Half Yearly Report

RNS Number : 3897H

Tertiary Minerals PLC

19 May 2014

 



Tertiary Minerals plc

("the Company")

19 May 2014

UNAUDITED INTERIM RESULTS FOR THE SIX MONTHS ENDED 31 MARCH 2014

Chairman's Statement

I am pleased to report on the Company's progress and unaudited interim results for the six month period ended 31 March 2014.

Review of Activities

Undoubtedly the news highlights of the year so far have been the result of drilling on the MB Fluorspar Project in Nevada, USA, and the definition of a maiden JORC compliant Mineral Resource that has far exceeded the Board's expectations from this first drill programme.

At 38.4 million tonnes grading 10.4% CaF₂ (fluorspar) the MB Mineral Resource more than doubles the amount of fluorspar now contained in the Company's reported Mineral Resources at its three fluorspar projects in Sweden, Norway and Nevada. Importantly, it also anchors the Company's ambition to be a supplier of fluorspar to the two largest fluorspar buying regions outside of China - North America and Europe - where fluorspar (CaF₂) is an essential raw material of fluorine in the chemical, steel and aluminium industries.

The Company has started metallurgical testwork on the MB project drill samples and is planning a programme of follow up drilling. Mineralisation remains open in all directions and at depth. A number of holes are likely to test deeper in the Central Area, where recent holes ended in higher grade mineralisation, and laterally in potentially shallow mineralised positions. It is a very exciting time for this project as the true size of the deposit, already large, is yet to be revealed.

Whilst the MB Project has provided the news, important work has been continuing in Sweden on the more advanced Storuman Fluorspar Project where the Company is continuing with pre-feasibility studies and preparing an application for a Mining Concession which I anticipate will be submitted shortly. This has involved a series of government and public meetings where the project has enjoyed strong support.

Results  

The Group is reporting a loss for the six month period of £84,134 (six months to 31 March 2013: £253,718). This loss comprises administration costs of £152,104 (which includes a share based payments credit of £13,850), pre-licence (reconnaissance) costs totalling £7,100 and interest income of £2,362. The loss is stated after crediting a non cash amount of £72,708 which is a gain in fair value between the Company's independently valued liability, under the Equity Swap Agreement, at 30 September 2013 and the settlement of the Agreement on 8 November 2013.  The share-based payment is a net non-cash item relating to the issue of warrants in this period and the expiry in this period of warrants which were issued in previous years.

During the period 2,200,000 warrants were exercised at an average price of 7.03 pence per share and in April this year, after the end of the current reporting period the Company raised £167,178 through the issue of 1,490,000 new ordinary shares to Darwin at a gross price of 12p per share by drawing down on its £10 million Equity Finance Facility. The Facility provides a useful means of fundraising which, when used judiciously, is less dilutive than conventional discounted placings. In this case the proceeds were raised at a higher price than the market price prevailing during draw down period.

It is highly disappointing that, despite the progress being made, the Company's share price has fallen in recent weeks and the Company's shares now trade at only a fraction of the higher revised broker price targets set after the announcement of the MB Mineral Resource Estimate.

Fluorspar is a strategic mineral where supply continues to be dominated by China. Following the proposed acquisition this year of TSX listed fluorspar development company Canada Fluorspar Inc. by a private equity group, Tertiary Minerals plc will become one of just two publicly traded companies offering investors exposure to this important strategic mineral and the only such company traded on AIM.

We believe the Company is well placed to make further progress during the second half of the financial year and we look forward to advising shareholders of this progress on a regular basis.

Patrick L Cheetham                

Executive Chairman

19 May 2014

ENQUIRIES

 For further information please contact:

 Tertiary Minerals plc                           Tel: [phone]

 Patrick Cheetham, Executive Chairman

 Richard Clemmey, Managing Director

 Cantor Fitzgerald Europe                    Tel: [phone]

 Stewart Dickson/Julian Erleigh (Corporate Finance)

 Jeremy Stephenson (Corporate Broking)

 Beaufort Securities Limited                 Tel: [phone]

 Saif Janjua

 Yellow Jersey PR Limited                   Tel: [phone]

 Dominic Barretto/Kelsey Traynor

Consolidated Income Statement

for the six months to 31 March 2014

	Six months  to 31 March 2014 Unaudited		Six months to 31 March 2013  Unaudited		Twelve months  to 30 September       2013 Audited
	£		£		£
Pre-licence exploration costs	7,100		12,987		32,131
Impairment of deferred exploration costs	-		7,140		7,140
Non-cash movement of liability under Equity Swap Agreement	(72,708)		-		(20,300)
Administrative expenses	152,104		236,278		437,857
Operating loss	(86,496)		(256,405)		(456,828)
Interest receivable	2,362		2,687		5,668
Loss on ordinary activities before taxation	(84,134)		(253,718)		(451,160)
Tax on loss on ordinary activities	-		-		-
Loss for the period attributable to equity holders of the parent	(84,134)		(253,718)		(451,160)
Loss per share - basic and fully diluted (pence) (note 2)	(0.05)		(0.19)		(0.31)

