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Tertiary Minerals (TYM)

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Wednesday 25 May, 2022

Tertiary Minerals

Half-year Report

RNS Number : 8020M
Tertiary Minerals PLC
25 May 2022
 

25 May 2022

 

TERTIARY MINERALS PLC

("Tertiary" or "the Company")

 

HALF-YEARLY REPORT 2022

 

Tertiary Minerals plc announces its unaudited interim results for the six-month period ended 31 March 2022.

 

Operational highlights:

 

Tertiary continued to develop its project portfolio, focused on copper opportunities in Zambia and Nevada. Most notably activities included:

 

· Completing environmental permitting for the Jacks Copper Project in Zambia, collecting historic data and completing additional surface geochemical studies in order to bring the project to drill-ready status;

 

· Planning a first phase of core drilling at Jacks comprising an orientation programme designed to establish copper grades and an improved understanding of the geometry of mineralised zones identified by historic work;

 

· Expanding Option & JV agreements with local partners covering four further licences which gives the Company access to over 1,200 km2 across the Central African Copperbelt (the "Copperbelt") and over an area 20 km east of the past-producing high-grade Kalengwa copper mine;

 

· Continuing to evaluate additional opportunities across the Copperbelt in Zambia and elsewhere; and

 

· Completing permitting for the next phase of exploration at the Brunton Pass Copper Project in Nevada which will commence in the coming months.

 

 

Zambia

 

Tertiary has begun field operations in Zambia. The Company planned a first phase of core drilling at the Jacks Copper Project during the period and drilling has since commenced. Historic exploration results at Jacks indicate a 16km long open-ended soil geochemical anomaly associated with rocks of the Lower Roan Subgroup. The Lower Roan Subgroup is typically associated with many of the stratiform copper deposits of the Copperbelt in Zambia. At Jacks, a large-scale fold and a series of folding events and faulting/shearing is in evidence from historic work. This first phase of drilling is the first step to gathering improved spatial data on the location and geometry of known mineralisation and an understanding of the associated structural setting.

 

The historic core and reverse circulation drilling at Jacks targeted just two small areas where soil anomalies were most pronounced. Historic intersections include an interval of 23.95m grading at 1.26% copper (including 1.88m grading at 2.93% copper).

 

In addition to Jacks, additional agreements are now in place with the Company's existing Zambian partner, Mwashia Resources Limited, giving the Company the right to earn up to 90% of four other licences located across the Copperbelt and in the North-Western Province. As with Jacks, the Lubuila, Mukai and Konkola West projects all target the Lower Roan Subgroup. The Mushima North project lies westwards of the past-producing Kalengwa copper mine, believed to be one of the highest grade copper deposits to have been mined in Zambia. Work is underway to provide the necessary supporting materials for the submission of environmental project briefs with the Zambia Environmental Management Agency for permitting of exploration activities on these licences. The process is most advanced for the Lubuila project and is expected to be concluded in the coming months with the others to follow later in the year. In the meantime, desktop studies and the acquisition of historic data has begun.

 

 

 

 

 

 

Nevada

 

A first phase of reverse circulation drilling at the Pyramid Silver-Gold Project in Nevada has not demonstrated mineralisation at depth. The continuity of grade at surface and the evidence of significant underground workings suggested a compelling drill target. The limited reverse circulation programme was conducted on schedule and below budget. Apart from rehabilitation, no further expenditure is planned at Pyramid and cumulative exploration costs of £361,379 have been impaired.

 

A permit for the next phase of exploration at the Brunton Pass Copper Project was issued in mid-April and the planned trenching programme across the main copper anomaly will commence shortly, alongside further investigation into the potential for gold and silver mineralisation on the property. Initial reconnaissance sampling resulted in multiple samples grading higher than 1% copper as well as a 2.44m channel sample grading 4.66% copper. The trenching programme will test for mineralisation at the primary target in the south of the project which is intrusion-related skarn copper mineralisation overprinted by a later mineralising episode which may represent the high levels of an epithermal system prospective for gold and silver. Trenching is also planned to investigate secondary targets in the northern area of the project.

