th May 2016 Harvest Minerals Limited Arapua Fertilizer ... · The air core drill programme at the Maximus Prospect focused on targeting phosphate and potassium rich rocks occurring

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10th May 2016

Harvest Minerals Limited

Arapua Fertilizer Project Update

Results for the Air Core Drilling Programme at Maximus Prospect

Harvest Minerals Limited (“Harvest” or “the Company”) is pleased to announce the

completion of an initial air core drilling programme at the Maximus Prospect, part of its

Arapua Fertilizer Project (“Arapua”), located in the Brazilian state of Minas Gerais, ahead of

the potential commencement of a mining programme.

The results from the drilling programme, which focused on a small area of the existing

license acreage, are in line with the Company’s estimates for tonnage and grade, having

identified a mineralized area with the appropriate balance of minerals to support a Direct

Application Natural Fertiliser (“DANF”) product.

The Company has identified a significant demand for DANF product, particularly within short

trucking distances from Arapua with over 1.8 million hectares of cultivated land (primarily

soybean, maize, coffee and sugar cane) within 200km of the project.

Drilling Result Highlights:

A total 25 air core drill holes (MXAC001 to MXAC025) have been completed to a

depth of between 4 to 24 meters thereby providing a total of approximately 400m of

drilling data.

All drill holes intersected consistent phosphate (P2O5) and potassium oxide (K2O)

enriched clay weathered kamafugite rocks – drilling ceased when intersecting

unweathered kamafugite.

Results from samples submitted to SGS Geosol, which is based in Belo Horizonte,

indicate mineralized interceptions, ranging from 4.0m to 24.0m in thickness and

grading from 1.67% to 4.27% P2O5 and from 2.16% to 5.30% K2O.

The results also highlight calcium oxide (CaO) and magnesium oxide (MgO) grades

of over 5%, potentially increasing the value of the material as a multi-nutrient direct

application fertilizer.

The area drilled represents only 0.107km² of the 1.691km2 (6%) of known kamafugite

mineralization which the Company’s geologists mapped in February 2016.

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Environmental Impact Study for trial mining permit has commenced. Trial Mining

License application is expected to be made in Q2 2016.

The Company is currently carrying out a topographic survey and sample density

measurements for use in estimating a potential resource.

Bulk samples have been submitted for metallurgical test work.

Executive Chairman, Brian McMaster, commented:

“Since receiving the proceeds of our recent funding in January, we have been steadily going

through the steps to develop Arapua into a low cost commercial project producing DANF for

the local market.

The drill results confirm our initial assumptions on K2O and P2O5 grade, yet with a significant

presence of CaO and MgO, which complement a highly sought after DANF product. Harvest

has only drilled a small area of the project, but which should provide enough material to

support the proposed initial period of trial mining. We also only targeted the weathered

mineralization, which will be easier and more cost efficient to extract.

The next steps are to scope the commercial viability of the project to produce a multi-nutrient

direct application natural fertilizer, and scope a resource in line with a trial mining license to

provide sufficient product to potential clients. The resource consultants are on site this week

and samples are currently being prepared for the metallurgical test work, with the results of

both expected in late June. In anticipation of this, we have also commenced work for the

lodgment of our Trial Mining License, which we also expect to lodge in late June.”

Enquiries:

Harvest Minerals Limited

Brian McMaster, Chairman Tel: +61 8 9200 1847

Strand Hanson Limited (Nominated & Financial Adviser)

Rory Murphy James Spinney Ritchie Balmer

Tel: +44 20 7409 3494

Mirabaud Securities LLP (Broker) Buchanan (Financial PR)

Rory Scott Bobby Morse Anna Michniewicz

Tel: + 44 20 7878 3360

Tel: +44 20 7466 5000

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Background:

The Arapua Fertilizer Project is strategically located in the Brazilian Cerrado, 360km NW

from Belo Horizonte, the capital of Minas Gerais State. The project consists of seven granted

exploration licenses covering total area of 12,997.6 hectares, divided across both the

Arapua and Maximus prospects.

