Tertiary Minerals Regulatory News (TYM)

12 December 2018

Tertiary Minerals plc ("Tertiary" or "the Company")

Audited Results for the year to 30 September 2018

Tertiary Minerals plc, the AIM traded company building a strategic position in the fluorspar sector, is pleased to announce audited results for the year ended 30 September 2018.

Operational Summary for 2018:

· Storuman Fluorspar Project, Sweden: Exploitation (Mine) Permit re-assessment process by the Swedish Mining Inspectorate is ongoing. Two key issues resolved.

· MB Fluorspar Project, Nevada:

Ø First phase of Scoping Study level bench scale metallurgical testwork completed at SGS Lakefield, Canada.

Ø Second phase of testwork planned for 2019

· Royalty Interest Gold Projects, Finland: Aurion Resources has re-logged and sampled the Tertiary drill cores with a view to further drilling in 2019

· Possehl Erzkontor GmbH & Co. KG: Through the Memorandum of Understanding signed last year, Possehl continue to support the Company with the development of its projects and evaluation of potential acquisition opportunities

· Fluorspar prices continued to rise in the year due to rising demand and China imposing strict environmental regulations on domestic fluorspar miners. Chinese benchmark acid-spar has recently hit a seven year high of mid US$565/tonne (FOB China)

Commenting today, Managing Director, Richard Clemmey said: "It is pleasing to see the recovery in the fluorspar market continue in 2018 but It has been a year of frustratingly slow progress for our Storuman Mine Permit re-assessment process. We have made good progress in establishing that our operations will not affect the nearby Natura 2000 area and that reindeer husbandry is able to co-exist alongside the open pit mine, but we still face objections from the County Administration Board (CAB) regarding the location of the Tailings Storage Facility. We, together with our Swedish consultants and legal team, strongly disagree with the CAB's position and so remain hopeful for a positive resolution of this matter".

"Looking forward to 2019, with the continued support from Possehl we look ahead to progressing the Scoping Study on our large MB project as well as continuing our evaluation of potential complimentary acquisition targets".

"I would like to thank all shareholders for their support in 2018 and hope to be reporting positive news in 2019."

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

Notes to Editors

Tertiary Minerals plc (ticker symbol 'TYM') is an AIM-traded mineral exploration and development company building a significant strategic position in the fluorspar sector. Fluorspar is an essential raw material in the chemical, steel and aluminium industries. Tertiary controls two significant Scandinavian projects (Storuman in Sweden and Lassedalen in Norway) and a large deposit of strategic significance in Nevada, USA (MB Project).

CAUTIONARY NOTICE

The news release may contain certain statements and expressions of belief, expectation or opinion which are forward looking statements, and which relate, inter alia, to the Company's proposed strategy, plans and objectives or to the expectations or intentions of the Company's directors. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the control of the Company that could cause the actual performance or achievements of the Company to be materially different from such forward-looking statements. Accordingly, you should not rely on any forward-looking statements and save as required by the AIM Rules for Companies or by law, the Company does not accept any obligation to disseminate any updates or revisions to such forward-looking statements.

Chairman's Statement

I am pleased to present the Company's Annual Report and Financial Statements for the year ended 30 September 2018. In the period under review we have continued to focus on the Company's three strategically located fluorspar projects in Europe and the USA.

At the Company's most advanced project, Storuman in Sweden, the repercussions of recent mining case law continue to impact the 2016 grant of our Exploitation (Mine) Permit. The Swedish Mining Inspectorate's review of the grant of the Exploitation Permit has continued throughout the year and has consumed an inordinate amount of management time. I encourage shareholders to read our Operating Review where we set out where this time has been spent and I would highlight that, despite the lack of headline news, two of the three issues raised by stakeholders have been successfully addressed and resolved by the Company. The remaining issue relates to a perceived conflict between the location of the Tailings Storage Facility and reindeer herding activities. The Company is frustrated in resolving this issue by a refusal on the part of the reindeer herding community to engage directly with the Company and the failure of the County Government to adequately address the Company's plans for mitigation of this conflict. Despite this remaining issue, the Company is confident that, with political will, this grant of the Exploitation Permit will eventually be confirmed.

At our MB Project in Nevada, where we have a significant JORC compliant Mineral Resource, a small programme of metallurgical testwork was carried out earlier this year and we have now formulated a plan to address the metallurgical complexity that characterises the near surface mineralisation that would be mined in the early years of the Company's preliminary mine plan. Assuming this progresses satisfactorily we intend to progress the economic scoping study for development of the project in 2019. This may include further drilling targeting conceptual higher grade targets in the northern part of the project.

Work on our second European project, Lassedalen in Norway, has been a lower priority during the year. However, further development work is justified and drilling is required to increase the size of the current JORC Mineral Resource Estimate which, alongside Storuman, is well located for the large European fluorspar market.

The Company's fluorspar projects contain a total of 13.1 million tonnes of fluorspar in JORC classified Mineral Resources and so we follow developments in the fluorspar market very closely. I can report that the upturn in prices that we reported in 2017 has continued strongly in 2018. The benchmark (FOB China) mid-price of acid-grade fluorspar is now $565/tonne (2017 Annual Report: $410) which compares well to the CIF Rotterdam price of $357.5/tonne used in the positive scoping study for development of the Storuman Project. The increase is, we believe, being driven by environmentally motivated mine closures in China and an increase in the value of downstream value-added products.

The general industry view is that fluorspar prices will continue to appreciate on the back of rising demand and this is discussed in more detail in the Strategic Report. Based on macroeconomic drivers the Company continues to be strategically placed to capitalise on the looming supply gap by developing its 100% controlled fluorspar assets which are located in the key markets of Europe and the USA.

The Company's efforts during the year to make a complementary project acquisition with nearer term production potential have not so far been successful despite coming close in one case. The Company is rightly cautious in its assessment of targets and follows the recently well used maxim that "no deal is better than a bad deal". We continue to assess opportunities and, through the Memorandum of Understanding ("MOU") signed last year, continue to enjoy the strong support of leading global commodities trading group, Possehl Erzkontor GmbH & Co. KG in this endeavour.

In addition to our fluorspar projects we retain a royalty interest in the Kaaresselkä and Kiekerömaa Gold Projects in Finland where, just to the north, the project owner, Aurion Resources, has recently drilled high-grade gold mineralisation on their Aamurusko Prospect. They have had three drill rigs working on this project and have advised that drilling may also be scheduled for our royalty interest projects in 2019.

At year end the Audit Committee and the Board are required to carry out an impairment review of the carrying values of the Company's various project interests and, in light of the current permitting delays surrounding the Storuman Project, it was decided that the carrying value of the Storuman Project and consequently the inter-company loan to the holding subsidiary, Tertiary Gold Limited, should be impaired. This has the effect of significantly increasing the loss for the year, but this is a non-cash movement and the Board is able to reverse this impairment in future when justified by future project developments.

Our Annual General Meeting for the year ended 30 September 2018 will be held in London on Thursday 21 February 2019.

Patrick Cheetham

Executive Chairman

11 December 2018

Strategic Report

Group Overview

Company's Aims

· To become a reliable long-term and competitive supplier of high quality fluorspar to world markets.

Company's Strategy

· To acquire and develop fluorspar deposits located close to established infrastructure and key markets in stable, democratic and mining friendly jurisdictions.

· To be revenue generating in the near term from potential new acquisition targets.

Principal Activities

· The principal activities of the Group are the identification, acquisition, exploration and development of mineral projects with primary focus on fluorspar, the main raw material source of fluorine for the chemical, steel and aluminium industries.

The head office is based in Macclesfield in the United Kingdom with core operating locations in Storuman in Sweden, Lassedalen in Norway and the MB Project in Nevada, USA.

