Tertiary Minerals Regulatory News (TYM)

14 Jan 2008 07:00

Tertiary Minerals PLC14 January 2008 Tertiary Minerals plc Final results for the year ended 30 September 2007 Chairman's Statement I am pleased to announce the Company's audited Financial Statements for the yearended 30 September 2007. Ghurayyah ProjectAfter concentrating our efforts in 2006 on preliminary feasibility studies forour world-class Ghurayyah tantalum-niobium-rare-earth project in Saudi Arabia itcame as a shock to have our application for renewal of our exploration licencerefused by the Saudi authorities in January 2007. Following this refusal theBoard requested the voluntary suspension of trading in the Company's shares fora short period. It is, however, important to point out that the issues affectingGhurayyah are entirely project specific, in contrast to the revocation oflicences, local empowerment legislation and increasing government royaltieswhich are common ways of achieving "back-door" nationalisation of mining assetsin many countries. The Saudi Government has indicated to the Company that it does not wish tolicense uranium for exploration or production. Given that the Ghurayyah depositcontains uranium, albeit at low levels not previously considered by the Companyfor production, the development of Ghurayyah for tantalum and niobium and otherassociated minerals is particularly sensitive. We have been working throughoutthe year with our Saudi investment partners and with the Saudi Ministry forPetroleum and Mineral Resources which is now processing a new explorationlicence application and in July 2007 the Company's share trading suspension waslifted. The Board continues to believe that exploration rights at Ghurayyah willbe renewed but we recognise that market confidence in this outcome has beenbadly affected by the continuing delays to the issue of a new licence. On a more positive note, I believe that we are now in the final stages of thelicence issuing process for Ghurayyah and I am pleased that we have been able tocontinue working effectively with our Saudi investment partners, having reachedan agreement with them during the year whereby their financial contributions tothe project will be accelerated once the licence is re-issued. Work on theGhurayyah feasibility study continued in 2007 at a low level but is now on holdwhilst we await the re-issue of the exploration licence on acceptable terms.Other positive developments at Ghurayyah are the increase in the prices for thetwo main metals, tantalum and niobium and the recognition that Ghurayyahcontains significant quantities of heavy rare-earth metals that are much indemand today for use in the magnets essential for hybrid vehicle manufacture.This presents a significant additional revenue opportunity for the project. Nordic Country ProjectsThe scale of the Company's commitment to Ghurayyah in the recent past and thespin-out of the Company's diamond projects to Sunrise Diamonds plc in late 2005resulted in a lower priority for the Company's Nordic Country projects in 2006.However the delays at Ghurayyah have allowed a renewed emphasis to be placed onthese Nordic Country projects in 2007 with pleasing results. At Kolari, in Finland, the Company is targeting magnetite iron-ore adjacent toNorthland Resources' iron-ore development project, and we have just recentlyannounced the positive results from our first drilling programme at theSivakkalehto prospect where a magnetite content of 20-50% has been encounteredover substantial widths. The Company is now targeting a large open-pittable bodyof magnetite iron ore for sale to local markets. The European market for ironore is large, but domestic production is small and Europe's requirements are metmainly by ore shipped at considerable cost from the southern hemisphere. Thecosts advantages for a European iron ore producer would be significant. Also in 2007, we signed an earn-in/joint venture agreement with Canada's InmetMining Corporation on our Vahajoki project in Finland to allow explorationto proceed on this exciting property at no immediate cost to Tertiary.Significant copper-gold-iron mineralisation is known from previous drilling at Vahajoki and Inmet has already initiated further exploration. The Company has plans for further work at other Nordic Country projectsincluding the Kaareselka gold project, the Ahmavuoma copper-gold project andthe Rosendal tantalum project. New Project PipelineFollowing extensive research and reconnaissance work during the year, I ampleased to herald our possible involvement in two new projects. We have appliedfor exploration rights over new areas in Sweden and in Namibia where we expectpotentially commercial resources can be defined at relatively low cost. Moreinformation will be provided should those licences be granted. Sunrise Diamonds plcThe Company retains a shareholding in Sunrise Diamonds plc throughout the year,although its holding has been diluted to 16.5% by share issues made during theyear. Annual ResultsThe Group reported a loss of £871,964 for the year (2006: £255,583 as restatedfor the adoption of Financial Reporting Standard 20) In ConclusionWith 2007 behind us, the Company has much to look forward to. In addition toexpectations of the revival of the Ghurayyah project, renewed exploration