Scoping Study Results

Tertiary Minerals PLC
08 April 2003


POSITIVE SCOPING STUDY DELIVERED FOR

GHURAYYAH TANTALUM-NIOBIUM PROJECT

  • Base Case Gives 3 Year Pay-back Of $101 Million Capital Cost
  • Attractive Project Funding Options Identified
  • Feasibility Studies Recommended

   _________________________________________________________________________

Tertiary Minerals plc ('the Company') is pleased to announce positive results
from the Scoping Study carried out on its Ghurayyah tantalum-niobium deposit in
Saudi Arabia.

The Study included financial modelling of a number of alternative processing
flowsheets over an initial 20 year mine life with costs estimated to an accuracy
of +/- 30%. On a 100% equity funded, un-escalated basis the four main flowsheets
were all economically attractive. Each produced pre-tax Internal Rates of Return
(IRR) in excess of 25% and Net Present Values (NPV) in the range $55-285 million
using discount rates between 10 and 20%.

The Base-Case returned the highest NPV and IRR. It considered:


  • mining of 1.52 million tonnes ore per annum over an initial 20 year
    period;

  • production of tantalum-niobium concentrate containing 600,000 lbs per
    annum of tantalum pentoxide and 6.3 million lbs per annum of niobium
    pentoxide and separate saleable zircon concentrate (10,000 tonnes per annum)
    by flotation and magnetic separation of ore after crushing/grinding;

  • aluminothermic reduction (smelting) of the concentrate to a
    low-radioactivity iron-niobium-tantalum alloy ('the ATR alloy'), and

  • further processing of the ATR alloy to saleable ferro-niobium (for use in
    steel industry) and salts of tantalum and niobium (for use refiners of
    tantalum and niobium metals, powders and oxides for use in the manufacture
    of capacitors and special alloys).

This flowsheet is based on a commercial flowsheet currently employed at the
Pittinga tin-tantalum-niobium mine in Brazil.

The Base-Case financial model gives a payback of three years on capital costs of
$101 million, average annual revenues of $106 million and average annual
operating costs of $51 million. The Base-Case financial model uses current
prices for niobium products and tantalum product prices factored to the tantalum
concentrate prices forecast by Metal Bulletin Research. It should be noted that
current spot prices for tantalum are at lower levels than both historical
averages and MBR future forecast prices and also that that the vast majority of
tantalum is not sold on a spot basis but on long term contract prices which are
considerably in excess of current spot prices.

The Base-Case flowsheet envisages the downstream production of tantalum and
niobium salts and ferro-niobium as these products are currently traded on world
markets and price information is readily available. However, Tertiary's
objective for Ghurayyah, at least in the first years of production, is to
process the ore only as far as is necessary to establish marketable 'raw
materials' for sale to existing processors.

Consequently the Scoping Study has considered a number of alternative flowsheets
where the concentrates are smelted into different intermediate tantalum and
niobium alloys and synthetic concentrates, including the ATR alloy, an
intermediate product in the Base-Case flowsheet. During smelting the uranium and
thorium contained in the concentrates are separated into a relatively inert slag
for disposal.

Ghurayyah intermediate 'raw materials' have a higher ratio of niobium-tantalum
than is normal for tantalum raw materials and whilst the Pittinga mine has
successfully made and sold such intermediate products in the past, future prices
for these materials can only be established by negotiation with tantalum and
niobium processors. The scoping study has established preliminary specifications
and target prices for intermediate products based on acceptable rates of return
and estimated costs of production.

Whilst intermediate products have the disadvantage of higher niobium-tantalum
ratios this will be less of a disadvantage if the use of niobium capacitors
grows as anticipated. The low levels of uranium and thorium will be a distinct
advantage as competitor raw materials (tantalite and columbite concentrates)
have variably higher levels of 'natural' radioactivity. The acceptable limits of
uranium and thorium for import of these materials into 1st-world processing
countries are becoming increasingly restrictive.

The flowsheets involving the production of alloy and synthetic concentrate 'raw
materials' involve a lower degree of process risk than the Base-Case. Some also
have lower capital costs and may prove more attractive to the Company if
adequate sales contracts can be negotiated. Discussions with potential
purchasers of Ghurayyah products have begun.

The project-financing environment in Saudi Arabia is very attractive with
Government funding available on low interest terms for, typically, 50% of
capital costs through the Saudi Industrial Development Fund. In addition,
project finance guarantees and low cost debt funding may be available for a
further 37.5% of capital costs through the British Aerospace Project Finance
Initiative administered by British Offset which is already supporting the
project having funded a part of the company's metallurgical development
programme. The net result of such funding is that the equity component of the
capital costs for the project could be as little as 12.5% of the total capital
requirement providing for significant leverage of the returns on equity capital
employed. This supportive project-financing environment gives the Ghurayyah
project a competitive advantage over other new tantalum projects currently on
the drawing-board.

The Study has recommended further feasibility studies and suggests a development
starting in 2006 when growth in the market for tantalum is expected to have
resumed. The Company is now investigating various sources of non-equity funding
to progress the recommended work programme.

The Study was carried out by St Barbara Consulting under the direction of senior
mineral processing consultant Richard Wilkinson, a metallurgist/chemical
engineer, who was formerly in charge of mineral processing research at Billiton
Research. Mine planning and costing was carried out by SRK Consulting whilst
process plant and infrastructure was costed by GBM Minerals Engineering
Consultants.

The Inferred Minerals Resource at Ghurayyah has been estimated by SRK Consulting
at 385 million tonnes grading 245 g/t tantalum pentoxide (Ta205), 2,840 g/t
niobium pentoxide (Nb205), and 8,915 g/t zirconium oxide (Zr02) sufficient for a
mine life over 250 years at the Scoping Study Base-Case production rate.

Further information:

Patrick Cheetham, Executive Chairman, Tertiary Minerals plc. Tel: [phone]

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


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