Harvest Minerals spikes on promising fertiliser study

10th Aug 2016 10:20

(ShareCast News) - Harvest Minerals shares spiked as an initial study confirmed its Brazilian fertiliser project could be financed from existing cash reserves, with first production due later this year.The scoping study indicated that Harvest Minerals's Maximus direct application natural fertiliser (DANF) project, based in Brazil's Minas Gerais region, will generate annual production of 100 kiltonnes (kt) of phosphate and potassium for at least seven years, based on an indicated JORC resource of 883kt.The study focused on pit optimization and design, mine scheduling, capital expenditure (capex), operational expenditure (opex), estimates and a preliminary economic assessment based on the current initial resource, which represents only around 3% of the estimated mineralisation.Extraction will be possible from an open pit, with very simple dry processing required, indicating low operating costs of US$4.77 per tonne mined and processed and US$7.34 per tonne including selling costs and general and administrative expenses.Executive chairman Brian McMaster said: "Completion of this study brings us one step closer to our objective of designing a simple and efficient project that delivers significant value for Harvest and its shareholders. There is significant upside to the project both in terms of the current resource and potential to expand the planned initial production with the project ideally located in the prime agricultural Cerrado region where fertilizer demand is high."McMaster said the company is in the process of appointing contractors to carry out the mining and processing, which in effect could significantly reduce the initial capex requirements and further reduce its opex costs.Having shot up to 9.05p in the early hours of Wednesday, the highest since it collapsed from above 50p to under 6p in December last year, the shares tapered off to 7.70p at 1030 BST.