 

 

 

FINANCIAL SUMMARY FOR THE SIX-MONTH PERIOD ENDED 31 MARCH 2022:

 

· Operating Loss of £604,213 comprises:

 

Revenue of £89,906; less Administration costs of £305,933 (which includes non-cash share-based payments of £29,237).

 

Pre-licence and reconnaissance exploration costs totalling £26,807.

 

Impairment of deferred exploration asset of £361,379 relating to Pyramid project in Nevada, US. This project was fully impaired following a series of phases of exploration across the property, most recently drilling at North Ruth.

 

 

· Total Group Loss of £604,193 is after crediting interest income of £20.

 

· Project expenditure of £222,876 was capitalised during the six-month period.

 

Funding and Cash Position:

 

· In January 2022, the Company completed a fundraising with Peterhouse Capital Limited raising £600,000 before expenses.

 

· The closing cash (and cash equivalent) position at the end of the period was £620,626.

 

For more information please contact:

Enquiries

 

Tertiary Minerals plc

Patrick Cullen, Managing Director

 

 

 

+44 (0)1625 838 679

 

SP Angel Corporate Finance LLP

Nominated Adviser & Joint Broker

Richard Morrison/Caroline Rowe

 

 

+44 (0) 20 3470 0470

 

Peterhouse Capital Limited

Joint Broker

Lucy Williams/Duncan Vasey

+44 (0) 207 469 0930

 

CAUTIONARY NOTICE

The news release may contain certain statements and expressions of belief, expectation or opinion which are forward looking statements, and which relate, inter alia, to the Company's proposed strategy, plans and objectives or to the expectations or intentions of the Company's directors. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors beyond the control of the Company that could cause the actual performance or achievements of the Company to be materially different from such forward-looking statements. Accordingly, you should not rely on any forward-looking statements and save as required by the AIM Rules for Companies or by law, the Company does not accept any obligation to disseminate any updates or revisions to such forward-looking statements.

 

MARKET ABUSE REGULATION (MAR) DISCLOSURE

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulations (EU) No. 596/2014 which forms part of UK domestic law by virtue of the European Union (Withdrawal) Act 2018 ('MAR'). Upon the publication of this announcement via Regulatory Information Service ('RIS'), this inside information is now considered to be in the public domain.



 

 

 

Statement from the Managing Director, Patrick Cullen

 

I am pleased to present our Interim Report for the six-month period ended 31 March 2022 and to be reporting the Company's progress with its new focus on copper, a key metal in the global green energy transition. We are now active on the ground in Zambia as well as in Nevada.

 

While Nevada remains a primary destination for exploration and mining investments, we are particularly excited to be now moving ahead in Zambia where recent announcements are instilling renewed confidence in the country's mining sector.

 

Zambia is currently in the limelight as its government continues to communicate and re-enforce its plans and ambitions to re-instate Zambia as a leading copper producer. The vision of "A New Dawn for Zambia", is one where macroeconomic stability is restored and sustainable and inclusive economic growth is promoted through significant increases in the production of copper. Zambia has already introduced a more competitive mining tax regime.

 

First Quantum Minerals has recently announced expansion at the Kansanshi mine and at their Enterprise nickel project, a combined $1.35 billion capital commitment which underlines the view that the investment climate in Zambia is and will continue moving in the right direction. We hold interests in the region of both of these deposits.

 

The Zambian government's stated ambition is to increase annual copper production from 830,000 tonnes to 3 million tonnes over the next 10 years, which will deplete reserves and resources at greater rates. This is positive news for Zambian copper explorers such as Tertiary. Activity in this space is increasing, as new copper explorers come to the stock markets and major mining companies return to Zambia.

 

Our priority project in Zambia is the Jacks Copper Project but this is only one of several Copperbelt projects where we have recently acquired interests.

 

In Nevada, we continue to explore the Brunton Pass Copper-Gold Project. This was staked by Tertiary in late 2020 to follow up widespread occurrences of copper oxide minerals at surface and where our own sampling included a 2.44m channel sample grading 4.66% copper. Anomalies generated by a project-wide soil sampling programme indicate that a programme of trenching is now appropriate and permitting is completed. We expect the first phase of that work to commence in the coming months.

