Harvest Minerals Limited / Index: LSE / Epic: HMI / Sector: Mining. Harvest Minerals Limited ( Harvest or the Company ) FY 2017 Audited Annual Results

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1 28 September 2017 Harvest Minerals Limited / Index: LSE / Epic: HMI / Sector: Mining Harvest Minerals Limited ( Harvest or the Company ) FY 2017 Audited Annual Results Harvest Minerals Limited, the AIM listed fertiliser development company, is pleased to announce its final audited annual results for the year ended 30 June The Company s annual report and accounts will be posted to shareholders shortly and uploaded to the Company s website. Overview Focussed on building a leading fertiliser business to take advantage of strong market fundamentals, in particular the announcement from the Brazilian Government that it has set a target to be self-sufficient in fertilisers by 2020 Advancing the Arapua multi-nutrient direct application natural fertiliser project, located in the heart of the Brazilian agriculture belt in Minas Gerais state Current resource of over 13Mt, achieved from 6.7% of identified resource, giving the project a +30-year mine life at a rate of 450k tonnes per annum Application for a full mining concession underway rolling four-year Trial Mining License in place, which facilitates the Company s current production Multiple agronomy trials demonstrate that KPfértil works as a fertiliser and has a positive agronomic efficiency Focus on gaining certification of KPfértil as a remineraliser application submitted and a positive initial response received from the Brazilian Ministry of Agriculture, Livestock and Supply Strong sales team and local sales pipeline sales expected in Q4 2017, ramping up once certification achieved Continue to review other projects that fit investment criteria and utilise Board s extensive experience in the sector For further information please visit or contact: Harvest Minerals Limited Brian McMaster Tel: (Chairman) Strand Hanson Limited James Spinney Tel: +44 (0) (Nominated & Financial Adviser) Ritchie Balmer Mirabaud Securities LLP Rory Scott Tel: +44 (0) (Joint Broker) Beaufort Securities Ltd Jon Belliss Tel: +44 (0) (Joint Broker) St Brides Partners Ltd Isabel de Salis Tel: +44 (0) Olivia Vita This announcement contains inside information for the purposes of Article 7 of EU Regulation 596/

2 Chairman s Statement I am pleased to provide an update on our recent activity and outline our plans for the future. Harvest remains focussed on building a leading fertiliser business to take advantage of strong market fundamentals, given Brazil s increasing reliance on fertiliser and its stated target to be self-sufficient in fertilisers by 2020; it currently imports 90% of the potash it uses. To this end, we continue to progress the advanced Arapua multi-nutrient direct application natural fertiliser ( DANF ) project ( Arapua ), located in the heart of the Brazilian agriculture belt in Minas Gerais. Arapua has a current resource of over 13Mt at 3.1% K2O and 2.49% P2O5, achieved from only 6.7% of identified resource, which translates into a mine life of over 30 years at a rate of 450k tonnes per annum. With its established infrastructure and local market, proven sales team and product ready for delivery, the foundations are in place for a robust business. Currently, the Company has a rolling four-year Trial Mining License allowing Harvest to extract 50kt of Arapua s product, KPfértil, on a rolling basis. However, the Company is in the process of applying for a full mining concession; as part of this process, in April 2017, the Company submitted a Final Exploration Report on Arapua to the National Department of Mineral Production ( DNPM ), which detailed all the geological, metallurgical and agronomic work completed to date. The DNPM continues to consider the report and once approved, the Company has up to a year to submit a feasibility study and environmental report as the final steps in the application process for the full mining licences. Once granted, Harvest will be obliged to pay US1 million to the third-party vendors of the Arapua project and therefore, we intend to utilise the full period available to submit the remaining reports. For the avoidance of doubt, whilst this process is ongoing, production from Arapua can continue pursuant to the trial mining license unabated. Our focus remains on gaining certification and developing sales channels. In line with this, the Company has submitted an application for certification of KPfértil as a remineraliser to the Brazilian Ministry of Agriculture, Livestock and Supply ( MAPA ). KPfértil is an organic, multi-nutrient, slow-release fertiliser and remineraliser produced from a weathered potassium and phosphate rich lava, which offers many economic and agronomic benefits. As part of the certification process, the Company has undertaken multiple agronomy trials, conducted by three organisations: The Federal University of Varginha; The Institute of Agricultural Research of Cerrado; and The Federal University of Uberlandia. These tests include: Chemical and physical analysis - to confirm the product meets minimum specifications and that it is not hazardous; Kinetic studies (incubation and leaching) - to demonstrate the product is able to release nutrients into the soil and how quickly they are leached from the soil; and Agronomic efficiency test work (growth tests) - to demonstrate the nutrients can be utilised by plants and that the product works effectively as a remineraliser. Results from tests undertaken to determine if plants could use the nutrients in KPfértil when applied to the soil and comparing these results with either no fertiliser or conventional fertilisers demonstrate that KPfértil works as a fertiliser and has a positive agronomic efficiency. Rice crops applied with KPfértil demonstrated a 2

