Harvest Minerals : HMI Final Financial Report 31 Dec 2023PDF, 1.

HARVEST MINERALS LIMITED

ABN 12 143 303 388

Financial Report

For the year ended 31 December 2023

Harvest Minerals Limited

CONTENTS	PAGE NO
Corporate Directory	1
Directors' Report	2
Corporate Governance Statement	10
Consolidated Statement of Comprehensive Income	17
Consolidated Statement of Financial Position	18
Consolidated Statement of Changes in Equity	19
Consolidated Statement of Cash Flows	20
Notes to the Financial Statements	21
Directors' Declaration	47
Auditor's Independence Declaration	48
Independent Auditor's Report	49
Tenement Table	54

Harvest Minerals Limited

CORPORATE DIRECTORY
Directors	Registered Office
Mr Brian McMaster (Executive Chairman)	22 Lindsay Street
Mr Luis Azevedo (Executive Director)	Perth WA 6000 Australia
Mr Jack James (Non-Executive Director)	Telephone:	+ 61 8 9200 1847
Mr Alex Penha (Non-Executive Director)	Facsimile:	+ 61 8 9227 6390

Company Secretary	Stock Exchange
Mr Jack James	The Company's securities are quoted on
	the AIM market of the London Stock Exchange.
Share Registry	AIM Code: HMI
Computershare Investor Services plc
The Pavilions
Bridgwater Road
Bristol BS99 6ZZ
Telephone: [phone]
Auditors
HLB Mann Judd (WA Partnership)
Level 4
130 Stirling Street
Perth WA 6000
Nominated & Financial Adviser
Strand Hanson Limited
26 Mount Row
London W1K 3SQ
United Kingdom
Broker
Tavira Securities Limited
88 Wood Street
London EC2V 7DA
United Kingdom

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Year ended 31 December 2023 Corporate Directory

Harvest Minerals Limited

Directors' Report

The Directors present their report for Harvest Minerals Limited ('Harvest' or 'the Company') and its subsidiaries ('the Group') for the year ended 31 December 2023.

DIRECTORS

The names, qualifications and experience of the Company's Directors in office during the year and until the date of this report are as follows. Directors were in office for the entire period unless otherwise stated.

Mr Brian McMaster - Executive Chairman

Mr McMaster is a Chartered Accountant and has over 27 years' experience in the area of corporate reconstruction and turnaround/performance improvement. Formerly, Mr McMaster was a partner of the restructuring firm Korda Mentha and prior to that was a partner at Ernst & Young. His experience includes significant working periods in the United Kingdom, South America, Asia and the United States.

Mr McMaster is currently a director AIM quoted Jangada Mines Plc (appointed 30 June 2015) and AIM quoted Arc Minerals Limited (1 August 2017). Mr McMaster was a director Valor Resources Ltd (appointed 10 January 2017, resigned 6 October 2022). He has not held any other listed directorships in the past three years.

Mr Luis Azevedo - Executive Director

Mr Azevedo is a resource industry professional with over 36 years of international experience. Mr Azevedo qualified as a geologist at the University of Rio de Janeiro in 1985 and, subsequent to working as a geologist, he completed a law degree at the University of Candido Mendes in 1992 and obtained his Master of Law from Pontifical Catholic University Rio de Janeiro in 1994. Mr Azevedo has held senior positions with major resource companies including Western Mining Corporation, Barrick Gold and Harsco. In 2004 he founded legal firm, FFA Legal, based in Rio de Janeiro, which provides specialist legal and technical support to resource companies operating in Brazil. Mr Azevedo is based in Rio de Janeiro, Brazil and is a Brazilian citizen.

Mr Azevedo is currently a director of TSX-V listed Aranjin Resources Limited (appointed 20 April 2017), AIM quoted Jangada Mines plc (appointed 5 May 2017), TSX listed company Talon Metals Corp (appointed 5 April 2005), TSX-V listed Bravo Mining Corp. (appointed 17 January 2022), Over The Counter exchange traded Brazil Minerals Inc (appointed 1 January 2014) and TSX listed / AIM quoted Serabi Gold plc (appointed 27 April 2020) . He has not held any other listed directorships in the past three years.