 

At the Pyramid Gold-Silver Project near Reno, Nevada, which we hold under lease, a drilling programme was conducted following extensive surface sampling and trenching with the objective of testing continuity of mineralisation at depth. The results were disappointing and the decision was made to terminate any further exploration and impair the asset, ensuring that no unnecessary further costs are incurred and attention is re-focused.

 

We maintain our interest in the Storuman fluorspar development project in Sweden where the Company's mining concession application remains under government review and we hope for a positive decision in the coming reporting period. The recent exploitation concession awards to Beowulf Mining may point to a more balanced approach to natural resource development by the Swedish government. Fluorspar is on the European Union's current (2020) list of critical raw materials (CRM) and has featured on all such lists since 2011.

 

We continue to hold our pre-production and production royalties on the Kaaresselkä and Kiekerömaa gold projects in Finland which are being explored by Aurion Resources and an Aurion/B2B Gold joint venture company respectively. Areas contiguous to the Sirkka Shear Zone such as these are experiencing high levels of exploration activity and interest. Tertiary has been in contact with a number of mineral royalty companies regarding the potential sale of these assets, and expects to make contact with other such companies in the coming months.

 

Our activities during the period have been funded through existing cash resources and a share placing with joint broker Peterhouse Capital Limited that raised £600,000 before expenses.

 

The Net Current Assets of the Group at the period end were £597,257 including cash and cash equivalents of £620,626.

 

Now that the wet season in Zambia has ended and field operations have commenced, we anticipate increased news flow over the remainder of the financial year and look forward to advising shareholders of our progress.

 

Patrick B Cullen

Managing Director

25 May 2022

 

 

 



 

Consolidated Income Statement

for the six-months' period to 31 March 2022

 

 

 

 




 

Six months

to 31 March

2022

Unaudited

 

Six months

to 31 March

2021

Unaudited


Twelve months

 to 30 September

2021

Audited

 

£

 

£


£

 






Revenue

89,906


81,495


165,058

 

 





Administration costs

(305,933)


(243,851)


(486,171)

 

 





Pre-licence exploration costs/impairment costs

(26,807)


(48,449)


(72,725)

 

Impairment of deferred exploration asset

 

(361,379)


 

(12,885)


 

(13,179)

 

 





 

 





Operating loss

(604,213)


(223,690)


(407,017)

 

 






 





Interest receivable

20


27


54


 






 





Loss before income tax

(604,193)


(223,663)


(406,963)


 





Income tax

-


-


-


 





Loss for the period attributable to equity holders of the parent

 

(604,193)


 

(223,663)


 

(406,963)

 

 

 

 




Loss per share - basic and diluted (pence)

(Note 2)

(0.05)


(0.02)


(0.038)


 





 

 



 

Consolidated Statement of Comprehensive Income

for the six-months' period to 31 March 2022

 

 

 

 

 

Six months to 31 March

2022

Unaudited

Six months to

31 March

2021

Unaudited

Twelve months to

30 September

2021

Audited


£

£

£

 
Loss for the period

 

(223,663)

 

(406,963)

 
Items that could be reclassified subsequently
to the Income Statement:

 

 



Foreign exchange translation differences on foreign currency net investments in subsidiaries

 

11,229

 

(10,876)

 

(1,758)

 

11,229

(10,876)

(1,758)


 



Items that will not be reclassified to the Income Statement:
 

 



Changes in the fair value of equity investments

 

(23,053)

(6,587)

(5,489)


(23,053)

(6,587)

(5,489)

 

Total comprehensive loss for the period attributable to equity holders of the parent

 

 

(616,017)

 

 

(241,126)

 

 

(414,210)

 

 



 



 

Company Registration Number 03821411

Consolidated Statement of Financial Position

at 31 March 2022

 

 

 

 




 

As at

31 March

2022

Unaudited

 

As at

31 March

2021

Unaudited


As at

30 September

2021

Audited

 

£

 

£


£

Non-current assets






Intangible assets

624,920


627,631


754,110

Property, plant & equipment

3,071


2,346


3,953

Other investments

27,443


49,398


50,496

 

 





 

655,434


679,375


808,559

 

 





Current assets

 





Receivables

103,569


82,855


81,024

Cash and cash equivalents

620,626


743,497


472,733

 

