Tertiary Minerals Regulatory News (TYM)

21 May 2008 14:12



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

Interim Statement 2008

Chairman's Statement

I am pleased to report the Company's progress and interim results for the six month period ended 31 March 2008. 

Review of Activities 

Our projects in Sweden and Finland have seen considerable progress in the past six months. The most significant development has been the acquisition in January this year of the Storuman fluorspar deposit in Sweden. This was defined as a multi-million tonne deposit in the 1970s and then abandoned at a time when fluorspar prices were artificially low as a result of Chinese dumping. Fluorspar , the main industrial source of fluorine for the manufacture of hydrofluoric acid and derivative fluorine chemicals, is now in critical short supply as traditional supplies from China are diverted to meet growing Chinese domestic demand. 

The Company has moved quickly to evaluate the Storuman project and has recently announced the results of its initial drilling programme where fluorspar mineralisation was intersected in each of 10 holes drilled over a strike length of 2km. Whilst assay results are awaited, it is already clear that our exploration licences host a large body of fluorspar mineralisation with potential for significant extensions.

A conceptual target for Storuman is a mining operation producing at least 100,000 tonnes per annum of acid grade fluorspar which currently sells in Europe for over US$300 per tonne, more than double the price some few years ago. A programme of metallurgical testwork is planned as a component of a technical and economic scoping study which the Company hopes to complete over the summer.

In Finland, at the Kolari iron project, three scout holes and the re-logging of a number of historic drill holes from the Sivakkalehto deposit have validated the potential for a substantial tonnage of near surface bulk-mineable iron mineralisation. Over the 550m strike length so far evaluated drilling has defined a coherent envelope of disseminated magnetite mineralisation over 100m wide with a magnetite content of approximately 30% (equal to approximately 20% Fe). Most historical drill intersections were made in this body at depths of 100-300m but interpretation of ground magnetic surveys and the results from the Company's three shallow drill holes suggests that the body is sub-vertical and sub-crops beneath glacial till cover. A programme of metallurgical testwork is planned to evaluate the marketability of magnetite concentrates from the deposit.

The Company has an ongoing programme to generate new projects holds a number of other projects in Finland and Sweden where new mineral discoveries are being targeted. For example, at the Company's Vähäjoki iron oxide-copper-gold project, also in Finland, exploration is being managed and funded by Canadian mining company Inmet Mining Corporation, under an earn-in/joint venture agreement. Drilling is currently in progress at Vähäjoki to test a number of geophysical anomalies.

In Saudi Arabia the issue of a new exploration licence at Ghurayyah in Saudi Arabia has been further delayed by newly introduced Government administrative processes but the Board remains hopeful that a new licence will be issued in the near future as we are optimistic that the issuing process is in its latter stages. The market for tantalum, one of the main metals contained in the Ghurayyah deposit, continues to strengthen with a major tantalum processor having recently announced double-digit percentage price rises for its tantalum products.

Results

The Group has adopted International Financial Reporting Standards and reports a loss for the six month period of £170,709 (Six months to 31 March 2007: £615,435). This loss comprises administration costs of £153,334, exploration costs (written-off and provided for) amounting to £36,829 and interest income of £19,454.

The directors have continued to provide in full against the carrying value of the Ghurayyah project until such time as a new exploration licence is issued on terms and conditions which are acceptable to the Company, at which point the provision may be reversed.

Patrick L Cheetham 

Executive Chairman

21 May 2008

For further information contact :

  Consolidated Income Statement

for the six months to 31 March 2008

Consolidated Statement of Total Recognised Income and Expense

for the six months to 31 March 2008

Consolidated Balance Sheet

as at 31 March 2008

Consolidated Cash Flow Statement

for the six months to 31 March 2008

Notes to the Interim Statement

Basis of preparation

The interim financial statement has been prepared on the basis of the recognition and measurement requirements of International Financial Reporting Standards (IFRS) for the first time. The Company has reviewed the accounting policies set out in the Company's financial statements for the period ended 30 September 2007, which were prepared in accordance with UK Generally Accepted Accounting Practice (UK GAAP). The review concluded that in preparing its opening IFRS balance sheet, the Group would need to adjust amounts reported previously in financial statements prepared since the transition date to IFRS, 1 October 2006 (see Note 2).

The Group has elected to apply the following IFRS1 exemptions and transitional provisions:

Cumulative translation differences exemption

The Group has elected to set previously accumulated translation differences to zero at the transition date.

Available for sale investments

The Group has applied IFRS7 for the first time. The ordinary shares held in Sunrise Diamonds plc are designated as an available for sale investment under non-current assets and are measured subsequently at fair value, with changes in value recognised in equity, through the Consolidated Statement of Changes in Equity. Gains and losses arising from available for sale investments are recognised in the income statement when they are sold or when the investment is impaired.

The financial information set out in this statement relating to the period ended 30 September 2007 does not constitute statutory accounts for that period. Full audited accounts in respect of that financial period have been delivered to the Registrar of Companies. They did not contain a statement under Section 237(2) or (3) of the Companies Act 1985 and received an unqualified audit opinion, however there was an emphasis of matter in relation to the availability of project finance.

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 financing will be required.

The Directors are satisfied that the Group has adequate resources to continue to operate for the foreseeable future. For this reason they continue to adopt the "going concern" basis for preparing the accounts. The interim statement has been approved by the Directors and is unaudited.

2. Explanation of Transition to IFRS

The balance sheets as at 1 October 2006, 31 March 2007 and 30 September 2007 as prepared under UK GAAP, were reviewed. No amendments are required to the balance sheet at 1 October 2006, but amendments are required to the balance sheets at 31 March 2007 and 30 September 2007, in order that they comply to IFRS and these are restated below.

Notes

2a Investments in Listed Companies

The Group in applying IAS32 and IAS39 (IFRS7) has valued the listed shares in Sunrise Diamonds plc at fair value. This investment is treated as an available for sale investment and the movement in fair value has been recognised through equity.

2b Foreign Currency Reserve 

A translation reserve was created for the exchange differences arising from the retranslation of the opening net investment in subsidiaries.

The income statements at 31 March 2007 and 30 September 2007, as prepared under UK GAAP, were reviewed, but no amendments are required to comply with IFRS. 

The cash flow statement has been restructured to comply with IFRS and interest received is included as an investing activity.

3. Loss per share

Loss per share has been calculated on the attributable loss for the period and the weighted average number of shares in issue during the period.

The loss attributable to ordinary shareholders and the weighted average number of ordinary shares used for the purpose of calculating diluted earnings per share, are identical to those used to calculate the basic earnings per ordinary share. This is because the exercise of share warrants would have the effect of reducing the loss per ordinary share and is therefore not dilutive under the terms of IAS33.

4. Reconciliation of operating loss to net cash outflow from operating activities

5. Financial information regarding associated undertaking

On 9 February 2007 the Company ceased to consider Sunrise Diamonds plc as an associate for accounting purposes following an issue of new ordinary shares by Sunrise Diamonds plc to third parties. This resulted in the Company's interest in Sunrise Diamonds plc falling below 20% (from 23.45% to 18.33%) and consequently the Company's interest has been treated as an investment from 9 February 2007.

6. Interim report

Copies of this interim report will be sent to all shareholders and are available from Tertiary Minerals plc, Sunrise House, Hulley Road, Macclesfield, Cheshire, SK10 2LP, United Kingdom. 

It is also available on the Company's website at www.tertiaryminerals.com