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Tertiary Minerals #TYM raises £600,000 in placing & terminates Bergen Agreement

Tertiary Minerals plc (“Tertiary” or “the Company”) (AIM:TYM) is pleased to announce the entry into a share subscription deed (the “Subscription Deed”) with Precious Metals Capital Group LLC (the “Subscriber”), a U.S. based institutional specialist investor.

 

Highlights:

  • Tertiary Minerals plc raised £600,000 in a placing to Precious Metals Capital Group LLC, an institutional investor
  • Termination of funding agreement with Bergen

Pursuant to the Subscription Deed, in the coming days, the Subscriber will make an investment of £600,000, by way of a subscription for Company shares. Further information regarding the placing is set out below.

The proceeds from the subscription will be used by the Company to fund ongoing exploration once the recently announced exploration programmes at the Pyramid Gold and Paymaster Polymetallic Projects in Nevada are completed and to ensure that the Company has sufficient working capital for the foreseeable duration of the Covid-19 pandemic.

The placing will be made by the Subscriber by way of prepayment for Company shares to be issued, at the Subscriber’s request, within 24 months of the date of the placing. A further investment may be made by the Subscriber within 12 months after the date of this placement, but only with the consent of the Company, in the amount not exceeding an additional £600,000, by way of prepayment for shares to be issued, at the Subscriber’s request, within 24 months following the date of such subsequent placement.

The number of shares to be issued as a result of the placing will be determined by dividing the subscription amount (or that part of the subscription amount in relation to which the shares are being issued) by 95% of the prevailing price, the latter being the average of the five daily volume-weighted average prices during a specified period immediately prior to the date of issuance of the shares.

Alternatively, the Subscriber may choose for the subscription price to be equal to £0.0042, being an approximately 133% premium to the Company’s share price on 1 April 2020. 

Tertiary’s Managing Director Richard Clemmey commented:  

“The recent impact of COVID-19 on the markets and investment outlook has been substantial. We are therefore very pleased to have attracted further interest from a specialist US institutional investor where the funding will further strengthen the company’s cash position and provide additional working capital during these uncertain times as well as enable the Company to continue with the planned exploration on its Paymaster Polymetallic and Pyramid Gold Projects in Nevada.”

Termination of Agreement with Bergen

The Company also announces that the convertible securities issuance deed (the “Agreement”) between the Company and Bergen Global Opportunity Fund, LP (“Bergen”), dated 19 November 2019, the details of which were notified on 20 November 2019, has been terminated by the parties by mutual consent, effective as of 1 April 2020. Following the termination, no further funding will be provided to the Company under the Agreement.

Tertiary’s Managing Director Richard Clemmey further commented:

“Bergen Global Opportunity Fund proved a supportive, valuable and flexible funding partner for Tertiary, and I wish to thank the team at Bergen for their support.” 

Related Party Transaction

The Subscriber is deemed a related party by virtue of its relationship with Bergen as defined by AIM Rule 13. Bergen has been a substantial shareholder of the Company within the last twelve months and as a result, the Subscription Deed constitutes a related party transaction.

The board, being Patrick Cheetham, Richard Clemmey and Donald McAlister, are considered to be independent Directors for the purposes of this transaction and, having consulted with the Company’s nominated adviser, consider the terms of the Subscription Deed to be fair and reasonable insofar as shareholders of the Company are concerned.

Total Voting Rights

Application will be made to the London Stock Exchange for any Shares issued and allotted under the Subscription Deed to be admitted to trading on AIM. Such Shares will only be issued to the extent that the Company has corporate authority to do so.

The Company has 733,836,092 Shares in issue with each Share carrying the right to one vote. There are no Shares currently held in treasury. The total number of voting rights in the Company is therefore 733,836,092 and this figure may be used by shareholders as the denominator for the calculations by which they determine if they are required to notify their interest in, or a change to their interest in, the Company under the Disclosure Rules and Transparency Rules.

About Tertiary Minerals plc

Tertiary Minerals plc (ticker symbol ‘TYM’) is an AIM-traded mineral exploration company building and developing a multi-commodity project portfolio – Industrial minerals, base and precious metals.

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

For more information please contact:

Tertiary Minerals plc:

Richard Clemmey, Managing Director

+44 (0) 1625 838 679        

Patrick Cheetham, Chairman

SP Angel Corporate Finance LLP

Nominated Adviser and Broker

Richard Morrison

+44 (0) 203 470 0470

Caroline Rowe

Peterhouse Capital Limited

Joint Broker

Lucy Williams

+ 44 (0) 207 469 0930

Duncan Vasey

 

Tertiary Minerals #TYM – Notice of Resignation of Managing Director

Tertiary Minerals plc, the AIM traded company building a multi-commodity project portfolio , wishes to advise that it has today received notice from Mr. Richard Clemmey of his resignation as Managing Director of the Company. 

Mr. Clemmey will continue in his position until 30 June 2020 to manage the upcoming drill programme on the Company’s exciting Pyramid Gold Project in Nevada, USA and to ensure an orderly transition of responsibilities. The Company will seek to make a replacement appointment in due course and the Executive Chairman will assume the role of Chief Executive as an interim measure, if so required.

Commenting today, the Executive Chairman, Mr. Patrick Cheetham, said; “It is with regret that the Board has accepted Ric’s resignation but understands his decision given that recent events on the Storuman project in Sweden have shifted the Group’s focus to its gold and other exploration and resource identification projects. We wish Ric every success in his new role and thank him for his contribution to the Company.”

Further information:

 

Enquiries

 

Tertiary Minerals plc

Patrick Cheetham, Executive Chairman 

 

 

 

+44 (0)1625 838 679 

SP Angel Corporate Finance LLP

Nominated Adviser & Broker

Richard Morrison/Caroline Rowe

 

 

+44 (0)203 470 0470

Peterhouse Capital Limited

Joint Broker

Lucy Williams/Duncan Vasey

 

+44 (0)207 469 0930

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement 

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

Tertiary Minerals #TYM – Grant of Warrants at 0.340 pence

Tertiary Minerals plc, the AIM traded company building a multi-commodity project portfolio announces that a s part of the remuneration of employees and directors on 27 February 2020  the Board of the Company granted a total of 8,100,000 warrants to subscribe for Ordinary Shares at 0.340 pence, being the closing mid-market price on the trading day prior to the issue of the Warrants (i.e. 26 February 2020).

 

Grantee

No. of Warrants

Warrant exercise price (pence per share)

Employees (4)

 

(Total of) 1,600,000

0.340 p

Managing Director

Mr Richard Clemmey

3,000,000

0.340 p

Non-Executive Director

Mr Donald McAlister

1,500,000

0.340 p

Executive Chairman

Mr Patrick Cheetham

2,000,000

0.340 p

 

Each warrant entitles the holder to subscribe for one ordinary share in the Company within 4 years from 27 February 2021.

Market Abuse Regulation

The notifications below, made in accordance with the requirements of the EU Market Abuse Regulation , provides further detail on the issue of ordinary shares to a director .

NOTIFICATION AND PUBLIC DISCLOSURE OF TRANSACTIONS BY PERSONS DISCHARGING MANAGERIAL RESPONSIBILITIES AND PERSONS CLOSELY ASSOCIATED WITH THEM.

 

.1 

Details of the person discharging managerial responsibilities/person closely associated

a)

Name:

Donald McAlister

2. 

Reason for the notification

a)

Position/status:

Non-Executive Director

b)

Initial notification/Amendment:

Initial notification

3. 

Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor

a)

Name:

Tertiary Minerals plc

b)

LEI:

213800OT9C6DQN9VO543

4. 

Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

a)

Description of the financial instrument, type of instrument:

Identification code:

Warrants, each warrant to subscribe for one ordinary share of 0.01p each


GB0008854563 (Ordinary Shares)

b)

Nature of the transaction:

Grant of warrants to subscribe for new ordinary shares

c)

Price(s) and volume(s):

 

Price(s)

Volume(s)

Exercise price of 0.340 p

1,500,000 warrants

 

d)

Aggregated information:

Aggregated volume:

Price:

Single transaction as in 4 c) above

Price(s)

Volume(s)

0.340 pence

1,500,000 warrants

 

e)

Date of the transaction:

27 February 2020

17:00 UTC

f)

Place of the transaction:

Outside a trading venue

 

1. 

Details of the person discharging managerial responsibilities/person closely associated

a)

Name: 

Judith Hayes

2. 

Reason for the notification

a)

Position/status:

Administration Manager

b)

Initial notification/Amendment:

Initial notification

3. 

Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor

a)

Name:

Tertiary Minerals plc

b)

LEI: 

213800OT9C6DQN9VO543

4. 

Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

a)

Description of the financial instrument, type of instrument:

Identification code:

Warrants, each warrant to subscribe for one ordinary share of 0.01p each

 GB0008854563 (Ordinary Shares)

b)

Nature of the transaction:

Grant of warrants to subscribe for new ordinary shares

c)

Price(s) and volume(s):

 

Price(s)

Volume(s)

Exercise Price of 0.340 pence

400,000 warrants

 

d)

Aggregated information:

Aggregated volume:

Price:

Single transaction as in 4 c) above

Price(s)

Volume(s)

Exercise price of 0.340 pence

400,000 warrants

 

e)

Date of the transaction:

27 February 2020

17:00 UTC

f)

Place of the transaction:

Outside a trading venue

 

1. 

Details of the person discharging managerial responsibilities/person closely associated

a)

Name: 

Sondra Pyrch

2. 

Reason for the notification

a)

Position/status:

Company Accountant

b)

Initial notification/Amendment:

Initial notification

3. 

Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor

a)

Name:

Tertiary Minerals plc

b)

LEI: 

213800OT9C6DQN9VO543

4. 

Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

a)

Description of the financial instrument, type of instrument:

Identification code:

Warrants, each warrant to subscribe for one ordinary share of 0.01p each

 GB0008854563 (Ordinary Shares)

b)

Nature of the transaction:

Grant of warrants to subscribe for new ordinary shares

c)

Price(s) and volume(s):

 

Price(s)

Volume(s)

Exercise Price of 0.340 pence

400,000 warrants

 

d)

Aggregated information:

Aggregated volume:

Price:

Single transaction as in 4 c) above

Price(s)

Volume(s)

Exercise price of 0.340 pence

400,000 warrants

 

e)

Date of the transaction:

27 February 2020

17:00 UTC

f)

Place of the transaction:

Outside a trading venue

 

1. 

Details of the person discharging managerial responsibilities/person closely associated

a)

Name: 

Jaelithe Talboom

2. 

Reason for the notification

a)

Position/status:

Business Assistant

b)

Initial notification/Amendment:

Initial notification

3. 

Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor

a)

Name:

Tertiary Minerals plc

b)

LEI: 

213800OT9C6DQN9VO543

4. 

Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

a)

Description of the financial instrument, type of instrument:

Identification code:

Warrants, each warrant to subscribe for one ordinary share of 0.01p each

 GB0008854563 (Ordinary Shares)

b)

Nature of the transaction:

Grant of warrants to subscribe for new ordinary shares

c)

Price(s) and volume(s):

 

Price(s)

Volume(s)

Exercise Price of 0.340 pence

400,000 warrants

 

d)

Aggregated information:

Aggregated volume:

Price:

Single transaction as in 4 c) above

Price(s)

Volume(s)

Exercise price of 0.340 pence

400,000 warrants

 

e)

Date of the transaction:

27 February 2020

17:00 UTC

f)

Place of the transaction:

Outside a trading venue

 

1. 

Details of the person discharging managerial responsibilities/person closely associated

a)

Name: 

Joel Cheetham

2. 

Reason for the notification

a)

Position/status:

Data Analyst

b)

Initial notification/Amendment:

Initial notification

3. 

Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor

a)

Name:

Tertiary Minerals plc

b)

LEI: 

213800OT9C6DQN9VO543

4. 

Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

a)

Description of the financial instrument, type of instrument:

Identification code:

Warrants, each warrant to subscribe for one ordinary share of 0.01p each

 GB0008854563 (Ordinary Shares)

b)

Nature of the transaction:

Grant of warrants to subscribe for new ordinary shares

c)

Price(s) and volume(s):

 

Price(s)

Volume(s)

Exercise Price of 0.340 pence

400,000 warrants

 

d)

Aggregated information:

Aggregated volume:

Price:

Single transaction as in 4 c) above

Price(s)

Volume(s)

Exercise price of 0.340 pence

400,000 warrants

 

e)

Date of the transaction:

27 February 2020

17:00 UTC

f)

Place of the transaction:

Outside a trading venue

 

 

1. 

Details of the person discharging managerial responsibilities/person closely associated

a)

Name:

Richard Clemmey

2. 

Reason for the notification

a)

Position/status:

Managing Director

b)

Initial notification/Amendment:

Initial notification

3. 

Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor

a)

Name:

Tertiary Minerals plc

b)

LEI:

213800OT9C6DQN9VO543

4. 

Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

a)

Description of the financial instrument, type of instrument:

Identification code:

Warrants, each warrant to subscribe for one ordinary share of 0.01p each


GB0008854563 (Ordinary Shares)

b)

Nature of the transaction:

Grant of warrants to subscribe for new ordinary shares

c)

Price(s) and volume(s):

 

Price(s)

Volume(s)

Exercise price of 0.340 pence

3,000,000 warrants

 

d)

Aggregated information:

Aggregated volume:

Price:

Single transaction as in 4 c) above

Price(s)

Volume(s)

Exercise price of 0.340 pence

3,000,000 warrants

 

e)

Date of the transaction:

27 February 2020

17:00 UTC

f)

Place of the transaction:

Outside a trading venue

 

1. 

Details of the person discharging managerial responsibilities/person closely associated

a)

Name: 

Patrick Cheetham

2. 

Reason for the notification

a)

Position/status:

Executive Chairman

b)

Initial notification/Amendment:

Initial notification

3. 

Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor

a)

Name:

Tertiary Minerals plc

b)

LEI: 

213800OT9C6DQN9VO543

4. 

Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

a)

Description of the financial instrument, type of instrument:

Identification code:

Warrants, each warrant to subscribe for one ordinary share of 0.01p each

 GB0008854563 (Ordinary Shares)

b)

Nature of the transaction:

Grant of warrants to subscribe for new ordinary shares

c)

Price(s) and volume(s):

 

Price(s)

Volume(s)

Exercise Price of 0.340 pence

2,000,000 warrants

 

d)

Aggregated information:

Aggregated volume:

Price:

Single transaction as in 4 c) above

Price(s)

Volume(s)

Exercise price of 0.340 pence

2,000,000 warrants

 

e)

Date of the transaction:

27 February 2020

17:00 UTC

f)

Place of the transaction:

Outside a trading venue

ENQUIRIES

Tertiary Minerals plc

Richard Clemmey, Managing Director

Patrick Cheetham, Executive Chairman

 

Tel: +44 (0)1625 838 679

S P Angel Corporate Finance LLP

Nominated Adviser & Joint Broker

Richard Morrison/Caroline Rowe

 

Tel: +44 (0)203 470 0470

Peterhouse Capital Limited

Joint Broker

Lucy Williams/Duncan Vasey

 

Tel: +44 (0)207 469 09

Tertiary Minerals #TYM – Audited Results for the year to 30 September 2019

The Board of Tertiary Minerals plc is pleased to announce audited results for the year ended 30 September 2019.

OPERATIONAL HIGHLIGHTS FOR THE 12 MONTHS ENDING 30 SEPTEMBER 2019:

In line with the Company’s strategy to build a new multi-commodity project portfolio to enable the Company to reduce its future geographical, technical, permitting and commodity risk exposure and provide long-term shareholder value, two new exploration projects have been acquired in the period:

Pyramid Project

Ø Geological analogies with high-grade multi-million ounce Fire Creek & Midas Gold Mines

Ø 20-year lease secured over group of 9 patented claims with option to purchase (subject to underlying royalties)

Ø Additional 25 mining claims staked to cover additional targets along strike

Ø Limited historical exploration (1989-90) has defined priority epithermal vein drill target:

· Drill hole PYR 9 – intersected visible gold and assayed 1.52m grading 17.8 g/t Au from 94.5m down hole

· PYR 9 ended in 1.52m grading 2.6 g/t Au at 115.8m depth

Ø PYR 9 was only drill hole to effectively test a cohesive 750m long open-ended gold-mercury-arsenic soil geochemical anomaly

Ø Claims contain a number of untested epithermal veins and stockwork target zones – 43 widespread surface samples assayed up to 7.27 g/t Au and averaged 1.3 g/t Au

Ø The State of Nevada:

· 5th largest gold producer in world

· 5.58 M oz of gold produced in 2018

· Ranked #1 most desirable mining jurisdiction in the world by The Fraser Institute

Ø The Company is currently planning an initial drilling programme; drill contractor selected to start as soon as possible.

 

Paymaster Polymetallic Project

Ø The Company staked claim to the Paymaster zinc-copper-silver-cobalt-tellurium prospect in Nevada, USA

Ø Grab samples assay up to 21% zinc (Zn), 6.5% lead (Pb), 3.3% copper (Cu) and 253g/t silver (Ag)

Ø Mineralisation intermittently exposed and sampled over 1.7km strike length

Ø Samples also contain high levels of high-tech metals tellurium and cobalt (Co)

Ø Successful soil sampling programme completed:

· 165 soil samples

· Significant elevated levels of Ag, Cu, Zn, Co and Pb over a strike length of over 2,000 metres, maximum values:

Ag: 17.5 ppm; Cu: 896 ppm; Zn: 872 ppm; Co: 33 ppm; Pb: 2251 ppm

A further two zones of zinc-silver mineralisation have also been identified in the field:

Ø Valley Prospect

· New thick skarn zone observed in the field: Approximately 350m long and up to 8m thick

· Rock sample taken from historic shaft spoil assayed 7.5% zinc, 4.3% lead and 180 g/t silver

Ø East Slope Prospect

· 650m long zinc soil anomaly (100-250 ppm Zinc) surrounding previously sampled outcrop of zinc-silver-cobalt bearing skarn mineralisation, including 175m long 250-500 ppm zinc soil anomaly

· Previous rock sample assays up to 20.9% zinc, 0.11% cobalt and 198 ppm silver within the prospect  

 

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

 

For more information please contact:

Tertiary Minerals plc:

Richard Clemmey, Managing Director

+44 (0) 1625 838 679

Patrick Cheetham, Chairman

 

SP Angel Corporate Finance LLP

Nominated Adviser and Broker

Richard Morrison

+44 (0) 203 470 0470

Caroline Rowe

 

 

Chairman’s Statement

I am pleased to present the Company’s Annual Report and Financial Statements for the year ended 30 September 2019.

 

In my interim report in May 2019, I spoke of our disappointment in the decision of the Swedish Mining Inspectorate to overturn their 2016 grant of our mining concession for the Storuman Fluorspar Project and our submission of an appeal to the Swedish Government. The Mining Inspectorate’s decision was made on the basis that our proposed mine infrastructure and reindeer herding in the area could not coexist although their decision states that the economic aspects point in favour of granting the exploitation concession, that a permit regarding Natura 2000-area is unnecessary, that fluorspar is included in the EU list of critical raw materials and that a mining establishment would mean positive socio-economic benefit for the municipality of Storuman. Our appeal contends that the Mining Inspectorate did not adequately consider the extensive mitigation measures proposed for the local reindeer herding activities.

 

The Government has not yet decided on the appeal and, frustratingly, will not commit to a decision timeframe. Many new mining projects in Sweden are similarly affected and lobbying of the Government by other mining companies has not resulted in a change in the Government’s current position towards mining projects.

 

Financial constraints during the year have limited our ability to fund activities on other fluorspar projects and so only limited work has taken place on the Company’s large MB Fluorspar Project in Nevada. However, testwork is ongoing to address the metallurgical complexity that characterises the near surface mineralisation that would be mined in the early years of the Company’s preliminary mine plan. When finances allow we intend to progress the economic scoping study for development of the project. This may include further drilling of conceptual higher-grade targets in the northern part of the project. No work was carried out at the Lassedalen Fluorspar Project in Norway.

 

As a Board we have faced some difficult decisions in 2019 as our fluorspar projects have not sustained the value they once added to the Company and our efforts to acquire a more advanced project are limited by our size and available financial resources. Consequently, the Board initiated a parallel back-to-its-roots strategy of gold and base metal exploration with an emphasis on low cost value adding acquisition and exploration of gold and base metal projects in Nevada, USA. Nevada is ranked as the most desirable mining jurisdiction in the world by the Fraser Institute and in 2018 produced 5.58 million ounces of gold.

 

In line with this parallel strategy we are delighted to have acquired interests in two new projects in 2019 of which the most advanced is the Pyramid Gold Project in Nevada where we have leased a parcel of private land and staked additional mining claims. Limited exploration in the late 1980s defined a priority epithermal gold vein drill target defined by a single drill hole which intersected visible gold and assayed 1.52m grading 17.8 g/t Au from 94.5m down hole. The broader target and vein trend are defined by a cohesive 750m long open-ended gold-mercury-arsenic soil geochemical anomaly. We intend to drill this target as soon as possible.

 

We also staked claims to secure the Paymaster Project in Nevada where grab samples of skarn-type mineralisation have returned assays up to 21% zinc, 6.5% lead, 3.3% copper and 253 g/t silver and where mineralisation is intermittently exposed and sampled over 1.7km strike length. We conducted a soil sampling programme in 2019 and identified the Valley and East Slope zinc-silver prospects as key prospects for follow up exploration in 2020.

 

In 2019, the stock market for junior mining companies on the AIM market was the most challenging I have experienced in over 20 years. Brexit was undoubtedly a factor as were the trade tensions between the US and China. For Tertiary, these factors have been exacerbated by the negative news from Sweden for our key Storuman Project and the inertia of the Swedish Government in its decision making.

