Ghurayyah Testwork Results

Tertiary Minerals PLC
11 November 2002



                             TERTIARY MINERALS PLC

                       VALUABLE CONCENTRATE PRODUCED FROM

                     WORLD'S LARGEST KNOWN TANTALUM DEPOSIT



  • Metallurgical Testwork Achieves Objectives To Add Significant Value To
    Project
  • 90-fold Upgrade From Ore To Concentrate
  • Favourable Recoveries Of Tantalum, Niobium And Yttrium/Rare-Earths
  • 10-fold Improvement Over Previous Testwork Results
  • Financial Support Being Provided By British Government's Offset Initiative
  • Tantalum Market Upturn Predicted From Mid-2003

Summary

Tertiary Minerals plc is pleased to announce that it has successfully developed
and tested an extraction and concentration process for the treatment of the
Ghurayyah tantalum/rare-metal deposit in Saudi Arabia, reportedly* the world's
largest known tantalum deposit.

Using industry standard mineral processing techniques of flotation and magnetic
separation, testwork has produced a concentrate containing 35.3% combined
tantalum, niobium and yttrium/rare-earth oxides with commercially favourable
recoveries of 71% and 65% for tantalum and niobium respectively and undetermined
but significant recoveries of yttrium and rare-earth oxides. This represents a
90-fold upgrade of the in-situ value for tantalum and niobium in the rock with
commercially favourable recoveries. Previously only considered as valuable for
tantalum, the current testwork has shown that both niobium and yttrium values
may be recovered.

The results represent a 10-fold improvement in concentrate grade compared to
that obtained in previous metallurgical testwork on which all previous technical
and financial evaluations have been based.

Further research is required to determine the market value of the concentrate
but Ghurayyah's large size and potential long mine life will support value-added
processing of the concentrate on-site. A number of commercially proven
processing technologies could be applicable. It is estimated that the
recoverable value of tantalum and niobium in intermediate value processed
products is US$38 per tonne of 'ore' at current prices.

A scoping study will now be undertaken to examine the capital and operating
costs for development of Ghurayyah. Recent published research suggests that the
tantalum market will firm in mid-2003 and that the market for Niobium will show
continuing stable growth.

The Ghurayyah project is now receiving financial support from British Offset, a
joint initiative of the British Ministry of Defence and BAE SYSTEMS supporting
new projects in Saudi Arabia through project financing assistance and the
provision of soft loans.

Introduction

The Ghurayyah rare-metal deposit is located in the Midyan region of north-west
Saudi Arabia, 85km south-west of the regional city of Tabuk and 55km from the
Red Sea.

SRK Consulting, on behalf of Tertiary, has estimated the deposit to contain a
bulk tonnage, open pittable, Inferred Mineral Resource, to a depth of
approximately 250m, as follows :

GHURAYYAH INFERRED MINERAL RESOURCE:

385 million tonnes grading:                   245 g/t tantalum pentoxide (Ta205)
                                             2,840 g/t niobium pentoxide (Nb205)
                                                8,915 g/t zirconium oxide (Zr02)

Metallurgical Sampling

Following the grant to Tertiary of an exclusive five-year exploration licence in
January this year, the Company collected six composite samples (total 300kg)
from Ghurayyah for metallurgical process development testwork. The six samples
were taken from drill core stored from a 1999 drilling programme carried out by
the United States Geological Survey ('USGS') and the Saudi Deputy Ministry for
Mineral Resources ('DMMR'). The samples, which were taken from core spread
throughout the deposit, were individually assayed and made into one master
composite for metallurgical testwork.

The master composite, which is considered to be reasonably representative of the
mineralisation, assayed 230 g/t tantalum pentoxide (Ta205), 2,700 g/t niobium
pentoxide (Nb205) & 7,800 g/t zirconium oxide (Zr02).