 





 

724,195


826,352


553,757

 

 





Current liabilities

 





Trade and other payables

(119,784)


(50,181)


(76,850)

Reclamation liability

(7,154)


(14,951)


(15,994)

 

 





 
Net current assets

 

597,257


 

761,220


 

460,913

 

 





Net assets

1,252,691


1,440,595


1,269,472

 

 





Equity

 





Called up Ordinary Shares

153,626


118,332


118,332

Share premium account

12,101,760


11,567,054


11,567,054

Capital redemption reserve

2,644,061


2,644,061


2,644,061

Merger reserve

131,096


131,096


131,096

Share option reserve

99,835


78,088


80,048

Fair value reserve

(13,723)


8,232


9,330

Foreign currency reserve

334,945


314,598


323,716

Accumulated losses

(14,198,909)


(13,420,866)


(13,604,165)

 

 





Equity attributable to the owners of the parent

1,252,691


1,440,595


1,269,472

 

 





 

 

 

 


  Consolidated Statement of Changes in Equity

 


 

Ordinary

Share

Capital

 

Share

Premium

 Account

Capital redemption reserve

 

 

Merger

Reserve

 

Share

Warrant

Reserve

 

Fair

Value

Reserve

 

Foreign

Currency

Reserve

 

 

Accumulated

Losses

 

 

 

Total


£

£

 

£

£

£

£

£

£

At 30 September 2020

83,164

10,740,972

2,644,061

131,096

71,897

14,819

325,474

(13,201,806)

809,677

Loss for the period

-

-

-

-

-

-

-

(223,663)

(223,663)

Change in fair value

-

-

-

-

-

(6,587)

-

-

(6,587)

Exchange differences

-

-

-

-

-

-

(10,876)

-

(10,876)

Total comprehensive loss for the period

-

-

-

-

-

(6,587)

(10,876)

(223,663)

(241,126)

Share issue

35,168

826,082

-

-

-

-

-

-

861,250

Share based payments expense

-

-

-

-

10,794

-

-

-

10,794

Transfer of expired warrants

-

-

-

-

(4,603)

-

-

4,603

-

At 31 March 2021

118,332

11,567,054

2,644,061

131,096

78,088

8,232

314,598

(13,420,866)

1,440,595

Loss for the period

-

-

-

-

-

-

-

(183,299)

(183,300)

Change in fair value

-

-

-

-

-

1,098

-

-

1,098

Exchange differences

-

-

-

-

-

-

9,118

-

9,118

Total comprehensive loss for the period

-

-

-

-

-

1,098

9,118

(183,299)

(173,084)

Share issue

-

-

-

-

-

-

-

-

-

Cancellation of deferred shares

-

-

-

-

-

-

-

-

-

Share based payments expense

-

-

-

-

1,960

-

-

-

1,960

Transfer of expired warrants

-

-

-

-

-

-

-

-

-

At 30 September 2021

118,332

11,567,054

2,644,061

131,096

80,048

9,330

323,716

(13,604,165)

1,269,472

Loss for the period

-

-

-

-

-

-

-

(604,193)

(604,193)

Change in fair value

-

-

-

-

-

(23,053)

-

-

(23,053)

Exchange differences

-

-

-

-

-

-

11,229

-

11,229

Total comprehensive loss for the period

-

-

-

-

-

(23,053)

11,229

(604,193)

(616,017)

Share issue

35,294

534,706

-

-

-

-

-

-

570,000

Share based payments expense

-

-

-

-

29,236

-

-

-

29,236

Transfer of expired warrants

-

-

-

-

(9,449)

-

-

9,449

-

At 31 March 2022

153,626

12,101,760

2,644,061

131,096

99,835

(13,723)

334,945

(14,198,909)

1,252,691

 

 

 


Consolidated Statement of Cash Flows

for the six-months' period to 31 March 2022

 

 

 

 




 

Six months

to 31 March

2022

Unaudited

 

Six months

to 31 March

2021

Unaudited


Twelve months

to 30 September

2021

Audited

 

£

 

£


£

Operating activity






 

 





Total loss after tax excluding interest received

(604,213)


(223,690)


(407,017)