 

Whilst we raised a modest amount of money in early 2019 to fund our activities in the first half of the year, fundraising for Tertiary and its peers at near market prices has been nearly impossible in the second half of 2019 and we have not been prepared to accept opportunistic offers of heavily discounted share placings. Instead, following the end of the financial year, we accepted an offer of funding from Bergen Global Opportunity Fund, LP, a U.S. based institutional investment fund and raised an initial £232,000 before expenses through the issuance of zero-coupon convertible securities as part of a facility having a nominal value of up to £653,000.  We believe this will prove less dilutive to shareholders at this time.  The balance of this facility can be drawn down by agreement with Bergen. As has been the case at year-end for several previous years, the Company will need to raise further funds in the next 12 months to continue as a going concern.

 

Market commentators are anticipating a better year for small cap companies in 2020 and we look forward to reporting news from our exciting new gold and base metal projects in Nevada over this coming year.

 

Our Annual General Meeting for the year ended 30 September 2019 will be held in our offices in Macclesfield this year, on Thursday 19 March 2020.

 

 

 

 

Patrick Cheetham

Executive Chairman

18 February 2020

 

 

Strategic Report

Group Overview

 

Company’s Aims

· Increase shareholder value through the discovery and development of valuable mineral deposits.

· Reduce the Group’s geographical, technical, permitting and commodity risk exposure.

 

Company’s Strategy

· Build and explore a new multi-commodity project portfolio.

· Continue the evaluation of the Company’s fluorspar deposits.

· Operate only in stable, democratic and mining friendly jurisdictions.

 

Principal Activities

· The identification, acquisition, exploration and development of mineral deposits including precious metals , base metals and industrial minerals in Nevada, USA and northern Europe.

 

The head office is based in Macclesfield in the United Kingdom with core operating locations in Nevada, USA, Sweden and Norway.

 

Company’s Business Model

For exploration projects, the Group prefers to acquire 100% ownership of mineral assets at minimal cost. This either involves applying for exploration licences from the relevant authority or negotiating rights with existing project owners for initially low periodic payments that rise over time as confidence in the project value increases.

 

The Group currently operates with a low-cost base to maximise the funds that can be spent on exploration and development – value adding activities. The Company has five full-time employees including the Managing Director who work with and oversee carefully selected and experienced consultants and contractors. During the year the Board of Directors comprised one independent Non-Executive Director, the Managing Director and the Chairman.

Administration costs are reduced via an arrangement governed by a Management Services Agreement with Sunrise Resources plc, whereby Sunrise Resources pays a share of the cost of head office overheads. As at the 30 September 2019, Tertiary holds 2.71% of the issued ordinary share capital of Sunrise Resources plc.

 

The Company’s activities are financed by periodic capital raisings, through share placings or share related financial instruments. Access to capital through this method has continued to be very challenging and this is a limiting factor to the speed at which the Company can progress the development of its projects. When projects become more advanced, or as acquisition opportunities advance, the Board will seek to secure additional funding from a range of various sources, for example debt funding, pre-financing through off-take agreements and joint venture partnerships.

 

 

Review & Operating Performance

 

Pyramid Gold Project, Nevada, USA

 

As part of the Company’s strategy to build a new multi-commodity project portfolio, in May 2019, the Company secured exploration rights and an option to purchase a group of claims in the Pyramid Mining District of Nevada. The project is located 25 miles northwest of Reno and is readily accessible from State Highway 445 which crosses the northwest tip of the project.

 

Project Highlights

· 20-year lease secured over a group of 9 patented claims with options to purchase (subject to underlying royalties)

· Additional 25 mining claims staked to cover additional targets along strike

· Located in productive Walker Lane porphyry copper/epithermal gold belt

· Limited historical exploration (1989-90) has defined priority epithermal vein drill target:

Drill hole PYR 9 – intersected visible gold and assayed 1.52m grading 17.8 g/t Au from 94.5m down hole

PYR 9 ended in 1.52m grading 2.6 g/t Au at 115.8m depth

PYR 9 was only drill hole to effectively test a cohesive 750m long open-ended gold-mercury-arsenic soil geochemical anomaly

Claims contain a number of untested epithermal veins and stockwork target zones – 43 widespread surface samples assayed up to 7.27 g/t Au and averaged 1.3 g/t Au

 

Geology and Mineralisation

The Pyramid Mining District lies at the northwest end of the Walker Lane mineral belt, a major northwest trending structural deformation zone and a highly productive gold, silver and copper producing region which is host to numerous past and currently producing multi-million ounce epithermal gold deposits as well porphyry copper and porphyry molybdenum deposits.

 

Within the Pyramid Mining District, the Company’s Pyramid Project is underlain by a thick sequence of mid-late Tertiary age (23 Ma old) rhyolitic tuffs interpreted by the Nevada Bureau of Mines & Geology to have formed within an east-west elongated Caldera structure named the Perry Canyon Caldera.

 

The gold veins at Pyramid lie within the Perry Canyon Caldera and are interpreted from historical mapping and mineral exploration to lie on the margins of a large and deeply buried porphyry system in the southeast part of the district that is currently claimed by copper producer Asarco LLC (a division part of Groupo Mexico). At the higher erosional levels currently preserved at Pyramid such porphyry systems are prospective for high-sulphidation gold deposits (in more central areas) such as those found further south in the Walker Lane at the Goldfield Mining District (4 million ounces of past production at 1oz gold/ton) and low and intermediate-sulphidation epithermal deposits (of which there are many examples in the Walker Lane) in more peripheral areas where the Company’s claims are located. This pattern of mineralisation is similar to that of many large porphyry systems in the US, Peru and the Pacific Basin countries.

 

Past Mining and Exploration

In the main part of the Pyramid District, precious metals were mined from three moderately to steeply dipping, northwest-striking vein systems named after the prominent mines that occur along them – Ruth, Burrus, and Bluebird. The Company’s claim interests cover the Ruth vein system and a number of parallel vein systems and zones of alteration.  In addition to abundant quartz and pyrite, vein minerals in unoxidized ore from the Ruth vein system include barite, anglesite, galena, sphalerite, acanthite, gold and cassiterite.

 

The Pyramid Mining District was established in 1866 with only small-scale production reported. Modern exploration in the Pyramid district has focused primarily on the search for porphyry copper mineralisation with only limited exploration having been carried out for gold.

 

The only documented field exploration in the area of the Company’s claims was carried out by Battle Mountain Gold Mining (“Battle Mountain”) who leased the project from the current lessors, Golden Crescent Corporation, in the period 1988-89. Battle Mountain carried out surface sampling, soil sampling and drilled 10 shallow exploration holes for a total of 1,006m of drilling to depths between 43m and 140m.

 

Soil sampling was conducted on a 30m x 120m grid within a confined area 600m x 600m centred on Battle Mountain’s main target area, the Ruth Mine vein system and associated vein stockwork. This identified a series of gold-in-soil anomalies and eight of their ten drill holes were designed to test a broad gold anomaly located just northwest of the Ruth Mine. These intersected areas of anomalous gold up to 1.5m grading 1.64 grammes/tonne gold (g/t Au) in hole PYR 1 from 10.7m depth.

 

Battle Mountain’s two other drill holes were designed to test a parallel vein west of the Ruth vein system which correlates with a separate strong gold-arsenic-mercury soil anomaly, mercury and arsenic being strongly associated with gold in epithermal gold deposits. This soil anomaly is open ended and continues strongly to the northwest and southeast boundaries of the sampled area.

 

Drill hole PYR 9 on this western line intersected high-grade gold mineralisation and visible gold within a sample thickness of 1.52m grading 17.8 g/t Au from 94.5m downhole. A broad zone of low-grade mineralisation continued to the end of the hole at 115.8m where the last 1.52m sample graded 2.6 g/t Au.

 

PYR 10 targeted the same western line soil anomaly some 150m to the southwest but was interpreted to have been drilled in the wrong direction and made no significant gold intersections.

 

Battle Mountain did not carry out any follow up exploration.

 

Next Steps

The association of high-grade gold mineralisation in a previous drill hole associated with a strong and open-ended gold soil anomaly supported strongly by epithermal pathfinder elements mercury and arsenic presents a compelling drill target.

 

Similar narrow high-grade epithermal gold deposits in Nevada have hosted multi-million-ounce deposits such as the producing Midas Mine where the main veins produced more than 2.2 million ounces of gold and 26.9 million ounces of silver between 1998 and 2013.

 

Tertiary Minerals intends to follow up Battle Mountain’s drilling and soil sampling results with an initial drilling programme as soon as possible. Core drilling is planned as water, which can affect sample quality, was encountered in drilling both holes PYR 9 and 10.

 

The broader potential of the vein systems on the Project area are highlighted by the results of 43 surface chip samples taken by Battle Mountain from various outcropping veins and old mine workings within the Company’s Project area. These assayed up to 7.27 g/t Au and averaged 1.3 g/t Au.

 

This high prospectivity was confirmed by surface grab carried out by the Nevada Bureau of Mines & Geology during a regional assessment in 1999 when samples from the 1km long Ruth vein system averaged 1.3 g/t gold and 131 g/t silver. The highest gold content, 8 g/t Au, was from the Surefire Mine area which has never been drill tested.

 

 

Paymaster Polymetallic Project, Nevada, USA

 

In February 2019, the Company staked claim (19 claims) to the Paymaster zinc-copper-silver-cobalt-tellurium prospect. The project is located approximately 30km southwest of Tonopah in Nevada, USA, and covers an area of more than 390 acres.

 

Project Highlights

· Grab samples assay up to 21% zinc, 6.5% lead, 3.3% copper and 253 g/t silver 

· Mineralisation intermittently exposed and sampled over 1.7km strike length 

· Samples also contain high levels of high-tech metals tellurium and cobalt 

 

Geology, Mineralisation and Past Exploration

Zinc skarns are important not only as a source of zinc, lead, copper, silver and other associated metals but also as indicators of buried porphyry copper and molybdenum deposits. As a class of mineral deposit they include a number of world class zinc-silver deposits such as Antamina in Peru.

 

The Paymaster skarn mineralisation was originally prospected in the late 1950’s under US Defense Minerals Exploration Administration grant system. A government mining engineer recommended that the project be drill tested, but records suggest this did not take place and no production ensued.

 

In 1960, it was the subject of a brief publication by the US Geological Survey when zinc rich secondary clay minerals, sphalerite (zinc sulphide), galena (lead sulphide) and magnetite were identified in a pyroxene-garnet-quartz skarn mineral assemblage at the eastern end of the area now claimed by the Company.  The prospector scale workings were later described in a Geological Survey of Nevada publication in 1991 by an acknowledged world expert on skarn deposits, Lawrence (Larry) Meinert who, on the basis of his observations, concluded that the Paymaster skarn must be part of a much larger hydrothermal system.

 

Within the Company’s claim holdings, the skarn mineralisation has recently been traced westward over a total distance of 1.7km in a number of wide spaced and very shallow prospector pits. Seven grab samples of the skarn mineralisation exposed in or excavated from the pits average 10.1% zinc (maximum 20.9%), 1.5% lead (max. 6.5%) 134 g/t silver (max 253 g/t or 7.3 ounces/ton) and 0.68% copper (maximum 3.4%).

 

The skarn samples also contain up to 0.11% cobalt (average of 419ppm or 0.045%) and up to 58ppm tellurium (average 31ppm) and 782ppm bismuth (average 315ppm).

 

The mineralised skarn samples were collected largely from one stratigraphic horizon within Cambrian age limestone in contact with shale and 1 mile south of the limestone contact with the Cretaceous age Lone Mountain granite pluton.  Where sampled the skarn appears to be associated with cross cutting faults and the continuity along strike between exposures is currently unknown but pinch and swell is seen on a local scale.

 

Follow-up soil sampling programme was completed by the Company in 2019:

 

· 165 soil samples

· Significant elevated levels of Ag, Cu, Zn, Co and Pb over a strike length of over 2,000 metres, maximum values:

 

Ag: 17.5 ppm

Cu: 896 ppm

Zn: 872 ppm

Co: 33 ppm

Pb: 2251 ppm

 

A further two zones of zinc-silver mineralisation have also been identified in the field:

 

Valley Prospect

· New thick skarn zone observed in the field: Approximately 350m long and up to 8m thick

· Rock sample taken from historic shaft spoil assayed 7.5% zinc, 4.3% lead and 180 g/t silver

 

East Slope Prospect

· 650m long zinc soil anomaly (100-250 ppm Zinc) surrounding previously sampled outcrop of zinc-silver-cobalt bearing skarn mineralisation, including 175m long 250-500 ppm zinc soil anomaly

· Previous rock sample assays up to 20.9% zinc, 0.11% cobalt and 198 ppm silver within the prospect  

 

Next Steps

Follow up mapping, sampling, geophysics are now planned to identify future drilling targets.

 

 

Storuman Fluorspar Project, Sweden

 

The Company’s 100% owned Storuman Project is located in north central Sweden and is linked by the E12 highway to the port city of Mo-i-Rana in Norway and by road and rail to the port of Umeå on the Gulf of Bothnia.

 

 

JORC Compliant Mineral Resource

 

Classification

Million Tonnes (Mt)

Fluorspar (CaF2 %)

Indicated

25.0

10.28

Inferred

2.7

9.57

Total

27.7

10.21

 

Exploitation (Mine) Permit

The Company, together with its Swedish Lawyers, prepared and submitted, on 3 May 2019, a detailed appeal to the Swedish Government against the decision by the Swedish Mining Inspectorate to reject Tertiary’s Exploitation (Mine) Permit in its current form. The Company now awaits feedback from the Swedish Government in response to its appeal.

 

 

MB Fluorspar Project, Nevada, USA

 

The MB Property comprises 60 contiguous mining claims and is located 19km southwest of the town of Eureka in central Nevada, USA. The state of Nevada is widely and justifiably recognised to be one of the most attractive mining jurisdictions in the world. Eureka is located on US Highway 50 and the main railroad is located 165km to the north of the deposit providing bulk freight distribution to the East and West of the USA. The USA, like Europe, is a key fluorspar market currently importing the majority of its fluorspar requirements. Rail access to the west coast provides access to Asian markets, which may be a target market in the future.

 

JORC Compliant Mineral Resource

 

Classification

Million Tonnes (Mt)

Fluorspar (CaF2 %)

Indicated

6.1

10.8

Inferred

80.3

10.7

Total

86.4

10.7

 

Metallurgical Testwork

Early metallurgical testwork completed at SGS Lakefield has indicated that the ore in certain areas of the deposit is metallurgically complex, presenting processing challenges, and therefore the Company has engaged the services of one of the world’s leading consultant fluorspar metallurgists to assist with the testwork. Progress has been slow during the period 2018/2019 due to lack of available funding. The Company has budgeted further testwork during 2020 subject to available funds.

 

Following successful completion of the metallurgical testwork, the Company will progress to modelling various production scenarios and optimisation of the transport method/cost from mine to the USA market and ports. Successful completion of these work programmes should enable the Company to work towards completion of a Scoping Study. Further work required for the completion of the Scoping Study may include an additional phase of drilling to target higher grade mineralisation, in line with the recommendations received from the appraisal of the MB deposit from world renowned economic geologist, Dr Richard Sillitoe.

 

Lassedalen Fluorspar Project, Norway

 

The Lassedalen Fluorspar Project is favourably located near Kongsberg, 80km to the south-west of Oslo in Norway. It is less than 1km from highway E134 and approximately 50km from the nearest Norwegian port. The Company views this resource as strategically important for the European market alongside its Storuman Project.

 

 

JORC Compliant Mineral Resource

 

Classification

Million Tonnes (Mt)

Fluorspar (CaF2 %)

Inferred

4.0

24.6

 

Given the commitments on its other projects and available funding, further exploration at the Lassedalen Project has been a lower priority in 2018/2019.

 

 

Strategic Relationship with Possehl Erzkontor GmbH & Co. KG

 

Further to the signing of a MOU in 2017 with leading global commodities trading group, Possehl Erzkontor GmbH & Co. KG (“Possehl”), a wholly owned subsidiary of CREMER, Possehl continue to support the Company with the development of its projects.

 

 

Non-Core Projects

 

Kaaresselkä and Kiekerömaa Gold Projects, Finland

Following the successful sale of its two legacy gold assets, Kaaresselkä and Kiekerömaa in Finland, to TSX‑V listed Aurion Resources Ltd (“Aurion”), the Company retains a royalty interest in the projects. Aurion continue to be supported by Kinross Gold Corporation which currently holds a 9.9% interest in Aurion.

 

Rosendal Tantalum Project, Finland

The Exploration Licence for the project expired in October 2015 and the Company has applied for a renewal of the Licence. If the Company is unsuccessful in finding a suitable partner or buyer to progress the project, it is unlikely the renewal will be granted.

 

 

Health and Safety

The Group has maintained strict compliance with its Health and Safety Policy and is pleased to report there have been no lost timeaccidents during the year.

 

 

Environment

No Group company has had or been notified of any instance of non-compliance with environmental legislation in any of the countries in which they work. The Company has previously received a prestigious national award for its innovative reclamation and sustainable mineral development work on its MB Project in Nevada, USA.

 



 

 

Financial Review & Performance

 

The Group is currently in the earlier stages of the typical mining development cycle and so has no income other than cost recovery from the management contract with Sunrise Resources plc and a small amount of bank interest. Consequently, the Group is not expected to report profits until it is able to profitably develop, dispose of, or otherwise commercialise its exploration and development projects.

 

The Group reports a loss of £831,507 for the year (2018: £2,267,197) after administration costs of £502,788 (2018: £507,931) and after crediting interest receivable of £234 (2018: £142). The loss includes impairment of the Lassedalen Project of £442,917, expensed pre-licence and reconnaissance exploration costs of £75,778 (2018: £38,725). Administration costs include £8,021 (2018: £8,997) as non-cash costs for the value of certain share warrants held by employees as required by IFRS 2.

 

Revenue includes £189,742 (2018: £218,841) from the provision of m anagement, administration and office services provided to Sunrise Resources plc, to the benefit of both companies through efficient utilisation of services.

 

The financial statements show that, at 30 September 2019, the Group had net current assets of £21,499 (2018: £249,787). This represents the cash position after allowing for receivables and trade and other payables. These amounts are shown in the Consolidated and Company Statements of Financial Position and are also components of the Net Assets of the Group. Net assets also include various “intangible” assets of the Company. As the name suggests, these intangible assets are not cash assets but include this year’s and previous years’ accrued expenditure on minerals projects where that expenditure meets the criteria set out in Note 1(d) (accounting policies) to the Financial Statements. The intangible assets total £2,461,972 (2018: £2,670,386) and the breakdown by project is shown in Note 2 to the Financial Statements.

 

Expenditure which does not meet the criteria set out in Notes 1(d) and 1(n), such as pre-licence and reconnaissance costs, are expensed and add to the Company’s loss. The loss reported in any year can also include expenditure that was carried forward in previous reporting periods as an intangible asset but which the Board determines is “impaired” in the reporting period.

 

The extent to which expenditure is carried forward as intangible assets is a measure of the extent to which the value of the Company’s expenditure is preserved.

 

The intangible asset value of a project does not equate to the realisable or market value of a particular project which will, in the Directors’ opinion, be at least equal in value and often considerably higher. Hence the Company’s market capitalisation on AIM can be in excess of or less than the net asset value of the Group.

 

Details of intangible assets, property, plant and equipment and investments are set out in Notes 8, 9 and 10 of the financial statements.

 

The Financial Statements of a mineral exploration company can provide a moment in time snapshot of the financial health of the Company but do not provide a reliable guide to the performance of the Company or its Board and its long-term potential to create value.

 

Key Performance Indicators

The usual financial key performance indicators (“KPIs”) are neither applicable nor appropriate to measurement of the value creation of a company involved in mineral exploration and which currently has no turnover other than cost recovery. The directors consider that the detailed information in the Operating Review is the best guide to the Group’s progress and performance during the year.

 

The Company does seek to reduce overhead costs, where practicable, and is reporting reduced administration costs this financial year – current year £502,788 (2018: £507,931).

 

 

Fundraising

During the 2019 financial year the Company raised a total of £250,000, before expenses, as shown in Note 14 of the Financial Statements.

 

The directors prepare annual budgets and cash flow projections that extend beyond 12 months from the date of this report.  Given the Group’s cash position at the year-end (£50,617), these projections include the proceeds of future fundraising necessary within the next 12 months to meet the Group’s overheads and planned discretionary project expenditures and to maintain the Company and its subsidiaries as going concerns.

 

Impairment

 

A biannual review is carried out by the directors to assess whether there are any indications of impairment of the Group’s assets.

Investments in Group undertakings

The directors have reviewed the carrying value of the Company’s investments in shares of subsidiary undertakings totalling £224,890, by reference to estimated recoverable amounts. In turn, this requires an assessment of the recoverability of underlying exploration assets in those subsidiaries in accordance with IFRS 6.

Loans to Group undertakings

A review of the recoverability of loans to subsidiary undertakings, totalling £1,971,407 has been carried out. This indicated a potential credit loss arising in the year of £486,907 (2018: £4,681,523) relating to Tertiary Gold Limited. The assessment and provision arises from the fact that there has been an impairment of the underlying exploration assets held by Tertiary Gold Limited, leading to doubt over recoverability of the loan. The provision made against the receivable has reduced it to the value of the underlying development assets.

Risks & Uncertainties

The Board regularly reviews the risks to which the Group is exposed and ensures through its meetings and regular reporting that these risks are minimised as far as possible.

The principal risks and uncertainties facing the Group at this stage in its development and in the foreseeable future are detailed below together with risk mitigation strategies employed by the Board.

 

RISK

MITIGATION STRATEGIES

Exploration Risk

 

The Group’s business is mineral exploration and evaluation which are speculative activities. There is no certainty that the Group will be successful in the definition of economic mineral deposits, or that it will proceed to the development of any of its projects or otherwise realise their value.

 

The directors bring many years of combined mining and exploration experience and an established track record in mineral discovery.

The Company mainly targets advanced and drill ready exploration projects in order to avoid higher risk grass roots exploration.

