Interim Results
Tertiary Minerals PLC
09 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 six
month period ended 31 March 2007.
Review of Activities
The Company's principal concern this past six months has been the resolution of
issues surrounding the renewal of its exploration rights over the Ghurayyah
tantalum-niobium project in Saudi Arabia and the resulting voluntary suspension
of our shares, which is now being lifted.
A more detailed explanation of these issues and the current status of the
Company's application for a new exploration licence is given in a separate
release to the Stock Exchange.
The occurrence of uranium in the Ghurayyah deposit makes its development for
tantalum and niobium and other associated minerals particularly sensitive for
the Saudi Government. Recognising these sensitivities, we have been working with
our Saudi joint venture partners and with the Saudi Deputy Ministry for Minerals
Resources (DMMR) to find workable solutions and, as a result, a new application
for an exploration licence at Ghurayyah is being processed by the DMMR. This
application has been made jointly with our Saudi joint partners following the
signing of an amendment to the Joint Venture Agreement whereby the two Saudi
joint venture partners will accelerate their future earn-in contributions to the
project and, together with Tertiary, form a local (Saudi) joint venture
operating vehicle.
Work on the Ghurayyah feasibility studies, outside of Saudi Arabia, has
continued steadily throughout the suspension period and we hope to issue a
progress report shortly. Whilst the suspension has been a period of unwelcome
uncertainty for shareholders, I am pleased that our licence application is being
progressed and that we have advanced the relationship with our Saudi joint
venture partners.
Results
The Group loss for the six month period was £615,435 (Six months to 31 March
2006 £135,944 restated on adoption of FRS 20 'Share Based Payments'). This
includes 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 associated
undertaking until 9 February 2007, and a profit on the deemed sale of an
interest in Sunrise Diamonds plc of £53,250.
Whilst we believe that the new Ghurayyah exploration licence will be issued in
due course, the terms and conditions it may contain relating to the processing
of radioactive minerals are as yet unclear, and in these circumstances the Board
considers it prudent to make a provision against the full 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 would be reversed.
I am pleased to report that the Company is continuing with other business as
normal. We have entered into negotiations which, if successful, will lead to the
acquisition of an interest in a second major niobium project. Other project
acquisitions are also under consideration and joint venture discussions are in
progress with parties wishing to acquire an interest in certain of our
Scandinavian exploration assets.
Patrick L Cheetham 9 July 2007
Executive Chairman
For further information contact :
Tertiary Minerals plc Tel: + 44 (0)1625 626203
Sunrise House Fax: + 44 (0)1625 626204
Hulley Road
Macclesfield Website: www.tertiaryminerals.com
Cheshire SK10 2LP
Jonathan Wright Tel: +44 (0)20 7107 8050
Seymour Pierce Limited
Consolidated Profit and Loss Account
for 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 Losses
for 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 exchange
translation differences
on foreign currency net
investments in
subsidiaries (25,389) 6,958 (21,507)
---------- --------- ---------
Total recognised
losses since last
accounts (640,824) (128,986) (277,090)
---------- --------- ---------
Consolidated Balance Sheet
as 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 assets
Intangible Assets 749,704 1,090,212 1,158,926
Tangible Assets 9,890 11,535 9,898
Share of net assets of
associate - 219,744 221,742
Investment 257,775 - -
---------- --------- ---------
1,017,369 1,321,491 1,390,566
Current assets
Debtors 49,681 1,062,839 57,197
Cash 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 one
year ---------- --------- ---------
Net Assets 1,630,988 1,942,756 2,260,821
---------- --------- ---------
Capital and reserves
Called up share capital 545,127 514,210 545,127
Share premium account 4,259,683 3,826,853 4,259,683
Merger reserve 131,096 131,096 131,096
Option Reserve 15,160 1,748 4,170
Profit 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 Statement
for 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 operating
activities (note 3) (122,545) (136,823) (217,465)
Returns on investments and
servicing of finance
Interest received 16,075 10,982 28,268
---------- --------- ---------
Net cash outflow from
operating activities
after returns on investments
and servicing of finance. (106,470) (125,841) (189,197)
---------- --------- ---------
Capital expenditure and
financial investment
Purchase of intangible
fixed assets (113,589) (140,280) (230,324)
Purchase of tangible fixed
assets (1,894) (1,846) (9,520)
Receipts from sale of
intangible fixed assets - - -
Receipts from sale of
tangible fixed assets - 2,500 4,166
---------- --------- ---------
Net cash outflow from
capital expenditure
and financial investment (115,483) (139,626) (235,678)
---------- --------- ---------
Acquisition and disposals
Payments to acquire
investment in associate - 65,250 65,250
---------- --------- ---------
Net cash outflow from
acquisitions and disposals - (65,250) (65,250)
---------- --------- ---------
Financing
Issue of share capital (net
of expenses) - 499,727 963,738
Exchange differences (25,389) 103 (25,472)
---------- --------- ---------
Net cash (outflow)/inflow from
financing (25,389) 499,830 938,266
---------- --------- ---------
---------- --------- ---------
(Decrease)/increase in cash
in the period (note 4) (247,342) 169,113 448,141
---------- --------- ---------
Notes to the Interim Statement
1. Basis of preparation
The interim statement has been prepared on the basis of the accounting policies
set out in the Company's financial statements for the period ended 30 September
2006 as amended by the adoption of FRS 20 and the application of FRS 25. The
financial information set out in this statement relating to the period ended 30
September 2006 does not constitute statutory accounts for that period. Full
audited accounts in respect of that financial period prior to the adoption of
FRS 20 and the application of FRS 25 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.
Prior year adjustments
The Company has applied the requirements of FRS 20 (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 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 set
out for the six month period ended 31 March 2006 ( £1,748) and the year ended 30
September 2006 (£4,170) to apply charges to the Profit and Loss Account for
share options granted or becoming vested in these periods. This has no impact on
the net assets of the Company.
The group has contractual arrangements with other participants to engage in
joint activities that do not create an entity carrying on a trade or business of
its own. The Group includes its share of assets and liabilities in such joint
arrangements measured in accordance with the terms of each arrangement, which is
usually 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 in
cash 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 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.
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 shares
in issue (No.) 54,512,736 49,415,598 51,710,679
Basic loss
per share (pence) (1.13) (0.28) (0.49)
---------- --------- ---------
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 FRS 22.
3. Reconciliation of operating loss to net cash outflow from operating
activities
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 against
intangible asset 522,809 - -
Depreciation charge 1,903 1,491 3,301
Depreciation released
on disposal - (2,169) (2,169)
Profit on disposal of
tangible fixed asset - 504 504
Non-cash movement
in reserves 10,990 1,748 4,170
Intangible fixed
assets 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 from
operating 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 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
This information is provided by RNS
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