Depreciation charge

869


1,023


1,691

Share based payment charge

29,237


10,794


12,754

Impairment of deferred exploration asset

361,379


12,885


13,179

Reclamation provision

(8,840)


14,951


-

(Increase)/decrease in receivables

(22,545)


(11,160)


(9,328)

Increase/(decrease) in payables

42,934


(16,007)


32,936


 






 




Net cash outflow from operating activity

(201,179)


(211,204)


(355,785)


 




Investing activity

 





 




Interest received

20


27


54

Exploration and development expenditures

(222,876)


(112,494)


(235,051)

Purchase of property, plant & equipment

(245)


-


(2,276)


 






 





Net cash (outflow)/inflow from investing activity

(223,101)


(112,467)


(237,273)

 

 




Financing activity

 





 




Issue of share capital (net of expenses)

570,000


441,250


861,251

Share subscription loan

-


-


(420,000)


 





 




Net cash inflow from financing activity

570,000


441,250


441,251


 




Net (decrease)/increase in cash and cash

equivalents

 

145,720


 

117,579


(151,807)


 




Cash and cash equivalents at start of period

472,733


622,859


622,859

Exchange differences

2,173


3,059


1,684


 




 

Cash and cash equivalents at end of period

 

620,626


 

743,497


472,733

 




 

 

 

 

 

 

 

 

 

 

 



 

 

 

Notes to the Interim Statement

 

1.  Basis of preparation

 

The consolidated interim financial information has been prepared in accordance with the accounting policies that are expected to be adopted in the Group's full financial statements for the year ending 30 September 2022 which are not expected to be significantly different to those set out in Note 1 of the Group's audited financial statements for the year ended 30 September 2021. These are based on the recognition and measurement requirements of applicable law and International Accounting Standards in conformity with the Companies Act 2006. The financial information has not been prepared (and is not required to be prepared) in accordance with IAS 34. The accounting policies have been applied consistently throughout the Group for the purposes of preparation of this financial information.

 

The financial information in this statement relating to the six-month period ended 31 March 2022 and the six-month period ended 31 March 2021 has neither been audited nor reviewed by the Independent Auditor, pursuant to guidance issued by the Auditing Practices Board. The financial information presented for the year ended 30 September 2021 does not constitute the full statutory accounts for that period.  The Annual Report and Financial Statements for the year ended 30 September 2021 have been filed with the Registrar of Companies. The Independent Auditor's Report on the Annual Report and Financial Statement for the year ended 30 September 2021 was unqualified, although it did draw attention to matters by way of emphasis in relation to going concern, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

 

The directors prepare annual budgets and cash flow projections for a 15 months' period. These projections include the proceeds of future fundraising necessary within the period to meet the Company's and the Group's planned discretionary project expenditures and to maintain the Company and the Group as a going concern. Although the Company has been successful in raising finance in the past, there is no assurance that it will obtain adequate finance in the future. These factors represent a material uncertainty related to events or conditions which may cast significant doubt on the entity's ability to continue as a going concern and, therefore, that it may be unable to realise its assets and discharge its liabilities in the normal course of business. However, the directors have a reasonable expectation that they will secure additional funding when required to continue meeting corporate overheads and exploration costs for the foreseeable future and therefore believe that the going concern basis is appropriate for the preparation of the financial statements.

 

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.

 

 

 



 

Six months

to 31 March

2022

Unaudited

Six months

to 31 March

2021

Unaudited

Twelve months

to 30 September

2021

Audited

 

 



Loss for the period (£)

(604,193)

(223,663)

(406,963)

Weighted average shares in issue (No.)

1,320,361,876

945,938,531

1,064,955,671

Basic and diluted loss per share (pence)

(0.05)

(0.02)

(0.038)

 

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.

 

 



 

 

3.  Share capital

 

During the six-month period to 31 March 2022 the following share issues took place:

 

An issue of 294,117,647 Ordinary Shares of 0.01p at 0.17p per share, by way of a share placing, for a total consideration of £500,000 before expenses (19 January 2022).

 

An issue of 58,823,529 Ordinary Shares of 0.01p at 0.17p per share, by way of a broker option, for a total consideration of £100,000 before expenses (21 January 2022).

 

 

 

 

 

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