3 substantial increase in dry matter production: no fertiliser - from 3.98g per plant; conventional source of potassium ( KCI ) - from 5.03g per plant; and KPfértil - up to 59.44g per plant. Compared to conventional sources potassium ( K ) and phosphate ( P ), applying the same dose of K and P as KPfértil in clayey soils produced up to 73.09% of the dry matter produced using expensive, conventional fertilisers. Similarly, tests conducted by Santinato & Santinato Cafés Ltda ( Santinato ), a renowned agronomic consulting company in Brazil specialising in coffee cultivation, at one of the Veloso Agropecuária coffee plantations, considered one of the largest coffee producers in the Brazilian Cerrado, indicate KPfértil as effective as traditional fertilisers in supplying potassium ( K ) and phosphate ( P ) to coffee plants. A second cycle of agronomic growth tests on rice and beans is underway to test KPfértil on winter crops; we anticipate that the results, expected Q4 2017, will demonstrate the long-term benefits, of using KPfértil as a slow release fertiliser, to potential customers. In accordance with MAPA regulations, the Company recently gave a presentation to MAPA representatives on KPfértil including the results of all the chemical, physical and agronomic tests conducted to date. This was warmly received and formal application was submitted to MAPA on Thursday 25 th September. As part of the process, MAPA requested that a covered storage shed be constructed, which we are duly building. Harvest will provide any further results of the current test work to MAPA as requested and the entire registration process is expected to be complete by the end of This will be before the next buying season, which will greatly benefit our sales effort. With regards to sales, the Company continues to advance off-take agreements. Post period end, in July 2017, we appointed a new Sales Manager, Mr Lino Furia, who has over 20 years experience in the management of crop production and the development of new products and markets in Brazil. Having worked with several major fertiliser companies including Vale Fertilisers, Yara Fertilisers and Mosaic Fertilisers, as well as phosphate miner, Rio Verde Minerals, Lino s contacts in the sector are extensive and experience second to none. Naturally, his job will be made easier once KPfértil is certified as a remineraliser, however, we are delighted with his initial progress, which has seen him advance agreements with a large number of potential customers ranging from consumers, co-operatives, agricultural distributors and trade bodies; these efforts are expected to bear fruit imminently. Following feedback from potential customers, the Company purchased a crusher, which is now operating on site. Given the expected selling price of KPfértil, the Company expects that farmers will see tangible economic benefits in introducing KPfértil to their fertiliser rotation and that sales will rapidly gain traction during Additionally, the Company has a portfolio of other projects including: the Sergi Potash Project, where high grade and economic zones of potash have been intercepted; the Capela Potash Project, where 3D seismic has identified the potential presence of salt layers at relatively shallow depths; and the Mandacaru Phosphate Project, which has a JORC (2012) compliant total resource of 4.55% phosphorus. Whilst our focus is on advancing Arapua to fully operational status, these projects are on hold. Looking ahead, we remain committed to developing our business and believe that the stars are lining up for us: we have the right commodity given continued global population growth that requires increased food production 3

4 and therefore increased need for fertiliser; we are in the right location, given that Brazil, the largest agribusiness exporter, set to double by 2024, lacks domestic fertiliser and currently imports 90% of potash and 51% of its phosphate requirements; and this is the right time, given Arapua s location and its simple, low cost product with its +80% margin and excellent expansion potential. I am confident that the foundations are in place for an extremely profitable business; subject to attaining certification, we anticipate national demand for our product to significantly increase and remain optimistic that Harvest will become a key player in the market. We also continue to review other projects that fit our investment criteria and would enable us to utilise our extensive experience in the sector. As we move forwards towards achieving our objectives, I would like to thank our entire team for their continued commitment and our shareholders for their ongoing support. Brian McMaster Chairman 28 September 2017 Consolidated Statement of Comprehensive Income for the year ended 30 June 2017 Notes 2017 Consolidated Revenue Interest income 12,686 5,872 Other income 1,156 - Revenue 13,842 5,872 Public company costs (36,411) (132,395) Accounting and audit fees (159,327) (89,636) Consultant and directors fees 4 (1,422,429) (1,412,287) Legal fees (57,789) (385,349) Share based payments 23 (144,583) - Travel expenses (131,718) (199,941) Impairment of exploration expenditure 11 (2,494) (21,537) Foreign exchange (loss) / gain (29,835) (160,349) Other expenses 5 (660,012) (424,850) Loss from continuing operations before income tax (2,630,756) (2,820,472) Income tax benefit Loss from continuing operations after income tax (2,630,756) (2,820,472) 4