Resource Resampling

During the metallurgical testwork programme the Company has been running a
series of check assays on assay pulps made in 1999 from the 1999 drill core. In
total 200 pulps and 40 duplicates were sampled and submitted for analysis by
lithium metaborate fusion and ICP-MS at ALS Chemex in Vancouver. 40 triplicates
were sent to SGS Lakefield in Toronto for analysis by their internal standard
pressed pellet XRF method. Tertiary has also carried out a thorough review of
historic assay data.

The 2002 check assays suggest that the fusion/ICP-MS method understates grade by
about 8% compared to pressed pellet XRF. The 2002 XRF assays on 1999 drill core
pulps indicate a 20% lower grade than that obtained by the DMMR in 1999 using an
acid digest/ICP-MS analysis. In particular it was noted that higher grade assays
obtained in 1999 from one particular hole could not be repeated returning lower
grades closer to the estimated grade of the deposit. The metallurgical
composites assayed in 2002 by XRF gave good assay agreement with 1999 assays
after the anomalous 1999 high values were cut.

The 2002 check-assaying programme has generally confirmed the remarkable grade
continuity of tantalum, niobium and zircon in the Ghurayyah deposit. Whilst
resampling of 1999 drill-pulps gave a 20% lower tantalum grade this was not
supported by the assays of fresh larger metallurgical samples taken in 2002 from
1999 drill core. It is expected that these discrepancies will be resolved in
future drilling programmes.

Metallurgical Development Programme

Metallurgical process development testwork been carried out during the period
May-October 2002 by SGS Lakefield Research, one of the world's leading
independent metallurgical laboratories. It has included mineralogical studies on
ore and concentrate and numerous grinding, gravity, flotation. leaching and
magnetic separation tests.

Flotation testwork showed early promise and was continued to investigate
different grind sizes and reagent schemes. Following selection of an appropriate
grind size and reagent scheme a locked cycle flotation test was carried out to
produce a bulk concentrate for upgrading testwork. Mineralogical work on the
flotation concentrate identified columbite-tantalite to be the main carrier of
tantalum and niobium in the concentrate with zircon as the main diluent. The
flotation concentrate was then upgraded by acid cleaning and magnetic separation
during which much of the zircon was removed. The locked cycle flotation tests
and magnetic separation tests were repeated with consistent results.

Testwork Results

The final concentrate assays and overall recoveries are as follows:
                                              Grade             Overall Recovery

Metal (oxide)

Ta205                                         1.84 %            71.4 %
Nb205                                         25.5 %            64.9 %
Y2O3                                          6.28 %            Not determined
Total Rare Earth Oxide                        1.68 %            Not determined

Uranium and thorium values in the concentrate were both below 1% and at similar
levels to those found in some other commercial niobium and tantalum
concentrates.

Comments on Testwork Results

The 2002 process development testwork has resulted in a 90-fold upgrading of the
tantalum and niobium values contained in the rock. This represents an almost
10-fold improvement to the concentrate grade produced in the 1970's testwork on
which previous evaluations of the Ghurayyah deposit have been made. This has
significant financial implications for the project.

It is important to note that these results have been achieved using industry
standard flotation and magnetic separation equipment and that the recoveries for
tantalum and niobium compare favourably with those published for other
commercial mining operations (e.g. 65-75% for tantalite in pegmatites, and
54-58% for niobium in pyrochlore).

Whilst considerable development of the flotation reagent scheme and conditions
has been carried out, the process is not fully optimised and concentrate grade
and recovery might be improved with further testwork.

Value of Concentrate

The high levels of niobium and yttrium in the concentrate have potential to add
significantly to the value of Ghurayyah ore. In particular the high levels of
valuable yttrium and rare-earths in the concentrate were not expected, although
it is noted that the world market for yttrium is relatively small in proportion
to the amount that could be produced from Ghurayyah.