Resource Risk

 

All mineral projects have risk associated with defined grade and continuity. Mineral Reserves are always subject to uncertainties in the underlying assumptions which include geological projections and metal/mineral assumptions.

 

Resources and reserves are estimated by independent specialists on behalf of the Group in accordance with accepted industry standards and codes. The Directors are realistic in the use of mineral price forecasts and impose rigorous practices in the QA/QC programmes that support its independent estimates.

Development Risk

 

Delays in permitting, or changes in permit legislation and/or regulation, financing and commissioning a project may result in delays to the Group meeting production targets or even the Company ultimately not receiving the required permits and in extreme cases loss of title.

 

 

 

In order to reduce development risk in future, the directors will ensure that its permit application processes and financing applications are robust and thorough.

Commodity Risk

 

Changes in commodity prices can affect the economic viability of mining projects and affect decisions on continuing exploration activity.

 

 

 

The Company consistently reviews commodity prices and trends for its key projects throughout the development cycle.

Mining and Processing Technical Risk

 

Notwithstanding the completion of metallurgical testwork, test mining and pilot studies indicating the technical viability of a mining operation, variations in mineralogy, mineral continuity, ground stability, groundwater conditions and other geological conditions may still render a mining and processing operation economically or technically non-viable.

 

From the earliest stages of exploration the directors look to use consultants and contractors who are leaders in their field and in future will seek to strengthen the executive and the Board with additional technical and financial skills as the Company transitions from exploration to production.

Environmental Risk

 

Exploration and development of a project can be adversely affected by environmental legislation and the unforeseen results of environmental studies carried out during evaluation of a project. Once a project is in production unforeseen events can give rise to environmental liabilities.

 

Mineral exploration carries a lower level of environmental liability than mining. The Company has adopted an Environmental Policy and the directors avoid the acquisition of projects where liability for legacy environmental issues might fall upon the Company.

Political Risk

 

All countries carry political risk that can lead to interruption of activity. Politically stable countries can have enhanced environmental and social permitting risks, risks of strikes and changes to taxation, whereas less developed countries can have, in addition, risks associated with changes to the legal framework, civil unrest and government expropriation of assets.

 

 

 

The Company’s strategy currently restricts its activities to stable, democratic and mining friendly jurisdictions.

 

The Company has adopted a strong Anti-corruption Policy and Code of Conduct and this is strictly enforced.

Partner Risk

 

Whilst there has been no past evidence of this, the Group can be adversely affected if joint venture partners are unable or unwilling to perform their obligations or fund their share of future developments.

 

 

The Company currently maintains control of certain key projects so that it can control the pace of exploration and reduce partner risk.

 

For projects where other parties are responsible for critical payments and expenditures the Company’s agreements legislate that such payments and expenditures are met.

 

Financing & Liquidity Risk

 

Liquidity risk is the risk that the Company will not be able to raise working capital for its ongoing activities. 

The Group’s goal is to finance its exploration and evaluation activities from future cash flows, but until that point is reached the Company is reliant on raising working capital from equity markets or from industry sources. There is no certainty such funds will be available when needed.

 

 

The Company maintains a good network of contacts in the capital markets that has historically met its financing requirements.

The Company’s low overheads and cost-effective exploration strategies help reduce its funding requirements. Nevertheless, further equity issues will be required over the next 12 months.

Financial Instruments

 

Details of risks associated with the Group’s Financial Instruments are given in Note 19 to the financial statements.

 

 

The directors are responsible for the Group’s systems of internal financial control. Although no systems of internal financial control can provide absolute assurance against material misstatement or loss, the Group’s systems are designed to provide reasonable assurance that problems are identified on a timely basis and dealt with appropriately.

In carrying out their responsibilities, the directors have put in place a framework of controls to ensure as far as possible that ongoing financial performance is monitored in a timely manner, that corrective action is taken and that risk is identified as early as practically possible, and they have reviewed the effectiveness of internal financial control.

The Board, subject to delegated authority, reviews capital investment, property sales and purchases, additional borrowing facilities, guarantees and insurance arrangements.

 

Forward-Looking Statements

This Annual Report 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.

This Strategic Report was approved by the Board on 18 February 2020 and signed on its behalf

Richard Clemmey

Managing Director

Tertiary Minerals #TYM – Director Dealing, Issue of Equity, Total Voting Rights and Warrants

Tertiary Minerals plc, the AIM traded company building a strategic position in the fluorspar sector announces that a non-executive director of the Company is receiving settlement of a portion of his outstanding fees in ordinary shares of 0.01 pence each in the Company (“Ordinary Shares”) calculated with reference to the closing mid-market price on the trading day prior to the issue of the Ordinary Shares.

On 21 February 2019, the Company resolved to issue a total of 418,578 Ordinary Shares to Donald McAlister for the six-month fee period ended 31 December 2018.

These Ordinary Shares were issued at a price of 0.325 pence per share, being the closing mid-market price on 20 February 2019. 

The following table shows the number of Ordinary Shares issued to Donald McAlister together with his total holdings following the issue of the Ordinary Shares: 

Director

Number of Ordinary Shares issued

Price of Ordinary Shares issued

Interest in total number of Ordinary Shares following Admission

% of Company’s issued share capital following Admission

Donald McAlister

418,578

0.325 pence

1,295,343

0.292%

Application has been made to the London Stock Exchange for 418,578 Ordinary Shares to be admitted to trading on AIM (“Admission”), and it is expected that Admission will occur on or around 28 February 2019. 

Total Voting Rights

In accordance with Financial Conduct Authority’s Disclosure and Transparency Rules (“DTRs”), following the issue and Admission, the total issued share capital of the Company with voting rights will be 443,075,665 ordinary shares.

The above figure of 443,075,665 ordinary shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the DTRs.

Grant of Warrants

As part of the remuneration of employees and directors the Company also announces that on 21 February 2019 the Board of the Company granted a total of 8.5 million warrants to subscribe for Ordinary Shares as follows:

Grantee

No. of Warrants

Warrant exercise price (pence per share)

Employees (4)

 

(Total of) 1,600,000

0.35

Company Secretary

Mr Colin Fitch

400,000

0.35

Managing Director

Mr Richard Clemmey

3,000,000

0.35

Non-Executive Director

Mr Donald McAlister

1,500,000

0.50

Executive Chairman

Mr Patrick Cheetham

2,000,000

0.50

Each warrant entitles the holder to subscribe for one ordinary share in the Company at their respective warrant exercise prices at any time within 4 years from 21 February 2020. 

Market Abuse Regulation

The notifications below, made in accordance with the requirements of the EU Market Abuse Regulation, provides further detail on the issue of ordinary shares to a director.

NOTIFICATION AND PUBLIC DISCLOSURE OF TRANSACTIONS BY PERSONS DISCHARGING MANAGERIAL RESPONSIBILITIES AND PERSONS CLOSELY ASSOCIATED WITH THEM.

1.     

Details of the person discharging managerial responsibilities/person closely associated

a)

Name:

Donald McAlister (1stsubmission)

2.     

Reason for the notification

a)

Position/status:

Non-Executive Director

b)

Initial notification/Amendment:

Initial notification

3.     

Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor

a)

Name:

Tertiary Minerals plc

b)

LEI:

213800OT9C6DQN9VO543

4.     

Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

a)

Description of the financial instrument, type of instrument:

Identification code:

Ordinary shares of 0.01p each

 
GB0008854563

b)

Nature of the transaction:

Issue of new ordinary shares in lieu of fees

c)

Price(s) and volume(s):

 

Price(s)

Volume(s)

0.325 pence

418,578

 

d)

Aggregated information:

Aggregated volume:

Price:

Single transaction as in 4 c) above

Price(s)

Volume(s)

0.325 pence

418,578

 

e)

Date of the transaction:

21 February 2019

14:00 UTC

f)

Place of the transaction:

Outside a trading venue

 

1.     

Details of the person discharging managerial responsibilities/person closely associated

a)

Name:

Donald McAlister (2nd submission)

2.     

Reason for the notification

a)

Position/status:

Non-Executive Director

b)

Initial notification/Amendment:

Initial notification

3.     

Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor

a)

Name:

Tertiary Minerals plc

b)

LEI:

213800OT9C6DQN9VO543

4.     

Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

a)

Description of the financial instrument, type of instrument:

Identification code:

Warrants, each warrant to subscribe for one ordinary share of 0.01p each

 
GB0008854563 (Ordinary Shares)

b)

Nature of the transaction:

Grant of warrants to subscribe for new ordinary shares

c)

Price(s) and volume(s):

 

Price(s)

Volume(s)

Exercise price of 0.5 pence

1,500,000 warrants

 

d)

Aggregated information:

Aggregated volume:

Price:

Single transaction as in 4 c) above

Price(s)

Volume(s)

0.5 pence

1,500,000 warrants

 

e)

Date of the transaction:

21 February 2019

16:00 UTC

f)

Place of the transaction:

Outside a trading venue

 

1.     

Details of the person discharging managerial responsibilities/person closely associated

a)

Name: 

Judith Hayes

2.     

Reason for the notification

a)

Position/status:

Administration Manager

b)

Initial notification/Amendment:

Initial notification

3.     

Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor

a)

Name:

Tertiary Minerals plc

b)

LEI:  

213800OT9C6DQN9VO543

4.     

Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

a)

Description of the financial instrument, type of instrument:

Identification code:

Warrants, each warrant to subscribe for one ordinary share of 0.01p each

 GB0008854563 (Ordinary Shares)

b)

Nature of the transaction:

Grant of warrants to subscribe for new ordinary shares

c)

Price(s) and volume(s):

 

Price(s)

Volume(s)

Exercise Price of 0.35 pence

400,000 warrants

 

d)

Aggregated information:

Aggregated volume:

Price:

Single transaction as in 4 c) above

Price(s)

Volume(s)

Exercise price of 0.35 pence

400,000 warrants

 

e)

Date of the transaction:

21 February 2019

16:00 UTC

f)

Place of the transaction:

Outside a trading venue

 

1.     

Details of the person discharging managerial responsibilities/person closely associated

a)

Name: 

Celia Jill Barnard-Blom

2.     

Reason for the notification

a)

Position/status:

Company Accountant

b)

Initial notification/Amendment:

Initial notification

3.     

Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor

a)

Name:

Tertiary Minerals plc

b)

LEI:  

213800OT9C6DQN9VO543

4.     

Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

a)

Description of the financial instrument, type of instrument:

Identification code:

Warrants, each warrant to subscribe for one ordinary share of 0.01p each

 GB0008854563 (Ordinary Shares)

b)

Nature of the transaction:

Grant of warrants to subscribe for new ordinary shares

c)

Price(s) and volume(s):

 

Price(s)

Volume(s)

Exercise Price of 0.35 pence

400,000 warrants

 

d)

Aggregated information:

Aggregated volume:

Price:

Single transaction as in 4 c) above

Price(s)

Volume(s)

Exercise price of 0.35 pence

400,000 warrants

 

e)

Date of the transaction:

21 February 2019

16:00 UTC

f)

Place of the transaction:

Outside a trading venue

 

1.     

Details of the person discharging managerial responsibilities/person closely associated

a)

Name: 

Jaelithe Talboom

2.     

Reason for the notification

a)

Position/status:

Business Assistant

b)

Initial notification/Amendment:

Initial notification

3.     

Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor

a)

Name:

Tertiary Minerals plc

b)

LEI:  

213800OT9C6DQN9VO543

4.     

Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

a)

Description of the financial instrument, type of instrument:

Identification code:

Warrants, each warrant to subscribe for one ordinary share of 0.01p each

 GB0008854563 (Ordinary Shares)

b)

Nature of the transaction:

Grant of warrants to subscribe for new ordinary shares

c)

Price(s) and volume(s):

 

Price(s)

Volume(s)

Exercise Price of 0.35 pence

400,000 warrants

 

d)

Aggregated information:

Aggregated volume:

Price:

Single transaction as in 4 c) above

Price(s)

Volume(s)

Exercise price of 0.35 pence

400,000 warrants

 

e)

Date of the transaction:

21 February 2019

16:00 UTC

f)

Place of the transaction:

Outside a trading venue

 

1.     

Details of the person discharging managerial responsibilities/person closely associated

a)

Name: 

Joel Cheetham

2.     

Reason for the notification

a)

Position/status:

Data Analyst

b)

Initial notification/Amendment:

Initial notification

3.     

Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor

a)

Name:

Tertiary Minerals plc

b)

LEI:  

213800OT9C6DQN9VO543

4.     

Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

a)

Description of the financial instrument, type of instrument:

Identification code:

Warrants, each warrant to subscribe for one ordinary share of 0.01p each

 GB0008854563 (Ordinary Shares)

b)

Nature of the transaction:

Grant of warrants to subscribe for new ordinary shares

c)

Price(s) and volume(s):

 

Price(s)

Volume(s)

Exercise Price of 0.35 pence

400,000 warrants

 

d)

Aggregated information:

Aggregated volume:

Price:

Single transaction as in 4 c) above

Price(s)

Volume(s)

Exercise price of 0.35 pence

400,000 warrants

 

e)

Date of the transaction:

21 February 2019

16:00 UTC

f)

Place of the transaction:

Outside a trading venue

 

1.     

Details of the person discharging managerial responsibilities/person closely associated

a)

Name: 

Colin Fitch

2.     

Reason for the notification

a)

Position/status:

Company Secretary

b)

Initial notification/Amendment:

Initial notification

3.     

Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor

a)

Name:

Tertiary Minerals plc

b)

LEI:  

213800OT9C6DQN9VO543

4.     

Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

a)

Description of the financial instrument, type of instrument:

Identification code:

Warrants, each warrant to subscribe for one ordinary share of 0.01p each

 GB0008854563 (Ordinary Shares)

b)

Nature of the transaction:

Grant of warrants to subscribe for new ordinary shares

c)

Price(s) and volume(s):

 

Price(s)

Volume(s)

Exercise Price of 0.35 pence

400,000 warrants

 

d)

Aggregated information:

Aggregated volume:

Price:

Single transaction as in 4 c) above

Price(s)

Volume(s)

Exercise price of 0.35 pence

400,000 warrants

 

e)

Date of the transaction:

21 February 2019

16:00 UTC

f)

Place of the transaction:

Outside a trading venue

 

1.     

Details of the person discharging managerial responsibilities/person closely associated

a)

Name:

Richard Clemmey

2.     

Reason for the notification

a)

Position/status:

Managing Director

b)

Initial notification/Amendment:

Initial notification

3.     

Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor

a)

Name:

Tertiary Minerals plc

b)

LEI:

213800OT9C6DQN9VO543

4.     

Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

a)

Description of the financial instrument, type of instrument:

Identification code:

Warrants, each warrant to subscribe for one ordinary share of 0.01p each

 
GB0008854563 (Ordinary Shares)

b)

Nature of the transaction:

Grant of warrants to subscribe for new ordinary shares

c)

Price(s) and volume(s):

 

Price(s)

Volume(s)

Exercise price of 0.35 pence

3,000,000 warrants

 

d)

Aggregated information:

Aggregated volume:

Price:

Single transaction as in 4 c) above

Price(s)

Volume(s)

Exercise price of 0.35 pence

3,000,000 warrants

 

e)

Date of the transaction:

21 February 2019

16:00 UTC

f)

Place of the transaction:

Outside a trading venue

 

1.     

Details of the person discharging managerial responsibilities/person closely associated

a)

Name: 

Patrick Cheetham

2.     

Reason for the notification

a)

Position/status:

Executive Chairman

b)

Initial notification/Amendment:

Initial notification

3.     

Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor

a)

Name:

Tertiary Minerals plc

b)

LEI:  

213800OT9C6DQN9VO543

4.     

Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

a)

Description of the financial instrument, type of instrument:

Identification code:

Warrants, each warrant to subscribe for one ordinary share of 0.01p each

 GB0008854563 (Ordinary Shares)

b)

Nature of the transaction:

Grant of warrants to subscribe for new ordinary shares

c)

Price(s) and volume(s):

 

Price(s)

Volume(s)

Exercise Price of 0.5 pence

2,000,000 warrants

 

d)

Aggregated information:

Aggregated volume:

Price:

Single transaction as in 4 c) above

Price(s)

Volume(s)

Exercise price of 0.5 pence

2,000,000 warrants

 

e)

Date of the transaction:

21 February 2019

16:00 UTC

f)

Place of the transaction:

Outside a trading venue

 

 

Enquiries

 

Tertiary Minerals plc

Patrick Cheetham, Executive Chairman

Richard Clemmey, Managing Director

 

 

 

 

+44 (0)1625 838 679           

SP Angel Corporate Finance LLP

Nominated Adviser & Joint Broker

Ewan Leggat /Lindsay Mair

+44 (0) 20 3470 0470

SVS Securities plc

Joint Broker

Elliot Hance

+44 (0)203 700 0093

 

Notes to Editors

Tertiary Minerals plc (ticker symbol ‘TYM’) is an AIM-traded mineral exploration and development company building a significant strategic position in the fluorspar sector. Fluorspar is an essential raw material in the chemical, steel and aluminium industries. Tertiary controls two significant Scandinavian projects (Storuman in Sweden and Lassedalen in Norway) and a large deposit of strategic significance in Nevada USA (MB Project).

Tertiary Minerals #TYM – David Whitehead

The Board and staff of Tertiary are deeply saddened to announce the death of Mr David Whitehead, a non-executive director of the Company. The Board wishes to extend its sympathy and condolences to David’s family at this very sad time.

Statement from the Chairman, Patrick Cheetham: “A larger-than-life character with a great intellect, wit and wisdom, David served the Company as a director for 15 years. During his time with us he made an invaluable contribution based on a long and successful career in the global mining industry where he rose to the highest levels of management. We will greatly miss him.”

Enquiries

Tertiary Minerals plc

Richard Clemmey, Managing Director

Patrick Cheetham, Executive Chairman

+44 (0) 1625 838 679

SP Angel Corporate Finance LLP

Nominated Adviser & Joint Broker

Ewan Leggat/Lindsay Mair

+44 (0) 20 3470 0470

Beaufort Securities Ltd

Joint Broker

Elliot Hance

+44 (0)20 7382 8300

Notes to Editors

Tertiary Minerals plc (ticker symbol ‘TYM’) is an AIM-traded mineral exploration and development company building a significant strategic position in the fluorspar sector. Fluorspar is an essential raw material in the chemical, steel and aluminium industries. Tertiary controls two significant Scandinavian projects (Storuman in Sweden and Lassedalen in Norway) and a large deposit of strategic significance in Nevada, USA (MB Project).

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement

Tertiary Minerals (TYM) – Total voting rights

Tertiary Minerals plc (TYM), the AIM traded company building a strategic position in the fluorspar sector announces that in accordance with Financial Conduct Authority’s Disclosure and Transparency Rules, the total issued share capital of the Company with voting rights is 317,076,933 ordinary shares.

The above figure of 317,076,933 ordinary shares may be used by shareholders in the Company as the denominator for the calculations by which they will determine if they are required to notify their interest in, or a change in their interest in, the share capital of the Company under the DTR.

Enquiries

 

Tertiary Minerals plc

Patrick Cheetham, Executive Chairman 

Richard Clemmey, Managing Director

 

 

 

+44 (0)1625 838 679             

SP Angel Corporate Finance LLP

Nominated Adviser & Joint Broker

Ewan Leggat / Lindsay Mair

 

 

+44 (0)203 470 0470

Beaufort Securities Ltd

Joint Broker

Elliot Hance

 

 

+44 (0)207 382 8300

Brand Communications                          

Alan Green

 

 

+44 (0)7976 431608              

Notes to Editors 

Tertiary Minerals plc (TYM) is an AIM-traded mineral exploration and development company building a significant strategic position in the fluorspar sector. Fluorspar is an essential raw material in the chemical, steel and aluminium industries. Tertiary controls two significant Scandinavian projects (Storuman in Sweden and Lassedalen in Norway) and a large deposit of strategic significance in Nevada USA (MB Project).

Tertiary Minerals (TYM) – Proposed Subdivision of Share Capital and GM

Tertiary Minerals plc, the AIM traded company building a strategic position in the fluorspar sector, announces that a General Meeting will be held on Thursday 13 April 2017 at 9.00 a.m. at Silk Point, Queens Avenue, Macclesfield, Cheshire, SK10 2BB. The Company is calling the General Meeting to propose the subdivision of its Existing Ordinary Shares and accompanying proposed amendments to its Articles of Association. 

Proposed Subdivision of Ordinary Shares

The Company is not permitted by law to issue Ordinary Shares at an issue price which is below their nominal value, currently 1 pence per Ordinary Share. In order to enable the Company to issue shares in the future at an issue price which exceeds their nominal value the Company is proposing to complete a subdivision of the ordinary share capital of the Company. Each of the Existing Ordinary Shares will be subdivided into 1 New Ordinary Share of 0.01 pence each and 1 Deferred Share of 0.99 pence each.

The Division of Capital will not of itself affect the value of the shares held by shareholders. After the Division of Capital, there will be the same number of New Ordinary Shares in issue as there are Existing Ordinary Shares in issue and therefore shareholders will not be diluted unless a further equity fundraising is completed by the Company. 

The New Ordinary Shares will have the same rights as those currently accruing to the Existing Ordinary Shares in issue under the Articles of Association of the Company, including those relating to voting and entitlement to dividends. New share certificates for New Ordinary Shares will not be issued and the existing certificates will remain valid.

The Deferred Shares will have no significant rights attached to them and carry no right to vote or participate in distribution of surplus assets and will not be admitted to trading on the AIM market of the London Stock Exchange plc. The Deferred Shares will effectively carry no value.

Key text from the shareholder Circular and Notice of General Meeting follows in the appendix below and full details are now available, together with the related Form of Proxy, for download on the Company’s website at the following URL: http://www.tertiaryminerals.com/investor-media/aim-rule-26 under the Company Documents section.

This Circular and Notice of General Meeting will be posted to shareholders today.

