Interim Results

RNS Number : 9828U

Tertiary Minerals PLC

21 May 2008

 



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 :

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

  Consolidated Income Statement

for the six months to 31 March 2008

	Six months  to 31 March 2008 Unaudited		Six months to 31 March 2007 Unaudited		Twelve months  to 30 September       2007 Unaudited
	£		£		£
Exploration costs written off and provided for	36,829		535,990		691,182
Administrative expenses	153,334		131,553		244,528
Operating loss	(190,163))		(667,543)		(935,710)
Share of operating loss of associate	-		(18,458)		(18,458)
Profit arising from the increase in value of the Group’s share of the net assets of Sunrise Diamonds resulting from share issues (note 5).	-		53,250		53,250
Interest receivable	19,454		16,075		27,713
Share of interest receivable of associate	-		1,241		1,241
Loss on ordinary activities before taxation	(170,709)		(615,435)		(871,964)
Tax on loss on ordinary activities	-		-		-
Loss for the period	(170,709)		(615,435)		(871,964)
Loss per share – basic and fully diluted (pence) (note 3)	(0.28)		(1.13)		(1.60)

Consolidated Statement of Total Recognised Income and Expense

for the six months to 31 March 2008

	Six months to  31 March 2008 Unaudited		Six months to  31 March  2007 Unaudited		Twelve months to  30 September 2007              Unaudited
	£		£		£
Loss for the period	(170,709)		(615,435)		(871,964)
Movement in revaluation of available for sale investment	(249,610)		257,475		291,825
Total recognised expense since last accounts	(420,319)		(357,960)		( 580,139)

Consolidated Balance Sheet

as at 31 March 2008

	As at  31 March 2008 Unaudited		As at  31 March 2007 Unaudited		As at 30 September 2007 Unaudited
	£		£		£
Non-current assets
Intangible Assets	805,815		749,704		688,170
Tangible Assets	7,023		9,890		8,682
Available for sale investment	299,990		515,250		549,600
	1,112,828		1,274,844		1,246,452
Current assets
Debtors	60,696		49,681		62,467
Cash at bank and in hand	864,261		636,768		441,617
	924,957		686,449		504,084
Payables : amounts falling due within one year	(56,432)		(72,830)		(78,307)
Net current assets	868,525		613,619		425,777
Net Assets	1,981,353		1,888,463		1,672,229
Equity
Called up share capital	636,037		545,127		545,127
Share premium account	4,859,689		4,259,683		4,259,683
Merger reserve	131,096		131,096		131,096
Other reserves	48,911		15,160		23,601
Available for sale revaluation reserve	42,215		257,475		291,825
Foreign currency reserve	(14,667)		(25,389)		(27,884)
Profit and loss account	(3,721,928)		(3,294,689)		(3,551,219)
Total Equity	1,981,353		1,888,463		1,672,229

Consolidated Statement of Changes in Equity

for the six months to 31 March 2008

 

	Six months  to 31 March 2008 Unaudited		Six months to 31 March  2007 Unaudited		Twelve months  to 30 September 2007              Unaudited
	£		£		£
Opening Equity	1,672,229		2,260,821		2,260,821
Issue of ordinary shares	690,916		-		-
Share based payments	25,310		10,990		19,431
Available for sale revaluation	(249,610)		257,475		291,825
Foreign exchange translation	13,217		(25,388)		(27,884)
Net loss for the period	(170,709)		(615,435)		(871,964)
Closing Equity	1,981,353		1,888,463		1,672,229

 

 

 

Consolidated Cash Flow Statement

for the six months to 31 March 2008

	Six months  to 31 March 2008 Unaudited		Six months  to 31 March  2007 Unaudited		Twelve months to 30 September  2007 Unaudited
	£		£		£
Operating Activities
Cash outflow from operating activity (note 4)	(164,675)		(122,545)		(218,719)
Net cash outflow from operating activity	(164,675)		(122,545)		(218,719)
Investing Activities
Interest received (note 2)	19,454		16,075		27,713
Purchase of intangible assets	(136,184)		(113,589)		(220,638)
Purchase of tangible assets	(84)		(1,894)		(3,177)
Net cash outflow from investing activity	(98,275)		(99,408)		(196,102)
Financing Activities
Issue of share capital (net of expenses)	690,916		-		-
Exchange differences	13,217		(25,389)		-
Net cash outflow from financing activity	704,133		(25,389)		-
Increase/(decrease) in cash in the period	422,644		(247,342)		414,821)

 

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.