Company's Business Model

For exploration projects, the Group prefers to acquire 100% ownership of mineral assets at minimal expense. This usually involves applying for exploration licences from the relevant authority, as was the case for the Storuman and Lassedalen projects. In other cases, rights are negotiated with existing project owners for initially low periodic payments that rise over time as confidence in the project value increases and this was the case for the MB Project. For acquisition targets with the potential to generate revenue in the near-term, the Group is considering a range of targets on a case-by-case basis.

The Group currently operates with a low-cost base to maximise the funds that can be spent on exploration and development - value adding activities. The Company has five full-time employees including the Managing Director who work with and oversee carefully selected and experienced consultants and contractors. During the year the Board of Directors comprised one independent Non-Executive Director, the Managing Director and the Chairman.

Administration costs are reduced via an arrangement governed by a Management Services Agreement with Sunrise Resources plc, whereby Sunrise Resources pays a share of the cost of head office overheads. As at the date of this report Tertiary is a significant shareholder (as defined under the AIM Rules) of Sunrise Resources plc, holding 5.17% of the issued ordinary share capital.

The Company's activities are financed by periodic capital raisings, through private share placements. Access to capital through this method continues to be challenging and this is a limiting factor to the speed at which the Company can progress the development of its projects. When projects become more advanced, or as acquisition opportunities advance, the Board will seek to secure additional funding from a range of various sources, for example debt funding, pre-financing through off-take agreements and joint venture partnerships.

Operating Review & Performance

Fluorspar Projects

Storuman Fluorspar Project, Sweden

2018 Operational Summary

· Exploitation (Mine) Permit re-assessment process by the Swedish Mining Inspectorate is ongoing

The Company's 100% owned Storuman Project is located in north central Sweden and is linked by the E12 highway to the port city of Mo-i-Rana in Norway and by road and rail to the port of Umeå on the Gulf of Bothnia. A bulk rail terminal, constructed in 2012, 25km from the project site, is likely to become an important factor in the cost-effective delivery of fluorspar to the key European fluorspar market.

JORC Compliant Mineral Resource

Exploitation (Mine) Permit Application

The Company submitted its Exploitation (Mine) Permit application in July 2014 to the Swedish Mining Inspectorate and following an extensive consultation process the 25-year Exploitation (Mine) Permit was granted on 18 February 2016.

However, as a consequence of the Supreme Court's decision to overturn the grant of a third-party mining company's Mine Permit in the south of Sweden (Norra Karr Mine Permit - rare earth element project, owned by Leading Edge Minerals) the government returned the Storuman Mine Permit case, along with many other cases, back to the Swedish Mining Inspectorate for re-assessment in December 2016. The re-assessment is intended to consider the impact of mining in the concession area on a wider surrounding area.

Earlier in 2017 the Swedish Mining Inspectorate requested additional information from the Company relating to the original Environmental Impact Assessment ("EIA") and the wider area and this information was provided to the Swedish Mining Inspectorate, in the form of an updated EIA, in May 2017. The additional information was accepted by the Mining Inspectorate which subsequently invited all stakeholders to provide comments on the application and additional information. In response to the stakeholder feedback the Swedish Mining Inspectorate requested further detail from the Company in relation to the impact of proposed operations on the Natura 2000 and reindeer herding within the wider surrounding area and were granted a deadline of 16 April 2018 to respond.

Given that the level of detail required for the wider area has changed in response to the new case law, the Company engaged, through a series of meetings, with its Swedish consultants, lawyers, the Swedish Mining Inspectorate and The County Administrative Board of Västerbotten ("CAB") in an effort to establish the requirements prior to the work being executed and submitted. Despite the Company continuing to have a good relationship with the CAB and has fully engaged with its key staff members throughout this process, without which the original Mine Permit would not have been awarded in the first place, the CAB seems unable to provide definitive guidance or opinion regarding the additional information or requirements.

Subsequently, comprehensive supplementary reports by the Company's consultants and a legal statement were prepared and submitted to the Swedish Mining Inspectorate in April 2018, consisting of:

· In-depth analysis of reindeer herding

· Reindeer herding and reindeer grazing conditions in the area of planned mining operations

· Description of vegetation and reindeer conditions in the area of the planned tailings storage facility ("TSF")

· In-depth analysis of impact on the Natura 2000 area, Kyrkbergstjärnen

The reports concluded that the Company's proposed mining operations at Storuman, with mitigation measures proposed, will have only a minimal impact on reindeer husbandry and that there will be no impact on the Natura 2000 area.

Following consultation between the Mining Inspectorate and key stakeholders, in July 2018 the CAB returned the following opinion to the Mining Inspectorate:

· The CAB is satisfied that the reindeer herding can, with mitigation measures, coexist alongside the mine itself

· Natura 2000 area: The CAB is satisfied with the supplementary in-depth analysis and has concluded that a supplementary Natura 2000 permit is not required

· Tailings Storage Facility ("TSF"): The CAB is not satisfied that the mitigation measures proposed by the Company enable the coexistence of reindeer husbandry and the TSF operation. The CAB has expressed the view that the proposed TSF location should be protected to secure reindeer husbandry.

The CAB has therefore advised against grant of the Mine Permit in its current form.

The Company, together with its Swedish consultants and lawyers, strongly disagree with the CAB's assessment that reindeer herding and the TSF cannot co-exist and maintain the conclusion of the in-depth analysis of reindeer herding that the Company's proposed mining operations at Storuman, with mitigation measures proposed, will have only a minimal impact on reindeer husbandry. The Company therefore prepared a comprehensive legal statement and submitted this to the Mining Inspectorate, summary as follows:

· The CAB has not sufficiently assessed the balance of interests between reindeer herding and mining under Chapter 3 of the Swedish Environmental Code

· The CAB has provided no supporting information as to why they believe the coexistence of reindeer husbandry and the TSF is not possible despite the Company providing in-depth analysis which shows that the proposed mining operations, with the extensive mitigation measures proposed, will have only a minimal impact on reindeer husbandry

· Socio-Economic factors have not been taken into account in the CAB's assessment despite the fact that the Storuman mine will result in a significant number of direct and indirect jobs in a sparsely populated area of Sweden containing a low number of inhabitants who are working age and an ageing population compared with the national average

· The Company has fully satisfied the requirements of Chapters 3, 4 and 6 of the Swedish Environmental Code by providing a comprehensive EIA for the mining location and wider surrounding area

The Company now awaits feedback from the Mining Inspectorate in response to its legal statement. Whilst the process is slow and frustrating, the Company continues to co-operate with the Mining Inspectorate and believes that the original Mine Permit application, EIA and supplementary information are of a very high standard. The Company remains hopeful of a positive resolution to this matter but it is worth noting that the Company has no influence on the speed at which the re-assessment of the grant of the mining permit is being processed by the Authorities. Any ratification of the grant of the mining concession will, however, be open to appeal and the Company will therefore not spend any further money on exploration or development of the Storuman Fluorspar Project until the matter is resolved.

MB Fluorspar Project, Nevada, USA

2018 Operational Summary

· First phase of Scoping Study level bench scale metallurgical testwork completed at SGS Lakefield in Canada

The MB Property comprises 146 contiguous mining claims covering an area more than 2,800 acres and is located 19km south-west of the town of Eureka in central Nevada, USA. The state of Nevada is widely and justifiably recognised to be one of the most attractive mining jurisdictions in the world. Eureka is located on US Highway 50 and the main railroad is located 165km to the north of the deposit providing bulk freight distribution to the East and West of the USA. The USA, like Europe, is a key fluorspar market currently importing the majority of its fluorspar requirements. Rail access to the west coast provides access to Asian markets, which may be a target market in the future.

