Home » Tertiary Minerals (TYM) » Tertiary Minerals (TYM) – Half-yearly report

Tertiary Minerals (TYM) – Half-yearly report

Tertiary Minerals plc, the AIM-traded company building a strategic position in the fluorspar sector, announces its unaudited interim results for the six months ended 31 March 2017.

Operational Highlights

Storuman Fluorspar Project, Sweden:

  • Exploitation (Mine) Permit has been referred to the Swedish Mining Inspectorate for re-assessment
  • The re-assessment is progressing; the Company has met with the Mining Inspectorate twice in 2017 and information supplementing the original application will be supplied to the Mining Inspectorate in May 2017
  • With the continued support from key stakeholders, the Company is hopeful of a positive resolution in 2017

MB Fluorspar Project, Nevada, USA:

  • Scoping Study modelling and testwork ongoing
  • Scoping Study to be completed following successful completion of the modelling and testwork

Lassedalen Fluorspar Project, Norway:

  • Due diligence has commenced for the purchase of land and old mine workings from Hydro

Kaaresselkä and Kiekerömaa Gold Projects, Finland:

  • Successful completion of the sale of its gold assets to TSX-V listed Aurion Resources Ltd
  • £100,000 initial consideration has been paid by Aurion: £15,000 in cash and £85,000 in Aurion shares (being 83,072 shares)
  • Tertiary retain pre-production and production royalty interests in the projects

Acquisition Opportunities:

  • A number of projects have been shortlisted which are potentially near-term revenue generating
  • More detailed evaluation and due diligence is in progress

Financial Results – Summary:

  • Operating Loss for the six month period of £156,140 (six months to 31 March 2016: £219,962) comprises:
    • Revenue of £134,885; less
    • Administration costs of £286,654 (which includes non-cash share based payments of £6,272); and
    • Pre-licence and reconnaissance exploration costs totalling £4,371
  • Total Group Loss of £211,850 is after charging:
    • Impairment of available for sale investment of £55,987
    • Interest income of £277
  • 132,720 Ordinary Shares were issued during the reporting period to a non-executive director in lieu of fees at a price of 1.025 pence per share
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

 

Chairman’s Statement

I am pleased to present our Interim Report for the six month period ended 31 March 2017.

The Company has made considerable progress in recent years with its 100% owned fluorspar projects, progressing through the development cycle from discovery towards commercial production.

A number of key issues have, however, resulted in delays to the development of our most advanced project, Storuman in Sweden. The government has asked the Swedish Mining Inspector to re-assess its grant of our Mining Concession in the light of a Supreme Court decision to overturn the grant of a third party mining company’s mining concession in the south of Sweden. This re-assessment, intended to consider the impact of mining in the concession area on a wider surrounding area, is underway and additional submissions are being made by the Company. Whilst this is frustrating, many companies in Sweden are similarly affected.

We continue to have the support of the majority of key stakeholders at Storuman, with the notable exception of the Sami reindeer herding community, and remain hopeful of a positive resolution to this in 2017. Any ratification of the grant of the mining concession will, however, be open to appeal and so we are firm in our resolve not to spend any further money on exploration or development of Storuman until the matter is resolved.

In Norway, at our Lassedalen Fluorspar Project, we have commenced due diligence work on the purchase from large Norwegian aluminium producer, Hydro, of the land and mineral rights that underlie our government exploration permissions exploration. A forerunner company of Hydro was responsible for mining fluorspar at Lassedalen in World War II and Hydro is a major consumer of fluorspar downstream products. Due to the presence of old mine workings on the property, a programme of environmental baseline sampling is being undertaken as part of the due diligence. Otherwise the project remains on hold pending a review of project priorities.

In Nevada, USA, our drilling over the past few years has demonstrated a very large resource of low-grade fluorspar at the MB Project. We are continuing our technical and economic studies which include metallurgical studies aimed at production of acid grade fluorspar and the evaluation of a potential by-product industrial filler grade mica. We have also planned a further drilling programme to test for higher grade fluorite mineralisation in specific target areas. We aim to complete a Scoping Study in 2017.

Fluorspar prices in the USA and Europe have remained stable, albeit at low levels, during the first part of 2017. The fluorochemical industry continues to go through a transition stage whereby the fluorine based HFC refrigerant chemicals are being phased out under various global climate change agreements and legislation and being replaced by new zero ozone-depleting and low global warming potential HFO fluorine based chemicals. China has begun to see an improvement in its fluorspar prices during the period, predominantly driven by supply disruptions and improved demand for refrigerants and hydrofluoric acid. Refrigerant demand in the USA has also improved during the period, and this coupled with the US recently imposing anti-dumping duties on China origin refrigerants may result in a more positive outlook for fluorspar prices and demand in the medium-term.

Outside of fluorspar, we were pleased to report in March 2017 the closing of the sale of our Kaaresselkä and Kiekerömaa gold projects in Finland to Canadian listed company Aurion Resources Ltd for £100,000 in cash and shares. We would also receive further payments on the definition of Ore Reserves and Mineral Resources and a royalty on production. Our own historical work on the project leads us to believe that such reserves and resources are likely to be defined with further exploration. The Lapland Gold belt is an emerging gold producing province and Aurion Resources has made a number of new high-grade discoveries in the region of the Kaaresselkä Project. We hope to share in Aurion’s future success.