Timetable of Principal Events 

Publication of Circular and Notice of General Meeting

Tuesday 28 March 2017

 

Latest time and date for receipt of Form of Proxy

9.00 a.m. Tuesday 11 April 2017

 

General Meeting

9.00 a.m. Thursday 13 April 2017

 

Record Date

6.00 p.m. Thursday 13 April 2017

 

Effective time of the share subdivision and New Ordinary Shares admitted to trading

8.00 a.m. Tuesday 18 April 2017

 

 

Enquiries

 

Tertiary Minerals plc

Richard Clemmey, Managing Director

Patrick Cheetham, Executive Chairman 

 

 

 

 

 

 

 

 

+44 (0) 1625 838 679            

SP Angel Corporate Finance LLP

Nominated Adviser & Joint Broker

Ewan Leggat/Lindsay Mair

+44 (0) 20 3470 0470

 

Beaufort Securities Ltd

Joint Broker

Elliot Hance

 

 

+44 (0)20 7382 8300

Notes to Editors

Tertiary Minerals plc (TYM) is an AIM-traded mineral exploration and development company building a significant strategic position in the fluorspar sector. Fluorspar is an essential raw material in the chemical, steel and aluminium industries. Tertiary controls two significant Scandinavian projects (Storuman in Sweden and Lassedalen in Norway) and a large deposit of strategic significance in Nevada, USA (MB Project)

Appendix – Key Text from the Shareholder Circular and Notice of General Meeting

Part I – Letter from the Chairman 

Dear Shareholder, 

Proposed subdivision of share capital of the Company and Notice of General Meeting 

1.     GENERAL MEETING

I am writing to you with details of a General Meeting which we are holding on Thursday 13 April 2017 at 9.00 a.m. at Silk Point, Queens Avenue, Macclesfield, Cheshire, SK10 2BB. The notice convening the General Meeting and the resolutions being proposed are set out at the end of this document. I would like to take this opportunity to explain to you the effect of the Resolutions, which the Board will be asking you to consider at the General Meeting.

2.     RESOLUTIONS TO BE PROPOSED

Resolutions 1 and 2 will be proposed as ordinary resolutions, requiring a simple majority (that is over 50%) of those voting in person or by proxy to vote in favour. 

Resolutions 3 and 4 will be proposed as special resolutions, requiring a majority of not less than 75% of those voting in person or by proxy to vote in favour. 

Resolution 1 – Division of Capital

The Company presently has 267,076,933 ordinary shares of 1 pence each in issue. The mid-market price of the Existing Ordinary Shares as at 24 March 2017 (being the latest practicable date prior to publication of this Circular) is 0.875p per Existing Ordinary Share.  As the Company is not permitted by law to issue shares at an issue price which is below their nominal value, it is unable, in the present climate, to raise money by way of a fresh issue of new ordinary shares of 1p each due to the fact that the market price of the Existing Ordinary Shares is below their nominal value. In order to enable the Company to issue shares in the future at an issue price which exceeds their nominal value, shareholder approval is being sought to complete a subdivision of the ordinary share capital of the Company. Each of the Existing Ordinary Shares will be subdivided into 1 New Ordinary Share and 1 Deferred Share.

The Deferred Shares will have no significant rights attached to them and carry no right to vote or participate in a distribution of surplus assets and will not be admitted to trading on the AIM market of the London Stock Exchange plc. The Deferred Shares will effectively carry no value.

The Division of Capital will not of itself affect the value of your shareholding. After the Division of Capital, there will be the same number of New Ordinary Shares in issue as there are Existing Ordinary Shares in issue and therefore your current shareholding will not be diluted unless a further equity fundraising is completed by the Company. 

The New Ordinary Shares will have the same rights as those currently accruing to the Existing Ordinary Shares in issue under the Articles of Association of the Company, including those relating to voting and entitlement to dividends. You will not be issued with a new share certificate for your New Ordinary Shares and the existing one will remain valid.

Holders of options or warrants over Existing Ordinary Shares will maintain the same rights as currently accruing to them and will not be issued with new warrant or option certificates.

The passing of Resolution 1 will be subject to and conditional on the passing of Resolution 4.

Resolution 2 – Authority to allot shares

It is proposed that the existing authority to allot share capital be replaced. Under the existing authority, passed at the Annual General Meeting held on 31 January 2017, the Directors are generally and unconditionally authorised to allot shares in the Company or grant rights to subscribe for or to convert any security into shares in the Company (“Rights”) up to an aggregate nominal amount of £3,000,000 (consisting of 300,000,000 Existing Ordinary Shares).

An ordinary resolution will be proposed to give the Directors new authority to allot share capital in the Company in accordance with section 551 of the Act. The authority will authorise the Directors to allot a reduced aggregate nominal amount of £30,000 (consisting of 300,000,000 New Ordinary Shares).

The reason why the Directors are proposing to replace the existing authority to allot share capital is to make sure the maximum potential level of dilution under the existing authorities does not increase following the Division of Capital. 

If given, this authority is in substitution for all previous authorities conferred on the Directors in accordance with section 551 of the Act and the authority will expire at the conclusion of the Annual General Meeting to be held in 2018.

The passing of Resolution 2 will be subject to and conditional on the passing of Resolutions 1 and 4.

Resolution 3 – Disapplication of statutory pre-emption rights

Resolution 3 is proposed pursuant to section 570 of the Act to give the Directors authority to issue as if section 561 of the 2006 Act (shareholders rights of pre-emption) did not apply to such issue and it proposed that, If passed, the authority granted by Resolution 3 will replace the existing authority granted at the Annual General Meeting held on 31 January 2017.

Resolution 3 will, if passed, authorise the Directors to allot shares or grant rights over shares of the Company where they propose to do so for cash and otherwise than to existing shareholders pro rata to their holdings, for example through a placement of shares.

The passing of Resolution 3 will be subject to and conditional on the passing of Resolutions 1, 2 and 4. 

If given, this authority is in substitution for all previous authorities conferred on the Directors in accordance with section 570 of the Act and the authority will expire at the conclusion of the Annual General Meeting to be held in 2018.

Resolution 4 – Amendments to the Articles

Resolution 4 will be proposed, subject to the passing of Resolution 1 to amend the Articles to create the new Deferred Shares and to set out the rights pertaining thereto relative to the New Ordinary Shares. 

The details of the amendment are set out in Resolution 4 in the Notice.

Resolution 4 is conditional upon the passing Resolution 1.

A copy of the New Articles will be available on request from the Company Secretary and will be available for inspection throughout the General Meeting.

3.     ACTION TO BE TAKEN

Shareholders will find enclosed with this document a Form of Proxy for the General Meeting. Whether or not you intend to be present at the meeting, you are invited to complete, sign and return the Form of Proxy in accordance with the instructions printed on it. The Form of Proxy should be returned to Capita Asset Services, PXS, 34 Beckenham Road, Beckenham, Kent BR3 4TU as soon as possible and, in any event, so as to arrive not later than 9.00 a.m. on Tuesday 11 April 2017. 

4.     RECOMMENDATION

At this stage in its development the Company relies on raising funds from the equity markets through the issue of shares and unless the proposed resolutions are put in place the Company will not be in a position to continue to raise funds to continue its activities. The Directors therefore recommend that you vote in favour of the Resolutions, as they intend to do in respect of their own shareholdings, which in aggregate amount to 14,301,032 Existing Ordinary Shares 5.35% of the entire issued Existing Ordinary Shares of the Company as at 24 March 2017 (being the latest practicable date prior to publication of this document).

Yours faithfully,

Patrick Cheetham

Executive Chairman

Part II – Notice of General Meeting

Notice is hereby given that a General Meeting of the Company will be held on Thursday 13 April 2017 at 9.00 a.m. at Silk Point, Queens Avenue, Macclesfield, Cheshire, SK10 2BB for the purpose of considering and, if thought fit, passing the following resolutions of which Resolutions 1 and 2 will be proposed as ordinary resolutions and Resolutions 3 and 4 will be proposed as special resolutions:

Ordinary Resolutions

Resolution 1

THAT, subject to the passing of Resolution 4, the issued share capital of the Company be subdivided such that each existing ordinary share of 1 pence in the capital of the Company (“Existing Ordinary Share”) be sub divided into one ordinary share of 0.01p (“New Ordinary Share”) and one Deferred Share of 0.99p (“Deferred Share”). 

Resolution 2

THAT, subject to the passing of Resolutions 1 and 4, and in accordance with section 551 of the Companies Act 2006 (“2006 Act”), the directors of the Company (“Directors”) be generally and unconditionally authorised to allot shares in the Company or grant rights to subscribe for or to convert any security into shares in the Company (“Rights”) up to an aggregate nominal amount of £30,000 (consisting of 300,000,000 New Ordinary Shares, resulting from the subdivision described in Resolution 1) provided that this authority shall, unless renewed, varied or revoked by the Company, expire at the end of the next Annual General Meeting of the Company to be held after the date on which this resolution is passed, save that the Company may, before such expiry, make an offer or agreement which would or might require shares to be allotted or rights to be granted and the Directors may allot shares or grant rights in pursuance of such offer or agreement notwithstanding that the authority conferred by this resolution has expired.

This authority is in substitution for all previous authorities conferred on the Directors in accordance with section 551 of the 2006 Act.

Special Resolutions

Resolution 3

THAT, subject to the passing of Resolutions 1, 2 and 4, the Directors be given the general power to allot equity securities (as defined by section 560 of the 2006 Act) for cash, either pursuant to the authority conferred by Resolution 2 or by way of a sale of treasury shares, as if section 561(1) of the 2006 Act did not apply to any such allotment, provided that this power shall be limited to: 

a)               the allotment of equity securities in connection with an offer by way of a rights issue to the holders of New Ordinary Shares in proportion (as nearly as may be practicable) to their respective holdings but subject to such exclusions or other arrangements as the Board may deem necessary or expedient in relation to treasury shares, fractional entitlements, record dates, legal or practical problems in or under the laws of any territory or the requirements of any regulatory body or stock exchange; and 

b)               the allotment (otherwise than pursuant to paragraph (a) above) of equity securities up to an aggregate nominal amount of £30,000 (consisting of 300,000,000 New Ordinary Shares of 0.01p each). 

The power granted by this resolution will expire on the conclusion of the Company’s next Annual General Meeting (unless renewed, varied or revoked by the Company prior to or on such date) save that the Company may, before such expiry, make offers or agreements which would or might require equity securities to be allotted after such expiry and the Directors may allot equity securities in pursuance of any such offer or agreement notwithstanding that the power conferred by this resolution has expired.

This resolution revokes and replaces all unexercised powers previously granted to the Directors to allot equity securities as if section 561(1) of the 2006 Act did not apply but without prejudice to any allotment of equity securities already made or agreed to be made pursuant to such authorities.

Resolution 4

THAT, subject to the passing of Resolution 1, the Articles of Association of the Company be amended by the insertion of the following provisions and the making of additional nonmaterial consequential amendments :

a)            by the insertion of the following new definitions:

“Deferred Shares” deferred shares of 0.99p each in the capital of the Company, having the rights set out in these Articles.

and

“Ordinary Shares” ordinary shares of 0.01p in the capital of the Company, having the rights set out in these Articles.

b)            by the insertion of the following new clauses 5, 6 and 7 immediately before the existing article 4 (Share rights and variation of rights) (and the renumbering of existing articles 4 to 45 accordingly): 

5. SHARE CAPITAL

The share capital of the Company is divided into Ordinary Shares and Deferred Shares, each having the rights set out in these Articles.

6. ORDINARY SHARES

6.1 The Ordinary Shares shall have attached to them the following rights and restrictions:

6.1.1 As regards income

The Ordinary Shares shall confer on the holders thereof the right to receive (in proportion to the number of such Ordinary Shares held by each of them) any dividend which the Company resolves to distribute.

6.1.2 As regards voting

6.1.2.1 On a show of hands at a general meeting every holder of Ordinary Shares who (being an individual) is present in person or by one or more proxies or (being a corporation) is present by one or more duly authorised representatives or proxies, shall have one vote; and

6.1.2.2 On a vote on a resolution on a poll taken at a general meeting every holder of Ordinary Shares shall have one vote for each Ordinary Share held.

6.1.3 As regards capital

Subject to any payment to be made to the holders of the Deferred Shares in accordance with Article  7.1.3 on a return of capital whether on liquidation or reduction of capital or otherwise the assets of the Company remaining after the payment of its liabilities shall be paid to the holders of the Ordinary Shares (in proportion to the number of such Ordinary Shares held by each of them).

7. DEFERRED SHARES

7.1 The Deferred Shares shall have attached to them the following rights and restrictions:

                        7.1.1 As regards income

The Deferred Shares shall not entitle the holders thereof to receive any dividend or other distribution;

7.1.2 As regards voting

The Deferred Shares shall not entitle the holders thereof to receive notice of or to attend or vote at any General Meeting of the Company;

7.1.3 As regards capital

On return of capital on a winding up the holders of the Deferred Shares shall only be entitled to receive the amount paid up on such shares after the holders of the Ordinary Shares have received the sum of 0.01p for each Ordinary Share held by them and shall have no other right to participate in the assets of the Company;

7.1.4 As regards transfer

The Company is authorised at any time:

7.1.4.1 to appoint a person to execute on behalf of the holders of the Deferred Shares a transfer thereof and/or an agreement to transfer the same, without making any payment to the holders thereof and persons so entitled, to such persons as the Company may determine as holder thereof beneficially entitled thereto; and

7.1.4.2 pending any such transfer not to issue certificates for the Deferred Shares;

7.1.5 As regards variation of rights

Neither:

7.1.5.1 the passing by the Company of any resolution for a reduction of capital involving the cancellation of the Deferred Shares without any repayment of capital in respect thereof, or a reduction of share premium account, or the obtaining by the Company or the making by the court of an order confirming any such reduction of capital or share premium account of the making effective of such order; nor 

7.1.5.2 the purchase by the Company in accordance with the provisions of the Acts of any of its own shares or other securities or the passing of a resolution to permit any such purchase, shall constitute a modification, variation or abrogation of the rights attaching to the Deferred Shares and accordingly the Deferred Shares may at any time be cancelled for no consideration by means of a reduction in capital or purchased by the Company, at its option at any time, in accordance with the provisions of the Acts, without making any payment to the holder thereof and without recourse to the holder, and to cancel the same without making any payment to or obtaining the sanction of the holder or holders thereof The Company may, at its option at any time, purchase all or any of the Deferred Shares then in issue, at a price not exceeding £1 in aggregate; 

7.1.6 As regards further issues

The rights conferred by the Deferred Shares shall not be varied or abrogated by the creation or issue of further shares ranking pari passu with or in priority to the Deferred Shares.”

(c)           To delete all references to the Companies Act 1985 make reference exclusively to the 2006 Act 

(d)           the existing definition of “Regulations” be replaced in its entirety with the following definition: 

“Regulations” the Uncertificated Securities Regulations 2001 (SI 2001 No. 2001/3755) (as amended from time to time) and “Regulation” shall refer to a specific provision of the Regulations.                                                                                                                                                                            

As a member of the Company you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at a general meeting of the Company. Please refer to the Notes on the reverse of the Form of Proxy.

 

Dated: 28 March 2017

By order of the Board

C D T Fitch

Company Secretary

Part III – Definitions

 

Act

Companies Act 2006 (as amended)

Articles

the articles of association of the Company as at the date of this document

Company or Tertiary

Tertiary Minerals plc, registered in England & Wales with company number 03821411

Deferred Shares

deferred shares of 0.99 pence each in the capital of Company resulting from the Division of Capital

Directors or Board

the directors of the Company from time to time

Division of Capital

the subdivision of the existing share capital of the Company such that each Existing Ordinary Share is sub divided into one New Ordinary Share and one Deferred Share

Existing Ordinary Shares

ordinary shares of 1 pence each in the capital of Company

General Meeting

the General Meeting of the Company to be held at 9.00 a.m. on 13 April 2017

New Articles

The proposed new Articles of Association to be adopted in the event that Resolution 4 set out in the notice is passed at the General Meeting

New Ordinary Shares

ordinary shares of 0.01 pence each in the capital of Company resulting from the Division of Capital

Notice

Record Date

the notice of General Meeting

6.00 p.m. Thursday 13 April 2017 – being the record date and time for the purpose of calculation

Resolutions

The resolutions to be proposed at the General Meeting as set out in the Notice

Tertiary Minerals (TYM) – Chairman Patrick Cheetham adds to his shareholding

Tertiary Minerals plc (TYM), the AIM traded company building a strategic position in the fluorspar sector, announces that it was notified on 22 March 2017 that Mr Patrick Cheetham, Executive Chairman, acquired 735,200 ordinary shares of 1p at prices between 0.895p and  0.92p per share, on 21 and 22 March 2017, as disclosed below.

Following these purchases, Mr Cheetham has an interest in 12,612,113 ordinary shares representing 4.72% of the Company’s issued share capital, including 2,843,625 held by K E Cheetham.  435,200 shares were purchased in Mr Cheetham’s SIPP and 300,000 in his ISA.

The notification below, made in accordance with the requirements of the EU Market Abuse Regulation, provides further details on the acquisition of shares by Mr Cheetham.

NOTIFICATION AND PUBLIC DISCLOSURE OF TRANSACTIONS BY PERSONS DISCHARGING MANAGERIAL RESPONSIBILITIES AND PERSONS CLOSELY ASSOCIATED WITH THEM

1.     

Details of the person discharging managerial responsibilities/person closely associated

a)

Name:

Patrick Cheetham

2.     

Reason for the notification

a)

Position/status:

Executive Chairman

b)

Initial notification/Amendment:

Initial notification

3.     

Details of the issuer, emission allowance market participant, auction platform, auctioneer or auction monitor

a)

Name:

Tertiary Minerals plc

b)

LEI:

213800OT9C6DQN9VO543

4.     

Details of the transaction(s): section to be repeated for (i) each type of instrument; (ii) each type of transaction; (iii) each date; and (iv) each place where transactions have been conducted

a)

Description of the financial instrument, type of instrument:

Identification code:

Ordinary shares of 1 pence each

 GB0008854563

b)

Nature of the transaction:

Acquisition of shares

c)

Price(s) and volume(s):

 

Price(s)

Volume(s)

0.895p

235,200

 

Price(s)

Volume(s)

0.900p

300,000

Price(s)

Volume(s)

0.920p

200,000

d)

Aggregated information:

Aggregated volume:

Weighted Average  Price:

 

Price(s)

Volume(s)

0.9038p

735,200

 

e)

Date of the transaction:

21-22  March2017

 

f)

Place of the transaction:

London Stock Exchange, AIM

Enquiries

Tertiary Minerals plc

Patrick Cheetham, Executive Chairman

Richard Clemmey, Managing Director

+44 (0) 1625 838 679

SP Angel Corporate Finance LLP

Nominated Adviser & Joint Broker

Ewan Leggat/Lindsay Mair

+44 (0) 20 3470 0470

Beaufort Securities Ltd

Joint Broker

Elliot Hance

+44 (0)20 7382 8300

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement

Notes to Editors

Tertiary Minerals plc (ticker symbol ‘TYM’) is an AIM-traded mineral exploration and development company building a significant strategic position in the fluorspar sector. Fluorspar is an essential raw material in the chemical, steel and aluminium industries. Tertiary controls two significant Scandinavian projects (Storuman in Sweden and Lassedalen in Norway) and a large deposit of strategic significance in Nevada, USA (MB Project). @Tertiaryplc

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.

Tertiary Minerals (TYM) – Audited Results for the year to 30 Sept 2016

TYM1Tertiary Minerals plc, the AIM traded company building a strategic position in the fluorspar sector, is pleased to announce audited results for the year ended 30 September 2016.

Operational Highlights for 2016:

  • Storuman Exploitation (Mine) Permit approved by the Swedish Mining Inspectorate
  • Phase 4 drilling programme completed on the MB Project in Nevada
  • Significant lateral and depth extensions to fluorspar mineralisation proven in the Western Area on the MB Project
  • Modelling, economic evaluation and metallurgical testwork progressing for the MB Project
  • Sale of the two non-core gold assets potentially providing the Company with future cash-flow through its retained royalty interest
  • Entered into a non-binding Heads of Terms with global aluminium company, Hydro, to purchase land and old mine workings on the Lassedalen fluorspar project

Commenting today, Managing Director, Richard Clemmey said: “Against a backdrop of very tough market conditions for fluorspar I am pleased to report continued progress on our core fluorspar projects. Receiving the Mining Permit for the Storuman project was a significant achievement for the Company and whilst the delays in processing the appeals is frustrating we remain positive that the original decision will be upheld.”

“We continue to work through the MB project modelling, test work and economic evaluation, a process which takes time in order to systematically address the challenges and opportunities associated with the project. Following successful completion of this work we are targeting the completion of a Scoping Study in the first half of 2017.”

“Maintaining the interest in our two non-core gold projects has finally paid off and the sale of these assets potentially provides the Company with future cash-flow through a retained royalty interest.”

Market Abuse Regulation (MAR) Disclosure

Certain information contained in this announcement would have been deemed inside information for the purposes of Article 7 of Regulation (EU) No 596/2014 until the release of this announcement.

Enquiries

 

Tertiary Minerals plc

Richard Clemmey, Managing Director

Patrick Cheetham, Executive Chairman 

 

 

 

 

 

+44 (0) 1625 838 679            

SP Angel Corporate Finance LLP

Nominated Adviser & Joint Broker

Ewan Leggat/Lindsay Mair

+44 (0) 20 3470 0470

 

Beaufort Securities Ltd

Joint Broker

Elliot Hance

Brand Communications

Alan Green

 

 

+44 (0)20 7382 8300

+44 (0)7976 431608

Notes to Editors

Tertiary Minerals plc (ticker symbol ‘TYM’) is an AIM-traded mineral exploration and development company building a significant strategic position in the fluorspar sector. Fluorspar is an essential raw material in the chemical, steel and aluminium industries. Tertiary controls two significant Scandinavian projects (Storuman in Sweden and Lassedalen in Norway) and a large deposit of strategic significance in Nevada, USA (MB Project).

