TIDMTYM
RNS Number : 7026Z
Tertiary Minerals PLC
15 January 2024
AIM Announcement 15 January 2024
TERTIARY MINERALS PLC
("Tertiary" or "the Company")
Audited Results for the year to 30 September 2023
Tertiary Minerals plc is pleased to announce its Chairman's
Statement and audited results for the year ended 30 September
2023.
The Company will announce posting of its Annual Report and
Financial Statements which will also be published on the Company's
website along with Notice of the Annual General meeting in due
course.
For more information please contact:
Tertiary Minerals plc:
Patrick Cheetham, Executive
Chairman +44 (0) 1625 838 679
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SP Angel Corporate Finance LLP
Nominated Adviser and Broker
Richard Morrison +44 (0) 203 470 0470
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Harry Davies-Ball
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Peterhouse Capital Limited
Joint Broker
Lucy Williams + 44 (0) 207 469 0930
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Duncan Vasey
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Market Abuse Regulation
The information contained within this announcement is deemed by
the Company to constitute inside information as stipulated under
the Market Abuse Regulations (EU) No. 596/2014 as it forms part of
UK domestic law by virtue of the European Union (Withdrawal) Act
2018 ('MAR'). Upon the publication of this announcement via
Regulatory Information Service ('RIS'), this inside information is
now considered to be in the public domain.
Notes:
1. The information in this release has been reviewed by Mr.
Patrick Cheetham (MIMMM, M.Aus.IMM), Executive Chairman of Tertiary
Minerals plc, who is a qualified person for the purposes of the AIM
Note for Mining and Oil & Gas Companies. Mr. Cheetham is a
Member of the Institute of Materials, Minerals & Mining and
also a member of the Australasian Institute of Mining &
Metallurgy.
2. This 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
Dear Shareholder,
It is with much pleasure that I present your annual report for
the year ended 30 September 2023.
In the reporting period we have continued to focus on our
Zambian copper projects in order to make best use of our financial
resources and to meet our option expenditure commitments to our
local partner, Mwashia Resources Ltd. Consequently, our projects in
Nevada have assumed a lower priority as those interests can be
maintained indefinitely and at very low cost.
Our work in Zambia is taking place against a background of
rising interest in copper exploration globally and in Zambia in
particular. Copper is the workhorse of the clean energy transition
and an essential metal in the production of solar and wind power
installations, electric vehicles and battery storage. Copper supply
from existing mines is falling and unless exploration activity is
increased significantly, and quickly, new discoveries and new mine
developments are not likely to meet the forecast rise in
consumption.
Zambia is a long-established producer of copper from its
Copperbelt and Northwest Provinces and President Hichilema's
government is actively promoting exploration and mine development
with ambitious targets for increased copper production. It is
rolling back unfavourable fiscal conditions imposed by the previous
government and industry has responded with around US$10 billion
committed to new mine developments and expansions and the
announcement of a joint Zambian-Chinese plan to build a new US$15
billion copper smelter in the Northwest Province where our Mukai
and Mupala projects are located. Notably, post the reporting
period, on 22 December 2023 it was announced that UAE based
International Resources Holdings (IHG) intends to invest some
US$1.1 billion to secure a 51% stake in Mopani Copper Mines from
ZCCM-IH.
Through our 96% owned Zambian subsidiary, Tertiary Minerals
(Zambia) Limited ("TMZ"), we now have interests in five projects in
Zambia, four of which are held by local partner, Mwashia Resources
Limited ("Mwashia"). All of these projects are well located, being
adjacent to existing mines and/or in very active exploration areas
where new copper discoveries are being made, and we believe they
have great potential.
A key objective in 2023 was to complete soil sampling on all of
the projects held under option from Mwashia, to define drill
targets and prioritise projects for drill testing with the
objective of making a significant copper discovery in 2024, and to
drop those projects where such targets could not be defined. This
objective was met with soil sampling carried out at the Jacks,
Lubuila, Mukai, Konkola West and Mushima North projects in the
reporting period. Some 4,000 soil samples were collected, defining
drill targets at all projects with the exception of the Lubuila
Project where our option was surrendered back to Mwashia.