5 Net loss for the year (2,630,756) (2,820,472) Other comprehensive (loss) / income Item that may be reclassified subsequently to profit or loss Foreign currency translation (119,402) 57,906 Other comprehensive loss for the year (2,750,158) (2,762,566) Total comprehensive loss for the year (2,750,158) (2,762,566) Loss per share attributable to owners of Harvest Minerals Limited Basic and diluted loss per share (cents per share) 20 (2.49) (3.97) The above Consolidated Statement of Comprehensive Income should be read in conjunction with the accompanying notes. 5

6 Consolidated Statement of Financial Position as at 30 June 2017 Notes 2017 Consolidated CURRENT ASSETS Cash and cash equivalents 7 1,386,284 2,737,190 Trade and other receivables 8 39,924 83,468 TOTAL CURRENT ASSETS 1,426,208 2,820,658 NON-CURRENT ASSETS Plant and equipment 10 12,149 14,894 Deferred exploration and evaluation expenditure 11 5,865,430 3,967,167 TOTAL NON-CURRENT ASSETS 5,877,579 3,982,061 TOTAL ASSETS 7,303,787 6,802,719 CURRENT LIABILITIES Trade and other payables ,094 95,092 TOTAL CURRENT LIABILITIES 194,094 95,092 TOTAL LIABILITIES 194,094 95,092 NET ASSETS 7,109,693 6,707,627 EQUITY Issued capital 13 23,892,802 21,345,616 Reserves 14 3,279,750 2,794,114 Accumulated losses 15 (20,062,85 9) (17,432,103) TOTAL EQUITY 7,109,693 6,707,627 The above Consolidated Statement of Financial Position should be read in conjunction with the accompanying notes. 6

7 Consolidated Statement of Cash Flows for the year ended 30 June 2017 Notes 2017 Consolidated CASH FLOWS FROM OPERATING ACTIVITIES Payments to suppliers and employees (2,335,579) (2,669,083) Interest received 11,357 5,872 Other income 1,156 - NET CASH USED IN OPERATING ACTIVITIES 7 (2,323,066) (2,663,211) CASH FLOWS FROM INVESTING ACTIVITIES Purchase of plant and equipment (52,370) (413) Proceeds from sale of plant and equipment 51,630 - Expenditure on exploration and evaluation expenditure (1,398,880) (805,940) NET CASH USED IN INVESTING ACTIVITIES (1,399,620) (806,353) CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from rights issue - 312,282 Proceeds from placement - 4,915,872 Proceeds from exercise of options 2,418,774 - Share issue costs (17,159) (399,011) NET CASH PROVIDED BY FINANCING ACTIVITIES 2,401,615 4,829,143 Net (decrease) / increase in cash held (1,321,071) 1,359,579 Cash and cash equivalents at beginning of year 2,737,190 1,537,960 Effect of exchange rate fluctuations on cash held (29,835) (160,349) CASH AND CASH EQUIVALENTS AT END OF THE FINANCIAL YEAR 7 1,386,284 2,737,190 The above Consolidated Statement of Cash Flows should be read in conjunction with the accompanying notes. 7

8 Consolidated Statement of Changes in Equity for the year ended 30 June 2017 Issued capital Accumulated losses Foreign currency translation reserve Share based payment reserve Total At 1 July 21,345,616 (17,432,103) (64,568) 2,858,682 6,707,627 Loss for the year - (2,630,756) - - (2,630,756) Other comprehensive loss - - (119,402) - (119,402) Total comprehensive loss - (2,630,756) (119,402) - (2,750,158) Transactions with owners in their capacity as owners Shares issued as consideration for acquisition 600, ,000 Shares issued on exercise of options 2,418, ,418,774 Share issue costs (471,588) (471,588) Share based payments , ,038 At 30 June ,892,802 (20,062,859) (183,970) 3,463,720 7,109,693 At 1 July ,241,114 (14,611,631) (122,474) 2,788,014 2,295,023 Loss for the year - (2,820,472) - - (2,820,472) Other comprehensive loss ,906-57,906 Total comprehensive loss - (2,820,472) 57,906 - (2,762,566) Transactions with owners in their capacity as owners Shares issued as consideration for acquisition 2,200, ,200,000 Shares issued as part of placement 4,915, ,915,872 Shares issued as part of rights issue 452, ,282 Share issue costs (463,652) (463,652) Share based payments ,668 70,668 At 30 June 21,345,616 (17,432,103) (64,568) 2,858,682 6,707,627