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. 

CHAIRMAN’S STATEMENT

I am pleased to present the Company’s Annual Report and Financial Statements for the year ended 30 September 2016. 

It has been a rather frustrating year for our Storuman Fluorspar Project in Sweden. Our long-awaited Mining Concession for the Storuman Project was granted by the Mining Inspectorate in February but the grant was then appealed to the Swedish Government by two separate groups. At the same time new case law established by the Supreme Court on a distant and unrelated project has caused the Mining Inspectorate to re-examine the basis on which Mining Concessions have recently been granted. Further information is given in our Operating Review. We remain positive that the original decision to grant the Mining Concession will be upheld and that the circumstances affecting of the Supreme Court decision were not applicable to our Mining Concession application. There are no time-frame constraints on the appeals process so it is important that we achieve a satisfactory resolution before proceeding with the next stages of project evaluation and development.

In contrast, progress continues to be made in Nevada with our MB Fluorspar Project where a further round of drilling has demonstrated significant extensions of possibly higher grade mineralisation to the north-west of our 86 million tonne Mineral Resource Estimate.  The Company is currently working towards completion of an economic and technical scoping study in the first half of 2017. This will include consideration of various value-adding optimisations and may include another phase of drilling.

In Norway, we continue to maintain our interest in the Lassedalen fluorspar deposit and have recently reached a heads of terms agreement with Hydro, a global producer of aluminium and a major consumer of aluminium fluoride (a downstream product of fluorspar) to acquire outright ownership of key land and mineral rights at Lassedalen. Currently we have exploration rights over these Hydro holdings through an expropriation granted by the Norwegian Government but this agreement, if completed, will cement our hold on this important fluorspar resource. Given the permitting delays being experienced in Sweden this project may assume a higher priority within our European strategy in 2017.

Fluorspar prices in 2016 have continued a five year decline and a number of fluorspar mines closed in recent times. Structurally the fluorochemical industry, which dominates consumption of fluorspar, is in transition. Fluorine based HFC refrigerant chemicals are being phased out under various global climate change agreements and legislation, but are being replaced by new zero ozone-depleting and very low global warming potential HFO fluorine based chemicals that should help see a return to more buoyant market conditions in the medium-term.

Outside of our fluorspar business we have recently announced the sale of our Kaaresselkå and Kiekerömaa gold projects in Finland to Aurion Resources Ltd. On completion we will receive an initial payment in cash and Aurion shares. Further variable payments will be linked to the definition and size of 43-101 compliant Mineral Resources and, on definition, paid as an advance against a 2% Net Smelter Return Royalty on gold and other mineral production. Our own historical work has demonstrated the potential for such Mineral Resources on both project areas and so we look forward to the prospect of a future cash flow from these projects.

In 2016 we have been successful in lowering our administration costs which we believe are amongst the lowest of all AIM traded companies. Our activities in 2016 have been funded by share placings with £1,150,000 raised before expenses during the financial year. Further information is given in the Annual Report which will be published in plain black and white text this year. The Company’s website has replaced the Annual Report as the main investor relations tool and, whilst the information being provided to shareholders in our Annual Report is no less comprehensive than last year, we feel that the money previously spent on colour and glossy colour printing is better spent on our projects.

We look forward to reporting further progress in 2017 and to meeting shareholders again at our next

Annual General Meeting to be held on Tuesday 31 January 2017.

Patrick Cheetham

Executive Chairman

12 December 2016

STRATEGIC REPORT

Group Overview 

Company’s Aims

·     To become a reliable long-term and competitive supplier of high quality fluorspar to world markets.

·     To add value to the Group’s mineral projects.

·     The discovery, acquisition and development of mineral resources.

Company’s Strategy

·     To acquire and develop large fluorspar deposits located close to established infrastructure and key markets in stable, democratic and mining friendly jurisdictions.

Principal Activities

·      The principal activities of the Group are the identification, acquisition, exploration and development of mineral projects with primary focus on fluorspar, the main raw material source of fluorine for the chemical, steel and aluminium industries.

The head office is based in Macclesfield in the United Kingdom with core operating locations in Storuman in Sweden, Lassedalen in Norway and the MB Project in Nevada, USA.

Company’s Business Model

·      Successful, efficient and low costs explorer.

The Group prefers to acquire 100% ownership of mineral assets at minimal expense. This usually involves applying for exploration licences from the relevant authority, as was the case for the Storuman and Lassedalen projects. In other cases, rights are negotiated with existing project owners for initially low periodic payments that rise over time as confidence in the project value increases and this was the case for the MB Project.

The Group seeks to operate with a low cost base in order to maximise the funds that can be spent on exploration and development – value adding activities. The Company has six full time employees including the two executive directors (Managing Director and Chairman) who work with and oversee carefully selected and experienced consultants and contractors. The Board of Directors comprises two independent Non-Executive Directors, the Managing Director and the Executive Chairman.

Administration costs are reduced via an arrangement governed by a Management Services Agreement with Sunrise Resources plc, whereby Sunrise Resources pays a portion of Tertiary’s office costs. As at the date of this report Tertiary is a substantial shareholder (as defined under the AIM Rules) of Sunrise Resources plc, holding 10.08%.

The Company’s activities are financed through periodic capital raisings, through private share placements and other innovative equity based financial instruments. As projects become more advanced the Board will seek to secure additional funding from potential end users. This kind of arrangement can take many forms, for example through off-take agreements or through joint venture partnerships.

 

OPERATING REVIEW & PERFORMANCE

Fluorspar Projects

Storuman Fluorspar Project, Sweden

2016 Highlights

·      Exploitation (Mine) Permit application approved by the Swedish Mining Inspectorate

The Company’s 100% owned Storuman project is located in north central Sweden and is linked by the E12 highway to the port city of Mo-i-Rana in Norway and by road and rail to the port of Umeå on the Gulf of Bothnia. A bulk rail terminal, constructed in 2012, 25km from the project site is likely to become an important factor in the cost-effective delivery of fluorspar to the key European fluorspar market.

JORC Compliant Mineral Resource

Classification

Million Tonnes (Mt)

Fluorspar (CaF2 %)

Indicated

25.0

10.28

Inferred

2.7

9.57

Total

27.7

10.21

 

Exploitation (Mine) Permit Application

The Company submitted its Exploitation (Mine) Permit application in July 2014 to the Swedish Mining Inspectorate and following an extensive consultation process the Exploitation (Mine) Permit (“Permit”)was approved on 18 February 2016. Key elements of the Permit: 

·      The Permit is valid for 25 years

·      Name of the mining concession area: Kyrkberget K nr.1

·      The Permit has been granted to extract fluorspar under the Swedish Minerals Act (1991:45) and, with regards to the question of localisation, the Swedish Environmental Code (1998:808)

·      The Permit covers 184.13 hectares

·      500,000 Swedish Krona must be paid to the Mining Inspectorate prior to the commencement of mining operations as economic security for rehabilitation measures after the mine is closed

·      An application for land allocation must be made according to the Minerals Act before any land can be used for the mine according to the Permit

·      The concession area is predominantly limited to the area of the proposed open pit

·      The Swedish Mining Inspectorate has granted the Permit by giving precedence to the national interest of minerals over the national interest of reindeer herding

Subsequent to the award of the Permit in February this year, two appeals have been lodged against the Permit. The appeals have been submitted by the Sami Reindeer Husbandry Community affected and Urbergsgruppen, a Swedish environmental action group which oppose all mining activities throughout Sweden. The appeals will be decided by the Swedish Government following their review of information from the original Permit application made by the Company, the Permit approval, the appeal documents and all key stakeholder groups.

As part of this process the Government has asked the Company for its opinion on a ruling earlier this year by the Swedish Supreme Administrative Court (“SAC”) regarding appeals made against the Exploitation (Mine) Permit over the Norra Karr rare earth element deposit owned by Leading Edge Materials (formerly Tasman Metals). Appeals may be considered by SAC following the government appeal process. The appeals were successful in this case and the SAC revoked the Norra Karr Exploitation (Mine) Permit and referred the case back to the Swedish Government. The basis on which the SAC revoked the Norra Karr Exploitation (Mine) Permit was that the Environment Impact Assessment (EIA) for the Mining Concession Area, relating to the Mineral Deposit Area only, did not sufficiently take into account the impact that mining activity may have on its surroundings (the “wider area”), including a Natura 2000 area. Following the ruling the case has now been referred back to the Swedish Mining Inspectorate (Bergsstaten) for re-assessment. Prior to this case the wider area impact has usually been addressed through the Environmental Permit process leading on from the Exploitation (Mine) Permit approval.

The Company provided a written opinion to the Government in September 2016 stating that the EIA prepared by Tertiary provides a sufficient description of the expected environmental impact on the wider area. The EIA was prepared based on the extensive and detailed baseline environmental studies and reindeer husbandry impact analysis completed by the Company.

When making the original decision to approve the Exploitation (Mine) Permit, the Mining Inspectorate maintained the view that continued sustainable reindeer husbandry can co-exist alongside the mining operation providing that the Company implements appropriate protective measures/precautions, the details of which will be set by the Swedish Land and Environmental Court.

The Company continues to reiterate to the Swedish Government that time is of the essence, ultimately the timing of this process and decision by the Swedish Government cannot be influenced further.

The Next Step

Whilst substantial progress has been made on the Preliminary Feasibility Study (PFS) level metallurgical testwork, following the Exploitation (Mine) Permit appeal the Company decided to place all metallurgical testwork and outstanding phases of the Preliminary Feasibility Study on hold until the appeal process has been brought to a conclusion.

Following successful resolution of the Exploitation Concession appeal process and before mine construction can commence the detailed conditions of the processing plant, tailings facility and associated infrastructure must be set through the Environmental Permit process. The process is handled in the Swedish Land and Environmental Court and is governed by the Swedish Environmental Code (1998:808).

Technical and economic information from the Preliminary Feasibility Study will be used to prepare the Environmental Permit application.

MB Fluorspar Project, Nevada, USA

2016 Highlights

·      Phase 4 Drilling programme completed

·      Significant lateral and depth extension of fluorspar mineralisation proven in the Western Area

·      Deposit field appraisal by world renowned geologist – Dr Richard Sillitoe

·      Modelling and economic evaluation of the project progressing

The MB Property comprises 146 contiguous mining claims covering an area more than 2,800 acres and is located 19km south-west of the town of Eureka in central Nevada, USA. The state of Nevada is widely and justifiably recognised to be one of the most attractive mining jurisdictions in the world. Eureka is located on US Highway 50 and the main railroad is located 165km to the north of the deposit providing bulk freight distribution to the East and West of the USA. The USA, like Europe, is a key fluorspar market currently importing the majority of its fluorspar requirements. Rail access to the west coast provides access to Asian markets, which may be a target market in the future.

JORC Compliant Mineral Resource

Classification

Million Tonnes (Mt)

Fluorspar (CaF2 %)

Indicated

6.1

10.8

Inferred

80.3

10.7

Total

86.4

10.7

 

Phase 4 Drilling

Following the JORC 2012 compliant Mineral Resource Estimate upgrade for the MB Project to 86.4 million tonnes grading 10.7% fluorspar (CaF2) in June 2015, the Company completed a further phase of drilling, Phase 4, with the key objective being:

·      To test the lateral and depth extent of higher grade mineralisation in the Western Area

Four holes were drilled totalling 1,553 metres using the reverse circulation method, key highlights being:

·      Hole 15TMBRC036 located west of the Western Area:

§ 89.91m grading 12.02% CaF2 from 120.40m depth (total of 8 significant fluorspar intersections

§ Including 31.99m grading 16.74% CaF2 from 150.88m (total of 6 higher grade intersections above 15% CaF2)

·      Hole 15TMBRC038 located to the north of the Western Area:

§ 22.86m grading 11.47% CaF2 from 74.68m depth

·      Hole 15TMBRC039 located to the north of the Western Area:

§ 137.16m grading 11.54% CaF2 from 53.34m depth (total of 16 significant fluorspar intersections)

§ Including 32.00m grading 15.81% CaF2 from 185.93m (total of 5 higher grade intersections above 15% CaF2)

·      Ore-grade molybdenum (Mo) encountered in the base of hole 15TMBRC036

Field Appraisal – Dr Richard Sillitoe

During the summer of 2016 the Company employed the services of world renowned economic geologist Dr Richard Sillitoe to complete an appraisal of the MB Deposit with particular focus on improved understanding of the geology/mineralogy/paragenesis for the deposit and potential association with a porphyry molybdenum-copper system. The key conclusions from the field visit and appraisal:

·      There is a reasonable possibility that the fluorspar grades could increase on approach to the inferred sub-surface intrusion in the north west region of the deposit

·      1 or 2 northwest-directed core holes could easily test the possibility of increased fluorspar gradeson approach to the inferred intrusion

·      It is unlikely that the MB deposit is associated with a porphyry molybdenum-copper system

Modelling, Economic Evaluation and Metallurgical Testwork

Following the appraisal by Dr Richard Sillitoe, the Company has started the process of modelling, optimisation, and associated economic evaluation of various production scenarios alongside early stage bench scale metallurgical testwork in order to provide a focus for a technical and economic Scoping Study. The early stage modelling and metallurgical testwork has highlighted some key opportunities and challenges:

·      Modelling the potential higher grade fluorspar in the north west into the production scenarios has a significant effect on the project economics

·      Potential for economic production of commercial grade mica as a secondary product provides valuable upside for the project

·      The project is particularly sensitive to transport distance/cost to USA market and port

·      The mineralogy of the deposit is highly variable

Based on these key findings the Company is systematically working through the following work programmes:

·      Bench scale metallurgical testwork to ascertain the potential for producing acid grade fluorspar from the different areas of the deposit

·      Metallurgical testwork to assess the potential of producing commercial grade mica as a secondary product

·      Optimisation of the transport method and cost from mine to USA market and port

Following successful completion of these work programmes the Company will work towards completion of a Scoping Study for the project in the first half of 2017, this may include another phase of drilling on the MB project in line with Dr Sillitoe’s recommendations.

Lassedalen Fluorspar Project, Norway

The Lassedalen Fluorspar Project is favourably located near Kongsberg, 80km to the south-west of Oslo in Norway. It is less than 1km from highway E134 and approximately 50km from the nearest Norwegian port. The Company views this resource as strategically important alongside its Storuman Project for the European market.

JORC Compliant Mineral Resource

Classification

Million Tonnes (Mt)

Fluorspar (CaF2 %)

Inferred

4.0

24.60

 

Due to financial and fluorspar market conditions in 2015/2016 and given the commitments on its other fluorspar projects and in the absence of expenditure obligations, further exploration at the Lassedalen Project has been a lower priority. 

A key landowner for the Company’s Lassedalen fluorspar project is the global aluminium company, Hydro. Tertiary and Hydro have recently entered into a heads of terms whereby Tertiary will acquire the land and historic mine workings from Hydro following successful due diligence and purchase agreement completion (within 14 months). The agreed purchase price is 1 Norwegian Krone. The acquisition provides an important value adding step for the project as well as strengthening the long-term security of tenure.

Once development work re-commences for the project, the immediate objective will be further drilling aimed at increasing the size of the current JORC compliant Mineral Resource Estimate.

Non-Core Projects

Kaaresselkä and Kiekerömaa Gold Projects, Finland

The Company has successfully negotiated the sale of the two legacy gold assets in Finland to TSX-V listed Aurion Resources Ltd. Following the initial consideration for the sale, the Company will retain a royalty interest in the projects and therefore providing the opportunity for potential income in the future. Summary of the transaction:

·      Aurion is a Canadian listed (TSX-V: AU) precious metals exploration company primarily focusing on the development of its Finnish gold projects, several of which are under a joint venture with B2Gold, a main listed (TSX:BTO,NYSE MKT:BTG) gold producer and developer

·      £100,000 initial consideration to be paid by Aurion: £15,000 in cash and £85,000 in Aurion shares

·      Tertiary will retain royalty interest in the projects:

§ Pre-Production Royalty of US$1.00/ounce gold following the definition of a NI 43-101 (or equivalent) Code compliant Inferred Mineral Resource Estimate on either project

§ Pre-Production Royalty of US$2.00/ounce gold following the definition of a NI 43-101 (or equivalent) Code compliant Indicated Mineral Resource Estimate on either project

§ Pre-Production Royalty of US$3.00/ounce gold following the definition of a NI 43-101 (or equivalent) Code compliant Measured Mineral Resource Estimate on either project

§ Net Smelter Returns Royalty (NSR) of 2% on all future gold production from either property

§ Aurion can purchase 50% of the NSR from Tertiary for USD$1,000,000 at any time prior to commencement of commercial production on either project

The sale is conditional upon successful transfer of the Exploration Licences for each project from Tertiary to Aurion (to be handled by the mining division of the Finnish Safety and Chemical Agency (Tukes)) and stock exchange approval by the TSX-V.

Rosendal Tantalum Project, Finland

The Exploration Licence for the project expired in October 2015 and the Company has applied for a renewal of the Licence. If the Company is unsuccessful in finding a suitable partner or buyer to progress the project it is unlikely the renewal will be granted.

Ghurayyah Tantalum-Niobium-Rare-Earth Project, Saudi Arabia

The project continues to be on hold pending the issue of a new exploration licence

Health and Safety

The Group has maintained strict compliance with its Health and Safety Policy and is pleased to report there have been no lost time accidents during the course of the year.

Environment

No Group company has had or been notified of any instance of non-compliance with environmental legislation in any of the countries in which they work.

 

Fluorspar Market and Strategic Opportunity* 

Fluorspar – Principal Uses

There are two principal commercial grades of fluorspar:

·      Metallurgical-spar (60-96% CaF2)

·      Acid-spar (+97% CaF2) 

Metallurgical-spar accounts for approximately 40% of the total fluorspar production with the principal applications being:

·      Steel production – used as a flux to lower the melting temperature and increase the chemical reactivity to help the absorption and removal of sulphur, phosphorus, carbon and other impurities in the slag

·      Cement – used as a flux to speed up the calcination process and enables the kiln to operate at lower temperatures

Acid-spar, the grade of fluorspar which the Company is planning to produce, accounts for approximately 60% of total fluorspar production with the principal applications being:

·      Aluminium production – used to produce aluminium fluoride (ALF3) which acts as a flux to lower the bath temperature in the manufacture of aluminium

·      Manufacture of hydrofluoric acid (HF) – the primary source of all fluorochemicals (the single largest consumer of fluorspar), with a wide range of applications including:

§ Fluorocarbons, e.g. refrigerant gases, propellants, etc.

§ Electrical and electronic appliances

§ Metallurgical industry (extraction, manufacture and processing)

§ Lithium batteries

§ Pharmaceuticals, polymers and agrochemicals

§ Petrochemical catalysts

 

Fluorspar – Production and Consumption

The current global production of fluorspar is approximately 5.8-6.0 million tonnes per year:

·      Major producing regions: China (>50% of the world’s production); Mexico; Mongolia/CIS; South Africa

·      Major Consuming regions (highest to lowest): China; North America; Europe; Mexico; Russia

Fluorspar – Pricing

·      The global supply and demand for fluorspar has seen steady growth over the decade 1998 to 2008 – reflected in the long-term upward trend in price

·      In 2009 the global financial crisis contributed to a contraction in acid-spar supply and demand followed by a short-term recovery in 2011

·      Demand for acid-spar has softened in the last 5 years resulting in oversupply and a downward trend in the price

·      The China export price for acid-spar (FOB China) is a traditional benchmark price and is currently published as US$250-270/tonne (Industrial Minerals Magazine). The equivalent price delivered into Europe (CIF Rotterdam) is published as US$250-270/tonne.

The current price weakness does not impact the Company’s long-term strategy as it is not yet in production and the positive macroeconomic drivers for future prices remain essentially unchanged. 

Fluorspar – Tertiary Minerals Strategic Opportunity

·      Industry view (producers, end users, analysts) is that demand and price will increase in the medium to long-term, the key drivers being:

§ No large scale commercial alternative or recycling

§ Refrigeration – new generation of zero ozone depleting potential (ODP) and very low global warming potential (GWP) refrigerants, hydrofluoroolefins (HFO’s)

§ Driven by environmental legislation, most recently the Kigali Amendment which was signed in October 2016, where over 170 nations agreed to phase down low ODP, high GWP Hydrofluorocarbons (HFCs). 

§ Energy reduction in the steel and aluminium industry

§ Emerging uses – fluoropolymers in lithium batteries for example

§ Chinese supply-demand dynamics

·      China Produces >50% world’s fluorspar

·      China fluorspar exports have continued to decline since 2000 driven by increasing internal demand and production/export restrictions – potentially a future net importer

·      Western Europe and North America are the largest acid-spar consuming regions outside of China, importing more than 900,000 tonnes per year

·      USA imports 100% of its fluorspar

·      North America and Europe face the potential risk of security of supply

·      Fluorspar is classified as a critical raw material by the European Commission – high risk of supply shortage and consequent impact on the economy

·      USA considers fluorspar as a strategic mineral 

Based on macroeconomic drivers the Company continues to be strategically placed to capitalise on this position in the future by developing its 100% owned large fluorspar assets, containing fluorspar resources of 13.1 million tonnes, located in the USA and Europe.

*The information in this Fluorspar Market Summary is drawn from various sources, including Industrial Minerals Magazine, United States Geological Survey, Roskill, UN Comtrade and CRU. 

Financial Review & Performance

The Group is currently in the earlier stages of the typical mining development cycle and so has no income other than cost recovery from the management contract with Sunrise Resources plc and a small amount of bank interest. Consequently the Group is not expected to report profits until it is able to profitably develop, dispose of, or otherwise commercialise its exploration and development projects.