Consolidated Statement of Comprehensive Income

for the six months to 31 March 2014

	Six months to  31 March 2014 Unaudited		Six months to  31 March  2013 Unaudited		Twelve months to  30 September 2013                Audited
	£		£
Loss for the period	(84,134)		(253,718)		(451,160)
Other comprehensive income
Items that will not be reclassified subsequently to the income statement:
Movement in revaluation of available for sale investment	(28,349)		(187,988)		(159,045)
	(28,349)		(187,988)		(159,045)
Items that could be reclassified subsequently to the income statement:
Foreign exchange translation differences on foreign currency net investments in subsidiaries	(62,794)		45,540		(10,204)
	(62,794)		45,540		(10,204)
Total comprehensive loss for the period attributable to the equity holders of the parent	(175,277)		(396,166)		(620,409)

Company Registration Number 03821411

Consolidated Statement of Financial Position

at 31 March 2014

	As at  31 March 2014 Unaudited		As at  31 March 2013 Unaudited		As at 30 September 2013 Audited
	£		£		£
Non-current assets
Intangible assets	2,853,140		2,089,046		2,420,947
Property, plant & equipment	5,943		11,902		8,605
Available for sale investment	273,173		167,387		230,251
	3,132,256		2,268,335		2,659,803
Current assets
Receivables	84,561		75,396		81,490
Cash and cash equivalents	914,748		792,337		1,187,612
Restricted cash	-		-		366,007
	999,309		867,733		1,635,109
Current liabilities
Trade and other payables	(207,292)		(147,440)		(233,881)
Equity swap	-		-		(102,381)
	(207,292)		(147,440)		(336,262)
Net current assets	792,017		720,293		1,298,847
Net assets	3,924,273		2,988,628		3,958,650
Equity
Called up share capital	1,639,662		1,357,661		1,617,662
Share premium account	8,141,354		7,111,236		8,008,604
Merger reserve	131,096		131,096		131,096
Share option reserve	390,344		367,298		404,194
Available for sale revaluation reserve	(114,748)		(115,342)		(86,399)
Foreign currency reserve	74,310		192,848		137,104
Accumulated losses	(6,337,745)		(6,056,169)		(6,253,611)
Equity attributable to the owners of the parent	3,924,273		2,988,628		3,958,650

                        Consolidated Statement of Changes in Equity

	Share Capital	Share Premium account	Merger reserve	Share Option reserve	Available for sale revaluation reserve	Foreign currency reserve	Accumulated losses	Total
	£	£	£	£	£	£	£	£
At 30 September 2012	1,305,862	6,826,760	131,096	315,688	72,646	147,308	(5,802,451)	2,996,909
Loss for the period	-	-	-	-	-	-	(253,718)	(253,718)
Change in fair value	-	-	-	-	(187,988)	-	-	(187,988)
Exchange differences	-	-	-	-	-	45,540	-	45,540
Total comprehensive
loss for the period	-	-	-	-	(187,988)	45,540	(253,718)	(396,166)
Share issue	51,799	284,476	-	-	-	-	-	336,275
Share based payments	-	-	-	51,610	-	-	-	51,610
At 31 March 2013	1,357,661	7,111,236	131,096	367,298	(115,342)	192,848	(6,056,169)	2,988,628
Loss for the period	-	-	-	-	-	-	(197,442)	(197,442)
Change in fair value	-	-	-	-	28,943	-	-	28,943
Exchange differences	-	-	-	-	-	(55,744)	-	(55,744)
Total comprehensive
loss for the period	-	-	-	-	28,943	(55,744)	(197,442)	(224,243)
Share issue	260,001	897,368	-	-	-	-	-	1,157,369
Share based payments	-	-	-	36,896	-	-	-	36,896
At 30 September 2013	1,617,662	8,008,604	131,096	404,194	(86,399)	137,104	(6,253,611)	3,958,650
Loss for the period	-	-	-	-	-	-	(84,134)	(84,134)
Change in fair value	-	-	-	-	(28,349)	-	-	(28,349)
Exchange differences	-	-	-	-	-	(62,794)	-	(62,794)
Total comprehensive
loss for the period	-	-	-	-	(28,349)	(62,794)	(84,134)	(175,277)
Share issue	22,000	132,750	-	-	-	-	-	154,750
Share based payments	-	-	-	(13,850)	-	-	-	(13,850)
At 31 March 2014	1,639,662	8,141,354	131,096	390,344	(114,748)	74,310	(6,337,745)	3,924,273