9 Notes to the financial statements at and for the year ended 30 June Corporate Information The financial report of Harvest Minerals Limited ( Harvest Minerals or the Company ) and its controlled entities ( the Group ) for the year ended 30 June 2017 was authorised for issue in accordance with a resolution of the Directors on 27 September Harvest Minerals Limited is a company limited by shares incorporated in Australia whose shares are publicly traded on the AIM Market of the London Stock Exchange. The nature of the operations and the principal activities of the Group are described in the Directors Report. 2. Summary of Significant Accounting Policies (a) Basis of Preparation The financial report is a general-purpose financial report, which has been prepared in accordance with Australian Accounting Standards, Australian Accounting Interpretations, other authoritative pronouncements of the Australian Accounting Standards Board and the Corporations Act The Group is a for profit entity for financial reporting purposes under Australian Accounting Standards. The financial report has been prepared on an accrual basis and is based on historical costs, modified, where applicable, by the measurement at fair value of selected non-current assets, financial assets and financial liabilities. Material accounting policies adopted in preparation of this financial report are presented below and have been consistently applied unless otherwise stated. The presentation currency is Australian dollars. Going Concern These financial statements have been prepared on the going concern basis, which contemplates the continuity of normal business activities and the realisation of assets and settlement of liabilities in the normal course of business. As disclosed in the financial statements, for the financial years ended 30 June and 30 June 2017, the Group incurred losses of 2,820,472 and 2,630,756 respectively. The Group had net cash outflows from operating activities of 2,323,066 (: 2,663,211) and net cash outflows from investing activities of 1,399,620 (: 806,353) for the year ended 30 June As at that date, the Group had net current assets of 1,232,144. The ability of the Company and Group to continue as going concerns is dependent on a combination of a number of factors, the most significant of which is the ability of the Company and Group to raise additional funds in the following 12 months from the date of signing the annual report. The Directors are of the opinion that there are reasonable grounds to believe that the Company and Group will continue as a going concern, after consideration of the following factors: The Group has the ability to scale down its operations in order to reduce costs, in the event that any capital raising or other funding raising activities are delayed or insufficient cash is available, to meet future expenditure commitments; The Directors have reduced discretionary spending and have the ability to defer payment of Directors fees or fees owing to Director related entities until the Company has sufficient funds; The Company has been able to successfully raise additional funds through equity raisings in the past; and

10 The Group is progressing towards being able to sell its product to generate revenue. In considering the above, the Directors have reviewed the Group s financial position and are of the opinion that the use of the going concern basis of accounting is appropriate as they believe the Group will be able to secure funds to meet the working capital needs of the Group. There are a number of inherent uncertainties relating to the Group s future plans including but not limited to: There is doubt as to whether the Company will be able to raise equity in the current market; and There is doubt as to whether the Group would be able to secure any other sources of funding. Accordingly, there is a material uncertainty that may cast significant doubt whether the Group will continue as a going concern and therefore whether it will realise its assets and extinguish its liabilities in the normal course of business and at the amounts stated in the financial report. The financial report does not include any adjustments relating to the amounts or classification of recorded assets or liabilities that might be necessary if the Company and Group do not continue as a going concern. (b) Parent entity information In accordance with the Corporations Act 2001, these financial statements present the results of the Group only. Supplementary information about the parent entity is disclosed in note 26. (c) Compliance statement The financial report complies with Australian Accounting Standards as issued by the Australian Accounting Standards Board and International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board. (d) New accounting standards and interpretations issued but not yet effective The following applicable accounting standards and interpretations have been issued or amended but are not yet effective. These standards have not been adopted by the Group for the year ended 30 June 2017 and no change to the Group s accounting policy is required. Reference Title Summary Impact on Group s financial report AASB 9 Financial Instruments AASB 9 includes requirements for the classification and measurement of financial assets. It was further amended by AASB to reflect amendments to the accounting for financial liabilities. These requirements improve and simplify the approach for classification and measurement of financial assets compared with the requirements of AASB 139. The main changes are described below. (a) Financial assets that are debt instruments will be classified based on (1) the objective of the entity s business model for managing the financial assets; (2) the The Group does not consider that the new standard will have a material impact on the Group s financial statements. Application date for Group 1 July 2018