At the Maximus prospect, the previous handheld XRF results from auger holes indicated the

occurrence of kamafugite rock with K2O rich zones varying from 2m @ 5.95% to 20m @

7.96% K2O and 3.89% P2O. Previous geological mapping at Maximus identified a

continuous kamafugite rock layer, mineralized phosphate and potassium rich rock, over an

area of approximately 1.691 km2.

Air Core Drilling

The air core drill programme at the Maximus Prospect focused on targeting phosphate and

potassium rich rocks occurring from surface within clay-weathered kamafugite rocks. The

programme finished with a total of 401 meters distributed in 25 vertical drill holes. The drill

holes were located approximately 50m apart from one another.

The 25 drilled holes covered an area of approximately 64,000m2 in the western portion of

Serra do Maxixe plateau (Figure 01). The holes were drilled between the elevation of 1,000m

and 1,044m and reached depths varying from 4.0m to 24.0m. All holes intercepted

weathered kamafugitic rocks from the top to the bottom and finished into hard kamafugitic

rock.

Figure 01 – Maximus Prospect – Location of Air core drill holes and (inset) area of known mineralisation.

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Sample Procedures

Samples from the air core drilling programme had been recovered directly from the cyclone

at each 1m of drilling advance in numbered plastic bags. Once the samples were received

at the field facilities, they were identified and logged. A total of 401 samples, representative

of the 401 drilled meters, were collected.

After the samples were logged, they were prepared for analysis by drying, crushing and

screening (at 4 mm), homogenization and splitting. A small portion with approximately 250g,

representative of each 1m interval sample, was collected for archive.

Prior to being sent to the laboratory, the samples were split into intervals varying from a

minimum of 1m close to surface to a maximum of 4m, corresponding to the geological

description. A total of 155 samples were prepared and dispatched to the SGS Geosol Lab

in Belo Horizonte for chemical analysis of SiO2, Al2O3, Fe2O3, CaO, MgO, TiO2, P2O5, Na2O,

K2O and MnO.

Quality Assurance / Quality Control (“QA/QC”) samples, including reference materials,

blank, and duplicates, were systematically introduced in the batches sent to the laboratory

at a nominal rate of 1:20. This practice was useful in determining the quality of sample

collection, sample preparation and lab analytical accuracy.

Drilling Results

All drill holes intersected widespread phosphate (P2O5) and potassium oxide (K2O)

weathered kamafugite rocks. Results from air core samples submitted to SGS Geosol lab

pointed to grades ranging from 0.42% to 6.79% P2O5 and 0.83% to 7.68% K2O.

The weathered mineralized interceptions range from 4.0m to 24.0m in thickness and grade

from 1.67% to 4.27% P2O5 and from 2.16% to 5.30% K2O (Table 01). The mineralization is

associated with kamafugite saprolite rocks, with the higher grades appear related to the

breccia facies within the kamafugite rocks.

Table 01 – Maximus Prospect – Air core drill holes mineralized interceptions.

Hole ID Eastings Northings RL From (m)

To (m)

Length (m)

P2O5 Intersection

grade (%)

K2O Intersection

grade (%) Comments

MXAC001 357,305.35 7,909,397.56 1,025.36 0.0 13.0 13.0 2.54 3.43 Including 6m @ 3.40% P2O5 and 4.99% K2O (from 0.0 to

6.0m)

MXAC002 357,344.77 7,909,349.28 1,040.99 0.0 23.0 23.0 2.84 3.84 Including 13m @ 3.12%

P2O5 and 4.07% K2O (from 0.0 to 13.0m)

MXAC003 357,350.73 7,909,400.32 1,036.18 0.0 20.0 20.0 2.49 4.02 Including 10m @ 3.39%

P2O5 and 4.64% K2O (from 0.0 to 10.0m)