Mr Jack James - Non-Executive Director & Company Secretary

Mr James was appointed as a Non-Executive Director on 3 July 2017. He is a Chartered Accountant and holds a Bachelor of Business from the Queensland University of Technology. Mr James has over 25 years' experience in chartered accounting specialising in corporate advisory and reconstruction. Mr James is a Partner of Palisade Business Consulting which provides accounting, secretarial and advisory advice to private and public companies, government and other stakeholders, including to the Company.

Mr James holds no other current listed directorships. He has not held any other listed directorships in the past three years.

Mr Alex Penha - Non-Executive Director

Mr. Penha has over 20 years of experience in capital markets focused on junior mining companies. He has played key roles with both private and publicly traded companies, executing equity raises, implementing listing transactions, and developing corporate and M&A strategies. Mr Penha is currently an officer of TSX-V listed Bravo Mining Corp. and serves in the role of EVP Corporate Development. Past roles include CFO with GK Resources Ltd., Founder and VP Corporate Development with Rio Verde Minerals Development Corp., Mr Penha holds no other current listed directorships and has not held any other listed directorships in the past three years.

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Year ended 31 December 2023 Report to Shareholders

Harvest Minerals Limited

Directors' Report

DIRECTORS' MEETINGS

During the year ended 31 December 2023 the number of meetings of Directors held and the number of meetings attended by each Director were as follows:

	Number of Meetings	Number of Meetings
Director	Eligible to Attend	Attended
Mr Brian McMaster	5	5
Mr Luis Azevedo	5	5
Mr Jack James	5	5
Mr Alex Penha	5	5

In addition to the formal meeting of Directors above, the Board has regular and frequent discussions throughout the period and passed circular resolutions on all material matters.

REMUNERATION REPORT (AUDITED)

This report outlines the remuneration arrangements in place for Key Management Personnel of Harvest Minerals Limited in accordance with the requirements of the Corporation Act 2001 and its Regulations. For the purpose of this report, Key Management Personnel of the Company are defined as those persons having authority and responsibility for planning, directing and controlling the major activities of the Group, directly or indirectly, including any Director of the Group.

The remuneration report is set out under the following main headings:

• Principles used to determine the nature and amount of remuneration
• Service agreements
• Details of remuneration
• Share-basedcompensation
• Additional disclosures relating to Key Management Personnel

Principles used to determine the nature and amount of remuneration

The Board is responsible for determining and reviewing compensation arrangements for the Directors. The Board assesses the appropriateness of the nature and amount of emoluments of such officers on a periodic basis by reference to relevant employment market conditions with the overall objective of ensuring maximum stakeholder benefit from the retention of a high quality board and executive team. The Group does not link the nature and amount of the emoluments of such officers to the Group's financial or operational performance. The expected outcome of this remuneration structure is to retain and motivate Directors.

As part of its Corporate Governance Policies and Procedures, the Board has adopted a formal Remuneration Committee Charter. Due to the current size of the Group and number of directors, the Board has elected not to create a separate Remuneration Committee but has instead decided to undertake the function of the Committee as a full Board under the guidance of the formal charter.

The Board determines appropriate levels of performance rewards as and when they consider rewards are warranted. The Group has no policy on Executives and Directors entering into contracts to hedge their exposure to options or shares granted as part of their remuneration package.

The table below shows the performance of the Group as measured by earnings/(loss) per share since 2019:

As at	31 Dec 2023	31 Dec 2022	31 Dec 2021	31 Dec 2020	31 Dec 2019
Earnings/(loss) per share (cents)	(1.68)	0.11	(2.24)	(1.79)	(0.49)

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Year ended 31 December 2023 Report to Shareholders

Harvest Minerals Limited

Directors' Report

Service Agreements

Executive Director Remuneration

The executive chairman and executive director are both paid an annual fee monthly under respective service agreements with the Company. Employment under each agreement continues unless validly terminated in accordance with the agreement. Services may be terminated by either party at any time with 12 months written notice and there are no termination payments provided under the agreement.