The Group reports a loss of £473,506 for the year (2015: £674,991) after administration costs of £558,857 (2015: £569,515) and after crediting interest of £1,712 (2015: £2,314). The loss includes expensed pre-licence and reconnaissance exploration costs of £25,343 (2015: £23,869), impairment of deferred exploration costs of £Nil (2015: £4,522) and impairment of available for sale investment (the Company’s share in Sunrise Resources plc) of £81,142 (2015: £260,997). Administration costs include £25,785 (2015: £63,278) as non-cash costs for the value of certain share warrants held by employees as required by IFRS 2.

Management and service charge revenue of £190,124 (2015: £181,598) arises from the provision of management, administration and office services to Sunrise Resources plc, to the benefit of both companies through efficient utilisation of services.

The financial statements show that, at 30 September 2016, the Group had net current assets of £461,018 (2015: £297,344). This represents the cash position after allowing for receivables and trade and other payables. These amounts are shown in the Consolidated and Company Statements of Financial Position and are also components of the Net Assets of the Group. Net assets also include various “intangible” assets of the Company. As the name suggests, these intangible assets are not cash assets but include this year’s and previous years’ accrued expenditure on minerals projects where that expenditure meets the criteria in Note 1(d) accounting policies. The intangible assets total £4,429,261 (2015: £3,536,609) and the breakdown by project is shown in Note 2 to the Financial Statements.

Expenditure which does not meet the criteria in Note 1(d), such as pre-licence and reconnaissance costs, are expensed and add to the Company’s loss. The loss reported in any year can also include expenditure that was carried forward in previous reporting periods as an intangible asset but which the Board determines is “impaired” in the reporting period. 

The extent to which expenditure is carried forward as intangible assets is a measure of the extent to which the value of the Company’s expenditure is preserved. In the current reporting period no costs were impaired.

The intangible asset value of a project does not equate to the realisable or market value of a particular project which will, in the Directors’ opinion, be at least equal in value and often considerably higher. Hence the Company’s market capitalisation on AIM can be in excess of or less than the net asset value of the Group.

Details of intangible assets, property, plant and equipment and investments are set out in Notes 8, 9 and 10of the financial statements.

In the reporting period an impairment review was undertaken by the Directors on the carried amount in the Available for Sale Investment Revaluation reserve, to ascertain whether the decline in fair value of the investment in Sunrise Resources plc could be considered to be significant or prolonged, as required under IAS 39.

The nature of the activity of Sunrise Resources plc is similar to that of Tertiary Minerals plc in that it is involved in long-term mineral development and exploration. The projects within the Company will typically take over 5 years to develop before they can be commercially exploited and until the end of a project it is expected that there will be volatility in the share price of the Company.

Whilst the overall Available for Sale Revaluation has been negative since 5 November 2012, in the context of this entity, this is not considered prolonged given the timescales of the associated projects. Furthermore, due to the inherent volatility in the nature of the investment during the life cycle of the projects, and taking into account the Directors detailed knowledge of the business of Sunrise Resources plc, the decline in fair value is not considered of significance to the underlying business nor its share price.

However, for Interim Accounts for the six month period to 31 March 2016, it was decided that the decline in fair value was likely to be deemed significant under the requirements of IAS 39; therefore the carried value of £81,142 in the Available for Sale Investment Reserve was impaired and reclassified to the Consolidated Income Statement, thereby increasing the loss for that period. An increase in fair value, due to an increase in share price, for the subsequent period to 30 September 2016, has been recognised in the Available for Sale Investment Reserve in equity (see note 1(f) in the Notes to the Financial Statements).

The Financial Statements of a mineral exploration company can provide a moment in time snapshot of the financial health of the Company but do not provide a reliable guide to the performance of the Company or its Board and its long-term potential to create value.

Key Performance Indicators

The usual financial key performance indicators (“KPIs”) are neither applicable nor appropriate to measurement of the value creation of a company involved in mineral exploration and which currently has no turnover. The Directors consider that the detailed information in the Operating Review is the best guide to the Group’s progress and performance during the year.

The Company does seek to reduce overhead costs, where practicable, and is reporting reduced administration costs this financial year.

Fundraising

During the 2016 financial year the Company raised a total of £1,150,000 before expenses from institutional investors as shown in Note 14 of the Financial Statements. 

Risks & Uncertainties

The Board regularly reviews the risks to which the Group is exposed and ensures through its meetings and regular reporting that these risks are minimised as far as possible.

The principal risks and uncertainties facing the Group at this stage in its development and in the foreseeable future are detailed below together with risk mitigation strategies employed by the Board.

 

RISK

MITIGATION STRATEGIES

Exploration Risk

 

The Group’s business is mineral exploration and evaluation which are speculative activities. There is no certainty that the Group will be successful in the definition of economic mineral deposits, or that it will proceed to the development of any of its projects or otherwise realise their value.

 

The directors bring over many years of combined mining and exploration experience and an established track record in mineral discovery.

The Company currently targets advanced and drill ready exploration projects in order to avoid higher risk grass roots exploration.

Resource Risk

 

All mineral projects have risk associated with defined grade and continuity. Mineral Reserves are always subject to uncertainties in the underlying assumptions which include geological projection and metal price assumptions.

 

Resources and reserves are estimated by independent specialists on behalf of the Group in accordance with accepted industry standards and codes. The directors are realistic in the use of mineral price forecasts and impose rigorous practices in the QA/QC programmes that support its independent estimates.

Development Risk

 

Delays in permitting, or changes in permit legislation and/or regulation, financing and commissioning a project may result in delays to the Group meeting production targets or even in extreme cases loss of title.

 

 

 

The Company’s permitting requirements are limited at this stage to its exploration activities but to reduce development risk in future the directors will ensure that its permit and financing applications are robust and thorough and will seek to position the Company as a low quartile cost producer.

Commodity Risk

 

Changes in commodity prices can affect the economic viability of mining projects and affect decisions on continuing exploration activity.

 

 

The company consistently reviews commodity prices and trends for its key projects throughout the development cycle.

Mining and Processing Technical Risk

 

Notwithstanding the completion of metallurgical testwork, test mining and pilot studies indicating the technical viability of a mining operation, variations in mineralogy, mineral continuity, ground stability, groundwater conditions and other geological conditions may still render a mining and processing operation economically or technically non-viable.

 

From the earliest stages of exploration the directors look to use consultants and contractors who are leaders in their field and in future will seek to strengthen the executive and the Board with additional technical and financial skills as the Company transitions from exploration to production.

Environmental Risk

 

Exploration and development of a project can be adversely affected by environmental legislation and the unforeseen results of environmental studies carried out during evaluation of a project. Once a project is in production unforeseen events can give rise to environmental liabilities.

 

Mineral exploration carries a lower level of environmental liability than mining. The Company has adopted an Environmental Policy and the directors avoid the acquisition of projects where liability for legacy environmental issues might fall upon the Company.

Political Risk

 

All countries carry political risk that can lead to interruption of activity. Politically stable countries can have enhanced environmental and social permitting risks, risks of strikes and changes to taxation, whereas less developed countries can have, in addition, risks associated with changes to the legal framework, civil unrest and government expropriation of assets.

 

The Company’s strategy restricts its activities to stable, democratic and mining friendly jurisdictions.

The Company has adopted a strong Anti-corruption Policy and Code of Conduct and this is strictly enforced.

Partner Risk

 

Whilst there has been no past evidence of this, the Group can be adversely affected if joint venture partners are unable or unwilling to perform their obligations or fund their share of future developments.

 

 

The Board’s current policy is to maintain control of certain key projects so that it can control the pace of exploration and reduce partner risk.

For projects where other parties are responsible for critical payments and expenditures the Company’s agreements legislate that such payments and expenditures are met.

Financing & Liquidity Risk

 

Liquidity risk is the risk that the Company will not be able to raise working capital for its ongoing activities. 

The Group’s goal is to finance its exploration and evaluation activities from future cash flows, but until that point is reached the Company is reliant on raising working capital from equity markets or from industry sources.

There is no certainty such funds will be available when needed.

 

 

The Company maintains a good network of contacts in the capital markets that has historically met its financing requirements.

The Company’s low overheads and cost effective exploration strategies help reduce its funding requirements and currently the directors take part of their fees in shares. Nevertheless further equity issues will be required from time to time.

Financial Instruments

 

Details of risks associated with the Group’s Financial Instruments are given in Note 19 to the financial statements.

 

The directors are responsible for the Group’s systems of internal financial control. Although no systems of internal financial control can provide absolute assurance against material misstatement or loss, the Group’s systems are designed to provide reasonable assurance that problems are identified on a timely basis and dealt with appropriately.

In carrying out their responsibilities, the directors have put in place a framework of controls to ensure as far as possible that ongoing financial performance is monitored in a timely manner, that corrective action is taken and that risk is identified as early as practically possible, and they have reviewed the effectiveness of internal financial control.

The Board, subject to delegated authority, reviews capital investment, property sales and purchases, additional borrowing facilities, guarantees and insurance arrangements.

 

Internal Controls & Risk Management

The Directors are responsible for the Group’s system of internal financial control. Although no system of internal financial control can provide absolute assurance against material misstatement or loss, the Group’s system is designed to provide reasonable assurance that problems are identified on a timely basis and dealt with appropriately and expeditiously.

In carrying out their responsibilities, the Directors have put in place a framework of controls to ensure as far as possible that ongoing financial performance is monitored in a timely manner, that corrective action is taken and that risk is identified as early as practically possible, and they have reviewed the effectiveness of internal financial control.

The Board, subject to delegated authority, reviews capital investment, property sales and purchases, additional borrowing facilities, guarantees and insurance arrangements.

Forward-Looking Statements

This Annual Report 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.

This Strategic Report was approved by the Board of Directors on 12 December 2016 and signed on its behalf.

Richard Clemmey

Managing Director

OUR GOVERNANCE

Corporate Governance 

Although the rules of AIM do not require the Company to comply with the UK Corporate Governance Code (“the Code”), the Company fully supports the principles set out in the Code and attempts to comply wherever possible, given both the small size and limited resources available to the Company.

The Board of Directors currently comprises the Executive Chairman, Managing Director and two Non-Executive Directors. The Board considers that this structure is suitable for the Company having regard to the fact that it is not yet revenue-earning.

The two Non-Executive Directors have both served in excess of nine years and under the terms of the Code would not now be formally regarded as independent. However, it is proposed that they should continue to seek annual re-election rather than every third year as per the Articles of Association. The Company has been fortunate to secure the services of Donald McAlister and David Whitehead during that time and both continue to provide valuable advice based on their long experience of the mining industry.

The Board can be strengthened by the appointment of independent Non-Executive Directors but is satisfied that its composition is currently suitable for an AIM-listed company.

Role of the Board

The Board’s role is to agree the Group’s long-term direction and strategy and monitor achievement of its business objectives. The Board meets four times a year for these purposes and holds additional meetings when necessary to transact other business. The Board receives reports for consideration on all significant strategic and operational matters.

Notwithstanding that the Non-Executive Directors are not considered to be independent under the terms of the Code, they are considered by the Board to be independent of management and free from any business or other relationship which could materially interfere with the exercise of their independent judgement. Directors have the facility to take external independent advice in furtherance of their duties at the Group’s expense and have access to the services of the Company Secretary.

The Board delegates certain of its responsibilities to the Audit, Remuneration and Nomination Committees of the Board. These Committees operate within clearly defined, written terms of reference.

Audit Committee

The Audit Committee, composed entirely of Non-Executive Directors, meets at least twice a year and assists the Board in meeting responsibilities in respect of external financial reporting and internal controls. The Audit Committee also keeps under review the scope and results of the audit. It also considers the cost-effectiveness, independence and objectivity of the Auditor taking account of any non-audit services provided by them.

Remuneration Committee

The Remuneration Committee also comprises the Non-Executive Directors. The Remuneration Committee meets at least once a year to determine the appropriate remuneration for the Company’s executive directors, ensuring that this reflects their performance and that of the Group, and to demonstrate to shareholders that executive remuneration is set by Board members who have no personal interest in the outcome of their decisions.

The Company has initiated a long-term bonus and incentive scheme for the Managing Director. The objective of adopting the scheme is to provide reward for successfully achieving performance targets set by the Board of Directors in line with the Company’s Aims and Strategy. The Company has in place an Inland Revenue approved share option scheme and also issues warrants to subscribe for shares to executive directors and employees. Directors’ emoluments are disclosed in Note 4 to the financial statements and details of Directors’ warrants are disclosed in Note 17.

The Board is aware that Non-Executive Directors are not considered to be independent under the terms of the Code if they hold warrants to buy shares in the Company and so they no longer participate in the issue of warrants.

Nomination Committee

The Nomination Committee comprises the Chairman, Managing Director and the Non-Executive Directors. The Nomination Committee meets at least once per year to lead the formal process of rigorous and transparent procedures for Board appointments and to make recommendations to the Board in accordance with best practice and other applicable rules and regulations, insofar as they are appropriate to the Group at this stage in its development.

Conflicts of Interest

The Companies Act 2006 permits directors of public companies to authorise directors’ conflicts and potential conflicts, where appropriate, and the Articles of Association contain a provision to this effect.

At 30 September 2016, Tertiary Minerals plc held 9.13% of the issued share capital of Sunrise Resources plc and the Chairman of Tertiary Minerals plc is also Chairman of Sunrise Resources plc. Tertiary Minerals plc also provides management services to Sunrise Resources plc, in the search, evaluation and acquisition of new projects.

Procedures are in place in order to avoid any conflict of interest between the Company and Sunrise Resources plc.

Corporate Responsibility

The Board takes regular account of the significance of social, environmental and ethical matters affecting the business of the Group. At this stage in the Group’s development the Board has not adopted a specific written policy on Corporate Social Responsibility as it has a limited pool of stakeholders other than its shareholders. Rather, the Board seeks to protect the interests of the Group’s stakeholders through individual policies and through ethical and transparent actions.

The Company engages positively with local communities and stakeholders in its project locations.

Shareholders

The Board seeks to protect shareholders’ interests by following, where appropriate, the guidelines in the Code and the Directors are always prepared, where practicable, to enter into a dialogue with shareholders to promote a mutual understanding of objectives. The Annual General Meeting provides the Board with an opportunity to informally meet and communicate directly with investors.

Environment

The Board recognises that its principal activity, mineral exploration, has the potential to impact on the local environment and consequently has adopted an Environmental Policy to ensure that the Group’s activities have minimal harmful environmental impact. Contractors are carefully selected on the basis that they have their own acceptable environmental policy, resources and training in order to carry out field activities in line with the Company’s high standards.

The Group’s activities, carried out in accordance with the Environmental Policy, have had only minimal environmental impact and this policy is regularly reviewed. Where appropriate, all work is carried out after advance consultation with all potentially affected parties.

Employees

The Group encourages its employees to understand all aspects of the Group’s business and seeks to remunerate its employees fairly, being flexible where practicable. The Group gives full and fair consideration to applications for employment received regardless of age, gender, colour, ethnicity, disability, nationality, religious beliefs, transgender status or sexual orientation. The Board takes account of employees’ interests when making decisions, and suggestions from employees aimed at improving the Group’s performance are welcomed. 

The Company has adopted and implements an Anti-corruption Policy and Code of Conduct.

Suppliers and Contractors

The Group recognises that the goodwill of its contractors, consultants and suppliers is important to its business success and seeks to build and maintain this goodwill through fair dealings. The Group has a prompt payment policy and seeks to settle all agreed liabilities within the terms agreed with suppliers. The amount shown in the Consolidated and Company Statements of Financial Position in respect of trade payables at the end of the financial year represents 14 days of average daily purchases (2015: 14 days).

Health and Safety

The Board recognises it has a responsibility to provide strategic leadership and direction in the development of the Group’s health and safety strategy in order to protect all of its stakeholders. The Company has developed and implements a Health and Safety Policy to clearly define roles and responsibilities and in order to identify and manage risk. 

Board of Directors

The Directors and Officers of the Company are:

Patrick Cheetham (56)

Executive Chairman

Key Strengths and Experience

·      Geologist.

·      35 years experience in mineral exploration.

·      30 years experience in public company management.

·      Founder of the Company, Dragon Mining Ltd, Archaean Gold NL and Sunrise Resources plc. 

External Appointments:

Chairman and founder of Sunrise Resources plc.

  

Richard Clemmey (44)

Managing Director

Key Strengths and Experience

·      Chartered Engineer.

·      23 years experience in developing and managing mining/quarrying projects worldwide for Derwent Mining, Lafarge, Hargreaves (GB) Ltd, Marshalls plc and CFE.

·      Board Director since May 2012.

External Appointments:

None.

David Whitehead (74)

Non-Executive Director

Key Strengths and Experience

·      Mining geologist.

·      43 years experience in all aspects of mineral exploration, mine development and operations management including senior Executive Management experience in major mining companies: Billiton plc and BHP Billiton Plc.

·      Board Director since 2002.

External Appointments

Currently a director of Consolidated Mines & Investments Ltd and Chairman of its subsidiary Consolidated Nickel Mines Ltd.  Both companies are unlisted.

Donald McAlister (57)

Non-Executive Director*

Key Strengths and Experience

·      Accountant.

·      Previously Finance Director at Mwana Africa plc, Ridge Mining plc and Reunion Mining.

·      22 years experience in all financial aspects of the resource industry, including metal hedging, tax planning, economic modelling/evaluation, project finance and IPOs.

·      Founding director of the Company.

External Appointments

Financial Director of Moxico Resources plc and of Finance Director of ZincOx Resources plc.

Colin Fitch LLM, FCIS

Company Secretary

Key Strengths and Experience

·      Barrister-at-Law.

·      Previously Corporate Finance Director of Kleinwort Benson, Partner and Head of Corporate Finance at Rowe & Pitman (SG Warburg Securities) and Assistant Company Secretary at the London Stock Exchange.

·      Held a number of non-executive directorships including Merrydown plc, African Lakes plc and Manders plc.

External Appointments

Company Secretary for Sunrise Resources plc.

* Chairman of the Audit Committee and member of the Remuneration Committee.
Chairman of the Remuneration Committee and member of the Audit Committee.

Directors’ Responsibilities

The Directors are responsible for preparing the Strategic Report, the Directors’ Report and the financial statements in accordance with applicable law and regulations.

Company law requires the Directors to prepare financial statements for each financial year.  Under that law the Directors have elected to prepare the Group and Company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union and applicable law. Under company law the Directors must not approve the financial statements unless they are satisfied that they give a true and fair view of the state of affairs of the Group and Company and of the profit or loss of the Group for that period. The Directors are also required to prepare financial statements in accordance with the AIM Rules of the London Stock Exchange for companies trading securities on the AIM Market.

 

In preparing these financial statements, the Directors are required to:

·       select suitable accounting policies and then apply them consistently;

·       make judgements and accounting estimates that are reasonable and prudent;

·       state whether they have been prepared in accordance with IFRSs as adopted by the European Union, subject to any material departures disclosed and explained in the financial statements; and

·       prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Company and the Group will continue in business.

The Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose with reasonable accuracy at any time the financial position of the Company and enable them to ensure that the financial statements comply with the requirements of the Companies Act 2006. They are also responsible for safeguarding the assets of the Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

They are further responsible for ensuring that the Strategic Report and the Report of the Directors and other information included in the Annual Report and Financial Statements is prepared in accordance with applicable law in the United Kingdom.

Website Publication

The maintenance and integrity of the Tertiary Minerals plc website is the responsibility of the Directors; the work carried out by the Auditors does not involve the consideration of these matters and, accordingly, the Auditors accept no responsibility for any changes that may have occurred in the accounts since they were initially presented on the website. Legislation in the United Kingdom governing the preparation and dissemination of the accounts and the other information included in annual reports may differ from legislation in other jurisdictions.

Information from Directors’ Report

The Directors are pleased to submit their Annual Report and audited accounts for the year ended 30 September 2016.

The Strategic Report details of the principal activities of the Company and includes the Operating Review and Performance which provides detailed information on the development of the Group’s business during the year and indications of likely future developments.

Going Concern

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. These projections include the proceeds of future fundraising necessary within the next 12 months to meet the Company’s and Group’s overheads and planned discretionary project expenditures and to maintain the Company and Group as going concerns. 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. This represents a material uncertainty related to events or conditions which may cast significant doubt on the Group and Company’s ability to continue as going concerns and, therefore, that they may be unable to realise their assets and discharge their 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.

Events After The Balance Sheet Date

Kaaresselkä and Kiekerömaa Gold Projects, Finland

On 5 December 2016 the Company announced the sale of the two legacy gold assets in Finland to TSX-V listed Aurion Resources Ltd.  £100,000 initial consideration to be paid by Aurion: £15,000 in cash and £85,000 in Aurion shares. The Company will retain a royalty interest in the projects.  The sale is conditional upon successful transfer of the Exploration Licences for each project from Tertiary to Aurion and exchange approval by the TSX-V.

Lassedalen Project, Norway

On 7 December 2016 the Company announced it has entered into a non-binding Heads of Terms to acquire land and historic mine workings on its Lassedalen Fluorspar Project in Norway from global aluminium company, Hydro. The Company has been granted exclusivity for 14-months to complete due-diligence and agree and finalise a purchase agreement.

For further detail please refer to the Operating Review.

Dividend

The Directors are unable to recommend the payment of a dividend.

Financial Instruments & Other Risks

Details of the Group’s Financial Instruments and risk management objectives and of the Group’s exposure to risk associated with its Financial Instruments is given in Note 19 to the financial statements.

The business of mineral exploration and evaluation has inherent risks. Details of risks and uncertainties that affect the Group’s business are given in Risks and Uncertainties.

