Tertiary Minerals Regulatory News (TYM)

9 Jul 2007 07:30

Tertiary Minerals PLC09 July 2007 www.tertiaryminerals.com 9 July 2007 TERTIARY LIFTS SHARE SUSPENSION AND PROVIDES UPDATE ON GHURAYYAH LICENCE PROGRESS • New Exploration Licence Application Being Processed in Saudi Arabia • JV Agreement Amended To Accelerate Saudi Partners' Financial Contributions • Niobium Now Major Metal Of Value After Threefold Price Rise Since Suspension • New Local Joint Venture Operating Vehicle To Be Set Up Tertiary Minerals plc ("Tertiary" or "the Company") is pleased to announce theimmediate lifting of the voluntary suspension of its shares from trading on AIMand provide an update on its Ghurayyah tantalum-niobium project in Saudi Arabiain respect of issues relating to the renewal of its exploration licence. The Company has agreed a course of action with its Saudi joint venture partnersand with the Deputy Ministry for Mineral Resources in Saudi Arabia ("DMMR", theadministrative authority overseeing mineral licences in Saudi Arabia) which theCompany now expects will result in the issue of a new exploration licence overthe Ghurayyah tantalum and niobium deposit in NW Saudi Arabia and ultimately inthe issue of a mining licence. Tertiary has applied, together with its two Saudi joint venture partners, and onthe recommendation of the DMMR, for a new 5-year renewable exploration licencefor a 47 km2 area covering the Ghurayyah deposit and the surrounding area. Thislicence application is in the joint names of: Tertiary (Middle East) Ltd - awholly-owned subsidiary of the Company (50%); AH Algosaibi Bros Co (25%); AlNahla Trading & Contracting Co (25%). The Mining Code provides that the holderof an exploration licence is entitled to apply for a mining licence over anycommercially exploitable deposit. The application is being processed by the DMMR, but the licence has not yet beenissued. The licence application covers tantalum and niobium, the main metals ofeconomic interest at Ghurayyah, and associated non-radioactive minerals. It doesnot include uranium as the Saudi Government does not wish to license thatmaterial for production at the present time. The Company's previous economicevaluations of the deposit have considered revenue from tantalum, niobium andzircon only. The Company believes that the new Ghurayyah exploration licence will be issuedin due course, although the terms and conditions it may contain relating to theprocessing of radioactive minerals are as yet unclear. In order to strengthen the relationship between the Company and its investmentpartners the existing joint venture agreement between Tertiary and its Saudipartners has also been amended by a Deed of Variation which speeds up theremaining US$5m funding of the current feasibility studies at Ghurayyah. The twoSaudi joint venture partners will accelerate their future earn-in contributionsto the project and, together with Tertiary, form a local (Saudi) joint ventureoperating vehicle. The Deed of Variation recognises that, notwithstanding the registered interestsin any new licences when granted, the beneficial interests in such licences willbe held from time to time according to the terms of the Joint Venture Agreement- Currently the Company holds the 100% beneficial interest until such time asthe future earning obligations of the partners are met in full. "Work on the project feasibility studies, outside of Saudi Arabia, has continuedsteadily throughout the suspension period and we hope to issue a progress reportshortly. Whilst the suspension has been a period of unwelcome uncertainty forshareholders, I am pleased that our licence application is being progressed andthat we have advanced the relationship with our Saudi joint venture partners."comments Company Chairman Patrick Cheetham. Tantalum/Niobium Markets/PricesIn previous economic evaluations at Ghurayyah, tantalum and niobium revenueshave been approximately equal. However, niobium is currently the main metal ofvalue as its trading price has increased more than three-fold in the past sixmonths. Tantalum prices are also starting to increase after a period ofconsolidation. BackgroundGhurayyah ProjectThe Ghurayyah deposit is located in the north west part of Saudi Arabia near thecity of Tabuk. It is some 50km from the Red Sea coast and is accessible byvehicle, being approximately 15km from a major highway. Ghurayyah is a world-class deposit containing valuable tantalum, niobium,zirconium and yttrium with a last estimated Inferred Mineral Resource of nearly400 million tonnes grading 245 grammes/tonne (0.024%) tantalum pentoxide(Ta2O5), 2,840 grammes/tonne (0.28%) niobium pentoxide (Nb2O5), 8,915 grammes/tonne (0.89%) zirconium oxide (ZrO2), and 1,270 grammes/tonne (0.13%) yttriumoxide (Y2O3). Tantalum is used in capacitors in the electronics industry and niobium instainless steel alloys. Zircon and Yttrium are used in the ceramics andelectronics industries. The deposit is a circular plug of granite nearly 1 kilometre wide that isuniformly mineralised throughout. It outcrops in five hills above thesurrounding dried up river bed and continues to an average depth of 250m belowsurface. Mineralisation is open to expansion at depth. A detailed economic and technical scoping study suggests the deposit hascommercial potential as a future source of supply of tantalum, niobium and othernon-radioactive raw materials and at an extraction rate of 1.5 million tonnes/year would have a mine life of over 200 years. A preliminary feasibility studyis in progress. Details of the markets for the metals of interest at Ghurayyah are given in theCompany's 2006 Annual Report which can be found at http://www.tertiaryminerals.com/reports.htm SuspensionThe Company's original exploration licence at Ghurayyah was granted in January2002 for an initial term of five years renewable for a further period of up to 4years. This licence covered tantalum, niobium, zircon, uranium, tin, rare-earthsand associated minerals. The original Ghurayyah Exploration Licence was granted under the then currentmining code (law) ("the Old Code") which was replaced in January 2005 with a newupdated mining code ("the New Code") which recognised and contains transitionalprovisions relating to licences granted under the Old Code. In December 2006 the Company applied for a renewal of its exploration licenceunder the terms of its issue under the Old Code and the transitional provisionsof the New Code. In December 2006 it also applied for a new Mining Licence underthe New Code. The decision to voluntarily suspend the Company's shares in January this yearwas made immediately following notification from DMMR that the Company'sapplications for a renewal of its Exploration Licence and for a Mining Leaseover the Ghurayyah deposit in Saudi Arabia have been rejected due to allegednon-compliance with the technicalities of the conditions of application andrenewal. The Company believed and continues to believe, that it has fulfilled itsobligations under the terms of its Exploration Licence and that it was entitledto a renewal under its terms of issue and that the licence also grants the rightto obtain a Mining Lease. However, following discussions with its Saudiinvestment partners the Company elected to seek a mutually acceptable solutionwith DMMR to retain its interest in Ghurayyah. Consequently, and acting onrecommendations from DMMR, the Company and its investment partners submitted thejoint application referred to above in February 2007 with supplementarysubmissions being made since then. For further information: Patrick Cheetham, Executive Chairman, Tertiary Minerals plc. Tel: +44 (0) 1625-626203Ron Marshman/John Greenhalgh, City of London PR Limited. Tel: + 44(0) 20-7628-5518Jonathan Wright, Seymour Pierce Limited. Tel: +44 (0)20-7107-8050 This information is provided by RNS The company news service from the London Stock Exchange