted; this may strengthen our proposition as a local producer.”
But he added that these are “unprecedented times and whilst there have been no reported cases of COVID-19 near the Arapua Project, we cannot afford to be complacent.
“We place the safety of our staff, customers and community as the highest priority and have therefore implemented a series of measures to help protect our team and community as best we can.
“We would like to take this opportunity to send our thoughts and best wishes to all at this difficult time and will continue to monitor updates on the COVID-19 pandemic closely and update shareholders as the situation evolves.”
Earlier in March, Harvest also announced a new cost-savings plan to improve its performance at its Arapua project in Brazil. The programme aims to save around $400,000 a year. The company also had positive news in late February, announcing it had obtained a full mining permit the Arapua fertiliser project.
Despite the company laying on plenty of positive news in the last month or so, its share has continued to fall. Bosses and longstanding shareholders will be hoping for and expecting, a recovery on the stock market soon.
Footage Frome Harvest Minerals Mine Site & Processing Plant Late January 2020
The author was remunerated but holds no shares in the company mentions