Our Mukai licence, in the Domes region of northwest Zambia, is
strategically located being surrounded by global copper producer,
First Quantum Minerals' ("FQM") Trident Project licences which
cover the large producing Sentinel copper mine and the newly
developed Enterprise nickel mine. At Mushima North our targets are
for copper and gold.
Our work at the Mukai and Mushima North projects continues to
benefit from the ongoing data sharing and technical cooperation
agreement with FQM which has helped us to focus our soil sampling
programmes and define drill targets for 2024.
An important development in the financial year was the grant to
the Company of the Mupala exploration licence. This covers
copper-prospective rocks adjoining Arc Minerals' Zambian
Copper-Cobalt Project where Anglo American is spending US$88.5
million to earn a 70% interest and which contains a 16km long
strike length of prospective Lower Roan Subgroup rocks, the main
host to copper mineralisation in Zambia.
Just recently, post the reporting period, we were delighted to
have announced the signing of an agreement for our Konkola West
Project with a subsidiary of KoBold Metals Company ("KoBold") and
TMZ's local partner, Mwashia. KoBold Metals will earn-in to the
project and has committed to a drilling programme to test for deep
extensions to the world class copper deposit mined on the adjacent
Konkola mining lease where Vedanta is currently investing over US$1
billion in mine redevelopment. KoBold is a US-based, privately
held, mineral exploration company that couples geoscience, data
science, machine learning, and artificial intelligence to search
for the critical minerals needed for the clean energy transition
and to accelerate growth in the production of electric vehicles.
KoBold is backed by technology investors including Breakthrough
Energy Ventures (initiated by Bill Gates) and a who's who of
Silicon Valley investors, pension funds and major mining companies.
Further details of this exciting project and the agreement with
KoBold are given in the Operating Review.
An unexpected development at the end of the reporting period
came from our long-suspended Storuman Fluorspar Project in Sweden
when the government, after 4 years of deliberation, annulled the
Mining Inspectorate's 2019 decision not to grant the exploitation
concession and the Mining Inspectorate has been instructed to
re-examine its decision. The Storuman Project once underpinned a
much higher market capitalisation for the Company and whilst there
is no immediate intention to allocate significant resources from
other projects, the re-emergence of the Storuman Project as a
potential value catalyst is timely as fluorine, sourced from
fluorspar, is a component in the most common electrolyte used in
lithium-ion batteries today and the use of fluorine-ion batteries
is under active development.
Looking forward to 2024, we have drilling planned for Jacks,
Mushima North and Mukai in Zambia although, given the interest we
have had from other companies in these, we may seek to farm out
this work to a joint venture partner at one of these projects at
least. In addition, at Konkola West, our joint venture partner,
KoBold has committed to commence a drilling programme by no later
than 14 May 2024 targeting deep extensions to the world class
Konkola copper deposit.
In Nevada, funds being available, we plan to drill at the
Brunton Pass Copper-Gold Project where a programme of trenching
last year targeted a high sulphidation epithermal gold deposit
which we believe has been overprinted on copper skarn which may
also suggest the presence of a larger porphyry copper target
nearby.
A more detailed discussion of our exploration programmes and
results can be found in our Operating Report.
Our next Annual General Meeting will be held in London on 14
February 2024 where Mr. Donald McAlister will be retiring and
standing for re-election as is customary practice.
At this AGM we will be seeking approval for two resolutions to
allow for the issue of new shares and the disapplication of
pre-emption rights respectively as we usually do. Without the first
of these resolutions the Company cannot issue new shares while the
second resolution allows the Company to issue shares for cash other
than strictly pro-rata to existing shareholders. For example, it
allows for rounding of entitlements and to exclude the issue of
shares to shareholders in jurisdictions where it would be illegal.