Non-Executive Director Remuneration

The non-executive directors are paid an annual fee monthly under respective service agreements with the Company. Their services may be terminated by either party at any time with 3 month's written notice and there are no termination payments provided under the agreements.

Details of Remuneration

The Key Management Personnel of the Group consisted of the following directors of the Company.

Mr Brian McMaster	Executive Chairman
Mr Luis Azevedo	Executive Director
Mr Jack James	Non-Executive Director
Mr Alex Penha	Non-Executive Director

Details of the remuneration of the Key Management Personnel of the Group are set out in the following tables.

			Short term		Shares	Post
				employment
31 December	Base	Directors'	Consulting	Share			Performance
2023	based
	Salary	Fees	Fees	Payments	Superannuation	Total	Related
Director	$		$	$	$	$	$	%
Mr McMaster	-	-	493,950	-	-	493,950	-
Mr Azevedo	-	225,366	-	-	-	225,366	-
Mr James	-	60,000	-	-	-	60,000	-
Mr Penha	-	29,047	-	-	-	29,047	-
	-	314,413	493,950	-	-	808,363	-
			Short term		Shares	Post
				employment
31 December	Base		Directors'	Consulting	Share			Performance
2022		based
	Salary		Fees	Fees	Payments	Superannuation	Total	Related
Director	$		$	$	$	$	$	%
Mr McMaster	-		-	471,266	-	-	471,266	-
Mr Azevedo	-		228,268	-	-	-	228,268	-
Mr James	-		60,000	-	-	-	60,000	-
Mr Penha	-		26,954	-	-	-	26,954	-
	-		315,222	471,266	-	-	786,488	-

During Q2 2023, the Directors agreed to pause drawing their remuneration due from the Company until such point as the Company is in a better position to pay.

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Year ended 31 December 2023 Report to Shareholders

Harvest Minerals LimitedDirectors' Report

Details of Remuneration (continued)

As at 31 December 2023, the amounts owing in respect to Director remuneration was as follows:

	Amount owing as at
	31 December 2023
	$
Mr McMaster	295,228
Mr Azevedo	190,401
Mr James	23,788
Mr Penha	7,444
Total	516,861

As at the date of this report:

• The Directors have continued to pause drawing their remuneration.
• The above amounts remain outstanding, together with Directors fees owing for the period since 1 January 2024.
• In May 2024, the Directors resolved to convert amounts owing for Directors' fees to shares in the Company. As at the date of this report, the pricing and timing of such conversion is yet to be determined.

Refer to note 24 in the Financial Statements for further information on Related Party Disclosures.

Share-Based Compensation

Issue of shares

There were no shares issued to Key Management Personnel during the period ended 31 December 2023.

Options

There were no options issued to Key Management Personnel during the period ended 31 December 2023.

Additional disclosures relating to Key Management Personnel

Shareholdings

The number of shares in the Company held during the year ended 31 December 2023 by each Director, including their related parties, is set out below.

	Balance at the	On appointment	Balance on	Purchased	Granted relating	Balance at
	start of the	to the Board	resignation	during the	to performance	the end of
	period	during the period	from the Board	period	conditions	the period
Mr McMaster	7,242,996	-	-	-	-	7,242,996
Mr Azevedo	1,645,135	-	-	-	-	1,645,135
Mr James	-	-	-	-	-	-
Mr Penha	-	-	-	-	-	-

Other transactions with Key Management Personnel

FFA Legal Ltd, a company in which Mr Azevedo is a director, provided the Group with legal and accounting services in Brazil totalling $314,798 (31 December 2022: $237,225). $nil (31 December 2022: $nil) was outstanding at year end.

Palisade Business Consulting Pty Ltd, a company in which Mr James is a director and shareholder, provided the Company with accounting and company secretarial services and provided a serviced office. Fees for Mr James' services as a director and company secretary are paid into this company. Fees invoiced by Palisade Business Consulting totalled $210,375 (31 December 2022: $186,000), which includes $60,000 (31 December 2022: $60,000) of directors' fees.