Directors

The Directors holding office in the period were:

Mr P L Cheetham

Mr R H Clemmey

Mr D A R McAlister

Mr D Whitehead

Shareholders

As at the date of this report the following interests of 3% or more in the issued share capital of the Company appeared in the share register:

 

 

As at 12 December 2016

Number of shares

% of share capital

SVS (Nominees) Limited POOL

35,483,607

13.29

TD Direct Investing Nominees (Europe) Limited SMKTNOMS

26,339,920

9.87

Barclayshare Nominees Limited

23,981,067

8.98

Hargreaves Lansdown (Nominees) Limited 15942

11,218,121

4.20

HSDL Nominees Limited

10,290,883

3.86

Hargreaves Lansdown (Nominees) Limited VRA

10,282,817

3.85

Ronald Bruce Rowan

8,000,000

3.00

 

Disclosure of Audit Information

Each of the Directors has confirmed that so far as he is aware, there is no relevant audit information of which the Company’s Auditor is unaware, and that he has taken all the steps that he ought to have taken as a director in order to make himself aware of any relevant audit information and to establish that the Company’s Auditor is aware of that information. 

Auditor

A resolution to re-appoint Crowe Clark Whitehill LLP as Auditor of the Company and the Group will be proposed at the forthcoming Annual General Meeting.

Charitable and Political Donations

During the year, the Group made no charitable or political donations.

Annual General Meeting

Notice of the Company’s Annual General Meeting convened for Tuesday 31 January 2017 will be sent to shareholders with the 2016 Annual Report

Publication of Statutory Accounts

The financial information set out in this announcement does not constitute the Company’s Statutory Accounts for the period ended 30 September 2016 or 2015. The financial information for 2015 is derived from the Statutory Accounts for 2015. Full audited accounts in respect of that financial period have been delivered to the Registrar of Companies. The Statutory Accounts for 2016 will be delivered to the Registrar of Companies following the Company’s Annual General Meeting. The auditors have reported on the 2016 and 2015 accounts. Neither set of accounts contain a statement under section 498(2) or (3) the Companies Act 2006 and both 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. 

Consolidated Income Statement

for the year ended 30 September 2016

 

Notes

2016

£

2015

£

Revenue

2,17

190,124

181,598

Administration costs

(558,857)

(569,515)

Pre-licence exploration costs

(25,343)

(23,869)

Impairment of deferred exploration costs

8

(4,522)

Operating loss

(394,076)

(416,308)

Impairment of available for sale investment 

(81,142)

(260,997)

Interest receivable

1,712

2,314

Loss before income tax

3

(473,506)

(674,991)

Income tax

7

Loss for the year attributable to equity holders of the parent

(473,506)

(674,991)

Loss per share – basic and diluted (pence)

6

(0.20)

(0.37)

 

All amounts relate to continuing activities. 

Consolidated Statement of Comprehensive Income
for the year ended 30 September 2016

 

2016

£

2015

£

Loss for the year

(473,506)

(674,991)

Items that could be reclassified subsequently to the income statement:

Foreign exchange translation differences on foreign currency net investments in subsidiaries

 

466,534

 

(59,439)

(6,972)

(734,430)

Items that have been reclassified subsequently to the Income Statement:

Fair value movement on available for sale investment

51,117

(112,702)

Transfer from available for sale investment reserve on impairment of available for sale investment 

 

 

260,997

51,117

148,295

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

44,145

(586,135)

  

Consolidated and Company Statements of Financial Position

at 30 September 2016

 

Company Number 03821411

 

Notes

Group

2016

£

Company

2016

£

Group

2015

£

Company

2015

£

Non-current assets

Intangible assets

4,429,261

3,536,609

Property, plant & equipment

9

9,785

9,636

7,296

6,961

Investment in subsidiaries

6,834,155

6,391,555

Available for sale investment

10

204,470

204,470

148,222

148,222

4,643,516

7,048,261

3,692,127

6,546,738

Current assets

Receivables

105,032

81,377

90,309

74,757

Cash and cash equivalents

448,474

421,292

309,815

245,140

553,506

502,669

400,124

319,897

Current liabilities

Trade and other payables

13

(92,488)

(53,424)

(102,780)

(49,573)

Net current assets

461,018

449,245

297,344

270,324

Net assets

5,104,534

7,497,506

3,989,471

6,817,062

Equity

Called up share capital

2,669,442

2,669,442

1,878,592

1,878,592

Share premium account

9,066,735

9,066,735

8,812,452

8,812,452

Merger reserve

131,096

131,096

131,096

131,096

Share option reserve

343,486

343,486

443,813

443,813

Available for sale investment reserve

51,117

51,117

Foreign currency reserve

382,354

(84,180)

Accumulated losses

(7,539,696)

(4,764,370)

(7,192,302)

(4,448,891)

Equity attributable to the owners of the parent

5,104,534

7,497,506

3,989,471

6,817,062

 

These financial statements were approved and authorised for issue by the Board of Directors on 12 December 2016 and were signed on its behalf.

R H Clemmey                                                                       D A R McAlister

Director                                                                                 Director

Consolidated Statement of Changes in Equity

 

Group

Share

capital

£

Share

premium

account

£

Merger

reserve

£

Share

option

reserve

£

Available

for sale

reserve

£

Foreign

currency

reserve

£

Accumulated

losses

£

Total

£

At 30 September 2014

1,743,020

8,622,974

131,096

426,721

(148,295)

(24,741)

(6,563,497)

4,187,278

Loss for the period

(413,994)

(413,994)

Change in fair value

(112,702)

(112,702)

Transfer of impairment to income statement

260,997

(260,997)

Exchange differences

(59,439)

(59,439)

Total comprehensive loss for the year

148,295

(59,439)

(674,991)

(586,135)

Share issue

135,572

189,478

325,050

Share based payments expense

63,278

63,278

Transfer of expired options and warrants

(46,186)

46,186

At 30 September 2015

1,878,592

8,812,452

131,096

443,813

(84,180)

(7,192,302)

3,989,471

Loss for the period

(473,506)

(473,506)

Change in fair value

51,117

51,117

Exchange differences

466,534

466,534

Total comprehensive loss for the year

51,117

466,534

(473,506)

44,145

Share issue

790,850

254,283

1,045,133

Share based payments expense

25,785

25,785

Transfer of expired warrants

(126,112)

126,112

At 30 September 2016

2,669,442

9,066,735

131,096

343,486

51,117

382,354

(7,539,696)

5,104,534

  

Company Statement of Changes in Equity

 

Company

Share

capital

£

Share

premium

account

£

Merger

reserve

£

Share

option

reserve

£

Available

for sale

reserve

£

Accumulated

losses

£

Total

£

At 30 September 2014

1,743,020

8,622,974

131,096

426,721

(105,770)

(3,901,584)

6,916,457

Loss for the period

(375,021)

(375,021)

Change in fair value

(112,702)

(112,702)

Transfer of impairment to income statement

218,472

(218,472)

Total comprehensive

loss for the year

105,770

(593,493)

(487,723)

Share issue

135,572

189,478

325,050

Share based payments expense

63,278

63,278

Transfer of expired options and warrants

(46,186)

46,186

At 30 September 2015

1,878,592

8,812,452

131,096

443,813

(4,448,891)

6,817,062

Loss for the period

(441,591)

(441,591)

Change in fair value

51,117

51,117

Total comprehensive

loss for the year

51,117

(441,591)

(390,474)

Share issue

790,850

254,283

1,045,133

Share based payments expense

25,785

25,785

Transfer of expired warrants

(126,112)

126,112

At 30 September 2016

2,669,442

9,066,735

131,096

343,486

51,117

(4,764,370)

7,497,506

  

Consolidated and Company Statements of Cash Flows

for the year ended 30 September 2016

Notes

Group

2016

£

Company

2016

£

Group

2015

£

Company

2015

£

Operating activity

Total loss after tax

(475,218)

(449,650)

(677,305)

(600,316)

Depreciation charge

6,833

6,647

4,600

3,883

Impairment charge – exploration

4,522

Impairment charge – available for sale investment

81,142

81,142

260,997

218,472

Share based payment charge

25,784

25,784

63,278

63,278

Non-cash additions to available for sale investment

(86,272)

(86,272)

(21,298)

(21,298)

Increase in provision for impairment of loans to subsidiaries

1,071

2,166

(Increase)/decrease in receivables

11

(14,723)

(6,620)

25,423

21,261

Increase/(decrease) in payables

13

(10,292)

3,851

(68,770)

(49,647)

Net cash outflow from operating activity

(472,746)

(424,047)

(408,553)

(362,201)

Investing activity

Interest received

1,712

8,059

2,314

6,823

Development expenditures

8

(473,527)

(560,250)

Purchase of property, plant & equipment

9

(9,322)

(9,322)

(3,040)

(3,040)

Additional loans to subsidiaries

(443,671)

(594,818)

Net cash outflow from investing activity

(481,137)

(444,934)

(560,976)

(591,035)

Financing activity

Issue of share capital (net of expenses)

1,045,133

1,045,133

325,050

325,050

Net cash inflow from financing activity

1,045,133

1,045,133

325,050

325,050

Net decrease in cash

and cash equivalents

91,250

176,152

(644,479)

(628,186)

Cash and cash equivalents at start of year

309,815

245,140

942,890

873,326

Exchange differences

47,409

11,404

Cash and cash equivalents at 30 September

12

448,474

421,292

309,815

245,140

Notes to the Financial Statements

for the year ended 30 September 2016

Background

Tertiary Minerals plc is a public company incorporated and domiciled in England. It is traded on the AIM market of the London Stock Exchange – EPIC: TYM.

The Company is a holding company for a number of companies (together, “the Group”). The Group’s financial statements are presented in Pounds Sterling (£) which is also the functional currency of the Company.

The following accounting policies have been applied consistently in dealing with items which are considered material in relation to the Group’s financial statements.

1.   Accounting policies

(a) Basis of preparation

The Financial Statements have been prepared on the basis of the recognition and measurement requirements of International Financial Reporting Standards (IFRS), as adopted by the European Union. They have also been prepared in accordance with those parts of the Companies Act 2006 applicable to companies reporting under IFRS.

(b) Going concern

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. These projections include the proceeds of future fundraising necessary within the next 12 months to meet the Company’s and Group’s overheads and planned discretionary project expenditures and to maintain the Company and Group as going concerns. 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. This represents a material uncertainty related to events or conditions which may cast significant doubt on the Group and Company’s ability to continue as going concerns and, therefore, that they may be unable to realise their assets and discharge their 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. 

(c) Basis of consolidation

Investments, including long-term loans, in subsidiaries are valued at the lower of cost or recoverable amount, with an ongoing review for impairment.

The Group’s financial statements consolidate the financial statements of Tertiary Minerals plc and its subsidiary undertakings using the acquisition method and eliminate intercompany balances and transactions.

In accordance with section 408 of the Companies Act 2006, Tertiary Minerals plc is exempt from the requirement to present its own Statement of Comprehensive Income. The amount of the loss for the financial year recorded within the financial statements of Tertiary Minerals plc is £441,591 (2015: £593,493).

(d) Intangible assets

Exploration and evaluation

Accumulated exploration and evaluation costs incurred in relation to separate areas of interest (which may comprise more than one exploration licence or exploration licence applications) are capitalised and carried forward where:

(1) such costs are expected to be recouped through successful exploration and development of the area, or alternatively by its sale; or 

(2) exploration and/or evaluation activities in the area have not yet reached a stage which permits a reasonable assessment of the existence or otherwise of economically recoverable reserves, and active and significant operations in, or in relation to the areas are continuing.

A bi-annual review is carried out by the Directors to consider whether any exploration and development costs have suffered impairment in value and, if necessary, provisions are made according to these criteria.  The bi-annual impairment reviews were conducted in March 2016 and September 2016.

Accumulated costs, where the Group does not yet have an exclusive exploration licence and in respect of areas of interest which have been abandoned, are written off to the income statement in the year in which the pre-licence expense was incurred or in which the area was abandoned.

Development

Exploration, evaluation and development costs are carried at the lower of cost and expected net recoverable amount. On reaching a mining development decision, exploration and evaluation costs are reclassified as development costs and all development costs on a specific area of interest will be amortised over the useful economic life of the projects, once they become income generating and the costs can be recouped.

(e) Property, plant & equipment

All property, plant and equipment assets are stated at cost less accumulated depreciation. Depreciation is provided by the Group on all property, plant and equipment, at rates calculated to write off the cost, less estimated residual value, of each asset evenly over its expected useful life, as follows:

Fixtures and fittings                      20% to 33% per annum                     Straight line basis

Computer equipment                   33% per annum                                   Straight line basis

Useful life and residual value are reassessed annually.

(f) Available for sale investments

Available for sale financial assets include non-derivative financial assets that are either designated as such or do not qualify for inclusion in any of the other categories of financial assets. Available for sale investments are initially measured at cost and subsequently at fair value, being the equivalent of market value, with changes in value recognised in equity. Gains and losses arising from available for sale investments are recognised in the income statement when they are sold or impaired. 

(g) Trade and other receivables and payables

Trade and other receivables and payables are measured at initial recognition at fair value and subsequently measured at amortised cost.

(h) Cash and cash equivalents

Cash and cash equivalents consist of cash at bank and in hand and short-term bank deposits with a maturity of three months or less.

(i) Deferred taxation

Deferred taxation, if applicable, is provided in full in respect of taxation deferred by temporary differences between the treatment of certain items for taxation and accounting purposes.

Deferred tax assets are recognised to the extent that they are regarded as recoverable.

(j) Revenue

Revenue is measured at the fair value of the consideration received or receivable and represents amounts receivable for services provided to Sunrise Resources plc net of discounts, VAT and other sales-related taxes. 

(k) Foreign currencies

The Group’s consolidated financial statements are presented in Pounds Sterling (£), being the functional currency of the Company, and the currency of the primary economic environment in which the Company operates. Monetary assets and liabilities denominated in foreign currencies are translated at the rate of exchange ruling at the balance sheet date.

For consolidation purposes, the net investment in foreign operations and the assets and liabilities of overseas subsidiaries, associated undertakings and joint arrangements, that have a functional currency different from the Group’s presentation currency, are translated at the closing exchange rates. Income statements of overseas subsidiaries, that have a functional currency different from the Group’s presentation currency, are translated at exchange rates at the date of transaction. Exchange differences arising on opening reserves are taken to the foreign currency reserve. 

(l) Leasing and hire purchase commitments

Rentals applicable to operating leases where substantially all the benefits and risks of ownership remain with the lessor are charged to the income statement on a straight-line basis. 

(m) Share warrants and share based payments

The Company issues warrants and options to employees (including directors) and third parties. For all options and warrants issued after 7 November 2002 the fair value of the services received is recognised as a charge measured at fair value on the date of grant and determined in accordance with IFRS 2, IAS 32 and IAS 39, adopting the Black-Scholes-Merton model. The fair value is charged to administrative expenses on a straight-line basis over the vesting period, together with a corresponding increase in equity, based on the management’s estimate of shares that will eventually vest. The expected life of the options and warrants is adjusted based on management’s best estimates, for the effects of non-transferability, exercise restrictions and behavioural considerations. The details of the calculation are shown in Note 15.

(n) Judgements and estimations in applying accounting policies

In the process of applying the Group’s accounting policies above, the Group has identified the judgemental areas that have the most significant effect on the amounts recognised in the financial statements:

Intangible assets – exploration and evaluation

Capitalisation of exploration and evaluation costs requires that costs be assessed against the likelihood that such costs will be recoverable against future exploitation or sale or alternatively, where activities have not reached a stage which permits a reasonable estimate of the existence of mineral reserves, a judgement that future exploration or evaluation should continue. This requires management to make estimates and judgements and to make certain assumptions, often of a geological nature, and most particularly in relation to whether or not an economically viable mining operation can be established in future. Such estimates, judgements and assumptions are likely to change as new information becomes available. When it becomes apparent that recovery of expenditure is unlikely the relevant capitalised amount is written off to the income statement.

Impairment

Impairment reviews for deferred exploration and evaluation costs are carried out on a project by project basis, with each project representing a potential single cash generating unit. The Group will review information produced by its exploration activities and consider whether the carrying value is impaired.  Assessment of the impairment of assets is a judgement based on analysis of the probability of future cash flows from the relevant project, including consideration of:

(a) The period for which the entity has the right to explore in the specific area and whether this right will expire in the near future, and whether the right is expected to be renewed.

(b) The availability of funds for expenditure on further exploration for and evaluation of mineral resources on the specific project.

(c)  Exploration for and evaluation of mineral resources on the specific project has not led to the discovery of commercially viable quantities of mineral resources and the entity has decided to discontinue such activities on the project.

(d) Sufficient data exist to indicate that, although a development on the specific project is likely to proceed, the carrying amount of the exploration and evaluation asset is unlikely to be recovered in full from successful development of a mine or by the sale of the project.

Impairment reviews for investments in subsidiaries and available for sale assets are carried out on an individual basis. The Group reviews performance indicators of the investment, such as market share price, to indicate whether the carrying value is impaired.

Available for sale assets represent a holding in Sunrise Resources plc as described in Note 10.  In the Interim Financial Statements for the six month period to 31 March 2016 a reduction in share price from cost was considered significant in terms of value and as a result the asset was treated as impaired in line with the requirements of IAS 39. This treatment is despite the fact that directors do not believe that the underlying business of Sunrise Resources plc is impaired either economically or commercially. A subsequent increase in share price in the period to 30 September 2016 has been recognised in equity (see note 1(f)).

Going concern

The preparation of financial statements requires an assessment of the validity of the going concern assumption. The validity of the going concern assumption is dependent on finance being available for the continuing working capital requirements of the Group. Based on the assumption that such finance will become available, the Directors believe that the going concern basis is appropriate for these accounts.

Share warrants, share options and share based payments

The estimates of costs recognised in connection with the fair value of share options and share warrants require that management selects an appropriate valuation model and make decisions on various inputs into the model, including the volatility of its own share price, the probable life of the warrants and options before exercise, and behavioural considerations of warrant holders.

(p) Standards, amendments and interpretations not yet effective

A number of new standards and amendments to standards and interpretations have been issued but are not yet effective and in some cases have not yet been adopted by the EU.

The directors do not expect that the adoption of these standards will have a material impact on the financial statements of the Group in future periods. Specifically, the adoption of IFRS 9 will have minimal impact for both the measurement and disclosures of existing financial instruments. As the Group does not have any turnover other than recharge of expenses, IFRS 15 will not have any significant impact on revenue recognition and related disclosures. Finally, the adoption of IFRS 16 will not have any impact on the financial statements of the Group as all lease contracts are for periods of less than one year.

2.    Segmental analysis

        The Chief Operating Decision Maker is the Board of Directors. The Board considers the business has one reportable segment, the management of exploration projects, which is supported by a Head Office function. For the purpose of measuring segmental profits and losses the exploration segment bears only those direct costs incurred by or on behalf of those projects.  No Head Office cost allocations are made to this segment. The Head Office function recognises all other costs.

 

2016

Exploration

projects

£

Head

office

£

Total

£

Consolidated Income Statement

Revenue (all UK)

190,124

190,124

Impairment of deferred exploration costs

Pre-licence exploration costs

(25,343)

(25,343)

Impairment of available for sale investment

(81,142)

(81,142)

Share based payments

(25,785)

(25,785)

Administration costs and other expenses

(533,072)

(533,072)

Operating Loss

(25,343)

(449,875)

(475,218)

Bank interest received

1,712

1,712

Loss before income tax

(25,343)

(448,163)

(473,506)

Income tax

Loss for the year attributable to equity holders

(25,343)

(448,163)

(473,506)

Non-current assets

Intangible assets:

    Deferred exploration costs:

        Kaaresselkä Gold Project, Finland

303,432

303,432

        Kiekerömaa Gold Project, Finland

141,190

141,190

        Lassedalen Fluorspar Project, Norway

376,921

376,921

        Storuman Fluorspar Project, Sweden

1,931,150

1,931,150

        MB Fluorspar Project, USA

1,676,568

1,676,568

4,429,261

4,429,261

Property, plant & equipment

9,785

9,785

Available for sale investment

204,470

204,470

4,429,261

214,255

4,643,516

Current assets

Receivables

23,603

81,429

105,032

Cash and cash equivalents

448,474

448,474

23,603

529,903

553,506

Current liabilities

Trade and other payables

(35,051)

(57,437)

(92,488)

Net current assets

(11,448)

472,466

461,018

Net assets

4,417,813

686,721

5,104,534

Other data

Deferred exploration additions

473,527

473,527

Exchange rate adjustments to deferred exploration costs

419,125

419,125

 

2015

Exploration

projects

£

Head

office

£

Total

£

Consolidated Income Statement

Revenue (all UK)

181,598

181,598

Impairment of deferred exploration costs

(4,522)

(4,522)

Pre-licence exploration costs

(23,869)

(23,869)

Transfer from available for sale investment reserve on impairment of available for sale investment

(260,997)

(260,997)

Share based payments

(63,278)

(63,278)

Administration costs and other expenses

(506,237)

(506,237)

Operating Loss

(28,391)

(648,914)

(667,305)

Bank interest received

2,314

2,314

Loss before income tax

(28,391)

(646,600)

(674,991)

Income tax

Loss for the year attributable to equity holders

(28,391)

(646,600)

(674,991)

Non-current assets

Intangible assets:

    Deferred exploration costs:

        Kaaresselkä Gold Project, Finland

289,421

289,421

        Kiekerömaa Gold Project, Finland

132,467

132,467

        Lassedalen Fluorspar Project, Norway

360,585

360,585

        Storuman Fluorspar Project, Sweden

1,656,135

1,656,135

        MB Fluorspar Project, USA

1,098,001

1,098,001

3,536,609

3,536,609

Property, plant & equipment

7,296

7,296

Available for sale investment

148,222

148,222

3,536,609

155,518

3,692,127

Current assets

Receivables

15,106

75,203

90,309

Cash and cash equivalents

309,815

309,815

15,106

385,018

400,124

Current liabilities

Trade and other payables

(46,743)

(56,037)

(102,780)

Net current assets

(31,637)

328,981

297,344

Net assets

3,504,972

484,499

3,989,471

Other data

Deferred exploration additions

560,250

560,250

Exchange rate adjustments to deferred exploration costs

70,843

70,843

 

3.    Loss before income tax

2016

£

2015

£

The operating loss is stated after charging

Operating lease rentals – land and buildings

19,727

19,290

Fees payable to the Group’s Auditor for:

    The audit of the Group’s annual accounts

6,000

6,000

Fees payable to the Group’s Auditor and its associates for other services:

    The audit of the Group’s subsidiaries, pursuant to legislation

3,000

3,000

    Other services

1,000

1,000

Depreciation – owned assets

6,833

4,600

 

4.    Directors’ emoluments

  Remuneration in respect of Directors was as follows:

 

Net cost

to Group

2016

£

Income from

recharge to

Sunrise Resources

2016

£

 

 

Total

2016

£

 

 

Total

2015

£

P L Cheetham (salary)

20,815

88,427

109,242

108,706

R H Clemmey (salary)

97,280

628

97,908

81,530

D A R McAlister (salary)

16,000

16,000

16,000

D Whitehead (salary)

15,000

15,000

15,519

149,095

89,055

238,150

221,755

        The above remuneration amounts does not include non-cash share based payments charged in these financial statements in respect of share warrants issued to the Directors in the year amounting to £19,308 (2015: £48,949) or Employer’s National Insurance contributions of £27,530 (2015: £25,076).