Rights issues are, in any event, prohibitively expensive for small
companies and these resolutions will allow the directors
flexibility to issue new shares to raise funds as and when
necessary, up to the limit specified. I urge shareholders to
support these resolutions as, until such time as the Company is
self-funding, the Company needs to be able to issue shares to raise
funds to continue as a going concern.
That we were able to carry out significant field programmes in
2023 in extremely difficult market conditions is due in no small
part to our dedicated teams in Zambia and the UK and our low-cost
base. Your Board believes that the foundations laid in 2023 should
provide a platform for growth in 2024 and we look forward to
reporting further progress.
Sincerely,
Patrick Cheetham
Executive Chairman
12 January 2024
Strategic Report
Organisation Overview
Tertiary Minerals plc (ticker symbol 'TYM') is an AIM-traded
mineral exploration and development company exploring a portfolio
of projects in Zambia and Nevada (USA), with legacy interests in
northern Europe.
Our strategic focus is to explore and develop energy transition
and precious metal projects in stable and democratic,
mining-friendly jurisdictions.
The Company's current principal activities are the
identification and acquisition of prospective projects, and the
exploration and development of copper, gold and silver resources in
Zambia and in Nevada.
Our aim is to increase shareholder value through the discovery
and development of valuable mineral deposits while optimising
opportunity and minimising risk through management of the Company's
jurisdictional, permitting, technical and commodity profile.
The Parent Company of the Group is Tertiary Minerals plc. The
Group's projects in Nevada are held through a Nevada registered
subsidiary, Tertiary Minerals US Inc., in Zambia through a 96%
owned Zambian registered Company, Tertiary Minerals (Zambia)
Limited, and in Sweden though a Swedish branch of UK registered
subsidiary Tertiary Gold Limited. A fourth subsidiary, UK
registered Tertiary (Middle East) Limited, is inactive. The head
office for all Group companies is based in Macclesfield in the
United Kingdom.
Company's Business Model
For exploration projects, the Group prefers to acquire majority
or 100% ownership of mineral assets at minimal cost. This involves
either applying for exploration licences from the relevant
authority or negotiating rights with existing project owners for
initially low periodic payments and/or expenditure commitments that
rise over time as confidence in the project value increases.
The Group aims to maximise the funds spent on exploration and
development, our core value adding activities. The Company
currently has five employees, including the Executive Chairman, who
work with and oversee carefully selected and experienced
consultants and contractors. The Board of Directors comprises two
independent Non-Executive Directors and the Executive Chairman.
Administration costs are shared through a Management Services
Agreement with Sunrise Resources plc ("Sunrise"), whereby Sunrise
pays a share of the cost of head office overheads and staff costs.
As at 30 September 2023, Tertiary holds 0.54% of the issued
ordinary share capital of Sunrise.
The Company's activities are financed by periodic capital
raisings, through share placings or share related financial
instruments. 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.
Financial Review and Performance
The Group's assets are all in the earlier stages of the typical
mining development cycle and so the Group has no income other than
cost recovery from the management contract with Sunrise Resources
plc ("Sunrise") 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 GBP541,341 for the year (2022:
GBP1,175,817). This included administration costs of GBP572,604
(2022: GBP566,675), expensed pre-licence and reconnaissance
exploration costs of GBP39,792 (2022: GBP80,843), and impairment of
deferred exploration expenditure of GBP111,691 (2022: 699,484).
Administration costs include a charge of GBP17,784 (2022:
GBP31,387) relating to share warrants held by employees and third
parties as required by IFRS 2.
Revenue included GBP166,429 (2022: GBP171,052) for the provision
of management, administration and office services provided to
Sunrise, to the benefit of both companies through efficient
utilisation of services.