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Year ended 31 December 2023 Report to Shareholders

Harvest Minerals Limited

Directors' Report

Additional disclosures relating to Key Management Personnel (continued)

During Q2 2023, at the same time that the Directors agreed to pause payment of their remuneration, Palisade Business Consulting also agreed to a pause in the payment of its fees. As at year end, Palisade Business Consulting was owed $118,338 (31 December 2022: $nil). As at the date of this report, this amount remains outstanding, together with amounts invoiced since 1 January 2024.

In May 2024, Palisade Business Consulting agreed to convert amounts owing for accounting and company secretarial services and serviced office fees to shares in the Company. As at the date of this report, the pricing and timing of such conversion is yet to be determined.

These transactions have been entered into on normal commercial terms and conditions no more favourable than those available to other parties unless otherwise stated.

END OF REMUNERATION REPORT

AUDIT COMMITTEE REPORT

The Board has formally adopted an Audit and Risk Committee Charter but given the present size of the Company, has not formed a separate Audit & Risk Committee. Instead, the function of the Committee has, to date, been largely undertaken by certain members of the Board in accordance with the policies and procedures outlined in the Audit and Risk Committee Charter. At such time when the Company is of sufficient size a separate Audit and Risk Committee will be formed.

During the year ended 31 December 2023, the full Board discharged its responsibilities in respect to the Audit and Risk Committee Charter by reviewing the Company's draft financial statements and interim results statement prior to board approval and reviewing the external auditor's detailed reports thereon while Brian McMaster and Jack James, acting as a subcommittee of the Board, have:

• reviewed the appropriateness of the Company's accounting policies;
• reviewed regularly the potential impact in the Company's financial statements of certain matters;
• reviewed and approved the audit fee and reviewed non-audit fees payable to the Company's external auditors. No non- audit fees were paid to the Company's external auditors during the period ended 31 December 2023; and
• liaised with the external auditors for the audit of the Company's accounts, which included discussion of key areas of audit focus, key risks on the accounts, confirmations of auditor independence and the proposed audit fee and approving the terms of engagement for the audit.

Under its terms of reference, the Board monitors the integrity of the Company's financial statements and any formal announcements relating to the Company's financial performance, reviewing any significant financial reporting judgements contained in them.

The Board is responsible for monitoring the external auditor's independence and objectivity, the effectiveness of the external audit process and the appointment, reappointment and remuneration of the external auditor. It is responsible for ensuring that an appropriate relationship between the Company and the external auditors is maintained, including reviewing non-audit services and fees.

The Board keeps under informal review, the need for the Company to have an internal audit function. Due to the size of the Company, the Board does not currently consider it appropriate for the Company to have an internal audit function.

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Year ended 31 December 2023 Report to Shareholders

Harvest Minerals Limited

Directors' Report

RESULTS OF OPERATIONS

The Group made a net loss after taxation for the year ended 31 December 2023 of $3,180,605 (31 December 2022: maiden net profit of $197,797), which included non-cash expenses. The following is a reconciliation from net profit to earnings, before interest, taxations, depreciation, and amortisation (EBITDA) and adjusted EBITDA:

	31 December	31 December
	2023	2022
	$'m	$'m
Net Profit / (Loss)	(3.2)	0.2
Interest	0.2	0.1
Tax	0.1	0.3
Depreciation	0.5	0.4
Amortisation	0.2	0.4

EBITDA	(2.2)	1.4
Impairment - trade receivables	0.5	0.5
Impairment - capitalised exploration	-	0.6
Adjusted EBITDA	(1.7)	2.5

The net assets of the Group at 31 December 2023 were $7,332,564 (31 December 2022: $9,713,742) and its cash position

was $795,554 (31 December 2022: $2,723,509).

DIVIDENDS

No dividend was paid or declared by the Company in the year ended to 31 December 2023 and up to the date of this report. The Board continues to review its dividend policy and expects over time to return cash to shareholders through a combination of dividends and share buybacks as profitability allows.