11 Reference Title Summary Impact on Group s financial report (b) (c) characteristics of the contractual cash flows. Allows an irrevocable election on initial recognition to present gains and losses on investments in equity instruments that are not held for trading in other comprehensive income. Dividends in respect of these investments that are a return on investment can be recognised in profit or loss and there is no impairment or recycling on disposal of the instrument. Financial assets can be designated and measured at fair value through profit or loss at initial recognition if doing so eliminates or significantly reduces a measurement or recognition inconsistency that would arise from measuring assets or liabilities, or recognising the gains and losses on them, on different bases. Application date for Group (d) Where the fair value option is used for financial liabilities the change in fair value is to be accounted for as follows: The change attributable to changes in credit risk is presented in other comprehensive income (OCI) The remaining change is presented in profit or loss If this approach creates or enlarges an accounting mismatch in the profit or loss, the effect of the changes in credit risk are also presented in profit or loss. Consequential amendments were also made to other standards as a result of AASB 9, introduced by AASB and superseded by AASB and AASB 15 Revenue from Contracts with Customers An entity will recognise revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. This means that revenue will be recognised when control of goods or services is transferred, rather than on transfer of risks and rewards as is currently the case under IAS 18 Revenue. The Group does not consider that the new standard will have a material impact on the Group s financial statements. 1 July 2018 AASB 16 Leases IFRS 16 eliminates the operating and finance lease classifications for lessees currently accounted for under AASB 117 Leases. It instead requires an entity to bring most leases The Group does not consider that the new standard will have a material 1 July 2019

12 Reference Title Summary Impact on Group s financial report onto its statement of financial position in a similar way to how existing finance leases are treated under AASB 117. An entity will be required to recognise a lease liability and a right of use asset in its statement of financial position for most leases. There are some optional exemptions for leases with a period of 12 months or less and for low value leases. impact on the Group s financial statements. Application date for Group The Group has not elected to early adopt any new Standards or Interpretations. (e) Changes in accounting policies and disclosures In the year ended 30 June 2017, the Directors have reviewed all of the new and revised Standards and Interpretations issued by the AASB that are relevant to its operations and effective for the current annual reporting period. It has been determined by the Directors that there is no impact, material or otherwise, of the new and revised Standards and Interpretations on its business and, therefore, no change is necessary to Group accounting policies. (f) Basis of Consolidation The consolidated financial statements comprise the financial statements of Harvest Minerals Limited and its subsidiaries as at 30 June each year ( the Company ). Subsidiaries are all those entities (including special purpose entities) over which the Company has control. The Company controls an entity when the company is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power to direct the activities of the entity. The financial statements of the subsidiaries are prepared for the same reporting period as the parent Company, using consistent accounting policies. In preparing the consolidated financial statements, all intercompany balances and transactions, income and expenses and profit and losses resulting from intra-company transactions have been eliminated in full. Subsidiaries are fully consolidated from the date on which control is obtained by the Company and cease to be consolidated from the date on which control is transferred out of the Company. The acquisition of subsidiaries is accounted for using the acquisition method of accounting. The acquisition method of accounting involves recognising at acquisition date, separately from goodwill, the identifiable assets acquired, the liabilities assumed and any non-controlling interest in the acquiree. The identifiable assets acquired and the liabilities assumed are measured at their acquisition date fair values. The difference between the above items and the fair value of the consideration (including the fair value of any pre-existing investment in the acquiree) is goodwill or a discount on acquisition. A change in the ownership interest of a subsidiary that does not result in a loss of control, is accounted for as an equity transaction.

13 (g) Foreign Currency Translation (i) Functional and presentation currency Items included in the financial statements of each of the Company s controlled entities are measured using the currency of the primary economic environment in which the entity operates ( the functional currency ). The functional and presentation currency of Harvest Minerals Limited is Australian dollars. The functional currency of the overseas subsidiaries is Brazilian Reals. (ii) Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income. (iii) Group entities The results and financial position of all the Company s controlled entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: assets and liabilities for each statement of financial position presented are translated at the closing rate at the date of that statement of financial position; income and expenses for each statement of comprehensive income are translated at average exchange rates (unless this is not a reasonable approximation of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transactions); and all resulting exchange differences are recognised as a separate component of equity. On consolidation, exchange differences arising from the translation of any net investment in foreign entities are taken to foreign currency translation reserve. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, a proportionate share of such exchange differences are recognised in the statement of comprehensive income, as part of the gain or loss on sale where applicable. (h) Plant and Equipment Each class of plant and equipment is carried at cost less, where applicable, any accumulated depreciation and impairment losses. Subsequent costs are included in the asset's carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably. Repairs and maintenance expenditure is charged to the statement of comprehensive income during the financial period in which it is incurred. Depreciation The depreciable amount of all fixed assets is depreciated on a straight-line basis over their useful lives to the Group commencing from the time the asset is held ready for use. The depreciation rates used for each class of depreciable assets are: Class of Fixed Asset Depreciation Rate Plant and equipment 33% 50%