In January this year we updated the market on our business strategy and, whilst the Company remains committed to its fluorspar business and the development of its fluorspar assets, it has, since then, been reviewing complementary project acquisition opportunities capable of generating revenue and profits in a shorter timescale. It has currently shortlisted a number of projects where more detailed evaluation and due diligence is in progress.

I would like to take this opportunity to thank shareholders for their continuing support and overwhelming approval at the March 2017 General Meeting of the Board’s proposal to subdivide the Ordinary Shares to facilitate future fundraising and we look forward to reporting further progress in 2017. 

Patrick L Cheetham

Executive Chairman

26 May 2017

Consolidated Income Statement

for the six months to 31 March 2017

 

     
  Six months

to 31 March

2017

Unaudited

  Six months

to 31 March

2016

Unaudited

Twelve months

to 30 September

2016

Audited

  £   £ £
 
Revenue
134,885 84,568 190,124
 
Administration costs
(286,654) (297,169) (558,857)
 
Pre-licence and other exploration costs
(4,371) (7,361) (25,343)
 
   
Operating loss (156,140) (219,962) (394,076)
   
Impairment of available for sale investment (55,987) (81,142) (81,142)
 
Interest receivable 277 968 1,712
 
 
Loss before income tax (211,850) (300,136) (473,506)
 
Income tax
 
Loss for the period attributable to equity holders of the parent  

(211,850)

   

(300,136)

 

(473,506)

 
Loss per share – basic and diluted (pence) (note 2) (0.08) (0.14) (0.20)

Consolidated Statement of Comprehensive Income

for the six months to 31 March 2017

 

 

 

 

Six months to 31 March

2017

Unaudited

  Six months to

31 March

2016

Unaudited

Twelve months to

30 September

2016

Audited

£   £ £
Loss for the period
 

(211,850)

   

(300,136)

 

(473,506)

Other comprehensive income:

 

   
Items that could be reclassified subsequently
to the Income Statement:
   
Fair value movement on available for sale investment
 

(3,638)

   

 

Foreign exchange translation differences on foreign currency net investments in subsidiaries
 

 

59,852

   

 

217,075

 

 

466,534

   
Items that have been reclassified subsequently

to the Income Statement:

   
Fair value movement on available for sale investment
 

(107,104)

   

 

51,117

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

 

 

 

55,987

 

 

 

 

   
Total comprehensive income/(loss) for the period attributable to equity holders of the parent
 

(206,753)

   

(83,061)

 

44,145

Company Registration Number 03821411

Consolidated Statement of Financial Position

at 31 March 2017

     
  As at

31 March

2017

Unaudited

  As at

31 March

2016

Unaudited

As at

30 September

2016

Audited

  £   £ £
Non-current assets
Intangible assets
4,497,712 4,038,021 4,429,261
Property, plant & equipment 6,607 13,147 9,785
Available for sale investments 231,463 153,353 204,470
   
  4,735,782 4,204,521 4,643,516
   
Current assets  
Receivables 86,975 104,578 105,032
Cash and cash equivalents 145,212 286,773 448,474
   
  232,187 391,351 553,506
   
Current liabilities  
Trade and other payables (62,555) (78,501) (92,488)
   
Net current assets
 

169,632

 

312,850

 

461,018

 
Net assets
4,905,414 4,517,371 5,104,534
 
Equity
 
Called up share capital
2,670,769 2,168,453 2,669,442
Share premium account
9,066,769 9,116,364 9,066,735
Merger reserve
131,096 131,096 131,096
Share warrant reserve
254,567 370,269 343,486
Available for sale investment reserve
(3,638) 51,117
Foreign currency reserve
442,206 132,895 382,354
Accumulated losses
(7,656,355) (7,401,706) (7,539,696)
 
Equity attributable to the owners of the parent
4,905,414 4,517,371 5,104,534

Consolidated Statement of Changes in Equity

 

 

 

Share

Capital

 

Share

Premium

Account

 

 

Merger

Reserve

 

Share

Warrant

Reserve

 

Available

for Sale

Reserve

 

Foreign

Currency

Reserve

 

 

Accumulated

Losses

 

 

 

