Tertiary Minerals Regulatory News (TYM)

9 Jul 2007 07:30

Tertiary Minerals PLC09 July 2007 Tertiary Minerals plc Interim results for the six months ended 31 March 2007 Chairman's Statement I am pleased to report the Company's progress and interim results for the sixmonth period ended 31 March 2007. Review of Activities The Company's principal concern this past six months has been the resolution ofissues surrounding the renewal of its exploration rights over the Ghurayyahtantalum-niobium project in Saudi Arabia and the resulting voluntary suspensionof our shares, which is now being lifted. A more detailed explanation of these issues and the current status of theCompany's application for a new exploration licence is given in a separaterelease to the Stock Exchange. The occurrence of uranium in the Ghurayyah deposit makes its development fortantalum and niobium and other associated minerals particularly sensitive forthe Saudi Government. Recognising these sensitivities, we have been working withour Saudi joint venture partners and with the Saudi Deputy Ministry for MineralsResources (DMMR) to find workable solutions and, as a result, a new applicationfor an exploration licence at Ghurayyah is being processed by the DMMR. Thisapplication has been made jointly with our Saudi joint partners following thesigning of an amendment to the Joint Venture Agreement whereby the two Saudijoint venture partners will accelerate their future earn-in contributions to theproject and, together with Tertiary, form a local (Saudi) joint ventureoperating vehicle. Work on the Ghurayyah feasibility studies, outside of Saudi Arabia, hascontinued steadily throughout the suspension period and we hope to issue aprogress report shortly. Whilst the suspension has been a period of unwelcomeuncertainty for shareholders, I am pleased that our licence application is beingprogressed and that we have advanced the relationship with our Saudi jointventure partners. Results The Group loss for the six month period was £615,435 (Six months to 31 March2006 £135,944 restated on adoption of FRS 20 "Share Based Payments"). Thisincludes a provision against the full carrying value of the Ghurayyah project of£522,809, a share of the losses of Sunrise Diamonds plc, which was an associatedundertaking until 9 February 2007, and a profit on the deemed sale of aninterest in Sunrise Diamonds plc of £53,250. Whilst we believe that the new Ghurayyah exploration licence will be issued indue course, the terms and conditions it may contain relating to the processingof radioactive minerals are as yet unclear, and in these circumstances the Boardconsiders it prudent to make a provision against the full carrying value of theGhurayyah project until such time as a new exploration licence is issued onterms and conditions which are acceptable to the Company, at which point theprovision would be reversed. I am pleased to report that the Company is continuing with other business asnormal. We have entered into negotiations which, if successful, will lead to theacquisition of an interest in a second major niobium project. Other projectacquisitions are also under consideration and joint venture discussions are inprogress with parties wishing to acquire an interest in certain of ourScandinavian exploration assets. Patrick L Cheetham 9 July 2007Executive Chairman For further information contact : Tertiary Minerals plc Tel: + 44 (0)1625 626203Sunrise House Fax: + 44 (0)1625 626204Hulley RoadMacclesfield Website: www.tertiaryminerals.comCheshire SK10 2LP Jonathan Wright Tel: +44 (0)20 7107 8050Seymour Pierce Limited Consolidated Profit and Loss Accountfor the six months to 31 March 2007 As restated As restated Six months to Six months Twelve to 31 March months to 31 March 2006 30 2007 Unaudited September Unaudited 2006 £ £ £ ---------- --------- ---------Exploration costs written off and provided for 535,990 11,307 52,077 Administrative expenses 131,553 135,218 231,420 ---------- --------- --------- Operating loss (667,543) (146,525) (283,497) Share of operating loss of associate (18,458) (27,109) (48,773) Profit on disposal of tangible asset - - 504 Profit arising from the increase in value of the Group's share of the net assets of Sunrise Diamonds resulting from share issues. 