14 Furniture, Fixtures and Fittings 10% Computer and software 20% The assets' residual values and useful lives are reviewed, and adjusted if appropriate, at each statement of financial position date. Derecognition Additions of plant and equipment are derecognised upon disposal or when no further future economic benefits are expected from their use or disposal. Gains and losses on disposals are determined by comparing proceeds with the carrying amount. These gains and losses are recognised in the statement of comprehensive income. (i) Impairment of non-financial assets The Group assesses at each reporting date whether there is an indication that an asset may be impaired. If any such indication exists, or when annual impairment testing for an asset is required, the Group makes an estimate of the asset s recoverable amount. An asset s recoverable amount is the higher of its fair value less costs to sell and its value in use and is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets of the Group and the asset's value in use cannot be estimated to be close to its fair value. In such cases the asset is tested for impairment as part of the cash generating unit to which it belongs. When the carrying amount of an asset or cash-generating unit exceeds its recoverable amount, the asset or cash-generating unit is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset. Impairment losses relating to continuing operations are recognised in the statement of comprehensive income. An assessment is also made at each reporting date as to whether there is any indication that previously recognised impairment losses may no longer exist or may have decreased. If such indication exists, the recoverable amount is estimated. A previously recognised impairment loss is reversed only if there has been a change in the estimates used to determine the asset s recoverable amount since the last impairment loss was recognised. If that is the case the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in profit or loss. After such a reversal, the depreciation charge is adjusted in future periods to allocate the asset s revised carrying amount, less any residual value, on a systematic basis over its remaining useful life. (j) Exploration expenditure Exploration and evaluation expenditure incurred by or on behalf of the Group is accumulated separately for each area of interest. Such expenditure comprises net direct costs and an appropriate portion of related overhead expenditure, but does not include general overheads or administrative expenditure not having a specific nexus with a particular area of interest. Each area of interest is limited to a size related to a known or probable mineral resource capable of supporting a mining operation.

15 Exploration and evaluation expenditure for each area of interest is carried forward as an asset provided that one of the following conditions is met: such costs are expected to be recouped through successful development and exploitation of the area of interest or, alternatively, by its sale; or exploration and evaluation activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in relation to the area are continuing. Expenditure which fails to meet the conditions outlined above is written off. Furthermore, the directors regularly review the carrying value of exploration and evaluation expenditure and make write downs if the values are not expected to be recoverable. Identifiable exploration assets acquired are recognised as assets at their cost of acquisition, as determined by the requirements of AASB 6 Exploration for and Evaluation of Mineral Resources. Exploration assets acquired are reassessed on a regular basis and these costs are carried forward provided that at least one of the conditions referred to in AASB 6 is met. Exploration and evaluation expenditure incurred subsequent to acquisition in respect of an exploration asset acquired is accounted for in accordance with the policy outlined above for exploration expenditure incurred by or on behalf of the entity. Acquired exploration assets are not written down below acquisition cost until such time as the acquisition cost is not expected to be recovered. When an area of interest is abandoned, any expenditure carried forward in respect of that area is written off. Expenditure is not carried forward in respect of any area of interest/mineral resource unless the Group s rights of tenure to that area of interest are current. (k) Trade and Other Receivables Trade receivables, which generally have day terms, are recognised and carried at original invoice amount less an allowance for any uncollectible amounts. An estimate for doubtful debts is made when collection of the full amount is no longer probable. Bad debts are written off when identified. (l) Cash and Cash Equivalents Cash and cash equivalent in the statement of financial position include cash on hand, deposits held at call with banks and other short term highly liquid investments with original maturities of three months or less. Bank overdrafts are shown as current liabilities in the statement of financial position. For the purpose of the statement of cash flows, cash and cash equivalents consist of cash and cash equivalents as described above and bank overdrafts. (m) Provisions Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.