Total

£ £ £ £ £ £ £ £
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 (218,994) (218,994)
Impairment of available for sale investment (81,142) (81,142)
Exchange differences 217,075 217,075
Total comprehensive loss for the period 217,075 (300,136) (83,061)
Share issue 289,861 303,912 593,773
Share based payments expense 17,188 17,188
Transfer of expired warrants (90,732) 90,732
At 31 March 2016 2,168,453 9,116,364 131,096 370,269 132,895 (7,401,706) 4,517,371
Loss for the period (173,370) (173,370)
Change in fair value 51,117 51,117
Exchange differences 249,459 249,459
Total comprehensive loss for the period 51,117 249,459 (173,370) 127,206
Share issue 500,989 (49,629) 451,360
Share based payments expense 8,597 8,597
Transfer of expired warrants (35,380) 35,380
At 30 September 2016 2,669,442 9,066,735 131,096 343,486 51,117 382,354 (7,539,696) 5,104,534
Loss for the period (155,863) (155,863)
Transfer of impairment to income statement 55,987 (55,987)
Change in fair value (110,742) (110,742)
Exchange differences 59,852 59,852
Total comprehensive loss for the period (54,755) 59,852 (211,850) (206,753)
Share issue 1,327 34 1,361
Share based payments expense 6,272 6,272
Transfer of expired warrants (95,191) 95,191
At 31 March 2017
2,670,769 9,066,769 131,096 254,567 (3,638) 442,206 (7,656,355) 4,905,414

Consolidated Statement of Cash Flows

for the six months to 31 March 2017

     
  Six months

to 31 March

2017

Unaudited

  Six months

to 31 March

2016

Unaudited

Twelve months

to 30 September

2016

Audited

  £   £ £
Operating activity
 
Total loss after tax (212,127) (301,104) (475,218)
Depreciation charge 3,265 3,471 6,833
Shares issued in lieu of net fees 1,361 1,361 2,721
Impairment charge – available for sale investment 55,987 81,142 81,142
Share based payment charge 6,272 17,188 25,784
Non-cash additions to available for sale investment (52,735) (86,272) (86,272)
(Increase)/decrease in receivables 18,057 (14,269) (14,723)
Increase/(decrease) in payables (29,933) (24,279) (10,292)
 
   
Net cash outflow from operating activity (209,853) (322,762) (470,025)
 
Investing activity  
 
Interest received 277 968 1,712
Development expenditures (108,558) (292,326) (473,527)
Disposal of exploration asset 15,000 ‘- ‘-
Purchase of property, plant & equipment (87) (9,322) (9,322)
 
   
Net cash outflow from investing activity (93,368) (300,680) (481,137)
 
Financing activity  
 
Issue of share capital (net of expenses) 592,412 1,042,412
 
 
Net cash inflow from financing activity 592,412 1,042,412
 
Net (decrease)/increase in cash and cash

equivalents

 

(303,221)

 

(31,030)

 91,250
 
Cash and cash equivalents at start of period 448,474 309,815 309,815
Exchange differences (41) 7,988 47,409
 
 

Cash and cash equivalents at end of period

 

145,212

   

286,773

 448,474

Notes to the Interim Statement

  1. Basis of preparation

The consolidated interim financial information has been prepared in accordance with the accounting policies that are expected to be adopted in the Group’s full financial statements for the year ending 30 September 2017 which are not expected to be significantly different to those set out in Note 1 of the Group’s audited financial statements for the year ended 30 September 2016. These are based on the recognition and measurement principles of IFRS in issue as adopted by the European Union (EU) or that are expected to be adopted and effective at 30 September 2017. The financial information has not been prepared (and is not required to be prepared) in accordance with IAS 34. The accounting policies have been applied consistently throughout the Group for the purposes of preparation of this financial information.

The financial information in this statement relating to the six months ended 31 March 2017 and the six months ended 31 March 2016 has neither been audited nor reviewed by the Auditors, pursuant to guidance issued by the Auditing Practices Board. The financial information presented for the year ended 30 September 2016 does not constitute the full statutory accounts for that period.  The Annual Report and Financial Statements for the year ended 30 September 2016 have been filed with the Registrar of Companies. The Independent Auditors’ Report on the Annual Report and Financial Statement for the year ended 30 September 2016 was unqualified, although did draw attention to matters by way of emphasis in relation to going concern, and did not contain a statement under 498(2) or 498(3) of the Companies Act 2006.

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

  1. Loss per share

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

   
  Six months

to 31 March

2017

Unaudited

Six months

to 31 March

2016

Unaudited

Twelve months

to 30 September

2016

Audited

 
Loss for the period (£)
(211,850) (300,136) (473,506)
Weighted average shares in issue (No.) 266,987,238 215,811,549 233,830,700
Basic and diluted loss per share (pence) (0.08) (0.14) (0.20)

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

  1. Share capital  

During the six months to 31 March 2017 the following share issues took place:

An issue of 132,720 1.0p Ordinary Shares at 1.025p per share to a director, in satisfaction of directors’ fees, for a total consideration of £1,361 (31 January 2017).

  1. Event after the Balance Sheet date

Capital subdivision

At a General Meeting on 13 April 2017 the shareholders approved the subdivision of the Company’s ordinary share capital whereby each existing ordinary share with a nominal value of 1p was subdivided into 1 new ordinary share of 0.01p and 1 deferred share of 0.99p each.

The New Ordinary Shares 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.

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

  1. Interim report

Copies of this interim report are available from Tertiary Minerals plc, Silk Point, Queens Avenue, Macclesfield, Cheshire SK10 2BB, United Kingdom. It is also available on the Company’s website at www.tertiaryminerals.com.


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