JORC Compliant Mineral Resource

Metallurgical Testwork

Early metallurgical testwork completed at SGS Lakefield has indicated that the ore in certain areas of the deposit is metallurgically complex, presenting certain processing challenges, and therefore the Company has engaged the services of one of the world's leading consultant fluorspar metallurgists to assist with the testwork. The Company, consultant metallurgist and SGS Lakefield have scoped the next phase of testwork which is planned with the aim of producing commercial grade acid-spar and a by-product, mica.

Following successful completion of the metallurgical testwork, the Company will progress with modelling various production scenarios and optimisation of the transport method/cost from mine to the USA market and ports. Successful completion of these work programmes should enable the Company to work towards completion of a Scoping Study for the project in 2019. Further work required for the completion of the Scoping Study may include an additional phase of drilling to target higher grade mineralisation, in line with the recommendations received from the appraisal of the MB deposit from world renowned economic geologist, Dr Richard Sillitoe.

Lassedalen Fluorspar Project, Norway

The Lassedalen Fluorspar Project is favourably located near Kongsberg, 80km to the south-west of Oslo in Norway. It is less than 1km from highway E134 and approximately 50km from the nearest Norwegian port. The Company views this resource as strategically important for the European market alongside its Storuman Project.

JORC Compliant Mineral Resource

Given the commitments on its other fluorspar projects and acquisition targets, further exploration at the Lassedalen Project has been a lower priority in 2017/2018.

Once development work re-commences for the project, the immediate objective will be further drilling aimed at increasing the size of the current JORC compliant Mineral Resource Estimate.

Acquisition Opportunities

Whilst the Company remains committed to its fluorspar business and the development of its fluorspar assets, throughout 2018 it has been reviewing complementary project acquisition opportunities potentially capable of generating revenue and profits in a shorter timescale. Finding quality projects is not an easy task and the Company has discontinued its review on several shortlisted projects, where either the acquisition breaches any of the class tests pursuant to AIM Rule 14 and therefore would constitute a reverse takeover, or the due diligence process has highlighted certain technical, economic or legal fatal flaws. The Company continues to evaluate numerous potential acquisition opportunities, however there is no guarantee that any deal will be successfully executed at this point.

Strategic Relationship with Possehl Erzkontor GmbH & Co. KG

Further to the signing of a MOU in 2017 with leading global commodities trading group, Possehl Erzkontor GmbH & Co. KG (Possehl), a wholly owned subsidiary of CREMER, Possehl continue to support the Company with the development of its projects and evaluation of potential acquisition opportunities through regular dialogue and meetings.

Non-Core Projects

Kaaresselkä and Kiekerömaa Gold Projects, Finland

Following the successful sale of its two legacy gold assets, Kaaresselkä and Kiekerömaa in Finland, to TSX‑V listed Aurion Resources Ltd, the Company sold its Aurion shares for £117,633, in November 2017, resulting in a profit of £31,264 on the value of the shares issued as part consideration for the sale of the project at the time of issue.

The Company has been informed that Aurion recently relogged and sampled the Tertiary drill cores and Aurion may drill test some targets in 2019. The Company retains pre-production and net smelter royalty interest in the projects.

Rosendal Tantalum Project, Finland

The Exploration Licence for the project expired in October 2015 and the Company has applied for a renewal of the Licence. If the Company is unsuccessful in finding a suitable partner or buyer to progress the project, it is unlikely the renewal will be granted.

Health and Safety

The Group has maintained strict compliance with its Health and Safety Policy and is pleased to report there have been no lost time accidents during the year.

Environment

No Group company has had or been notified of any instance of non-compliance with environmental legislation in any of the countries in which they work. In late 2017 the Company received a prestigious national award for its innovative reclamation and sustainable mineral development work on its MB Project in Nevada, USA.

Fluorspar Market and Strategic Opportunity* 

Fluorspar - Principal Uses

There are two principal commercial grades of fluorspar:

· Metallurgical-spar (60-96% CaF2)

· Acid-spar (+97% CaF2)

Metallurgical-spar accounts for approximately 35% of the total fluorspar production with the principal applications being:

· Steel production - used as a flux to lower the melting temperature and increase the chemical reactivity to help the absorption and removal of sulphur, phosphorus, carbon and other impurities in the slag

· Cement - used as a flux to speed up the calcination process and enables the kiln to operate at lower temperatures

Acid-spar, the grade of fluorspar which the Company is planning to produce, accounts for approximately 65% of total fluorspar production with the principal applications being:

· Aluminium production - used to produce aluminium fluoride (AlF3) which acts as a flux to lower the bath temperature in the manufacture of aluminium

· Manufacture of hydrofluoric acid (HF) - the primary source of all fluorochemicals (the single largest consumer of fluorspar), with a wide range of applications including:

o Fluorocarbons, e.g. refrigerant gases, propellants, etc.

o Electrical and electronic appliances

o Metallurgical industry (extraction, manufacture and processing)

o Lithium batteries

o Pharmaceuticals, polymers and agrochemicals

o Petrochemical catalysts

Fluorspar - Production, Consumption and Price Trend

The current global production of fluorspar is approximately 5.7 million tonnes per year:

· Major producing regions: China (>50% of the world's production); Mexico; Mongolia/CIS; S. Africa

· Major Consuming regions (highest to lowest): China; North America; Europe; Mexico; Russia

· The global supply and demand for fluorspar grew over the decade 1998 to 2008

· Since the global financial crisis in 2009 there was a contraction in acid-spar demand driven by a combination of environmental legislation and demand - fluorspar price followed this downward trend

· In 2017 prices for acid-spar started to recover and the price recovery has continued through 2018, export price for acid-spar (FOB China) is a traditional benchmark price and is currently published as mid US$565/tonne (Industrial Minerals Magazine)

· The price increases are believed to be driven by the following key factors:

o Increase in production of downstream value-added fluorspar products

o As China moves its focus to environmental protection they have implemented strict environmental policies and permitting requirements resulting in a number of fluorspar mines closing - Chinese fluorspar production down 13% year-on-year in 2017

o Between 2012 and 2016 various fluorspar producers outside China have closed their mining operations

· The equivalent price delivered into Europe (CIF Rotterdam), published as mid US$515/tonne, has now started to recover following the FOB China price recovery

· Overall long-term upward trend in price

Fluorspar - Outlook and Strategic Opportunity

· Industry view (producers, end users, analysts) is that demand for acid-spar will increase by >3% per year over the next 5 years and prices are forecast to increase in the medium to long-term, the key drivers being:

o No large scale commercial alternative or recycling

o Refrigeration demand will continue to grow in emerging economies - new generation of zero ozone depleting potential ("ODP") and very low global warming potential ("GWP") refrigerants, hydrofluoroolefins ("HFO's")

o Driven by environmental legislation, most recently the Kigali Amendment, where over 170 nations agreed to phase down low ODP, high GWP Hydrofluorocarbons ("HFCs")

o Energy reduction in the steel and aluminium industry

o Emerging uses - fluoropolymers in lithium batteries for example, demand for automotive Li‑ion batteries forecast to grow CAGR 34%

o Chinese supply-demand dynamics

· China produces >50% world fluorspar production

· China fluorspar exports continue to decline with acid-spar exports decreasing >50% since 2011, driven by increasing internal demand and production/export restrictions, China already consumes 90% of its fluorspar domestic production - heading towards becoming a future net importer

· Western Europe and North America are the largest acid-spar consuming regions outside China, importing more than 900,000 tonnes per year

· USA imports 100% of its fluorspar

· North America and Europe face the potential risk of security of supply

· Fluorspar is classified as a critical raw material by the European Commission - high risk of supply shortage and consequent impact on the economy

· USA listed fluorspar as a critical mineral in 2018

· China listed fluorspar as a strategic mineral in 2017

· Imbalance between production and consumption in China causing supply gap - to be filled by new fluorspar producers outside China

Based on macroeconomic drivers the Company continues to be strategically placed to capitalise on the supply gap in the future by developing its 100% owned large fluorspar assets, containing fluorspar resources of 13.1 million tonnes, located in the key markets of the USA and Europe.