The financial statements show that, as at 30 September 2023, the
Group had net current assets of GBP166,410 (2022: GBP251,152). 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 term
suggests, these intangible assets are not cash assets but include
this year's and previous years' accrued expenditure on mineral
projects where that expenditure meets the criteria set out in Note
1(d) (accounting policies) to the financial statements. The
intangible assets total GBP620,481 (2022: GBP542,907) and the
breakdown by project is shown in Note 2 to the Financial
Statements.
Expenditure which does not meet the criteria for continued
capitalisation set out in Note 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 a
company but the Company's financial statements 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") relating
to financial performance are neither applicable nor appropriate to
measure value creation of a company involved in mineral exploration
and which currently has no turnover other than cost recovery. The
applicable KPIs are predominantly qualitative rather than
quantitative and relate to the success, or otherwise, of
exploration and mineral discovery on the Group's projects which is
extensively covered in the Operating Review of the Strategic
Report.
The Company does seek to reduce overhead costs, where
practicable, but is reporting slightly higher administration costs
this financial year of GBP572,604 (2022: GBP566,675) mainly due to
the costs of an additional staff member for a part of the year, an
increase in audit fees and the inclusion of share-based payments
associated with the issue of share warrants during the year.
Fundraising
During the year to 30 September 2023, the Company raised a total
of GBP550,000 before expenses, as shown in Note 14 to the financial
statements.
These funds were raised through:
-- a share placing on 3 February 2023 to clients of the
Company's joint broker, Peterhouse Capital Limited, as detailed in
Note 14 of the financial statements; and
-- a share placing on 13 April 2023 following interest from
professional investors via the Company's joint broker, Peterhouse
Capital Limited, as detailed 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 approval of this
report. Given the Group's cash position at the year-end
(GBP121,813), these projections include the proceeds of future
fundraising necessary within the next 12 months to meet overheads
and planned discretionary project expenditure. The successful
raising of finance is required, based on projections for the Group
and Company, to meet their liabilities as they fall due and
continue to operate on a going concern basis.
Impairment
A biannual review is carried out by the directors to assess
whether there are any indications of impairment of the Group's
assets.
Group
The carrying value of the Lubuila Project in Zambia (GBP40,624)
and the Lucky Project in Nevada, USA, (GBP71,066) were impaired in
full as a result of the year end impairment review. The underlying
reasons were negative exploration results at Lucky and the
surrender of the Company's option to acquire an interest in the
Lubuila property following the receipt of unfavourable results from
exploration during the 2023 field season.
Company
Investments in share capital of subsidiary undertakings
The directors have reviewed the carrying value of the Company's
investments in shares of subsidiary undertakings and the impaired
carrying value is GBP860 , 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
Amounts owed by subsidiary undertakings are unsecured and
repayable in cash. Loan interest is charged to US and Zambia
subsidiaries on intercompany loans with the Parent Company.
A review of the recoverability of loans to subsidiary
undertakings has been carried out. The review indicated potential
credit losses arising in the year relating to Tertiary Gold Limited
and an additional provision of GBP156,594 was made. The provisions
made reflect the differences between the loan carrying amounts and
the value of the underlying project assets.
Tertiary Minerals (Zambia) Limited
Tertiary Minerals (Zambia) Limited is a 96% owned subsidiary
which is fully financed by the Parent Company via intercompany
loans and capital contributions. A recoverability review has raised
no potential credit losses arising in the year.
Operating Review
Tertiary Minerals plc is exploring for copper and precious
metals in Zambia and Nevada, USA, and has a legacy interest for the
industrial mineral fluorspar in Sweden.
The Company has been operating in Zambia since 2021 through a
96% owned subsidiary, Tertiary Minerals (Zambia) Limited
("TMZ").
In Nevada, USA, the Company operates through its long
established 100% owned subsidiary Tertiary Minerals (US) Inc.,
whilst in Sweden its interest is held through its wholly owned UK
subsidiary, Tertiary Gold Limited.