        The above remuneration amount for R H Clemmey includes a bonus of £15,977 (2015: £Nil).

        There were no pension contributions made during the year on behalf of Directors (2015: £Nil).

The Directors are also the key management personnel.  If all benefits are taken into account, the total key management personnel compensation would be £257,458 (2015: £270,704).

5.    Staff costs

  Total staff costs for the Group and Company, including directors, were as follows:

 

Net cost

to Group

2016

£

Income from recharge to

Sunrise Resources

2016

£

 

 

Total

2016

£

 

 

Total

2015

£

Wages and salaries

214,286

145,298

359,584

329,801

Social security costs

19,336

17,050

36,386

34,757

Share based payments

25,785

25,785

58,730

259,407

162,348

421,755

423,288

 

The average monthly number of employees, including directors, employed by

the Group and Company during the year was as follows:

2016

Number

2015

Number

Technical employees

3

3

Administration employees (including Non-Executive Directors)

6

5

9

8

           

An increase in the number of administration employees for 2016 is due to inclusion of the part-time company secretary onto the payroll, which was not included in prior years.

6.    Loss per share

Loss per share has been calculated using the loss for the year attributable to equity holders of the parent and the weighted average number of shares in issue during the year.

2015

Loss (£)

(473,506)

(674,991)

Weighted average shares in issue (No.)

233,830,700

181,090,346

Basic and diluted loss per share (pence)

(0.37)

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 anti-dilutive.

7.    Income tax

No liability to corporation tax arises for the year due to the Group recording a taxable loss (2015: £Nil).

The tax credit for the period is lower than the credit resulting from the loss before tax at the standard rate of corporation tax in the UK – 20% (2015: 20%). The differences are explained below.

 

 

2016

£

2015

£

Tax reconciliation

Loss before income tax

(473,506)

(674,991)

Tax at hybrid rate 20% (2015: 20.5%)

(94,701)

(138,373)

Differences between capital allowances and depreciation

(4,218)

(549)

Pre-trading expenditure no longer deductible for tax purposes

125,770

85,476

Tax effect at 20% (2015: 20.5%)

24,310

17,410

Unrelieved tax losses carried forward

(70,391)

(120,963)

Tax recognised on loss

Total losses carried forward for tax purposes

(5,351,834)

(4,999,880)

Factors that may affect future tax charges

The Group has total losses carried forward of £5,351,834 (2015: £4,999,880).  This amount would be charged to tax, thereby reducing tax liability, if sufficient profits were made in the future. The deferred tax asset has not been recognised as the future recovery is uncertain given the exploration status of the Group. The carried tax loss is adjusted each year for amounts that can no longer be carried forward.

8.   Intangible assets

Group

Deferred

exploration

expenditure

2016

£

Deferred

exploration

expenditure

2015

£

Cost

At start of year

4,799,087

4,309,680

Additions

473,527

560,250

Exchange adjustments

419,125

(70,843)

At 30 September

5,691,739

4,799,087

Impairment losses

At start of year

(1,262,478)

(1,257,956)

Charge during year

(4,522)

At 30 September

(1,262,478)

(1,262,478)

Carrying amounts

At 30 September

4,429,261

3,536,609

At start of year

3,536,609

3,051,724

 

9.    Property, plant & equipment

Group

Fixtures

 and fittings

2016

£

Company

fixtures

and fittings

2016

£

Group

Fixtures

and fittings

2015

£

Company

fixtures

and fittings

2015

£

Cost

At start of year

53,422

36,046

50,544

33,006

Additions

9,322

9,322

3,040

3,040

Disposals

(11,224)

(11,224)

(162)

At 30 September

51,520

34,144

53,422

36,046

Depreciation

At start of year

(46,126)

(29,085)

(41,688)

(25,202)

Charge for the year

(6,833)

(6,647)

(4,600)

(3,883)

Disposals

11,224

11,224

162

At 30 September

(41,735)

(24,508)

(46,126)

(29,085)

Net Book Value

At 30 September

9,785

9,636

7,296

6,961

At start of year

7,296

6,961

8,856

7,804

10.  Investments

        Subsidiary undertakings

Company

Country of

incorporation/

registration

Type and percentage

of shares held at

30 September 2016

Principal activity

Tertiary Gold Limited

England & Wales

100% of ordinary shares

Mineral exploration

Tertiary (Middle East) Limited

England & Wales

100% of ordinary shares

Mineral exploration

Tertiary Minerals US Inc.

Nevada, USA

100% of ordinary shares

Mineral exploration

 

Investment in subsidiary undertakings

Company

2016

£

Company

2015

£

Ordinary shares – Tertiary (Middle East) Limited

1

1

Ordinary shares – Tertiary Gold Limited

224,888

224,888

Ordinary shares – Tertiary Minerals US Inc.

1

1

Loan – Tertiary (Middle East) Limited

683,586

682,301

Less – Provision for impairment

(683,372)

(682,301)

Loan – Tertiary Gold Limited

5,158,075

5,045,884

Loan – Tertiary Minerals US Inc.

1,450,976

1,120,781

At 30 September

6,834,155

6,391,555

 

Available for sale investment

Company

Country of

incorporation/

registration

Type and percentage

of shares held at

30 September 2016

Principal activity

Sunrise Resources plc

England & Wales

9.13% of ordinary shares

Mineral exploration

 

Available for sale investment

Group

2016

£

Company

2016

£

Group

2015

£

Company

2015

£

Value at start of year

148,222

148,222

239,626

239,626

Additions to available for sale investment

86,273

86,273

21,298

21,298

Movement in valuation of available for sale investment

(30,025)

(30,025)

(112,702)

(112,702)

At 30 September

204,470

204,470

148,222

148,222

The additions to available for sale investment are shares issued in lieu of a cash payment for settlement of outstanding invoices for management fees.

The fair value of the available for sale investment is equal to the market value of the shares in Sunrise Resources plc at 30 September 2016, based on the closing mid-market price of shares on the AIM Market.

These are level one inputs for the purpose of the IFRS 13 fair value hierarchy. 

11.  Receivables

Group

2016

£

Company

2016

£

Group

2015

£

Company

2015

£

Trade receivables

64,902

64,902

53,906

53,906

Other receivables

22,683

676

15,102

524

Prepayments

17,447

15,799

21,301

20,327

At 30 September

105,032

81,377

90,309

74,757

The Group aged analysis of trade receivables is as follows:

Not

impaired

 

£

30 days

or less

 

£

Over

30 days

 

£

Total

carrying

 amount

£

2016 Trade receivables

64,902

64,902

64,902

2015 Trade receivables

53,906

53,906

53,906

 

12. Cash and cash equivalents

Group

2016

£

Company

 2016

£

Group

2015

£

Company

 2015

£

Cash at bank and in hand

43,756

16,574

91,227

26,552

Short-term bank deposits

404,718

404,718

218,588

218,588

At 30 September

448,474

421,292

309,815

245,140

13. Trade and other payables

Group

2016

£

Company

 2016

£

Group

2015

£

Company

 2015

£

Trade payables

33,471

16,214

32,027

13,042

Other taxes and social security costs

10,358

10,358

5,684

5,684

Accruals

38,324

16,517

59,866

25,644

Other payables

10,335

10,335

5,203

5,203

At 30 September

92,488

53,424

102,780

49,573

14.   Issued capital and reserves

2016

No.

2016

£

2015

No.

2015

£

Allotted, called up and fully paid

Ordinary shares of 1p each

Balance at start of year

187,859,217

1,878,592

174,302,034

1,743,020

Shares issued in the year

79,084,996

790,850

13,557,183

135,572

Balance at 30 September

266,944,213

2,669,442

187,859,217

1,878,592

 

During the year to 30 September 2016 the following share issues took place:

An issue of 28,888,889 1.0p ordinary shares at 2.25p per share, by way of placing, for a total consideration of £592,412 net of expenses (6 October 2015).

An issue of 97,170 1.0p ordinary shares at 1.40p per share to a director, in satisfaction of directors fees, for a total consideration of £1,360 (11 March 2016).

An issue of 50,000,000 1.0p ordinary shares at 1.00p per share, by way of placing, for a total consideration of £450,000 net of expenses (25 May 2016).

An issue of 98,937 1.0p ordinary shares at 1.375p per share to a director, in satisfaction of directors fees, for a total consideration of £1,361 (2 August 2016).

During the year to 30 September 2015 a total of 13,557,183 1.0p ordinary shares were issued, at an average price of 2.654p, for a total consideration of £324,795 net of expenses.

The total amount of transaction fees debited to the Share Premium account in the year was £107,588 (2015: £34,745).

Nature and purpose of reserves

Foreign currency reserve

Exchange differences relating to the translation of the net assets of the Group’s foreign operations, which relate to subsidiaries only, from their functional currency into the Parent’s functional currency, being Sterling, are recognised directly in the foreign currency reserve.

Share option reserve

The share option reserve is used to recognise the fair value of share based payments provided to employees, including key management personnel, by means of share options and share warrants issued as part of their remuneration. Refer to Note 15 for further details.

15.  Warrants and options granted

Warrants not exercised at 30 September 2016

Issue date

Exercise

price

Number

Exercisable

Expiry

dates

26/01/2012

9.75p

2,300,000

Any time before expiry

26/01/2017

26/01/2012

9.75p

200,000

Any time before expiry

26/01/2017

10/01/2013

7.63p

1,700,000

Any time before expiry

10/01/2018

10/01/2013

7.63p

300,000

Any time before expiry

10/01/2018

14/01/2014

11.25p

1,050,000

Any time before expiry

14/01/2019

14/01/2014

11.25p

300,000

Any time before expiry

14/01/2019

01/10/2014

9.00p

600,000

Any time before expiry

30/09/2019

01/10/2014

12.00p

600,000

Any time from 01/10/2016

30/09/2019

01/10/2014

15.00p

600,000

Any time from 01/10/2017

30/09/2019

01/10/2014

18.00p

600,000

Any time from 01/10/2018

30/09/2019

01/10/2014

21.00p

600,000

Any time from 01/10/2018

30/09/2019

20/02/2015

4.00p

1,200,000

Any time before expiry

20/02/2020

20/02/2015

4.00p

500,000

Any time before expiry

20/02/2020

11/03/2016

1.40p

200,000

Any time from 11/03/2017

11/03/2021

11/03/2016

1.40p

800,000

Any time from 11/03/2017

11/03/2021

 

Warrants and options are issued for nil consideration and are exercisable as disclosed above. They are exchangeable on a one for one basis for each ordinary share of 1.0p at the exercise price on the date of conversion.

Share based payments

The Company has an Inland Revenue approved share option scheme for all employees. Options are exercisable at a price equal to the market price of the Company’s shares on the date of grant. The vesting period is three years. If the options remain unexercised after a period of ten years from the date of grant the options expire. Options may be forfeited if the employee leaves the Company.

In addition, the Company issues warrants to directors and employees, outside of the approved scheme, on varying terms and conditions.

 

Details of the share warrants outstanding during the year are as follows:

2016

2015

Number of

share warrants

Weighted

average

exercise

price

Pence

Number of

share warrants

and share

options

Weighted

average

exercise

price

Pence

Outstanding at start of year

15,050,000

9.259

13,700,000

7.422

Granted during the year

1,000,000

1.400

4,700,000

11.02

Exercised during the year

(200,000)

2.375

Forfeited during the year

Expired during the year

(4,500,000)

7.272

(3,150,000)

4.337

Outstanding at 30 September

11,550,000

9.353

15,050,000

9.259

Exercisable at 30 September

8,150,000

8.224

10,350,000

8.459

The warrants outstanding at 30 September 2016 had a weighted average exercise price of £0.08 (2015: £0.09), a weighted average fair value of £0.03 (2015: £0.03) and a weighted average remaining contractual life of 2.22 years.

There were no warrants exercised in the year ended 30 September 2016. Warrants exercised in the year ended 30 September 2015 had a weighted average exercise price of £0.02.

In the year ended 30 September 2016, warrants were granted on 11 March 2016. The aggregate of the estimated fair values of the warrants granted on this date is £4,603. In the year ended 30 September 2015, warrants were granted on 1 October 2014 and 20 February 2015. The aggregate of the estimated fair values of the warrants granted on these dates is £76,354. 

No share options were outstanding at 30 September 2016.

No share options were granted in the year ended 30 September 2016 or the year ended 30 September 2015.

The inputs into the Black-Scholes-Merton Pricing Model were as follows:    

2016

2015

Weighted average share price

1.40p

5.43p

Weighted average exercise price

1.40p

11.02p

Expected volatility

75%

80%

Expected life

4 years

4 years

Risk-free rate

0.80%

1.75%

Expected dividend yield

0%

0%

        Expected volatility was determined by calculating the historical volatility of the Company’s share price over the previous four years. The expected life used in the model has been adjusted based on management’s best estimate for the effects of non-transferability, exercise restrictions and behavioural considerations.

        The Company recognised total expenses of £25,785 and £63,278 related to equity-settled share based payment transactions in 2016 and 2015 respectively.

16. Operating lease commitments

The Company rents office premises under an operating lease agreement. The current lease term is for one year expiring on 30 November 2016. No contingent rent is payable. The lease is eligible for renewal on expiry.

Future minimum lease payments under non-cancellable operating leases are:

2016

Land & buildings

£

2015

Land & buildings

£

Office accommodation:

Within one year

3,299

3,234

        The Company does not sub-lease any of its leased premises.

        Lease payments recognised in loss for the period amounted to £19,727 (2015: £19,290).

17.  Related party transactions

Key management personnel

The Directors holding office in the period and their warrants held in the share capital of the Company are:

At 30 September 2016

At 30 September 2015

Warrants

Shares number

Number

Exercise

price

Expiry date

Shares

number

Warrants

number

P L Cheetham*

11,876,913

1,500,000

9.750p

26/01/2017

11,876,913

5,000,000

500,000

7.630p

10/01/2018

500,000

11.250p

14/01/2019

1,000,000

4.000p

20/02/2020

D A R McAlister

453,894

300,000

9.750p

26/01/2017

257,787

600,000

D Whitehead

414,900

300,000

9.750p

26/01/2017

414,900

600,000

R H Clemmey

504,037

1,000,000

7.630p

10/01/2018

6,333

5,350,000

350,000

11.250p

14/01/2019

600,000

9.000p

30/09/2019

600,000

12.000p

30/09/2019

600,000

15.000p

30/09/2019

600,000

18.000p

30/09/2019

600,000

21.000p

30/09/2019

        * Includes 2,843,625 shares held by K E Cheetham, wife of P L Cheetham.

The Directors have no beneficial interests in the shares of the Company’s subsidiary undertakings as at 30 September 2016. The Directors of the Company are the Directors of all Group companies.

        Details of the Parent Company’s investment in subsidiary undertakings are shown in Note 10.

        Sunrise Resources plc

During the year the Company charged costs of £190,124 (2015: £181,598) to Sunrise Resources plc being shared overheads of £23,488 (2015: £22,809), costs paid on behalf of Sunrise Resources plc of £4,288 (2015: £6,312), staff salary costs of £61,866 (2015: £55,454) and directors’ salary costs of £100,482 (2015: £97,023), comprising P L Cheetham £99,775 (2015: £96,972) and R H Clemmey £707 (2015: £51). The salary costs in Notes 4 and 5 include these charges.

         At the balance sheet date an amount of £64,724 (2015: £53,888) was due from Sunrise Resources plc.

        P L Cheetham, a director of Tertiary Minerals plc, is also a director of Sunrise Resources plc.

Shares and warrants held in Sunrise Resources plc by the Tertiary Minerals plc Directors are as follows:

 

At 30 September 2016

At 30 September 2015

Warrants

Shares

number

Number

Exercise

price

Expiry date

Shares

number

Warrants

number

P L Cheetham*

75,776,599

2,000,000

1.250p

24/02/2017

22,725,951

13,222,222

2,000,000

0.850p

19/03/2018

2,000,000

0.550p

14/01/2019

3,000,000

0.275p

05/02/2020

D A R McAlister

550,000

550,000

D Whitehead

250,000

250,000

R H Clemmey

500,000

1.250p

24/02/2017

2,250,000

500,000

0.850p

19/03/2018

500,000

0.550p

14/01/2019

750,000

0.275p

05/02/2020

500,000

0.160p

18/02/2021

        * Includes 5,500,000 shares held by K E Cheetham, wife of P L Cheetham.

18.  Capital management

The Group’s capital requirements are dictated by its project and overhead funding requirements from time to time. Capital requirements are reviewed by the Board on a regular basis. 

        The Group manages its capital to ensure that entities within the Group will be able to continue as going concerns, to increase the value of the assets of the business and to provide an adequate return to shareholders in the future when exploration assets are taken into production.

The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the risk characteristics of its assets. In order to maintain or adjust the capital structure the possibilities open to the Group in future include issuing new shares, consolidating shares, returning capital to shareholders, taking on debt, selling assets and adjusting the amount of dividends paid to the shareholders.

19.  Financial instruments

At 30 September 2016, the Group’s and Company’s financial assets consisted of available for sale investments, trade receivables and cash and cash equivalents.  At the same date, the Group and Company had no financial liabilities other than trade and other payables due within one year and had no agreed borrowing facilities as at this date. There is no material difference between the carrying and fair values of the Group and Company’s financial assets and liabilities.

 

        The carrying amounts for each category of financial instruments held at 30 September 2016, as defined in IAS 39, are as follows:

Group

2016

£

Company

 2016

£

Group

2015

£

Company

 2015

£

Loans & receivables

536,846

487,652

379,845

300,510

Available for sale investments

204,470

204,470

148,222

148,222

Financial liabilities at amortised cost

81,449

42,385

96,416

43,209

Risk management

        The principal risks faced by the Group and Company resulting from financial instruments are liquidity risk, foreign currency risk and, to a lesser extent, interest rate risk and credit risk. The Directors review and agree policies for managing each of these risks as summarised below. The policies have remained unchanged from previous periods as these risks remain unchanged.

        Liquidity risk

        The Group holds cash balances in Sterling, US Dollars, Swedish Kronor, Euros and Saudi Riyals to provide funding for exploration and evaluation activity, whilst the Company holds cash balances in Sterling, US Dollars and Euros. The Group and Company are dependent on equity fundraising through private placings which the Directors regard as the most cost-effective method of fundraising. The Directors monitor cash flow in the context of their expectations for the business to ensure sufficient liquidity is available to meet foreseeable needs.

        Currency risk

        The Group’s financial risk management objective is broadly to seek to make neither profit nor loss from exposure to currency risk. The Group is exposed to transactional foreign exchange risk and takes profits and losses as they arise as, in the opinion of the Directors, the cost of hedging against fluctuations would be greater than the related benefit from doing so.

Bank and cash balances were held in the following denominations:

 Group

Company

2016

£

2015

£

2016

£

2015

£

United Kingdom Sterling

415,860

225,795

409,535

221,972

United States Dollar

19,240

71,543

11,641

23,140

Swedish Krona

553

2,373

European Euro

12,777

9,200

116

28

Canadian Dollar

866

Saudi Riyal

44

38

448,474

309,815

421,292

245,140

        Surplus Sterling funds are placed with NatWest bank on short-term treasury deposits at variable rates of interest

        The Company and the Group are exposed to changes in the US Dollar/UK Sterling exchange rate mainly in the Sterling value of US Dollar denominated financial assets.

        Sensitivity analysis shows that the Sterling value of its US Dollar denominated financial assets at

30 September 2016 would increase or decrease by £962 for each 5% increase or decrease in the value of Sterling against the Dollar.

        Neither the Company nor the Group is exposed to material transactional currency risk.

        Interest rate risk

        The Group and Company finance their operations through equity fundraising and therefore do not carry borrowings.

        Fluctuating interest rates have the potential to affect the loss and equity of the Group and the Company insofar as they affect the interest paid on financial instruments held for the benefit of the Group. The Directors do not consider the effects to be material to the reported loss or equity of the Group or the Company presented in the financial statements.

        Credit risk

        The Company has exposure to credit risk through receivables such as VAT refunds, invoices issued to related parties and its joint arrangements for management charges. The amounts outstanding from time to time are not material other than for VAT refunds which are considered by the Directors to be low risk.

        The Company has exposure to credit risk in respect of its cash deposits with NatWest bank and this exposure is considered by the Directors to be low.

20.  Event after the Balance Sheet date

Kaaresselkä and Kiekerömaa Gold Projects, Finland

On 5 December 2016 the Company announced the sale of the two legacy gold assets in Finland to TSX-V listed Aurion Resources Ltd. £100,000 initial consideration to be paid by Aurion: £15,000 in cash and £85,000 in Aurion shares. The Company will retain a royalty interest in the projects.  The sale is conditional upon successful transfer of the Exploration Licences for each project from Tertiary to Aurion and exchange approval by the TSX-V.  For further detail please refer to the Non-Core Projects section of the Operating Review

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