\* The information in this Fluorspar Market Summary is drawn from various sources, including Industrial Minerals Magazine/Fastmarkets IM, United States Geological Survey, Roskill, IHS, UN Comtrade, industry sources, Xenops and CRU. CAGR - Compound annual growth rate.

Financial Review & Performance

The Group is currently in the earlier stages of the typical mining development cycle and so has no income other than cost recovery from the management contract with Sunrise Resources plc and a small amount of bank interest. Consequently the Group is not expected to report profits until it is able to profitably develop, dispose of, or otherwise commercialise its exploration and development projects.

The Group reports a loss of £2,267,197 for the year (2017: £395,532) after administration costs of £507,931 (2017: £550,229) and after crediting interest receivable of £142 (2017: £277). The loss includes impairment of the Storuman Project of £1,976,618, expensed pre-licence and reconnaissance exploration costs of £38,725 (2017: £30,617) and impairment of available for sale investment (the Company's share in Sunrise Resources plc) of £Nil (2017: £55,987). Administration costs include £8,997 (2017: £11,396) as non-cash costs for the value of certain share warrants held by employees as required by IFRS 2. The pre-tax loss is net of gains on disposal of available for sale equity share investments of £37,094.

Revenue includes £218,841 (2017: £204,110) from the provision of management, administration and office services provided to Sunrise Resources plc, to the benefit of both companies through efficient utilisation of services.

The financial statements show that, at 30 September 2018, the Group had net current assets of £249,787 (2017: £177,723). This represents the cash position after allowing for receivables and trade and other payables. These amounts are shown in the Consolidated and Company Statements of Financial Position and are also components of the Net Assets of the Group. Net assets also include various "intangible" assets of the Company. As the name suggests, these intangible assets are not cash assets but include this year's and previous years' accrued expenditure on minerals projects where that expenditure meets the criteria in Note 1(d) accounting policies. The intangible assets total £2,670,386 (2017: £4,508,015) and the breakdown by project is shown in Note 2 to the Financial Statements.

Expenditure which does not meet the criteria in Notes 1(d) and 1(n), such as pre-licence and reconnaissance costs, are expensed and add to the Company's loss. The loss reported in any year can also include expenditure that was carried forward in previous reporting periods as an intangible asset but which the Board determines is "impaired" in the reporting period.

The extent to which expenditure is carried forward as intangible assets is a measure of the extent to which the value of the Company's expenditure is preserved.

The intangible asset value of a project does not equate to the realisable or market value of a particular project which will, in the Directors' opinion, be at least equal in value and often considerably higher. Hence the Company's market capitalisation on AIM can be in excess of or less than the net asset value of the Group.

Details of intangible assets, property, plant and equipment and investments are set out in Notes 8, 9 and 10 of the financial statements.

The Financial Statements of a mineral exploration company can provide a moment in time snapshot of the financial health of the Company but do not provide a reliable guide to the performance of the Company or its Board and its long-term potential to create value.

Key Performance Indicators

The usual financial key performance indicators ("KPIs") are neither applicable nor appropriate to measurement of the value creation of a company involved in mineral exploration and which currently has no turnover other than cost recovery. The Directors consider that the detailed information in the Operating Review is the best guide to the Group's progress and performance during the year.

The Company does seek to reduce overhead costs, where practicable, and is reporting reduced administration costs this financial year - current year £507,931 (2017: £550,229).

Fundraising

During the 2018 financial year the Company raised a total of £500,000, before expenses, as shown in Note 14 of the Financial Statements.

The Directors prepare annual budgets and cash flow projections that extend beyond 12 months from the date of this report. Given the Group's cash position at year end (£218,297), these projections include the proceeds of future fundraising necessary within the next 12 months to meet the Group's overheads and planned discretionary project expenditures and to maintain the Company and its subsidiaries as going concerns.

Impairment

A biannual review is carried out by the directors to assess whether there are any indications of impairment of the Group's assets.

A review of exploration assets for indication of impairment under IFRS 6 and IAS 36 resulted in an impairment charge in Tertiary Gold Limited, relating to the Storuman Fluorspar Project, being recognised in the Consolidated Income Statement as part of operating expenses, with a commensurate reduction in the carrying value of intangible assets. Consequently, the value of the Company's investment in and due from its subsidiaries was considered. Being in excess of the market value of the Group at year end, this indicated a potential impairment under IAS 36 12(d). The directors therefore undertook an impairment review of the carrying values of the investments, with particular reference to Tertiary Gold Limited. The result of this review, together with the fact that there had been an impairment of the underlying assets held by Tertiary Gold Limited, indicated that impairment was required in the carrying value of the investment in Tertiary Gold Limited. The investment has been impaired down to the value of the underlying exploration and development assets, i.e. an impairment of £4,681,523 (Note 10).

A review of available for sale investment assets for indication of impairment under IAS 39 was carried out by the directors. Available for sale assets at year end comprised investment in shares of Sunrise Resources plc.

The nature of the activity of Sunrise Resources plc is similar to that of Tertiary Minerals plc in that it is involved in long-term mineral development and exploration. The projects within the company will typically take over five years to develop before they can be commercially exploited and until the end of a project it is expected that there will be volatility in the share price of the company.

The overall revaluation of Sunrise Resources plc has been negative since 5 November 2012 and at March 2017 the decline was considered, under IAS 39, to be prolonged and significant, resulting in further impairment in addition to that of previous periods. At the last review the share price had recovered to a level which did not necessitate impairment in the current period. Under the terms of IAS 39, previous impairment of available for sale assets cannot be reversed.

Risks & Uncertainties

The Board regularly reviews the risks to which the Group is exposed and ensures through its meetings and regular reporting that these risks are minimised as far as possible.

The principal risks and uncertainties facing the Group at this stage in its development and in the foreseeable future are detailed overleaf together with risk mitigation strategies employed by the Board.

Forward-Looking Statements

This Annual Report may contain certain statements and expressions of belief, expectation or opinion which are forward-looking statements, and which relate, inter alia, to the Company's proposed strategy, plans and objectives or to the expectations or intentions of the Company's directors. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the control of the Company that could cause the actual performance or achievements of the Company to be materially different from such forward-looking statements.

This Strategic Report was approved by the Board of Directors on 11 December 2018 and signed on its behalf.

Richard Clemmey

Managing Director

Our Governance

Corporate Governance Statement

There is no prescribed corporate governance code for AIM companies and London Stock Exchange prefers to give companies the flexibility to choose from a range of codes which suit their specific stage of development, sector and size.

The Board considers the corporate governance code published by Quoted Companies Alliance Corporate Governance Code 2018 ("the QCA Code") for small and mid-sized quoted companies to be the most suitable code for the Company and has adopted the principles set out in the QCA Code and applies these principles wherever possible, and where appropriate to its size and available resources.

The Chairman, Patrick Cheetham, has overall responsibility for the Corporate Governance of the Company. This Corporate Governance Statement was approved by the Board on 17 August 2018.

The QCA Code sets out ten principles which should be applied. The principles are listed below with an explanation of how the Company applies each principle and/or the reasons for any aspect of non-compliance.

Principle One: Establish a strategy and business model which promote long-term value for shareholders.

The Company has a clearly defined strategy and business model that has been adopted by the Board and is set out in the Strategic Report.

Principle Two: Seek to understand and meet shareholder needs and expectations.

All shareholders are encouraged to attend the Annual General Meeting where they can meet and directly communicate with the Board. Shareholders are welcome to contact the Company via email at info@tertiaryminerals.com with any specific queries.

The Company also provides regulatory, financial and business news updates through the Regulatory News Service (RNS) and various media channels such as Twitter. Shareholders also have access to information through the Company's website, www.tertiaryminerals.com, which is updated on a regular basis.