16 Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presented in the statement of comprehensive income net of any reimbursement. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money, and where appropriate, the risks specific to the liability. Where discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost. (n) Trade and other payables Liabilities for trade creditors and other amounts are measured at amortised cost, which is the fair value of the consideration to be paid in the future for goods and services received that are unpaid, whether or not billed to the Group. (o) Income Tax Deferred income tax is provided for on all temporary differences at balance date between the tax base of assets and liabilities and their carrying amounts for financial reporting purposes. No deferred income tax will be recognised from the initial recognition of goodwill or of an asset or liability, excluding a business combination, where there is no effect on accounting or taxable profit or loss. No deferred income tax will be recognised in respect of temporary differences associated with investments in subsidiaries if the timing of the reversal of the temporary difference can be controlled and it is probable that the temporary differences will not reverse in the near future. Deferred tax is calculated at the tax rates that are expected to apply to the period when the asset is realised or liability is settled. Deferred tax is charged or credited in the statement of comprehensive income except where it relates to items that may be charged or credited directly to equity, in which case the deferred tax is adjusted directly against equity. Deferred income tax assets are recognised for all deductible temporary differences, carry forward of unused tax assets and unused tax losses to the extent that it is probable that future tax profits will be available against which deductible temporary differences can be utilised. The amount of benefits brought to account or which may be realised in the future is based on tax rates (and tax laws) that have been enacted or substantially enacted at the balance date and the anticipation that the Group will derive sufficient future assessable income to enable the benefit to be realised and comply with the conditions of deductibility imposed by the law. The carrying amount of deferred tax assets is reviewed at each balance date and only recognised to the extent that sufficient future assessable income is expected to be obtained. Income taxes relating to items recognised directly in equity are recognised in equity and not in the statement of comprehensive income.

17 Deferred tax assets and deferred tax liabilities are offset only if a legally enforceable right exists to set off current tax assets against current tax liabilities and the deferred tax assets and liabilities relate to the same taxable entity and the same taxation authority. (p) Issued capital Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are shown in equity as a deduction, net of tax, from the proceeds. (q) Revenue Revenue is recognised to the extent that it is probable that the economic benefits will flow to the Group and the revenue is capable of being reliably measured. The following specific recognition criteria must also be met before revenue is recognised: Interest income Revenue is recognised as the interest accrues (using the effective interest method, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial instrument) to the net carrying amount of the financial asset. (r) Earnings per share Basic earnings per share Basic earnings per share is calculated by dividing the profit / loss attributable to equity holders of the Company, excluding any costs of servicing equity other than dividends, by the weighted average number of ordinary shares, adjusted for any bonus elements. Diluted earnings per share Diluted earnings per share is calculated as profit / loss attributable to members of the Company, adjusted for: costs of servicing equity (other than dividends); the after-tax effect of dividends and interest associated with dilutive potential ordinary shares that have been recognised as expenses; and other non-discretionary changes in revenues or expenses during the period that would result from the dilution of potential ordinary shares; divided by the weighted average number of ordinary shares and dilutive potential ordinary shares, adjusted for any bonus elements. (s) Goods and services tax Revenues, expenses and assets are recognised net of the amount of GST/sales tax, except where the amount of GST/sales tax incurred is not recoverable from the relevant Tax Authority. In these circumstances, the GST/sales tax is recognised as part of the cost of acquisition of the asset or as part of an item of the expense. Receivables and payables in the statement of financial position are shown inclusive of GST/sales tax. The net amount of GST/sales tax recoverable from, or payable to, the Tax Authority is included as part of receivables or payables in the statement of financial position. Cash flows are presented in the statement of cash flows on a gross basis, except for the GST component of investing and financing activities, which is receivable from or payable to the ATO, being disclosed as operating

18 cash flows. (t) Share based payment transactions The Group provides benefits to individuals acting as, and providing services similar to employees (including Directors) of the Group in the form of share based payment transactions, whereby individuals render services in exchange for shares or rights over shares ( equity settled transactions ). There is currently an Employee Share Option Scheme (ESOS) in place, which provides benefits to Directors and individuals providing services similar to those provided by an employee. The cost of these equity settled transactions with employees is measured by reference to the fair value at the date at which they are granted. The fair value is determined by using an option pricing formula taking into account the terms and conditions upon which the instruments were granted, as discussed in note 23. In valuing equity settled transactions, no account is taken of any performance conditions, other than conditions linked to the price of the shares of Harvest Minerals Limited ( market conditions ). The cost of the equity settled transactions is recognised, together with a corresponding increase in equity, over the period in which the performance conditions are fulfilled, ending on the date on which the relevant employees become fully entitled to the award ( vesting date ). The cumulative expense recognised for equity settled transactions at each reporting date until vesting date reflects (i) the extent to which the vesting period has expired and (ii) the number of awards that, in the opinion of the Directors of the Company, will ultimately vest. This opinion is formed based on the best available information at balance date. No adjustment is made for the likelihood of the market performance conditions being met as the effect of these conditions is included in the determination of fair value at grant date. The statement of comprehensive income charge or credit for a period represents the movement in cumulative expense recognised at the beginning and end of the period. No expense is recognised for awards that do not ultimately vest, except for awards where vesting is conditional upon a market condition. Where the terms of an equity settled award are modified, as a minimum an expense is recognised as if the terms had not been modified. In addition, an expense is recognised for any increase in the value of the transaction as a result of the modification, as measured at the date of the modification. Where an equity settled award is cancelled, it is treated as if it had vested on the date of the cancellation, and any expense not yet recognised for the award is recognised immediately. However if a new award is substituted for the cancelled award, and designated as a replacement award on the date that it is granted, the cancelled and new awards are treated as if they were a modification of the original award, as described in the previous paragraph. The cost of equity-settled transactions with non-employees is measured by reference to the fair value of goods and services received unless this cannot be measured reliably, in which case the cost is measured by reference to the fair value of the equity instruments granted. The dilutive effect, if any, of outstanding options is reflected in the computation of loss per share (see note 20). (u) Comparative figures When required by Accounting Standards, comparative figures have been adjusted to conform to changes in presentation for the current financial year.