Zambia
TMZ holds a 90% entitlement in the Jacks Copper Project
("Jacks") with local partner Mwashia Resources Limited ("Mwashia")
and has in place option agreements with Mwashia to acquire up to a
90% joint venture interest in four additional exploration licences
considered prospective for copper. All of the licences currently
held by Mwashia are subject to renewal in November 2024. The
Company has no reason to believe that renewals will not be granted.
In the reporting period, TMZ also acquired its first 100% owned
exploration licence, 32139-HQ-LEL ("Mupala").
Following a successful maiden drilling programme at Jacks last
year, the Company's main objective during the reporting period was
to progress soil sampling on all other licences. This objective was
achieved with soil sampling programmes conducted at Lubuila, Mukai,
Konkola West and Mushima North. The Company has now prioritised
projects for drill testing in 2024.
UK & Foreign Investment in Zambia
During the reporting period, Zambia has seen a significant
increase in direct investment in the mining sector largely led by
the increase in demand for copper to support the green energy
transition and the political and fiscal initiatives introduced by
President Hichilema's government.
The reporting period saw the announcement of nearly US$10
billion of new investments in currently producing and mothballed
copper mining operations in Zambia. This includes First Quantum
Minerals' approval of the US$1.25 billion expansion of the
Kansanshi Copper Mine, Vedanta's commitment to invest approximately
US$1 billion to restart production at the Konkola Mine, China's
state-owned China Non-Ferrous Metals Mining Corporation's US$1.3
billion investment in the Chambishi Copper-Cobalt Mine and Barrick
Gold's upcoming expansion of the Lumwana Copper Mine which will see
an investment of approximately US$2 billion.
In addition, Zambia is attracting large-scale investment into
infrastructure development including the recently announced US$15
billion funding from China to construct what will be Africa's
largest copper smelter and the signing of a Memorandum of
Understanding between the African Development Bank and Africa
Finance Corporation with the United States and European governments
to develop the Lobito Rail Corridor. The Lobito Rail Corridor will
connect the Copperbelt of Zambia and the Democratic Republic of
Congo to the port of Lobito in Angola which will open up the mines
of the interior to improved international logistics.
Finally, during the period several large mining and investment
groups undertook due diligence work on the Mopani Copper Mines and,
post the reporting period, a US$1.1 billion bid by UAE based
International Resources Holdings (IHG) has since been made and
accepted by the owner, ZCCM-IH.
Technical Cooperation with First Quantum Minerals Limited
("FQM")
The Company holds a Technical Cooperation and Data Sharing
Agreement with FQM that covers the Mukai Copper Project and Mushima
North Copper Project. This Agreement effectively harnesses the
expertise of one of the world's largest copper producers without
cost to the Company in return for which FQM gains first-hand
knowledge of any new discoveries that the Company makes and is well
positioned should Tertiary seek an exploration or development
partner in future. However, the Agreement does not bind either
company to any further agreement or grant FQM any right of first
refusal, so it is not commercially restrictive for Tertiary.
FQM is a global copper company operating long life mines in
several countries. FQM's copper production from its Kansanshi and
Sentinel mines represents approximately 50% of the total Zambian
copper output.
The Company has already received extensive exploration data from
FQM which has been of substantial benefit to the Company's 2023
exploration programmes. Various Technical Committee meetings were
held in 2023 between the Company and FQM to present the Company's
2023 exploration results and discuss all technical matters relating
to the Mukai Copper Project and the Mushima North Copper
Project.
Konkola West Copper Project (Option Agreement to acquire up to a
90% joint venture interest)
Exploration Licence 27067-HQ-LEL, which forms the Konkola West
Project, covers 71.9km(2) and is located 18km northwest of Chingola
in the Copperbelt Province. Prospective Lower Roan Subgroup rocks
are projected to be deeply buried in the licence area but key fault
structures, such as the Luansobe Fault extension and the Cross Axis
Fault Zone, may cross into Konkola West and bring the Lower Roan
Subgroup close to the surface. These fault structures are often
associated with an increased grade of copper mineralisation in the
area.