BALANCE SHEET AT 31 MARCH 2007	UK
	GAAP	Note 2a	Note 2b	IFRS
	Unaudited			Unaudited
	£	£	£	£
Non-current assets
Intangible Assets	749,704	-	-	749,704
Tangible Assets	9,890	-	-	9,890
Share of net assets of associate	-	-	-	-
Available for sale investment	257,775	257,475	-	515,250
	1,017,369	257,475	-	1,274,844
Current assets
Debtors	49,681			49,681
Cash at bank and in hand	636,768	-	-	636,768
	686,449	-	-	686,449
Payables : amounts falling	-
due within one year	(72,830)	-	-	(72,830)
Net current assets	613,619			613,619
		-	-
Net Assets	1,630,988	257,475	-	1,888,463
Equity
Called up share capital	545,127	-	-	545,127
Share premium account	4,259,683	-	-	4,259,683
Merger reserve	131,096	-	-	131,096
Other reserves	15,160	-	-	15,160
Available for sale revaluation reserve	-	257,475	-	257,475
Foreign currency reserve	-	-	(25,388)	(25,388)
Profit and loss account	(3,320,078)	-	25,388	(3,294,690)
Total Equity	1,630,988	257,475	-	1,888,463

BALANCE SHEET AT 30 SEPTEMBER 2007	UK
	GAAP	Note 2a	Note 2b	IFRS
	Audited			Unaudited
	£	£	£	£
Non-current assets
Intangible Assets	688,170	-	-	688,170
Tangible Assets	8,682	-	-	8,682
Share of net assets of associate	-	-	-	-
Available for sale investment	257,775	291,825	-	549,600
	954,627	291,825	-	1,246,452
Current assets
Debtors	62,467	-	-	62,467
Cash at bank and in hand	441,617	-	-	441,617
	504,084	-	-	504,084
Payables : amounts falling
due within one year	(78,307)	-	-	(78,307)
Net current assets	425,777	-	-	425,777
Net Assets	1,380,404	291,825	-	1,672,229
Equity
Called up share capital	545,127	-	-	545,127
Share premium account	4,259,683	-	-	4,259,683
Merger reserve	131,096	-	-	131,096
Other reserves	23,601	-	-	23,601
Available for sale revaluation reserve	-	291,825	-	291,825
Foreign currency reserve	-	-	(27,884)	(27,884)
Profit and loss account	(3,579,103)	-	27,884	(3,551,219)
Total Equity	1,380,404	291,825	-	1,672,229

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.

	Six months to 31 March 2008 Unaudited		Six months to 31 March 2007 Unaudited		Twelve months to 30 September 2007 Unaudited
	£		£		£
Loss for the period (£)	(170,709)		(615,435)		(871,964)
Weighted average shares in issue (No.)	62,063,731		54,512,736		54,512,736
Basic loss per share (pence)	(0.28)		(1.13)		(1.60)

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

	Six months  to 31 March 2008 Unaudited		Six months to 31 March 2007 Unaudited		Twelve months  to 30 September 2007 Unaudited
	£		£		£
Operating loss	(190,163)		(667,543)		(935,710)
Provision against intangible asset	18,039		522,809
Depreciation charge	1,743		1,903		4,393
Non-cash movement in reserves	25,310		10,990		19,431
Intangible assets written off	500		-		691,182
Decrease/(Increase) in receivables	1,770		7,517		(5,270)
(Decrease)/Increase in payables	(21,874)		1,779		7,255
Net cash outflow from operating activities	(164,675)		(122,545)		(218,719)

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

 

END

 

 

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