19 (v) Operating segments Operating segments are presented using the 'management approach', where the information presented is on the same basis as the internal reports provided to the Chief Operating Decision Makers ('CODM'). The CODM is responsible for the allocation of resources to operating segments and assessing their performance. (w) Fair value measurement When an asset or liability, financial or non-financial, is measured at fair value for recognition or disclosure purposes, the fair value is based on the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date; and assumes that the transaction will take place either in the principle market; or in the absence of a principal market, in the most advantageous market. Fair value is measured using the assumptions that market participants would use when pricing the asset or liability, assuming they act in their economic best interest. For non-financial assets, the fair value measurement is based on its highest and best use. Valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, are used, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. Assets and liabilities measured at fair value are classified, into three levels, using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. Classifications are reviewed each reporting date and transfers between levels are determined based on a reassessment of the lowest level input that is significant to the fair value measurement. For recurring and non-recurring fair value measurements, external valuers may be used when internal expertise is either not available or when the valuation is deemed to be significant. External valuers are selected based on market knowledge and reputation. Where there is a significant change in fair value of an asset or liability from one period to another, an analysis is undertaken, which includes a verification of the major inputs applied in the latest valuation and a comparison, where applicable, with external sources of data. (x) Critical accounting estimates and judgements Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that may have a financial impact on the entity and that are believed to be reasonable under the circumstances. The Group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are discussed below. Capitalised exploration and evaluation expenditure The future recoverability of capitalised exploration and evaluation expenditure is dependent on a number of factors, including whether the Group decides to exploit the related lease itself or, if not, whether it successfully recovers the related exploration and evaluation asset through sale. Factors which could impact the future recoverability include the level of proved, probable and inferred mineral resources, future technological changes which could impact the cost of mining, future legal changes (including changes to environmental restoration obligations) and changes to commodity prices and exchange rules.

20 To the extent that capitalised exploration and evaluation expenditure is determined not to be recoverable in the future, this will reduce profits and net assets in the period in which this determination is made. In addition, exploration and evaluation expenditure is capitalised if activities in the area of interest have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves. To the extent that it is determined in the future that this capitalised expenditure should be written off, this will reduce profits and net assets in the period in which this determination is made. Share based payment transactions The Group measures the cost of equity settled transactions with employees by reference to the fair value of the equity instruments at the date at which they are granted. The fair value is determined by using the Black Scholes formula taking into account the terms and conditions upon which the instruments were granted, as discussed in note 23. Functional currency translation reserve Under Accounting Standards, each entity within the Group is required to determine its functional currency, which is the currency of the primary economic environment in which the entity operates. Management considers the Brazilian subsidiaries to be foreign operations with Brazilian Reals as the functional currency. In arriving at this determination, management has given priority to the currency that influences the labour, materials and other costs of exploration activities as they consider this to be a primary indicator of the functional currency. 3. Segment Information For management purposes, the Group is organised into one main operating segment, which involves mining exploration. All of the Group s activities are interrelated, and discrete financial information is reported to the Board (Chief Operating Decision Makers) as a single segment. No revenue is derived from a single external customer. Accordingly, all significant operating decisions are based upon analysis of the Group as one segment. The financial results from this segment are equivalent to the financial statements of the Group as a whole. Total revenue earned by the Group is generated in Australia and all of the Group s non-current assets reside in Brazil Consolidated 4. Consulting and Directors Fees Directors fees 744, ,553 Company secretary fees 29,633 61,500 Public relations consulting fees 123,217 29,446 Accounting consultant fees for AIM admission - 168,796 AIM nominated and financial adviser fees 161, ,699 Other consultant fees 245, ,293 Corporate advisory fees 118,145 60,000 Total consulting and directors fees 1,422,429 1,412,287