The licence lies immediately west of the 15km long line of
copper orebodies exploited at the Konkola-Lubambe-Musoshi mines and
which is also a focus of a deep drilling programme by KoBold Metals
("KoBold") at its Mingomba Project which is reported to be one of
the world's largest currently undeveloped copper deposits. During
the reporting period, Vedanta, the major shareholder of Konkola
Copper Mines, committed to invest approximately US$1 billion
redeveloping the Konkola Copper Mine.
Geophysical Data Acquisition
During the reporting period, the Company acquired licence-wide
airborne geophysical data flown by KoBold in 2021. This comprises
airborne gravity, magnetics and radiometric data, interpretation of
which has identified areas in the north and northwest of the
licence where the target Lower Roan formation - the main host to
copper mineralisation in the Zambian Copperbelt - may be shallower
and less steeply dipping than on the eastern side of the
licence.
Soil Sampling Programme
In August 2023, the Company contracted Geo-Junction Consulting
Limited ("Geo-Junction") to conduct a reconnaissance soil sampling
programme at the Konkola West Copper Project to evaluate the
possibility that copper mineralisation may also occur in younger
rocks at higher stratigraphic levels than the main Lower Roan ore
shale which is currently exploited to the east.
A total of 287 soil samples were collected from a depth of
approximately 30cm at the B-horizon. Samples were dry sieved to
-180 micron and analysed by portable X-ray Fluorescence ("pXRF") .
Only minor occurrences of elevated copper-in-soil were
detected.
Earn-in Agreement with KoBold Metals
Following the end of the reporting period, on 19 December 2023,
the Company and its local partner, Mwashia, signed an Earn-in
Agreement with a subsidiary of KoBold Metals whereby KoBold commits
in Stage 1 to a specified drilling programme, to be completed
within 14 months of signing the Earn-in Agreement and to start no
later than 14 May 2024, in order to earn an initial 51% interest in
the licence (39% Tertiary and 10% Mwashia). KoBold then has the
option to increase its interest to 70% in Stage 2 (20% Tertiary and
10% Mwashia) by sole funding a cumulative US$6 million on
exploration within 48 months of signing the Earn-in Agreement.
KoBold Metals is a US-based, privately held, mineral exploration
company that couples geoscience, data science, machine learning,
and artificial intelligence to search for the critical minerals
needed for the clean energy transition and to accelerate growth in
electric vehicles. KoBold is backed by technology investors
including Breakthrough Energy Ventures (initiated by Bill Gates)
and Silicon Valley venture capital firm Andreessen Horowitz, as
well as institutional investors such as T. Rowe Price and the
Canadian Pension Plan Investment Board.
The objective of the initial drilling programme is to test for
deep extensions to the world class Konkola copper deposit.
Mukai Copper Project (Option Agreement to acquire up to a 90%
joint venture interest)
Exploration Licence 27066-HQ-LEL, which forms the Mukai Copper
Project, covers 55.4km(2) and is located 125km west of Solwezi in
the North-Western Province of Zambia. Located in the Domes Region
of the Central African Copperbelt, the licence encompasses
prospective Lower Roan Subgroup rocks on the southern flank of the
Kabompo Dome.
The licence is directly adjacent to FQM's Trident Project which
includes the recently opened Enterprise Nickel Mine and the large
producing Sentinel (Kalumbila) Copper Mine, located 8km south and
18km southeast of the licence, respectively. Once in full
production, Enterprise will be the largest nickel mine in Africa
with a total Measured and Indicated Resource of 37.5 million tonnes
of ore containing 386,250 tonnes of nickel. The US$2.1 billion
Sentinel Copper Mine has the capacity to treat 55 million tonnes
("Mt") of ore per annum (Mineral Reserves - 657.6 Mt with a mean
grade of 0.46% copper).
The Mukai Copper Project is subject to the Technical Cooperation
and Data Sharing Agreement between TMZ and FQM.