53,250 25,052 44,357 Interest receivable 16,075 10,982 28,268 Share of interest receivable of associate 1,241 1,656 3,558 ---------- --------- --------- Loss on ordinary activities before taxation (615,435) (135,944) (255,583) Tax on loss on ordinary activities - - - ---------- --------- --------- Loss for the period (615,435) (135,944) (255,583) ---------- --------- --------- Loss per share - basic (pence) (note 2) (1.13) (0.28) (0.49) ---------- --------- --------- Consolidated Statement of Total Recognised Gains and Lossesfor the six months to 31 March 2007 As restated As restated Six months to Six months to Twelve months to 31 March 2007 31 March 2006 to 30 September Unaudited Unaudited 2006 £ £ £ ---------- --------- --------- Loss for the period (615,435) (135,944) (255,583) Foreign exchangetranslation differenceson foreign currency netinvestments insubsidiaries (25,389) 6,958 (21,507) ---------- --------- ---------Total recognisedlosses since lastaccounts (640,824) (128,986) (277,090) ---------- --------- --------- Consolidated Balance Sheetas at 31 March 2007 As restated As restated As at 31 As at 31 As at 30 March 2007 March 2006 September Unaudited Unaudited 2006 £ £ £ ---------- --------- ---------Fixed assetsIntangible Assets 749,704 1,090,212 1,158,926Tangible Assets 9,890 11,535 9,898Share of net assets ofassociate - 219,744 221,742Investment 257,775 - - ---------- --------- --------- 1,017,369 1,321,491 1,390,566 Current assetsDebtors 49,681 1,062,839 57,197Cash at bank and in hand 636,768 179,571 884,110 ---------- --------- --------- 686,449 1,242,410 941,307 ---------- --------- --------- Creditors: amounts falling (72,830) (131,119) (71,052)due within one year ---------- --------- --------- Net current assets 613,619 1,111,291 870,255 ---------- --------- --------- ---------- --------- ---------Creditors: amounts falling - (490,026) -due after more than oneyear ---------- --------- --------- Net Assets 1,630,988 1,942,756 2,260,821 ---------- --------- --------- Capital and reservesCalled up share capital 545,127 514,210 545,127Share premium account 4,259,683 3,826,853 4,259,683Merger reserve 131,096 131,096 131,096Option Reserve 15,160 1,748 4,170Profit and loss account (3,320,078) (2,531,151) (2,679,255) ---------- --------- --------- Shareholders' funds 1,630,988 1,942,756 2,260,821 ---------- --------- --------- Consolidated Cash Flow Statementfor the six months to 31 March 2007 As restated As restated Six months to Six months to Twelve months 31 March 2007 31 March 2006 to 30 September Unaudited Unaudited 2006 £ £ £ ---------- --------- --------- Net outflow from operatingactivities (note 3) (122,545) (136,823) (217,465) Returns on investments andservicing of financeInterest received 16,075 10,982 28,268 ---------- --------- ---------Net cash outflow fromoperating activitiesafter returns on investmentsand servicing of finance. (106,470) (125,841) (189,197) ---------- --------- --------- Capital expenditure andfinancial investmentPurchase of intangiblefixed assets (113,589) (140,280) (230,324) Purchase of tangible fixedassets (1,894) (1,846) (9,520) Receipts from sale of intangible fixed assets - - - Receipts from sale oftangible fixed assets - 2,500 4,166 ---------- --------- ---------Net cash outflow fromcapital expenditureand financial investment (115,483) (139,626) (235,678) ---------- --------- --------- Acquisition and disposalsPayments to acquireinvestment in associate - 65,250 65,250 ---------- --------- --------- Net cash outflow fromacquisitions and disposals - (65,250) (65,250) ---------- --------- ---------FinancingIssue of share capital (netof expenses) - 499,727 963,738 Exchange differences (25,389) 103 (25,472) ---------- --------- ---------Net cash (outflow)/inflow fromfinancing (25,389) 499,830 938,266 ---------- --------- --------- ---------- --------- ---------(Decrease)/increase in cashin the period (note 4) (247,342) 169,113 448,141 ---------- --------- --------- Notes to the Interim Statement 1. Basis of preparationThe interim statement has been prepared on the basis of the accounting policiesset out in the Company's financial statements for the period ended 30 September2006 as amended by the adoption of FRS 20 and the application of FRS 25. Thefinancial information set out in this statement relating to the period ended 30September 2006 does not constitute statutory accounts for that period. Fullaudited accounts in respect of that financial period prior to the adoption ofFRS 20 and the application of FRS 25 have been delivered to the Registrar ofCompanies. They did not contain a statement under Section 237(2) or (3) of theCompanies Act 1985 and received an unqualified audit opinion, however there wasan emphasis of matter in relation to the availability of project finance.In common with many exploration