Principle Three: Take into account wider stakeholder and social responsibilities and their implications for long-term success.

The Board takes regular account of the significance of social, environmental and ethical matters affecting the business of the Group. At this stage in the Group's development, the Board has not adopted a specific written policy on Corporate Social Responsibility as it has a limited pool of stakeholders other than its shareholders. Rather, the Board seeks to protect the interests of the Group's stakeholders (both internal and external to the Group) through individual policies and through ethical and transparent actions. The Company engages positively with local communities and stakeholders in its project locations and encourages feedback through this engagement.

Principle Four: Embed effective risk management, considering both opportunities and threats, throughout the organisation.

The Board regularly reviews the risks to which the Group is exposed and ensures through its meetings and regular reporting that these risks are minimised as far as possible whilst recognising that its business opportunities carry an inherently high level of risk. The principal risks and uncertainties facing the Group at this stage in its development and in the foreseeable future together with risk mitigation strategies employed by the Board are detailed in the Strategic Report.

Principle Five: Maintain the board as a well-functioning, balanced team led by the chair.

The Board's role is to agree the Group's long-term direction and strategy and monitor achievement of its business objectives. The Board meets formally four times a year for these purposes and holds additional meetings when necessary to transact other business. The Board receives reports for consideration on all significant strategic, operational and financial matters.

The Board is supported by the Audit, Remuneration and Nomination Committees.

The Board currently consists of the Chairman, Managing Director and one Non-Executive Director. The current Board's preference is that independent Non-Executive directors are equally represented or comprise the majority of Board members. However, due to the untimely death of the Company's second Non-Executive Director, David Whitehead, in November 2017 this is not currently the case. However, the Company intends that a replacement will be appointed in due course. When there are two Non-Executive directors in post, the Board considers that the structure is nevertheless acceptable having regard to the fact that it is not yet revenue-earning.

Despite serving as a Non-Executive Director for more than nine years, Donald McAlister is considered independent of management and free from any business or other relationship which could materially interfere with the exercise of his independent judgement. In compliance with good practice, he will continue to seek annual re-election rather than every third year as per the Articles of Association.

Attendance at Board and Committee Meetings

The Board retains full control of the Group with day-to-day operational control delegated to Executive Directors. The full Board meets four times a year and on any other occasions it considers necessary. During 2018 there were nine Board meetings, two Remuneration Committee meetings, two Audit Committee meetings and one Nomination Committee meeting. All meetings were attended by their constituent directors.

Principle Six: Ensure that between them the directors have the necessary up-to-date experience, skills and capabilities.

The Board considers the current balance of sector, financial and public market skills and experience appropriate given the current size and stage of development of the Company and that the Board has the skills and experience necessary to execute the Company's strategy and business plan and discharge its duties effectively.

The directors maintain their skills through membership of various professional bodies, attendance at mining conferences and through their various external appointments.

All Directors have access to the Company Secretary who is responsible for ensuring that Board procedures and applicable rules and regulations are observed.

The Board and its committees will also seek external expertise and advice where required.

Principle Seven: Evaluate board performance based on clear and relevant objectives, seeking continuous improvement.

The ultimate measure of the effectiveness of the Board is the Company's progress against the long-term strategy and aims of the business. This progress is reviewed in Board meetings held at least four times a year. The Managing Director's performance is reviewed once a year by the rest of the Board, and measured against a definitive list of short, medium and long-term strategic targets set by the Board.

The Nomination Committee, currently consisting of the Chairman, Managing Director and one Non-Executive Director, meets once a year to lead the formal process of rigorous and transparent procedures for Board appointments. During this meeting the Nomination Committee review the structure, size and composition of the Board; succession planning; leadership; key strategic and commercial issues; conflicts of interest; time required from Non-Executive directors to execute their duties effectively; overall effectiveness of the Board and its own terms of reference.

Principle Eight: Promote a corporate culture that is based on ethical values and behaviours.

The Board recognises and strives to promote a corporate culture based on strong ethical and moral values. The corporate culture of the Company is promoted throughout its workforce, suppliers and contractors and is underpinned by the implementation and regular review, enforcement and documentation of various policies: Health and Safety Policy; Environmental Policy; Share Dealing Policy; Anti-Corruption Policy and Code of Conduct; Privacy and Cookies Policy and Social Media Policy.

Employees

The Group encourages its employees to understand all aspects of the Group's business and seeks to remunerate its employees fairly, being flexible where practicable. The Group gives full and fair consideration to applications for employment received regardless of age, gender, colour, ethnicity, disability, nationality, religious beliefs, transgender status or sexual orientation. The Board takes account of employees' interests when making decisions, and suggestions from employees aimed at improving the Group's performance are welcomed.

Suppliers and Contractors

The Group recognises that the goodwill of its contractors, consultants and suppliers is important to its business success and seeks to build and maintain this goodwill through fair dealings. The Group has a prompt payment policy and seeks to settle all agreed liabilities within the terms agreed with suppliers. The amount shown in the Consolidated and Company Statements of Financial Position in respect of trade payables at the end of the financial year represents 15 days of average daily purchases (2017: 8 days).

Anti-Corruption Policy and Code of Conduct

The Company has adopted and implements an Anti-Corruption Policy and Code of Conduct.

Health and Safety

The Board recognises it has a responsibility to provide strategic leadership and direction in the development of the Group's health and safety strategy in order to protect all of its stakeholders. The Company has developed and implements a Health and Safety Policy to clearly define roles and responsibilities and in order to identify and manage risk.

Principle Nine: Maintain governance structures and processes that are fit for purpose and support good decision-making by the Board.

The Board has overall responsibility for all aspects of the business. The Chairman is responsible for overseeing the running of the Board, ensuring that no individual or group dominates the Board's decision-making and ensuring the Non-Executive Directors are properly briefed on all operational and financial matters. The Chairman has overall responsibility for corporate governance matters in the Group and chairs the Nomination Committee. The Managing Director has the responsibility for implementing the strategy of the Board and managing the day-to-day business activities of the Group. The Company Secretary is responsible for ensuring that Board procedures are followed and applicable rules and regulations are complied with.

Non-Executive Director, Donald McAlister, is responsible for bringing independent and objective judgment to Board decisions. The Board has established an Audit and Remuneration Committee with formally delegated duties and responsibilities. Donald McAlister currently chairs the Audit and Remuneration Committee.

Audit Committee

The Audit Committee, composed entirely of Non-Executive Directors, meets at least twice a year and assists the Board in meeting responsibilities in respect of external financial reporting and internal controls. The Audit Committee also keeps under review the scope and results of the audit. It also considers the cost-effectiveness, independence and objectivity of the Auditor taking account of any non-audit services provided by them.

Remuneration Committee

The Remuneration Committee also comprises the Non-Executive Directors. The Remuneration Committee meets at least once a year to determine the appropriate remuneration for the Company's executive directors, ensuring that this reflects their performance and that of the Group, and to demonstrate to shareholders that executive remuneration is set by Board members who have no personal interest in the outcome of their decisions.

The Company has initiated a long-term bonus and incentive scheme for the Managing Director. The objective of adopting the scheme is to provide reward for successfully achieving performance targets set by the Board of Directors in line with the Company's Aims and Strategy. The Company has in place an Inland Revenue approved share option scheme and also issues warrants to subscribe for shares to executive directors and employees. Directors' emoluments are disclosed in Note 4 to the financial statements and details of Directors' warrants are disclosed in Note 15.

Conflicts of Interest

The Companies Act 2006 permits directors of public companies to authorise directors' conflicts and potential conflicts, where appropriate, and the Articles of Association contain a provision to this effect.

