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billfunk

Harvest Minerals #HMI 4.35p

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Harvest Minerals sell an ecologically friendly fertiliser which they mine and produce themselves and sell at 86% margin. Their processing plant is located in the middle of a huge agricultural district in Brazil, the world's fastest growing agricultural market. Having completed the processing plant they are now on the cusp of turning a profit in 2019. Currently valued at only £8m. If they manage to sell their full production they will generate EBITDA of $21.45m pa. At a very conservative P/E of 5 their MCAP will be $100m or £80m ball park. They have other mines in Brazil they are seeking to develop so there is potential to extend their growth runway further.

Price has been in a downtrend which reflects the cash burning nature of getting their operation up and running. Now is not the time to buy, however once price entry conditions are met and profit is announced this should signal steady growth in the medium term. This is a 10 bag opportunity once the price pops its head. For the time being, however, it is best to watch and wait for it to continue its slide downwards.

 

HMI.png

Edited by billfunk

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Discovered some negatives re HMI from a Twit friend. The product contains a lot of dust which customers require sieving prior to them buying it. Not a terminal problem but increases costs and makes sales harder. Still on the watchlist but will wait for further confirmation that they have sorted this out. Also there is a belief that the management team are not fully involved. 

Apparently there are a lot of biggish PIs and the BOD who are severely underwater here, if they jump ship now it could plummet further. 2-3p could be achievable.

 

Edited by billfunk

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@billfunk - do any of these recent announcements alter your perception of HMI? Any up-to-date thoughts on the company?

23 September: Fertiliser producer Harvest Minerals has expanded the current mining area and added additional run-of-mine storage capacity at its Arapua Project in Brazil, it announced on Monday. https://www.hl.co.uk/shares/stock-market-news/aim-and-small-cap-news/aim-bulletin/harvest-minerals-expands-mining-area-at-arapua-project

19 September: Fertiliser producer Harvest Minerals announced on Thursday that the Brazil Ministry of Agriculture (MAPA) has issued approval for its new 'big bag' handling and storage facility, located at the Arapua Project, where it produces multi-nutrient direct application natural remineraliser 'KPFértil'. https://www.hl.co.uk/shares/stock-market-news/aim-and-small-cap-news/aim-bulletin/harvest-minerals-gets-approval-for-big-bag-facility-at-arapua

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1 minute ago, Gordie Lastchance said:

@billfunk - do any of these recent announcements alter your perception of HMI? Any up-to-date thoughts on the company?

23 September: Fertiliser producer Harvest Minerals has expanded the current mining area and added additional run-of-mine storage capacity at its Arapua Project in Brazil, it announced on Monday. https://www.hl.co.uk/shares/stock-market-news/aim-and-small-cap-news/aim-bulletin/harvest-minerals-expands-mining-area-at-arapua-project

19 September: Fertiliser producer Harvest Minerals announced on Thursday that the Brazil Ministry of Agriculture (MAPA) has issued approval for its new 'big bag' handling and storage facility, located at the Arapua Project, where it produces multi-nutrient direct application natural remineraliser 'KPFértil'. https://www.hl.co.uk/shares/stock-market-news/aim-and-small-cap-news/aim-bulletin/harvest-minerals-gets-approval-for-big-bag-facility-at-arapua

I think the last week or so has been the beginning of its rise. My perception of the growth thesis remains intact, but my new found knowledge of the dust issue has lowered HMI's quality in my eyes. It is still on and I await a Livermore-esque entry point after the higher low is formed. My other shares are subdued and testing my patience so I may not have any funds to put in here anyway. 

It remains a viable mutlibag bet over the medium term in my eyes. Small risk at these levels, decent reward. 

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