Historical Exploration
Historic exploration in the Mukai licence area was carried out
for copper by Roan Selection Trust Limited ("RST") in the 1960s,
for uranium by Agip in the 1980s, and by an Equinox-Anglo American
JV in the early 2000s. Most of this work was of a regional nature
comprising stream sediment sampling and soil sampling.
To date, FQM has provided Tertiary with licence-wide geological
mapping and geophysical data including magnetic data, radiometric
data and electromagnetic data. FQM's mapping, in part based on this
data, has traced the Enterprise and Sentinel host rocks into the
Mukai Licence where they occur in similar proximity to the deep
seated Kalumbila Fault Zone.
FQM also provided extensive soil sampling data for the
surrounding area, collected as part of the Trident Project, and
drill data on the border of the licence area from their Tirosa
Prospect. Review of the regional soil sampling and drill data
suggested that copper mineralisation intersected at the Tirosa
Prospect continues into the Mukai licence area.
During the reporting period, the Company acquired historical
exploration data from Sinomine Resources Group relating to work
conducted by Hua Yuan Mining Limited which held the licence area
from 2013-2020. The dataset is currently being reviewed but it
appears to be incomplete.
Forest Permits
The licence area lies entirely within Bushingwe National Forest
and access is restricted without prior consent from the Department
of Forestry. After several months of delays, permission to enter
Bushingwe National Forest for soil sampling was granted in late
July 2023.
Soil Sampling Programme
The Company contracted Geo-Junction to perform a soil sampling
programme at Mukai, with work commencing in late August 2023. A
total of 311 soil samples were collected in a first pass soil
sampling programme on north-south sampling lines with a sample
spacing of 100m and line spacing of 300m. Soil samples were
collected from the B-horizon, dried and sieved to -180 micron. The
sieved soil samples were analysed in the field using a pXRF
instrument to guide infill sampling.
Initial pXRF results were reviewed in the field and a total of
206 further samples were collected by infilling the first pass grid
at 150m line spacing and an offset 100m sample spacing. In the
areas of the most significant copper-in-soil anomalies the infill
samples were collected on a much tighter 50m by 100m grid.
The initial pXRF results revealed a broad northwest striking
copper anomaly approximately 1,800m long and 800m wide comprising
174 soil samples with copper values in excess of 80ppm. Soil
samples in this broad anomaly contain an average copper value of
164ppm. Within this, a higher-grade core strikes northwest,
following the favourable stratigraphy, and has dimensions 1,300m
long and 400m wide comprising 71 soil samples averaging 226ppm
copper and having a peak value of 1,660ppm copper (0.16%
copper).
Drill testing of the soil anomaly is warranted and the Company
has received expressions of joint venture interest for the Mukai
Copper Project which are now being considered.
Mushima North Copper Project (Option Agreement to acquire up to
a 90% joint venture interest)
Exploration Licence 27068-HQ-LEL, which forms the Mushima North
Copper Project, covers 701.3km(2) and is located 100km east of
Manyinga in the North-Western Province of Zambia.
The licence encompasses basement rocks outside of the
traditional Copperbelt and the region is a focus of exploration for
copper-gold in so called Iron-Oxide-Copper-Gold ("IOCG") deposits
best exemplified by the giant Olympic Dam copper-gold-uranium
deposit in South Australia.
The past producing Kalengwa copper mine is situated
approximately 20km west of the licence and is believed to be one of
the highest-grade copper deposits ever mined in Zambia with
high-grade ore in excess of 26% copper mined in the 1970s.
The Mushima North Copper Project is also subject to the
Technical Cooperation and Data Sharing Agreement between TMZ and
FQM.
Historical Exploration
Historical exploration has focused on the eastern margin of a
series of syenitic-granitic intrusives. A number of historic copper
prospects occur within the licence and soil anomalies have been
identified in RST soil sampling programmes in the 1960s.