MXAC004 357,354.71 7,909,447.74 1,035.70 0.0 22.0 22.0 3.25 5.30

MXAC005 357,403.40 7,909,398.10 1,038.10 1.0 21.0 20.0 3.17 3.85


9.0m)

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9.0m)

MXAC008 357,476.21 7,909,435.12 1,040.02 0.0 24.0 24.0 3.36 3.74


3.0m)


6.0m)

MXAC011 357,560.75 7,909,631.49 1,009.50 0.0 9.0 9.0 1.89 2.88

MXAC012 357,557.86 7,909,682.55 1,012.15 0.0 10.0 10.0 1.67 2.16


12.0m)

MXAC014 357,363.31 7,909,478.12 1,044.11 1.0 16.0 15.0 3.16 3.77


7.0m)


10.0m)

MXAC017 357,489.89 7,909,534.07 1,025.36 0.0 16.0 16.0 2.48 2.84


9.0m)


8.0m)

MXAC020 357,308.11 7,909,438.33 1,023.92 0.0 9.0 9.0 3.82 3.81

MXAC021 357,564.78 7,909,477.79 1,036.90 0.0 21.0 21.0 4.27 3.28 Including 3m @ 6.79% P2O5 and 2.76% K2O (from 12.0

to 15.0m)


9.0m)

MXAC023 357,417.17 7,909,529.76 1,015.99 0.0 4.0 4.0 3.08 4.05

MXAC024 357,299.12 7,909,489.36 1,015.51 0.0 10.0 10.0 2.32 3.24

MXAC025 357,275.03 7,909,341.93 1,035.70 0.0 13.0 13.0 2.09 2.27

In addition to the phosphate and potassium oxide mineralization, grades of CaO (ranging

from 0.80% to 15.60%), MgO (ranging from 3.21% to 17.90%), MnO (ranging from 0.18%

to 0.55%) and silicon dioxide (SiO2) (ranging from 27.70% to 41.00%) were detected in the

kamafugite weathered rocks. These results corroborate the potential of the kamafugite as a

multi-nutrient silicate agro-mineral which could produce a direct application natural fertilizer

(DANF).

Results for the QA/AC samples, including blanks, duplicates and standards, were within

acceptable limits.

Next Steps and Timeline

The Company has already contracted a third party to carry out a topographic survey over

the area covered by the drill holes and the consultants who will carry out an initial resource

estimate are currently on site.

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Additionally, several bulk samples have been collected and sent to the SGS Geosol Lab, for

further analysis and metallurgical test work.

Additionally, the Company has commenced the Environmental Assessment report required

for its application for a Trial Mining License.

Once the results of the above work are completed, the Company intends to prepare a

Scoping Study which will act as the trial mining planning document.

The Company estimates these tasks will be competed over the coming three months.

COMPETENT PERSON STATEMENT

The technical information in this release which relates to the Exploration Target and

exploration results is based on compiled and reviewed data by Mr. Paulo Brito. Mr. Brito is

a consulting geologist for Harvest Minerals Limited and is a Member of AusIMM-The

Minerals Institute, as well as, a Member of Australian Institute of Geoscientists. Mr. Brito has

sufficient experience which is relevant to the style of mineralization and type of deposit under

consideration and to the activity which is being undertaken to qualify as a Competent Person

as defined in the 2012 Edition of the “Australasian Code for Reporting of Exploration Results,

Mineral Resources and Ore Reserves”. Mr. Brito also meets the requirements of a qualified

person under the AIM Note for Mining, Oil and Gas Companies and consents to the inclusion

in the release of the matters based on their information in the form and context in which it

appears. Mr. Brito accepts responsibility for the accuracy of the statements disclosed in this

release.

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Section 1 Sampling Techniques and Data

Criteria JORC Code Explanation Commentary Sampling Techniques Nature and quality of sampling (e.g. cut channels, random

chips, or specific specialised industry standard measurement tools appropriate to the minerals under investigation, such as down hole, gamma sondes, or handheld XRF instruments etc). These examples should not be taken as limiting the broad meaning of sampling.