CORPORATE STRUCTURE

Harvest Minerals Limited is a company limited by shares which is incorporated and domiciled in Australia.

NATURE OF OPERATIONS AND PRINCIPAL ACTIVITIES

During the financial year, the principal activity of the Group was mineral exploration and production of organic natural fertiliser at its Arapua Fertiliser Project. The Group currently holds mining and agricultural related projects in Brazil.

REVIEW OF OPERATIONS

Arapua Fertiliser Project (Arapua)

Arapua is the Company's principal business unit and currently its sole source of revenue. The Company's focus during the year, and in prior years, has been progressing commercial production and revenue generation.

2023 proved to be a challenging year for the Company and its key project, Arapua. Following the record high global fertilizer prices seen in 2022 after sanctions on Russia and Belarus triggered a global supply shortage, stocks returned to normal levels in 2023 causing the price of fertilizers to drop. Simultaneously, the price of the soybean, the main crop planted in Brazil, also dropped, reaching levels below the expectations of the farmers and, in some cases, close to the cost of production. Accordingly, farmers postponed the sale of grains in 2023 in anticipation of a price increase and postponed the purchase of fertilizers in anticipation of a price drop.

As a result, total sales for the year were 40,991 tonnes, which included 11,367 tonnes of orders placed in 2022, but only delivered, and therefore recognised as revenue, in 2023. The volatility experienced by the Company during 2023 was a macroeconomic issue and outside the control of the Company. In response to the difficult market conditions, the Company

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Year ended 31 December 2023 Report to Shareholders

Harvest Minerals Limited

Directors' Report

took steps to reduce overhead and operating expenses. As and when the market improves, the Company is positioned to support higher sales volumes and rebuild profitability at its low cost and high margin Arapua operation.

In order to reduce the Company's cash burn rate, the Directors agreed to pause drawing their remuneration due from the Company during Q2 2023 until such point as the Company is in a better position to pay. As at the date of this report, the pause in payment of remuneration remains in place.

Subsequent to year end, and despite soybean prices remining low, fertilizer values began to stabilise bringing greater predictability.

Sergi Potash Project & Iguatama Limestone Project

Given the challenges being experienced at the Arapua project, the Company did not advance either its Sergi Potash Project or its Iguatama Limestone Project during the year to 31 December 2023.

Corporate Activity

Issue of Shares

There have been no shares issued by the Company during the period.

SIGNIFICANT CHANGES IN THE STATE OF AFFAIRS

There were no significant changes in the state of affairs of the Company during the period, other than as set out in this report.

SIGNIFICANT EVENTS AFTER THE BALANCE DATE

As announced to the market on 15 February 2024, the Group has set 2024 sales guidance of 70,000 tonnes of placed orders.

In May 2024, the Directors resolved to convert amounts owing for Directors' fees to shares in the Company. As at the date of this report, the pricing and timing of such conversion is yet to be determined.

In April 2024, the Group sourced a drawdown of an existing Working Capital loan for $R2,500,000.

In May 2024, Palisade Business Consulting agreed to convert amounts owing for accounting and company secretarial services and serviced office fees to shares in Company. As at the date of this report, the pricing and timing of such conversion is yet to be determined.

There have been no other significant events subsequent to the balance date.

LIKELY DEVELOPMENTS AND EXPECTED RESULTS OF OPERATIONS

The Directors have excluded from this report any further information on the likely developments in the operations of the Company and the expected results of those operations in future financial years, as the Directors believe that such information would be speculative in nature.

ENVIRONMENTAL REGULATIONS AND PERFORMANCE

The Group carries out operations that are subject to environmental regulations under legislation in Brazil. The Group has formal procedures in place to ensure regulations are adhered to. The Group is not aware of any breaches in relation to environmental matters.

SHARES UNDER OPTIONS AND WARRANTS

No option or warrant holder has any right under the options to participate in any other share issue of the Company or any other entity. No other options or warrants were exercised during or since the end of the financial year.

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Year ended 31 December 2023 Report to Shareholders