Final Results

RNS Number : 7220J

Tertiary Minerals PLC

08 December 2008

 



Tertiary Minerals plc

Final Results for the year ended 30 September 2008

Chairman's Statement 

I have pleasure in presenting the Company's audited Financial Statements for the year ended 30 September 2008.

Storuman Fluorspar Project

The most significant development this year has been the acquisition in January 2008 of the Storuman fluorspar deposit in Sweden.  

Fluorspar is the principal industrial source of fluorine for the manufacture of hydrofluoric acid and derivative fluorine chemicals and it is used as a flux in the manufacture of steel. Following years of oversupply from China, fluorspar is now in critically short supply as traditional Chinese sources become depleted and reserved for Chinese domestic use. The Company's evaluation of a new European source of fluorspar is therefore timely.

Storuman was defined as a multi-million tonne deposit in the 1970s when resource estimation, mine planning and metallurgical testwork outlined a potentially commercial deposit that was not subsequently developed.

In 2008, Tertiary fast-tracked further work on the deposit having completed a confirmatory drilling programme and initiated metallurgical testwork and a technical and economic scoping study. Whilst development of any mineral project faces challenges, particularly in the current financial environment, we have been encouraged by the high level of industry interest in our project.

Kolari Iron Project

The Kolari iron deposit sits at the heart of the Kolari-Pajala iron province in the border areas of northern Finland and Sweden where a number of iron deposits are being considered for development.

Our work during the year has validated the potential for a substantial tonnage of near surface bulk-mineable iron mineralisation on our Sivakkalehto claims in Finland that could be developed to produce high grade iron concentrates. 

Tertiary's target is to define a resource of approximately 100 million tonnes grading 30% magnetite. An initial programme of metallurgical testwork has produced premium-grade magnetite concentrates averaging 70% iron.

Iron ore prices doubled in 2007 and early 2008, but more recently price pressures have been strongly downward with a number of iron ore companies announcing production cut-backs. Annual contract prices are expected to fall sharply.

Ghurayyah

At Ghurayyah, in Saudi Arabia, we have seen further progress towards the issue of the new exploration licence over the world class Ghurayyah tantalum-niobium rare-earth deposit, with the issue and agreement of draft licence terms and we hope that our patience will be rewarded before too long. 

Sunrise Diamonds plc

The Company has maintained its shareholding in Sunrise Diamonds plc throughout the year and continues to provide management services and to share costs to the advantage of both companies. The Company currently holds 14% of the issued capital of Sunrise Diamonds plc. 

Financials

The audited financial statements are prepared for the first time under International Reporting Standards (IFRS), as adopted by the European Union. 

The Group is reported a loss of £791,965 for the year (2007: £871,964).  

During the year we have secured a trading platform on PLUS markets and whilst our AIM trading facility is unaffected, it gives investors further choice and will lead, we hope, to increased trading liquidity once markets recover.

Outlook

The Company's progress during the year has been eclipsed by the 2008 financial crisis, the resulting stock market crash and a burgeoning recession. In response, the Board took immediate action to further reduce costs on an already low cost base. 

In recent months many metal prices have collapsed as demand slows and financial institutions deleverage their commodity related financial instruments. However, the prices of some of the commodities in which we are involved, fluorspar, tantalum, niobium, and rare-earths have not yet been as badly affected as they are not speculatively traded and as a result demand and prices tend to track global GDP more closely than do the prices of those metals that trade on terminal markets such as the London Metal Exchange. 

Commentators seem divided on the future level of real commodity demand depending on their view of the dependence of China on western world demand for its exports. Undoubtedly the trading picture is currently obscured as the collapse of shipping costs translates to lower delivered prices for many bulk minerals such as fluorspar. However it seems certain that 'mine-gate' prices are softening on negative global economic demand and sentiment.

Iron ore prices doubled in 2007 and early 2008, but more recently price pressures have been strongly downward with a number of iron ore companies announcing production cut-backs. Annual contract prices are expected to be sharply down when next fixed.

Even allowing for the deepening recession, financial deleveraging has caused the prices of many metals to fall below the limits of sustainable economic production suggesting that medium term outlook should be positive.

In Conclusion

Amongst the current market gloom and uncertain outlook it is worth remembering that it is in such financial environments, when mines are closed and production lost, that the seeds of the next mining boom are being sown.

I remain optimistic that the quality of the Company's projects and the experience of the Board will carry the Company forward.

I would like to thank all my fellow directors and all shareholders for their support in 2008. 

Patrick Cheetham

Executive Chairman

8 December 2008

Further Information:

Patrick Cheetham, Tertiary Minerals Plc. Tel: [phone]. 

Ron Marshman/John Greenhalgh, Lothbury Financial  Tel:  [phone]

Web-site: www.tertiaryminerals.com

                         Tertiary Minerals plc

Consolidated Income Statement

for the year ended 30 September 2008

		2008 £	2007 £
Pre-licence exploration costs		53,292	22,269
Impairment of deferred exploration costs		481,842	668,913
Administrative expenses		289,768	244,528
Operating loss		(824,902)	(935,710)
Share of operating loss of associate		-	(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		-	53,250
Interest receivable		32,937	27,713
Share of interest receivable of associate		-	1,241
Loss on ordinary activities before taxation		(791,965)	(871,964)
Tax on loss on ordinary activities		-	-
Loss for the year attributable to equity holders of the parent		(791,965)	(871,964)
Loss per share - basic and diluted (pence)		(1.27)	(1.60)

All amounts relate to continuing activities.