Each air core drill hole was sampled using a 1 meter interval. Samples were collected directly in the cyclone and identified according to the hole number and depth. The cyclone was systematically cleaned at each 1 meter drilled.

Samples were prepared at company´s field facilities and included, drying, crushing, screening at 4mm, homogenization and splitting. A small portion of approximately 250gr, representative of each 1m interval sample, was collected for archive.

Samples for lab analysis had been composed in intervals varying from minimum 1 m to maximum 4 m, in compliance with the geological description.

Include reference to measures taken to ensure sample representivity and the appropriate calibration of any measurement tools or systems used.

QA/QC samples, including reference materials, blanks, and duplicates, were systematically introduced in the batches to the lab at a nominal rate of 1:20.

The location of each air core drill hole was registered with the help of a hand-held GPS Garmin model 62sc and the coordinates were recorded on UTM_WGS84, zone 23 south.

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Aspects of the determination of mineralisation that are Material to the Public Report. In cases where “industry standard “ work has been done this would relatively simple (e.g. ‘reverse circulation drilling was used to obtain 1m samples from which 3kg was pulverised to produce a 30g charge for fire assay). In other cases more explanation may be required, such as where there is course gold that has inherent sampling problems. Unusual commodities or mineralisation types ( e.g. submarine nodules ) may warrant disclosure of detailed information.

All the samples were collected at 1m interval and were utilised for geological logging.

Samples for lab analysis, weighting 1.5 to 2 kg, had been split into intervals varying from minimum 1 m to maximum 4 m, in compliance to the geological description.

Criteria JORC Code Explanation Commentary Drilling Techniques Drill types (e.g. core, reverse circulation, open hole

hammer, rotary air blast, auger, Bangka, sonic etc ) and details (e.g. core diameter, triple or standard tube, depth of diamond tails, face- sampling bit or other type, whether core is oriented and if so by what method etc).

Air core rig Mantis 80 mounted on a 6 x 6 Toyota Landcruiser. Hole diameter of standard NQ size.

Drill Sample Recovery Method of recording and assessing core and chip sample recoveries and results assayed.

Samples were logged by geologist at the company field facilities.

Measures taken to maximise sample recovery and ensure

representative nature of the samples. Samples were collected directly in the

cyclone and identified according to the hole number and depth. The cyclone was systematically cleaned at each 1 meter drilled.

Samples collected were systematically weighed, after being dried, at the company field facilities.

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Whether a relationship exists between sample recovery and grade and whether sample bias may have occurred due to preferential loss/gain of fine /course material.

In general, the sample recoveries were high within the mineralised zones. No significant bias is expected.

Logging Whether core and chip samples have been geologically and geotechnically logged to a level of detail to support appropriate Mineral Resource estimation, mining studies and metallurgical studies.

Air core samples had been logged considering the limitation of the drilling method.

Whether logging is qualitative or quantitative in nature. Core ( or costean, channel, etc) photography.

Air core drill holes intersected strongly weathered kamafugite rock. Despite the weathering conditions, all the intervals were logged in the best way that was possible.

The total length and percentages of the relevant intersections logged.

All samples from air core drilling were

logged.

Sub- Sampling Techniques and Sampling Procedures

If core, whether cut or sawn and whether quarter, half or all core taken.

All core was taken.

If non-core, whether riffled, tube sampled, rotary split etc and whether sample wet or dry.

The entire air core samples were collected.

Samples were dried, crushed, screened,

homogenized and split.

Samples for lab analysis were prepared at

intervals varying from minimum 1 m to

maximum 4 m, in compliance with the

geological description.

Criteria JORC Code Explanation Commentary For all sample types, the nature, quality and

appropriateness of the sample preparation technique.

Samples were dried, crushed, screened,

homogenized and split.

Quality control procedures adopted for all sub – sampling stages to maximise representivity of samples.