At 30 September 2018, Tertiary Minerals plc held 5.19% of the issued share capital of Sunrise Resources plc and the Chairman of Tertiary Minerals plc is also Chairman of Sunrise Resources plc. Tertiary Minerals plc also provides management services to Sunrise Resources plc, in the search, evaluation and acquisition of new projects.

Procedures are in place in order to avoid any conflict of interest between the Company and Sunrise Resources plc.

Principle Ten: Communicate how the company is governed and is performing by maintaining a dialogue with shareholders and other relevant stakeholders.

The Company regularly communicates with, and encourages feedback from, its various stakeholder groups. The Company's website is regularly updated and users can register to be alerted via email when certain announcements are made.

The Group's financial reports can be found here: www.tertiaryminerals.com/investor-media/financial-reports

Notices of General Meetings held for at least the past five years can be found here: www.tertiaryminerals.com/news-releases 

The results of voting on all resolutions in future general meetings will be posted to the Company's website, including any actions to be taken as a result of resolutions for which votes against have been received from at least 20 per cent of independent votes.

This Corporate Governance statement will be reviewed at least annually to ensure that the Company's corporate governance framework evolves in line with the Company's strategy and business plan.

Patrick Cheetham

Executive Chairman

11 December 2018

Board of Directors

The Directors and Officers of the Company during the financial year were:

Patrick Cheetham (58)

Chairman

Key Strengths and Experience

· Geologist.

· 37 years' experience in mineral exploration.

· 32 years' experience in public company management.

· Founder of the Company, Dragon Mining Ltd, Archaean Gold NL and Sunrise Resources plc.

External Appointments

Chairman and founder of Sunrise Resources plc.

Richard Clemmey (46)

Managing Director

Key Strengths and Experience

· Chartered Engineer.

· 25 years' experience in developing and managing mining/quarrying projects worldwide for Derwent Mining, Lafarge, Hargreaves (GB) Ltd, Marshalls plc and CFE.

· Board Director since May 2012.

External Appointments

None.

Donald McAlister (59)

Non-Executive Director*

Key Strengths and Experience

· Accountant.

· Previously Finance Director at Mwana Africa plc, Ridge Mining plc and Reunion Mining.

· 24 years' experience in all financial aspects of the resource industry, including metal hedging, tax planning, economic modelling/evaluation, project finance and IPOs.

· Founding director of the Company.

External Appointments

Financial Director of Moxico Resources plc and Finance Director of ZincOx Resources plc.

* Chairman of the Audit Committee and member of the Remuneration Committee.

David Whitehead (now deceased)

Non-Executive Director

During part of the last financial year David Whitehead operated as a non-executive director but he sadly passed away in November 2017. The Board will be seeking a replacement in due course.

Colin Fitch LLM, FCIS

Company Secretary

Key Strengths and Experience

· Barrister-at-Law.

· Previously Corporate Finance Director of Kleinwort Benson, Partner and Head of Corporate Finance at Rowe & Pitman (SG Warburg Securities) and Assistant Company Secretary at the London Stock Exchange.

· Held a number of non-executive directorships including Merrydown plc, African Lakes plc and Manders plc.

External Appointments

Company Secretary for Sunrise Resources plc.

Directors' Responsibilities

The Directors are responsible for preparing the Strategic Report, the Directors' Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year. Under that law the Directors have elected to prepare the Group and Company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and applicable law. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group for that period. The Directors are also required to prepare financial statements in accordance with the AIM Rules of the London Stock Exchange for companies trading securities on the AIM Market.

In preparing these financial statements, the Directors are required to:

· select suitable accounting policies and then apply them consistently;

· make judgements and accounting estimates that are reasonable and prudent;

· state whether they have been prepared in accordance with IFRSs as adopted by the European Union, subject to any material departures disclosed and explained in the financial statements; and

· prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company and the Group will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company's transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the requirements of the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

They are further responsible for ensuring that the Strategic Report and the Report of the Directors and other information included in the Annual Report and Financial Statements is prepared in accordance with applicable law in the United Kingdom.

Website Publication

The maintenance and integrity of the Tertiary Minerals plc website is the responsibility of the Directors; the work carried out by the Auditors does not involve the consideration of these matters and, accordingly, the Auditors accept no responsibility for any changes that may have occurred in the accounts since they were initially presented on the website. Legislation in the United Kingdom governing the preparation and dissemination of the accounts and the other information included in annual reports may differ from legislation in other jurisdictions.

Information from the Directors' Report

The Directors are pleased to submit their Annual Report and audited accounts for the year ended 30 September 2018.

The Strategic Report contains details of the principal activities of the Company and includes the Operating Review and Performance which provides detailed information on the development of the Group's business during the year and indications of likely future developments.

Going Concern

In common with many exploration companies, the Company raises finance for its exploration and appraisal activities in discrete tranches. Further funding is raised as and when required. When any of the Group's projects move to the development stage, specific project financing will be required.

The Directors prepare annual budgets and cash flow projections that extend beyond 12 months from the date of this report. Given the Group's cash position at year end (£218,297), these projections include the proceeds of future fundraising necessary within the next 12 months to meet the Company's and Group's overheads and planned discretionary project expenditures and to maintain the Company and Group as going concerns. Although the Company has been successful in raising finance in the past, there is no assurance that it will obtain adequate finance in the future. This represents a material uncertainty related to events or conditions which may cast significant doubt on the Group and Company's ability to continue as going concerns and, therefore, that they may be unable to realise their assets and discharge their liabilities in the normal course of business. However, the Directors have a reasonable expectation that they will secure additional funding when required to continue meeting corporate overheads and exploration costs for the foreseeable future and therefore believe that the going concern basis is appropriate for the preparation of the financial statements.

Dividend

The Directors are unable to recommend the payment of a dividend.

Financial Instruments & Other Risks

Details of the Group's Financial Instruments and risk management objectives and of the Group's exposure to risk associated with its Financial Instruments is given in Note 19 to the financial statements.

The business of mineral exploration and evaluation has inherent risks. Details of risks and uncertainties that affect the Group's business are given in Risks and Uncertainties in the Strategic Report.

Directors

The Directors currently holding office are:

Mr P L Cheetham

Mr R H Clemmey

Mr D A R McAlister

In addition, Mr D Whitehead (now deceased) was a non-executive director during part of the financial year.

Post Balance Sheet Events

There were no post balance sheet events

Shareholders

As at the date of this report the following interests of 3% or more in the issued share capital of the Company appeared in the share register:

Disclosure of Audit Information

Each of the Directors has confirmed that so far as he is aware, there is no relevant audit information of which the Company's Auditor is unaware, and that he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the Company's Auditor is aware of that information.

Auditor

A resolution to re-appoint Crowe U.K. LLP as Auditor of the Company and the Group will be proposed at the forthcoming Annual General Meeting.

Charitable and Political Donations

During the year, the Group made no charitable or political donations.

Annual General Meeting

The Annual General Meeting will be held on Thursday 21 February 2018 at 2.30 p.m.

Approved by the Board of Directors on 11 December 2018 and signed on its behalf.

Richard Clemmey

Managing Director

Publication of Statutory Accounts

The financial information set out in this announcement does not constitute the Company's Annual Accounts for the period ended 30 September 2018 or 2017. The financial information for 2017 is derived from the Statutory Accounts for 2017. Full audited accounts in respect of that financial period have been delivered to the Registrar of Companies. The Statutory Accounts for 2018 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The Auditors have reported on the 2018 and 2017 accounts. Neither set of accounts contain a statement under section 498(2) of (3) the Companies Act 2006 and both received an unqualified audit opinion. However, there was an emphasis of matter in relation to a requirement that the Company raise funds in the future to continue as a going concern.

Availability of Financial Statements

The Annual Report containing the full financial statements for the year to 30 September 2018 will be posted to shareholders on or around 21 December 2018, a soft copy of which will then be available to download from the Company's website: https://www.tertiaryminerals.com.