of thecompany's Nordic projects is underway and valuable new projects are in thepipeline. We expect to be in a position to deliver good news on a number offronts in 2008 and I would like to thank all my fellow shareholders for theirsupport in 2007. Patrick L CheethamExecutive Chairman 14 January 2008 Further Information: Patrick Cheetham, Tertiary Minerals Plc. Tel: +44 (0)1625-626203.Ron Marshman/John Greenhalgh, City of London PR Ltd. Tel: +44 (0)20-7628-5518 Web-site: www.tertiaryminerals.com Consolidated Profit and Loss Accountfor the year ended 30 September 2007 As restated 2007 2006 £ £ Exploration costs written off and provided for 691,182 52,077Administrative expenses 244,528 231,420 --------- -------- Operating loss (935,710) (283,497) Share of loss of associate (18,458) (48,773) Profit on disposal of tangible asset - 504 Profit arising from the increase in value of theGroup's share of the net assets of Sunrise Diamonds resulting from share issues 53,250 44,357 Interest receivable 27,713 28,268 Share of interest receivable of associate 1,241 3,558 --------- -------- Loss on ordinary activities before taxation (871,964) (255,583) Tax on loss on ordinary activities - - Loss for the year (871,964) (255,583) --------- -------- Loss per share - basic and diluted (pence) (1.60) (0.49) --------- -------- All amounts relate to continuing activities. Consolidated Statement of Total Recognised Gains and Lossesfor the year ended 30 September 2007 As restated 2007 2006 £ £ Loss for the year (871,964) (255,583) Foreign exchange translation differences on foreigncurrency net investments in subsidiaries (27,884) (21,507) --------- -------- Total recognised losses since last accounts (899,848) (277,090) --------- -------- Balance sheetsat 30 September 2007 Group Group Company Company As restated As restated 2007 2006 2007 2006 £ £ £ £Fixed assetsIntangible assets 688,170 1,158,926 - -Tangible assets 8,682 9,898 5,090 6,500Investment insubsidiary - - 224,889 224,889Investment inassociate - - - 215,250Share of net assetsof associate - 221,742 - -Investment 257,775 - 215,250 -------- -------- -------- -------- 954,627 1,390,566 445,229 446,639 -------- -------- -------- -------- Current assetsDebtors 62,467 57,197 3,215,540 3,122,500Cash at bank and inhand 441,617 884,110 148,024 385,305 -------- -------- -------- -------- 504,084 941,307 3,363,564 3,507,805 Creditors: amountsfalling due withinone year (78,307) (71,052) (40,902) (37,274) -------- -------- -------- -------- Net current assets 425,777 870,255 3,322,662 3,470,531 -------- -------- -------- -------- Net assets 1,380,404 2,260,821 3,767,891 3,917,170 -------- -------- -------- -------- Capital and reservesCalled up sharecapital 545,127 545,127 545,127 545,127Share premiumaccount 4,259,683 4,259,683 4,259,683 4,259,683Merger reserve 131,096 131,096 131,096 131,096Other reserves 23,601 4,170 23,601 4,170Profit and lossaccount (3,579,103) (2,679,255) (1,191,616) (1,022,906) -------- -------- -------- -------- Shareholders' funds 1,380,404 2,260,821 3,767,891 3,917,170 -------- -------- -------- -------- Consolidated Cash Flow Statementfor the year ended 30 September 2007 2007 As restated 2006 £ £ Net cash outflow from operating activities (240,987) (217,465) Returns on investment and servicing of financeInterest received 27,713 28,268 ----------- ---------- ----------- ----------Net cash outflow from operating activities (213,274) (189,197)after returns on investments and servicing offinance ----------- ---------- Capital expenditure and financial investmentPurchase of intangible fixed assets (198,370) (230,324)Purchase of tangible fixed assets (3,177) (9,520)Receipts from sale of intangible fixed assets - -Receipts from sale of tangible fixed assets - 4,166 ----------- ----------Net cash outflow from capital expenditure andfinancial investment (201,547) (235,678) ----------- ---------- Acquisitions and disposalsPayments to acquire investment in associate - (65,250) ----------- ----------Net cash outflow from acquisitions and disposals - (65,250) ----------- ---------- FinancingIssue of share capital (net of expenses) - 963,738 ----------- ---------- Net cash inflow from financing - 963,738 ----------- ---------- (Decrease)/Increase in cash (414,821) 473,613 ----------- ---------- Notes: 1. Publication of Non-Statutory Accounts The financial information set out in this announcement does not constitute theCompany's Statutory Accounts for the period ended 30 September 2007 or 2006. Thefinancial information for 2006 is derived from the Statutory Accounts for 2006as amended by the adoption of FRS20. The financial information set out in thisstatement relating to the period ended 30 September 2006 does not constitutestatutory accounts for that period. Full audited accounts in respect of thatfinancial period prior to the adoption of FRS20 have been delivered to theRegistrar of Companies. The Statutory Accounts for 2007 will be delivered to the Registrar of Companiesfollowing the Company's Annual General Meeting. The auditors have reported onthe 2006 and 2007 accounts. They did contain a statement under Section 237(2) or(3) of the Companies Act 1985 and received an unqualified audit opinion. Howeverthere was an emphasis of matter in relation to the availability