The quality of the prepared samples, weighting 1.5 kg to 2.0 kg, used for analysis is considered appropriate at the actual stage of exploration.

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Assays are reported as part of this announcement.

Measures taken to ensure that the sampling is representative of the in situ material collected, including for instance results for field duplicate/second –half sampling.

Results for QA/AC samples, including blanks, duplicates and standards, are totally inside the expected range.

Whether sample sizes are appropriate to the grain size of the material being sampled.

Sample sizes (1kg to 8kg) are considered to be of a sufficient size to accurately represent the key fertilizer elements, based on the near-surface mineralisation style, the width and continuity of the intersections at shallow depths and the sampling methodology.

Quality of Assay Data and Laboratory Tests

The nature quality and appropriateness of the assaying and laboratory procedures used and whether the technique is considered partial or total.

All assays reported were conducted by a certified lab.

For geophysical tools, spectrometers, hand held XRF instruments, etc, the parameters used in determining the analysis including instrument make and model, reading times, calibrations factors applied and their derivation etc.

No geophysical techniques, spectrometers etc were used in the analysis.

Nature of quality control procedures adopted ( e.g. standards, blanks, duplicates, external laboratory checks) and whether acceptable levels of accuracy (i.e. lack of bias) and precision have been established.

QA/QC samples, including reference materials, blanks, and duplicates, were systematically introduced in the batches to the lab at a nominal rate of 1:20.

Verification of Sampling and Assaying

The verification of significant intersections by either independent or alternative company personnel.

Company geologist identified appropriate sample intervals, based on core logs.

The use of twinned holes No twinned hole had been drilled at this stage.

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Documentation of primary data, data entry procedures, data verification, data storage (physical and electronic) protocols.

All data are entered into excel

spreadsheets, that are formatted to be

imported by other GIS software.

Discuss and adjustment to assays No adjustments made.

Criteria JORC Code explanation Commentary Location of Data Points Accuracy and quality of surveys used to locate drill holes

(collar and down hole surveys), trenches, mine workings and other locations used in Mine Resource estimation

No downhole surveying was done on air core drill holes due to the shallow depth of the holes.

A hand held GPS Garmin model 62sc was used to locate the position of the holes.

Specification of grid system used Coordinates are presented in datum WGS84, System UTM Zone 23S.

Quality and adequacy of topographic control. Topographic control is based on topographic data down loaded from public source.

Data Spacing and Distribution Data spacing for reporting of Exploration results. Air core drill holes were spaced of approximately 50 m.

Whether the data spacing and distribution is sufficient to establish the degree of geological and grade continuity appropriate for the Mineral Resource and Ore Reserve estimation procedure(s) and classification applied.

Not applicable to this style of sampling due to its reconnaissance nature.

Whether sample compositing has been applied. Samples had been split into intervals varying from a minimum 1 m to maximum 4 m, in compliance to the geological description.

Orientation of Data in relation to Geological Structure

Whether the orientation of sampling achieves unbiased sampling of possible structures and the extent to which is known, considering the deposit type.

The air core drill holes were located at the western side of Serra do Maxixe Plateau

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within the potential geological unit, which is sub-horizontal.

If the relationship between the drilling orientation and the orientation of key mineralised structures is considered to have introduced a sampling bias, this should be assessed and reported if material.

There is no relationship with mineralized structure. The target is a sub-horizontal unit which is strongly weathered close to surface, sometimes reaching 25 metres depth.

Sample security The measures taken to ensure sample security. Each sample was been bagged in an appropriate numbered plastic bag and sealed. A sample card with the sample identification was placed inside the sample bag.

Audit or Reviews The results of any audits or reviews of sampling techniques and data.

No audits or reviews have been carried out at this stage.

Section 2 Reporting of Exploration Results

Criteria JORC Code explanation Commentary

Mineral tenement and land tenure status

Type, reference name/number, location and ownership including agreements or material issues with third parties such as joint ventures, partnerships, overriding royalties, native title interests, historical sites, wilderness or national park and environmental settings.