The concentrate produced in testwork may be directly saleable to established
tantalum and niobium processors. Processed tantalum and niobium products are
limited in range and specification but the concentrate feed materials from which
they are produced have a wide range of composition and value to different
processors. The price paid for any concentrate will vary with composition and a
buyers ability to extract profitably its various valuable components using any
particular plant configuration. Further market research is therefore required to
determine the direct sale value of the Ghurayyah concentrate.

Estimated resources at Ghurayyah are sufficiently large to meet current world
demand for over 40 years. This large size and a potentially long mine-life
favour the establishment of on-site concentrate processing facilities to
add-value to the contained tantalum, niobium and yttrium/rare-earth oxides.

Environmental regulations may also in future restrict the movement of tantalum
concentrates (which all contain thorium and uranium to a greater or lesser
degree) and result in a trend towards the processing of concentrates at
mine-site.

On-site, value-adding processing is standard practice in the niobium industry
where pyrochlore concentrates are converted to ferro-niobium, but is less common
in the tantalum industry which is dominated by separate and independent miners
and concentrate processors.

The concentrate produced from Ghurayyah could be further processed using one or
more of a number of the different commercially proven processes used by existing
processors including:


  • smelting to produce a higher grade 'synthetic' concentrate suitable for
    hydrometallurgical processing

  • aluminothermic reduction to produce a tantalum-niobium ferroalloy for sale
    or hydrometallurgical processing

  • direct hydrometallurgical treatment to produce intermediate value
    potassium fluorotantalate ('K-Salt') or higher value tantalum and niobium
    oxides or metal powders

If, for example, K-Salt and standard-grade ferro-niobium (intermediate value
products) were produced from Ghurayyah concentrate then, using conservative
in-situ grades for mineralisation and realistic metallurgical recoveries -

- at current low tantalum prices and current niobium prices the recoverable
value of these two metals in that intermediate value form is estimated by the
company to be US$38 per tonne of rock mined and processed.

Recent market research published by Metal Bulletin Research suggests that the
market for tantalum should start to recover by mid-2003 and predicts a
sustainable long-term price of US$60/lb tantalum pentoxide (in concentrates)
considerably above the current spot price of US$25-30 used in the above
estimate. Roskill has recently published market research on the niobium market
which shows that it has not suffered the same downturn as the tantalum market
and that niobium demand has increased strongly over the past decade with prices
remaining stable.

Using Metal Bulletin's predicted sustainable tantalum price of US$60/lb, and
current niobium prices, the estimated recoverable value of the niobium and
tantalum in intermediate processed form increases to US$61/tonne of rock mined
and processed.

The above estimates equate to values of over US$5,000 and US$8,000 per tonne of
concentrate respectively. The concentrates can therefore stand high downstream
processing costs before these costs become significant per-tonne-of-ore-mined
because of the high concentration ratio achieved in recent testwork. Mining
costs at Ghurayyah are expected to be very low due as the ore is bulk-minable.

Future Work Programme & Financial Assistance

The Company is now planning a preliminary technical and economic scoping study
to determine the capital and operating costs for various mining rates and
processing options and to indicate the financial viability of the Ghurayyah
project. This will include production of tantalum, niobium and possibly yttrium/
rare-earth oxides.

The Company is currently being assisted in the evaluation and future development
of the Ghurayyah project by British Offset. British Offset is the manager of the
Al Yamamah Economic Offset Programme, a joint initiative of the British
Government (Ministry of Defence) and BAE SYSTEMS arising from military sales to
Saudi Arabia. British Offset supports new investment in Saudi Arabia through
practical help and financial support. It helps arrange project financing and
makes soft loans for project development, working in close cooperation with the
Saudi Industrial Development Fund.

British Offset is providing a grant to the Company in connection with the
metallurgical testwork now being reported.

(*Laznika. P 1999. Quantitive Relationships Among Giant Deposits of Metals.
Econ. Geol. V94. No.4)



For further Information contact:

Patrick Cheetham, Tertiary Minerals plc. Tel: [phone]; mobile: [phone]

Ron Marshman/John Greenhalgh, City of London PR Ltd. Tel: [phone]


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