companies, the Company raises finance for itsexploration and appraisal activities in discrete tranches. Further funding israised as and when required. When any of the Group's projects move to thedevelopment 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. The interim statement has beenapproved by the Directors and is unaudited. Prior year adjustmentsThe Company has applied the requirements of FRS 20 (share based payments) in accordance with the transitional provisions to all relevant equity instrumentsgranted 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 FRS 20 has resulted in a charge to the Profit & Loss Account of£10,990. A prior year adjustment has been made to the financial information setout for the six month period ended 31 March 2006 ( £1,748) and the year ended 30September 2006 (£4,170) to apply charges to the Profit and Loss Account forshare options granted or becoming vested in these periods. This has no impact onthe net assets of the Company. The group has contractual arrangements with other participants to engage injoint activities that do not create an entity carrying on a trade or business ofits own. The Group includes its share of assets and liabilities in such jointarrangements measured in accordance with the terms of each arrangement, which isusually pro-rata to the Group's interest in the risks of the joint arrangement. A review of the accounting of such arrangements has resulted in a decrease incash and creditors due after more than one year as at 31 March 2006 of £425,511.There is no impact on the net assets of the Group. 2. Loss per shareLoss per share has been calculated on the attributable loss for the period andthe weighted average number of shares in issue during the period. As restated As restated Six months to Six months to Twelve months 31 March 2007 31 March 2006 to 30 September Unaudited Unaudited 2006 ---------- --------- --------- Loss for the period (£) (615,435) (135,944) (255,583) Weighted average sharesin issue (No.) 54,512,736 49,415,598 51,710,679 Basic lossper share (pence) (1.13) (0.28) (0.49) ---------- --------- --------- The loss attributable to ordinary shareholders and the weighted average numberof ordinary shares used for the purpose of calculating diluted earnings pershare, are identical to those used to calculate the basic earnings per ordinaryshare. This is because the exercise of share warrants would have the effect ofreducing the loss per ordinary share and is therefore not dilutive under theterms of FRS 22. 3. Reconciliation of operating loss to net cash outflow from operatingactivities As restated As restated Six months to Six months to Twelve months 31 March 2007 31 March 2006 to 30 September Unaudited Unaudited 2006 £ £ £ ---------- --------- --------- Operating loss (667,543) (146,525) (283,497) Provision againstintangible asset 522,809 - - Depreciation charge 1,903 1,491 3,301 Depreciation releasedon disposal - (2,169) (2,169) Profit on disposal oftangible fixed asset - 504 504 Non-cash movementin reserves 10,990 1,748 4,170 Intangible fixedassets written off - - 18,582 Decrease/(increase)in debtors 7,517 (13,246) 8,508 Increase in creditors 1,779 21,374 33,136 ---------- --------- --------- Net cash outflow fromoperating activities (122,545) (136,823) (217,465) ---------- --------- --------- 4. Reconciliation of cash flow to movement in net funds Cash at bank and in hand £---------------------------- --------(Decrease) in cash in the period (247,342)Cash outflow from decrease in funds and lease financing -Cash inflow from decrease in liquid resources ----------------------------- --------Changes in net funds resulting from cash flows (247,342)---------------------------- --------Net funds at 30 September 2006 884,110---------------------------- --------Net funds at 31 March 2007 636,768---------------------------- -------- 5. Financial information regarding associated undertaking On 9 February 2007 the Company ceased to consider Sunrise Diamonds plc as anassociate for accounting purposes following an issue of new ordinary shares bySunrise Diamonds plc to third parties. This resulted in the Company's interestin Sunrise Diamonds plc falling below 20% (from 23.45% to 18.33%) andconsequently the Company's interest has been treated as an investment from 9February 2007. 6. Interim report Copies of this interim report will be sent to all shareholders and are availablefrom 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 This information is provided by RNS The company news service from the London Stock Exchange