  Tertiary Minerals plc

                                                                               Statements of Total Recognised Income and Expense

for the year ended 30 September 2008

		Group	Company	Group	Company
		2008 £	2008 £	2007 £	2007 £
Loss for the year		(791,965)	(241,783)	(871,964)	(168,170)
Movement in revaluation of available for sale investment		(317,035)	(317,035)	291,825	334,350
Foreign exchange translation differences on foreign currency, net investments in subsidiaries		105,348	-	(27,884)	-
Total recognised (expense)/income since last accounts		(1,003,652)	(558,818)	(608,023)	166,180

Tertiary Minerals plc

Balance sheets

at  30 September 2008

		Group	Company	Group	Company
		2008	2008	2007	2007
		£	£	£	£
Non-current assets
Intangible assets		504,823	-	688,170	-
Property, plant & equipment		5,448	3,545	8,682	5,090
Investment in subsidiary		-	3,719,351	-	3,386,656
Available for sale investment		257,519	257,519	549,600	549,600
		767,790	3,980,415	1,246,452	3,941,346
Current assets
Receivables		53,216	33,248	62,467	53,773
Cash and cash equivalents		591,968	310,903	441,617	148,024
		645,184	344,151	504,084	201,797
Current liabilities
Trade and other payables		(94,280)	(48,209)	(78,307)	(40,902)
Net current assets		550,904	295,942	425,777	160,895
Net assets		1,318,694	4,276,357	1,672,229	4,102,241
Equity
Called up share capital		636,037	636,037	545,127	545,127
Share premium account		4,859,689	4,859,689	4,259,683	4,259,683
Merger reserve		131,096	131,096	131,096	131,096
Share option reserve		65,619	65,619	23,601	23,601
Available for sale revaluation reserve		(25,210)	17,315	291,825	334,350
Foreign currency reserve		77,464	-	(27,884)	-
Retained losses		(4,426,001)	(1,433,399)	(3,551,219)	(1,191,616)
Shareholders' funds		1,318,694	4,276,357	1,672,229	4,102,241

        Tertiary Minerals plc

 Cash Flow Statements

for the year ended 30 September 2008

	Group 2008	Company 2008	Group 2007	Company 2007
	£	£	£	£
Operating activities
Operating loss	(824,902)	(267,057)	(935,710)	(181,058)
Depreciation charge	3,318	1,545	4,393	1,545
Impairment charge	481,842	-	691,182
Share based payment charge	42,018	42,018	19,431	19,431
(Increase)/Decrease in receivables	9,252	20,525	(5,270)	(7,007)
Increase in payables	15,973	7,307	7,255	3,628
Net cash outflow from operating activity	(272,499)	(195,662)	(218,719)	(163,461)
Investing activities
Interest received	32,937	25,274	27,713	12,348
Purchase of intangible assets	(291,320)	-	(220,638)	-
Purchase of property, plant & equipment	(84)	-	(3,177)	(135)
Purchase of available for sale investments	(24,954)	(24,954)	-	-
Additional investment in subsidiaries	-	(332,695)	-	(86,033)
Net cash outflow from investing activity	(283,421)	(332,375)	(196,102)	(73,820)
Financing activity
Issue of share capital (net of expenses)	690,916	690,916	-	-
Net cash inflow from financing activity	690,916	690,916	-	-
Net increase/(decrease) in cash and cash equivalents	134,996	162,879	(414,821)	(237,281)
Cash and cash equivalents at start of year	441,617	148,024	884,110	385,305
Exchange differences	15,355	-	(27,672)	-
Cash and cash equivalents at  30 September	591,968	310,903	441,617	148,024

  NOTES 

         1.  Accounting Policies

      The financial information set out in this announcement has been prepared on the basis of the recognition and measurement requirements of International Financial Reporting Standards (IFRSs), as adopted by the European Union, and their interpretations adopted by the International Accounting Standards Board (IASB). The Company has reviewed the accounting policies set out in the Company's financial statements for the year ended 30 September 2007, which were prepared in accordance with UK Generally Accepted Accounting Practice (UK GAAP). Consequently the opening IFRS balance sheet contains adjustments made to the amounts reported previously in financial statements prepared since the transition date to IFRS, 1 October 2006.

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 project financing will be required.

The directors prepare annual budgets and cash flow projections that extend beyond 12 months from the date of this report. On the basis of these projections, which include the proceeds of future fundraising, the directors continue to adopt the 'going concern' basis for preparing the accounts.

         2.  Publication of Non-Statutory Accounts

The financial information set out in this announcement does not constitute the Company's Statutory Accounts for the period ended 30 September 2008 or 2007. The financial information for 2007 is derived from the Statutory Accounts for 2007 and amended by the adoption of IFRSs. Full audited accounts in respect of that financial period prior to the adoption of IFRSs have been delivered to the Registrar of Companies. 

The Statutory Accounts for 2008 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. The auditors have reported on the 2008 and 2007 accounts. 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 a requirement that the Company raise funds in the future to continue as a going concern.

3.     Loss per share

Loss per share has been calculated on the loss and the weighted average number of shares in issue during the year.

		2008	2007
Loss (£)		(791,965)	(871,964)
Weighted average shares in issue (No.)		62,560,506	54,512,736
Basic and diluted loss per share (pence)		(1.27)	(1.60)

The loss attributable to ordinary shareholders and weighted average number of ordinary shares for the purpose of calculating the diluted earnings per ordinary share are identical to those used for the basic earnings per ordinary share. This is because the exercise of share warrants and options would have the effect of reducing the loss per ordinary share and is therefore not dilutive under the terms of IAS33.

4.    Dividend

No dividend is proposed.

5.    Annual Report

The Company's 2008 Annual Report will be published and sent to shareholders in due course and copies will be available to the public, free of charge, from the Registered Office of the Company at Sunrise House, Hulley Road, Macclesfield, Cheshire, SK10 2LP and will be downloadable from the Company's website at www.tertiaryminerals.com. 

 

END

 

 

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