Consolidated Income Statement

for the year ended 30 September 2018

All amounts relate to continuing activities.

Consolidated Statement of Comprehensive Incomefor the year ended 30 September 2018

Consolidated and Company Statements of Financial Position

at 30 September 2018

Company Number 03821411

The Company reported a loss for the year ended 30 September 2018 of £4,971,649 (2017 - £366,439).

These financial statements were approved and authorised for issue by the Board of Directors on 11 December 2018 and were signed on its behalf.

R H Clemmey D A R McAlister

Director Director

Consolidated Statement of Changes in Equity

Company Statement of Changes in Equity

Consolidated and Company Statements of Cash Flows

for the year ended 30 September 2018

Notes to the Financial Statements

for the year ended 30 September 2018

Background

Tertiary Minerals plc is a public company incorporated and domiciled in England. It is traded on the AIM market of the London Stock Exchange - EPIC: TYM.

The Company is a holding company for a number of companies (together, "the Group"). The Group's financial statements are presented in Pounds Sterling (£) which is also the functional currency of the Company.

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Group's financial statements.

1. Accounting policies

(a) Basis of preparation

The Financial Statements have been prepared on the basis of the recognition and measurement requirements of International Financial Reporting Standards (IFRS), as adopted by the European Union. They have also been prepared in accordance with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

(b) Going concern

In common with many exploration companies, the Company raises finance for its exploration and appraisal activities in tranches as and when required. When any of the Group's projects move to the development stage, specific project financing will be required.

The Directors prepare annual budgets and cash flow projections that extend beyond 12 months from the date of this report. Given the Group's cash position at year end (£218,297), these projections include the proceeds of future fundraising necessary within the next 12 months to meet the Group's overheads and planned discretionary project expenditure and to maintain the Company and its subsidiaries as going concerns. Although the Company has been successful in raising finance in the past, there is no assurance that it will obtain adequate finance in the future. This represents a material uncertainty related to events or conditions which may cast significant doubt on the Group and Company's ability to continue as going concerns and, therefore, that they may be unable to realise their assets and discharge their liabilities in the normal course of business. However, the Directors have a reasonable expectation that they will secure additional funding when required to continue meeting corporate overheads and exploration costs for the foreseeable future and therefore believe that the going concern basis is appropriate for the preparation of the financial statements.

(c) Basis of consolidation

Investments, including long-term loans, in subsidiaries are valued at the lower of cost or recoverable amount, with a biannual review for impairment.

The Group's financial statements consolidate the financial statements of Tertiary Minerals plc and its subsidiary undertakings eliminating inter-company balances and transactions.

In accordance with section 408 of the Companies Act 2006, Tertiary Minerals plc is exempt from the requirement to present its own Statement of Comprehensive Income. The amount of the loss for the financial year recorded within the financial statements of Tertiary Minerals plc is £4,971,649 (2017: £366,439). The loss for 2018 includes provision for impairment of its investment in subsidiary undertakings in the amount of £4,681,523 (Note 10).

(d) Intangible assets

Exploration and evaluation

Accumulated exploration and evaluation costs incurred in relation to separate areas of interest (which may comprise more than one exploration licence or exploration licence applications) are capitalised and carried forward where:

(1) such costs are expected to be recouped through successful exploration and development of the area, or alternatively by its sale; or

(2) exploration and/or evaluation activities in the area 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, or in relation to the areas are continuing.

An annual review is carried out by the Directors to consider whether there are any indications of impairment in capitalised exploration and development costs. The biannual impairment reviews were conducted in April 2018 and November 2018.

Where an indication of impairment is identified, the relevant value is written off to the income statement in the period for which the impairment was identified. An impairment of exploration and development costs may subsequently be reversed in later periods should conditions allow.

Accumulated costs, where the Group does not yet have an exclusive exploration licence and in respect of areas of interest which have been abandoned, are written off to the income statement in the year in which the pre-licence expense was incurred or in which the area was abandoned.

Development

Exploration, evaluation and development costs are carried at the lower of cost and expected net recoverable amount. On reaching a mining development decision, exploration and evaluation costs are reclassified as development costs and all development costs on a specific area of interest will be amortised over the useful economic life of the projects, once they become income generating and the costs can be recouped.

(e) Property, plant & equipment

All property, plant and equipment assets are stated at cost less accumulated depreciation. Depreciation is provided by the Group on all property, plant and equipment, at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its expected useful life, as follows:

Fixtures and fittings 20% to 33% per annum Straight-line basis

Computer equipment 33% per annum Straight-line basis

Useful life and residual value are reassessed annually.

(f) Available for sale investments

Available for sale financial assets include non-derivative financial assets that are either designated as such or do not qualify for inclusion in any of the other categories of financial assets. Available for sale investments are initially measured at cost and subsequently at fair value, being the equivalent of market value, with changes in value recognised in equity. Gains and losses arising from available for sale investments are recognised in the income statement when they are sold or impaired.

(g) Trade and other receivables and payables

Trade and other receivables and payables are measured at initial recognition at fair value and subsequently measured at amortised cost.

(h) Cash and cash equivalents

Cash and cash equivalents consist of cash at bank and in hand and short-term bank deposits with a maturity of three months or less.

(i) Deferred taxation

Deferred taxation, if applicable, is provided in full in respect of taxation deferred by temporary differences between the treatment of certain items for taxation and accounting purposes.

Deferred tax assets are recognised to the extent that they are regarded as recoverable.

(j) Revenue

Revenue is measured at the fair value of the consideration received or receivable and includes amounts receivable for services provided to Sunrise Resources plc net of discounts, VAT and other sales-related taxes.

(k) Foreign currencies

The Group's consolidated financial statements are presented in Pounds Sterling (£), being the functional currency of the Company, and the currency of the primary economic environment in which the Company operates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date.

For consolidation purposes, the net investment in foreign operations and the assets and liabilities of overseas subsidiaries, associated undertakings and joint arrangements, that have a functional currency different from the Group's presentation currency, are translated at the closing exchange rates. Income statements of overseas subsidiaries, that have a functional currency different from the Group's presentation currency, are translated at exchange rates at the date of transaction. Exchange differences arising on opening reserves are taken to the foreign currency reserve in equity.

(l) Leasing and hire purchase commitments

Rentals applicable to operating leases where substantially all the benefits and risks of ownership remain with the lessor are charged to the income statement on a straight-line basis.

(m) Share warrants and share based payments

The Company issues warrants and options to employees (including directors) and third parties. The fair value of the warrants and options is recognised as a charge measured at fair value on the date of grant and determined in accordance with IFRS 2, IAS 32 and IAS 39, adopting the Black-Scholes-Merton model. The fair value is charged to administrative expenses on a straight-line basis over the vesting period, together with a corresponding increase in equity, based on the management's estimate of shares that will eventually vest. The expected life of the options and warrants is adjusted based on management's best estimates, for the effects of non-transferability, exercise restrictions and behavioural considerations. The details of the calculation are shown in Note 15.

The Company also issues shares in order to settle certain liabilities, including partial settlement of outstanding directors fees. The fair value of shares issued is based on the closing mid-market price of the shares on the AIM Market on the day prior to the date of settlement and it is expensed on the date of settlement with a corresponding increase in equity.

(n) Judgements and estimations in applying accounting policies

In the process of applying the Group's accounting policies above, the Group has identified the judgemental areas that have the most significant effect on the amounts recognised in the financial statements:

Intangible assets - exploration and evaluation

Capitalisation of exploration and evaluation costs requires that costs be assessed against the likelihood that such costs will be recoverable against future exploitation or sale or alternatively, where activities have not reached a stage which permits a reasonable estimate of the existence of mineral reserves, a judgement that future exploration or evaluation should continue. This requires management to make estimates and judgements and to make certain assumptions, often of a geological nature, and most particularly in relation to whether or not an economically viable mining operation can be established in future. Such estimates, judgements and assumptions are likely to change as new information becomes available. When it becomes apparent that recovery of expenditure is unlikely the relevant capitalised amount is written off to the income statement.