Consolidated Statement of Cash Flows

for the six months to 31 March 2014

	Six months  to 31 March 2014 Unaudited		Six months  to 31 March  2013 Unaudited		Twelve months to 30 September  2013 Audited
	£		£		£
Operating activity
Total loss after tax	(84,134)		(253,718)		(451,160)
Interest received	2,362		2,687		5,668
Operating loss	(86,496)		(256,405)		(456,828)
Depreciation charge	3,088		4,120		8,293
Impairment charge	-		7,140		7,140
Share based payment charge	(13,850)		51,610		88,506
Non-cash movement of liability under Equity Swap Agreement	(72,708)		-		(20,300)
(Increase)/decrease in receivables	(3,071)		540		(5,554)
(Decrease)increase in payables	(26,589)		(12,434)		18,709
Net cash outflow from operating activity	(199,626)		(205,429)		(360,034)
Investing activity
Interest received	2,362		2,687		5,668
Purchase of intangible assets	(494,323)		(149,359)		(480,227)
Purchase of property, plant & equipment	(414)		(750)		(1,626)
Purchase of available for sale investment	(71,271)		-		(33,921)
Net cash outflow from investing activity	(563,646)		(147,422)		(510,106)
Financing activity
Issue of share capital (net of expenses)	154,750		336,275		1,616,986
Net transfer from/(to) restricted cash	336,333		-		(366,667)
Net cash inflow from financing activity	491,083		336,275		1,250,319
Net (decrease)/increase in cash and cash equivalents	(272,189)		(16,576)		380,179
Cash and cash equivalents at start of period	1,187,612		841,299		841,299
Exchange differences	(675)		(32,386)		(33,866)
Cash and cash equivalents at end of period	914,748		792,337		1,187,612

Notes to the Interim Statement

1.       Basis of preparation

The consolidated interim financial information has been prepared in accordance with the accounting policies that are expected to be adopted in the Group's full financial statements for the year ending 30 September 2014 which are not expected to be significantly different to those set out in Note 1 of the Group's audited financial statements for the year ended 30 September 2013.  These are based on the recognition and measurement principles of IFRS in issue as adopted by the European Union (EU) and are effective at 30 September 2014 or are expected to be adopted and effective at 30 September 2014.  The financial information has not been prepared (and is not required to be prepared) in accordance with IAS 34. The accounting policies have been applied consistently throughout the Group for the purposes of preparation of this financial information.

The financial information in this statement relating to the six months ended 31 March 2014 and the six months ended 31 March 2013 has neither been audited nor reviewed pursuant to guidance issued by the Auditing Practices Board. The financial information for the year ended 30 September 2013 does not constitute the full statutory accounts for that period.  The Annual Report and Financial Statements for the year ended 30 September 2013 have been filed with the Registrar of Companies.  The Independent Auditors' Report on the Annual Report and Financial Statement for the year ended 30 September 2013 was unqualified, although did draw attention to  matters by way of emphasis in relation to going concern, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

          The directors prepare annual budgets and cash flow projections that extend beyond 12 months from the date of the last Annual Report. These projections include the proceeds of future fundraising necessary within the next 12 months to meet the Company's and Group's planned discretionary project expenditures and to maintain the Company and Group as a going concern. 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 entity's ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its 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.

2.       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.

	Six months to 31 March 2014 Unaudited	Six months to 31 March  2013 Unaudited	Twelve months  to 30 September                    2013 Audited
Loss for the period (£)	(84,134)	(253,718)	(451,160)
Weighted average shares in issue (No.)	162,290,390	32,435,280	143,365,584
Basic loss per share (pence)	(0.05)	(0.19)	(0.31)

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.

2.      Share capital  

During the six months to 31 March 2014the following share issues took place:

An issue of 200,000 new 1.0p ordinary shares at 2.375p per share, being a share warrant exercise by an employee, for a total consideration of £4,750 (14 January 2014).

An issue of 2,000,000 new 1.0p ordinary shares at 7.50p per share, being a share warrant exercise by Darwin Strategic Limited, for a total consideration of £150,000 net of expenses (20 February 2014).

Following the end of the current reporting period, in April 2014, the Company issued 1,490,000 new 1.0 pence ordinary shares to Darwin Strategic Limited at a gross price of 12p per share for a total consideration of £167,178, net of expenses, by drawing down on its £10 million Equity Finance Facility.

3.      Interim report

Copies of this interim report are available from Tertiary Minerals plc, Silk Point, Queens Avenue, Macclesfield, Cheshire SK10 2BB, United Kingdom.  It is also available on the Company's website at www.tertiaryminerals.com

 

END

 

 

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