of projectfinance. In common with many exploration companies, the Company raises financefor its exploration and appraisal activities in discrete tranches. Furtherfunding is raised as and when required. When any of the Group's projectsprogress to the development stage, specific financing will be required. The Directors are satisfied that the Group has adequate resources to continue tooperate for the foreseeable future. For this reason they continue to adopt the"going concern" basis for preparing the accounts. Prior year adjustmentsThe Company has applied the requirements of FRS20 (share based payments) in accordance with the transitional provisions to all relevant equity instruments granted after 7 November 2002 and unvested at 1 October 2005. The Company issues share based payments to directors, employees and to key consultants to the Company. All share based payments are measured at fair value at the date of grant and expensed on a straight line basis over any vesting period, based on the Company's estimate of shares that will eventually vest. Fair value is measured by use of a model based on the Black-Scholes-Merton valuation method. The expected life of the instrument used in the model is adjusted, based on the Company's best estimate, for the effects of any exercise restrictions and behavioural considerations. The adoption of FRS20 has resulted in a charge to the Profit & Loss Account of£19,431. A prior year adjustment has been made to the financial information setout for the year ended 30 September 2006 (£4,170) to apply charges to the Profitand Loss Account for share options granted or becoming vested in these periods.This has no impact on the net assets of the Company. 2. Loss per share Loss per share has been calculated on the loss and the weighted average numberof shares in issue during the year. 2007 As restated 2006 Loss (£) (871,964) (255,583)Weighted average shares in issue (No.) 54,512,736 51,710,679Basic and diluted loss per share (pence) (1.60) (0.49) ----------- --------- The loss attributable to ordinary shareholders and weighted average number ofordinary shares for the purpose of calculating the diluted earnings per ordinaryshare 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 effectof reducing the loss per ordinary share and is therefore not dilutive under theterms of FRS14. 3. Reconciliation of movements in shareholders' funds Group Group Company Company As restated As restated 2007 2006 2007 2006 £ £ £ £ Loss for the year (871,964) (255,583) (168,710) (159,699)Exchange differences (27,884) (21,507) - -Shares issued during the - 963,738 - 963,738yearFRS20 share based payments 19,431 4,170 19,431 4,170 -------- --------- --------- --------- Increase in shareholders'funds (880,417) 690,818 (149,279) 808,209 -------- --------- --------- --------- Opening shareholders' funds 2,260,821 1,570,003 3,917,170 3,108,961 -------- --------- --------- --------- Closing shareholders' funds 1,380,404 2,260,821 3,767,891 3,917,170 -------- --------- --------- --------- 4. Reconciliation of operating loss to net cash outflow from operatingactivities 2007 2006 £ £Operating loss (935,710) (283,497)Depreciation charge 4,393 3,301Depreciation released on disposal - (2,169)Profit on disposal of tangible fixed assets - 504Intangible fixed assets written off 691,182 18,582Additions to intangible fixed assets 22,268 -Non-cash movement in reserves 19,431 4,170(Increase)/Decrease in debtors (5,270) 8,508Increase/(Decrease) in creditors 7,255 33,136 --------- --------- Net cash outflow from operating activities (240,987) (217,465) --------- --------- 5. Reconciliation of cash flow to movement in net funds 1 Cash flow Exchange 30 September October £ movement 2007 2006 £ £ £Cash in hand and at bank 884,110 (442,534) (27,672) 441,617 Interest received - 27,713 - - ---------- ---------- ----------- ----------- Net funds 884,110 (414,821) (27,672) 441,617 ---------- ---------- ----------- ----------- 2007 2006 £ £(Decrease)/ Increase in cash in the year (414,821) 473,613 ----------- ----------- Change in net funds resulting from cash flows (414,821) 473,613 Translation difference (27,672) (25,472) ----------- ----------- Movement in net funds in year (442,493) 448,141Net funds at 1 October 2006 884,110 435,969 ----------- ----------- Net funds at 30 September 2007 441,617 884,110 ----------- ----------- 6. Financial information regarding former associated undertakingOn 9 February 2007 the shareholding in Sunrise Diamonds plc was diluted by theissue of additional share capital to third parties. This dilution reduced theshareholding in Sunrise Diamonds plc to 18.33% and as a result from this pointforward the holding In Sunrise Diamonds plc has been treated as an investmentrather than an associate undertaking. The current shareholding is 16.5%. 7. Dividend No dividend is proposed. 8. Annual Report The Company's 2007 Annual Report will be published and sent to shareholders indue course and copies will be available to the public, free of charge, from theRegistered Office of the Company at Sunrise House, Hulley Road, Macclesfield,Cheshire, SK10 2LP and will be downloadable from the Company's website atwww.tertiaryminerals.com. This information is provided by RNS The company news service from the London Stock Exchange