Impairment

Impairment reviews for deferred exploration and evaluation costs are carried out on a project by project basis, with each project representing a potential single cash generating unit. The Group will review information produced by its exploration activities and consider whether the carrying value is impaired. Assessment of the impairment of assets is a judgement based on analysis of the probability of future cash flows from the relevant project, including consideration of:

(a) The period for which the entity has the right to explore in the specific area and whether this right will expire in the near future, and whether the right is expected to be renewed.

(b) Whether substantive expenditure on further exploration for and evaluation of mineral resources for the specific project is either budgeted or planned.

(c) Whether exploration for and evaluation of mineral resources on the specific project has led to the discovery of commercially viable quantities of mineral resources and whether the entity has decided to discontinue such activities on the project.

(d) Whether sufficient data exist to indicate that, although a development on the specific project is likely to proceed, the carrying amount of the exploration and evaluation asset is likely to be recovered in full from successful development of a mine or by the sale of the project.

Impairment reviews for investments in subsidiaries and available for sale assets are carried out on an individual basis. The Group reviews performance indicators of the investment, such as market share price, to indicate whether the carrying value is impaired. The results of the impairment review conducted during this year are detailed within Note 8.

Available for sale assets include a holding in Sunrise Resources plc as described in Note 10. In the Interim Financial Statements for the six month period to 31 March 2017 a reduction in share price from cost was considered significant in terms of value and as a result the asset was treated as impaired in line with the requirements of IAS 39. This treatment is despite the fact that directors do not believe that the underlying business of Sunrise Resources plc is impaired either economically or commercially. A subsequent increase in share price in the period to 30 September 2018 has been recognised in equity (see Note 1(f)).

Going concern

The preparation of financial statements requires an assessment of the validity of the going concern assumption. The validity of the going concern assumption is dependent on finance being available for the continuing working capital requirements of the Group. Based on the assumption that such finance will become available, the Directors believe that the going concern basis is appropriate for these accounts (see Note 1(b)).

Share warrants, share options and share based payments

The estimates of costs recognised in connection with the fair value of share options and share warrants require that management selects an appropriate valuation model and make decisions on various inputs into the model, including the volatility of its own share price, the probable life of the warrants and options before exercise, and behavioural considerations of warrant holders (see Note 1(m)).

(p) Standards, amendments and interpretations not yet effective

A number of new standards and amendments to standards and interpretations have been issued but are not yet effective and in some cases have not yet been adopted by the EU.

The directors do not expect that the adoption of these standards will have a material impact on the financial statements of the Group in future periods. Specifically, the adoption of IFRS 9 will have minimal impact for both the classification and measurement of existing financial instruments. As the Group does not have any turnover other than recharge of expenses, IFRS 15 will not have any significant impact on revenue recognition and related disclosures. Finally, the adoption of IFRS 16 will not have any impact on the financial statements of the Group as all lease contracts are for periods of less than one year.

2. Segmental analysis

The Chief Operating Decision Maker is the Board of Directors. The Board considers the business has one reportable segment, the management of exploration projects, which is supported by a Head Office function. For the purpose of measuring segmental profits and losses the exploration segment bears only those direct costs incurred by or on behalf of those projects. No Head Office cost allocations are made to this segment. The Head Office function recognises all other costs.

3. Loss before income tax

4. Directors' emoluments

The above remuneration amounts do not include non-cash share based payments charged in these financial statements in respect of share warrants issued to the Directors amounting to £4,224 (2017: £7,509) or Employer's National Insurance contributions of £28,050 (2017: £25,985). During the year shares were issued to D A R McAlister having a market value of £2,720 at the time of issue in part settlement of outstanding directors fees.

The above remuneration amount for R H Clemmey includes a bonus of £12,500 (2017: £4,097). Bonus remuneration is applicable to performance in the previous financial year.

Pension contributions made during the year on behalf of Directors amounted to £599 (2017: £258).

The Directors are also the key management personnel. If all benefits are taken into account, the total key management personnel compensation would be £235,550 (2017: £235,213).

After recharge to Sunrise Resources plc, if all benefits are taken into account, the key management personnel net compensation cost to the Group would be £136,878 (2017: £142,449).

5. Staff costs

6. Loss per share

The loss attributable to ordinary shareholders and weighted average number of ordinary shares for the purpose of calculating the diluted earnings per ordinary share are identical to those used for the basic earnings per ordinary share. This is because the exercise of share warrants and options would have the effect of reducing the loss per ordinary share and is therefore anti-dilutive. Deferred shares are excluded from the loss per share calculation as they have no attributable earnings.

7. Income tax

No liability to corporation tax arises for the year due to the Group recording a taxable loss (2017: £Nil).

The tax credit for the period is lower than the credit resulting from the loss before tax at the standard rate of corporation tax in the UK - 19% (2017: 19%). The differences are explained below.

Factors that may affect future tax charges

The Group has total losses carried forward of £7,859,632 (2017: £5,714,426). This amount would be charged to tax, thereby reducing tax liability, if sufficient profits were made in the future. The deferred tax asset has not been recognised as the future recovery is uncertain given the exploration status of the Group. The carried tax loss is adjusted each year for amounts that can no longer be carried forward.

8. Intangible assets

The directors carried out an impairment review which, with reference to IFRS 6.20(b) and IAS 36.12(b), resulted in an impairment charge, relating to the Tertiary Gold Limited Storuman Fluorspar Project, being recognised in the Consolidated Income Statement as part of operating expenses. Refer to accounting policy 1(d) and 1(n) for a description of the considerations used in the impairment review.

The key reasons for the impairment of the Storuman Project relate to the fact that the County Administrative Board has advised against the grant of the Mine Permit in its current from and that all further expenditure on exploration or development of the project is currently on hold.

As a result of the impairment review the directors concluded to impair the carrying value of the project fully.

9. Property, plant & equipment

10. Investments

Subsidiary undertakings

The registered office of Tertiary Gold Limited and Tertiary (Middle East) Limited is the same as the Parent Company, being Sunrise House, Hulley Road, Macclesfield, Cheshire, SK10 2LP.

The registered office of Tertiary Minerals US Inc. is 241 Ridge Street, Suite 210, Reno, NV 89501, USA.

In relation to indication of impairment of exploration assets under IFRS 6, and with reference to IAS 36.12(b), the value of the Company's investment in and due from its subsidiaries was considered. Being in excess of the market value of the Group at year end, this indicated a potential impairment under IAS 36.12(d). The directors therefore undertook an impairment review of the carrying values of the investments, with particular reference to Tertiary Gold Limited. The result of this review, together with the fact that there had been an impairment of the underlying assets held by Tertiary Gold Limited, indicated that impairment was required in the carrying value of the investment in Tertiary Gold Limited. The investment has been impaired down to the value of the underlying exploration assets, i.e. an impairment of £4,681,523.

Available for sale investment

Additions to available for sale investments in 2017 are a combination of shares issued in lieu of cash payment for settlement of outstanding invoices to Sunrise Resources plc for management fees, and shares acquired in Aurion Resources Limited for part settlement of consideration on disposal of Finland gold assets.

Disposals in the year ended September 2018 comprises disposal of 10,000,000 Sunrise Resources plc shares and full disposal of all Aurion Resources Limited shares.

The fair value of each available for sale investment is equal to the market value of its shares at 30 September 2018, based on the closing mid-market price of shares on its equity exchange market.

These are level one inputs for the purpose of the IFRS 13 fair value hierarchy.

11. Receivables

The Group aged analysis of trade receivables is as follows:

12. Cash and cash equivalents

13. Trade and other payables

14. Issued capital and reserves