The security of the tenure held at the time of reporting along with any known impediments to obtaining a licence to operate in the area.

The Arapua Project comprises seven exploration licenses covering a total area of 12,997.6 hectares.

The mineral properties at Arapua Project are registered under the following processes; 832.447/2009, 832.448/2009, 832,451/2009, 831.144/2010, 831.145/2010, 831.146/2010 and 831.275/2010.

All tenements are granted exploration licenses.

Exploration done by other parties

Acknowledgment and appraisal of exploration by other parties. Very limited work was conducted by the original owners and limited to regional mapping and few rock analysis, using a hand held XRF equipment.

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Geology Deposit type, geological setting and style of mineralisation. Potash-phosphate enrichment associated with ultrapotassic rocks (Arapua Project).

Drill hole Information

A summary of all information material to the understanding of the exploration results including a tabulation of the following information for all Material drill holes: o easting and northing of the drill hole collar o elevation or RL (Reduced Level – elevation above sea level

in metres) of the drill hole collar o dip and azimuth of the hole o down hole length and interception depth o hole length.

If the exclusion of this information is justified on the basis that the information is not Material and this exclusion does not detract from the understanding of the report, the Competent Person should clearly explain why this is the case.

To date, a total of 25 air core drill holes have been drilled.

Coordinates are presented in datum WGS84, System UTM Zone 23S.

All holes were vertical so no dip or azimuth measurements were taken.

All holes intersected weathered mineralisation throughout the whole and were stopped in mineralisation.

Down hole intersections are reported within this announcement.

Data aggregation methods

In reporting Exploration Results, weighting averaging techniques, maximum and/or minimum grade truncations (eg cutting of high grades) and cut-off grades are usually Material and should be stated.

Where aggregate intercepts incorporate short lengths of high grade results and longer lengths of low grade results, the procedure used for such aggregation should be stated and some typical examples of such aggregations should be shown in detail.

The assumptions used for any reporting of metal equivalent values should be clearly stated.

No such techniques or cut-offs were applied to the data.

The data was not aggregated including short lengths of high grade material

No assumptions are included in this report. For

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Relationship between mineralisation widths and intercept lengths

These relationships are particularly important in the reporting of Exploration Results.

If the geometry of the mineralisation with respect to the drill hole angle is known, its nature should be reported.

If it is not known and only the down hole lengths are reported, there should be a clear statement to this effect (eg ‘down hole length, true width not known’).

The mineralization occurs related to a sub-horizontal unit which is strongly weathered close to surface, sometimes reaching 25 metres depth.

Diagrams Appropriate maps and sections (with scales) and tabulations of intercepts should be included for any significant discovery being reported These should include, but not be limited to a plan view of drill hole collar locations and appropriate sectional views.

Plan view map including drill hole collar locations is included in the announcement.

Balanced reporting

Where comprehensive reporting of all Exploration Results is not practicable, representative reporting of both low and high grades and/or widths should be practiced to avoid misleading reporting of Exploration Results.

All the results are included in this announcement.

Other substantive exploration data

Other exploration data, if meaningful and material, should be reported including (but not limited to): geological observations; geophysical survey results; geochemical survey results; bulk samples – size and method of treatment; metallurgical test results; bulk density, groundwater, geotechnical and rock characteristics; potential deleterious or contaminating substances.

The Company’s previous ASX releases have detailed exploration works on the Arapuá Project and results/conclusions drawn from these.

Further work The nature and scale of planned further work (eg tests for lateral extensions or depth extensions or large-scale step-out drilling).

Diagrams clearly highlighting the areas of possible extensions, including the main geological interpretations and future drilling areas, provided this information is not commercially sensitive.

Topographic Survey.

Bulk sampling for metallurgical test work. For

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Documents

th May 2016 Harvest Minerals Limited Arapua Fertilizer ... · The air core drill programme at the Maximus Prospect focused on targeting phosphate and potassium rich rocks occurring