One of these anomalies was followed up by RST with a 154m deep
drill hole, RKN800, which intersected pyritic siltstone and
sandstone containing chalcopyrite (copper sulphide) in association
with calcite veins.
As part of the Data Sharing and Technical Cooperation Agreement
with FQM, the Company was provided with licence wide soil sampling
data (pXRF) and airborne geophysical surveys which included
magnetic and VTEM(TM) electromagnetic data.
In April 2023, the Company contracted JAW Consulting to conduct
a comprehensive historical data compilation and review of
historical exploration data. The work was presented in a
Geophysical Interpretation Report and Targeting Report which drew
upon the data provided by FQM and other regional work such an
airborne Falcon Gravity Survey flown by BHP Billiton ("BHP"), a
Magnetic-Radiometric survey flown by African Minerals Limited and a
SPECTRUM Electromagnetic-Magnetic-Radiometric survey flown by
Zamanglo Prospecting Limited.
The Targeting Report presented a number of exploration targets
with the two highest priority for follow-up being target C1 and
target A1.
Target C1 is a prominent gravity high defined by BHP's Falcon
airborne gravity survey with a coincident copper soil anomaly.
Historical drill hole RKN800 sits on the margin of the gravity
anomaly. Target A1 is a 1.7km long copper soil anomaly with values
up to 350ppm copper (pXRF) defined by 500m spaced samples and
supported by coincident arsenic and zinc anomalies.
Historical Drill Core Resampling
Drill core from RST drill hole RKN800 is stored at ZCCM-IH's
core storage facility in Kalulushi, Zambia. The core was logged,
sampled and submitted to SGS Laboratories in Kalulushi for analysis
by independent contractor Geo-Junction.
Preliminary analysis was performed on the drill core at the
storage facility using pXRF to provide a guide for core cutting and
sampling. Although low-level copper mineralisation was observed in
the interval from 0-100m, it was too intermittent and low level to
warrant sampling and therefore only the interval 100-155m was
sampled. Drill core was cut to quarter core and sampled on 1m
lengths over this interval.
Drill core analysis was performed using SGS analytical method
code ICP42S, a 4-acid digest, ICP-OES finish, providing results for
a total of 33 elements. Analytical results returned 33m grading
0.24% copper from 122m-155m downhole, including 9m grading 0.43%
copper from 140m-149m. The drill hole ended in mineralisation
grading 0.19% copper from 154-155m and lies on the edge of the
untested gravity anomaly defined and targeted by BHP for possible
IOCG style mineralisation.
Forest Permits
The licence area lies entirely within Ndenda National Forest and
access is restricted without prior consent from the Department of
Forestry. After several months of delays, permission to enter
Ndenda National Forest was granted in late July 2023.
Soil Sampling Programme
In September 2023, the Company contracted Geo-Junction to
perform a soil sampling programme at Mushima North to cover the C1,
A1 and A2 targets.
A total of 572 samples were collected on or around target C1
with a sample spacing of 200m. pXRF results from target C1 indicate
a broad west-northwest striking anomaly which, at a 60ppm copper
cut off, covers an area approximately 4km long by 1.25km wide. The
peak copper value in soils is 216ppm at the western end of the
anomaly, in the area of hole RKN800. This area also contains the
highest arsenic-in-soil values consistent with the geochemical
signature of copper mineralisation in drill hole RKN800. This
enhances the possibility that mineralisation of this style is
present over a wider area. The soil anomaly also appears to sit
within a zone of demagnetisation which may be indicative of
magnetite destructive alteration due to hydrothermal alteration.
Drill planning will now follow and may include a prior programme of
ground geophysics as the sulphide mineralisation in RKN800 is
expected to be amenable to certain geophysical detection
methods.
A total of 184 samples were collected on or around target A1
with a sample spacing of 200m. Based on preliminary field pXRF
analysis, infill sampling was then carried out on 100m x 100m
spacing with three 400m spaced lines sampled at 50m spacing. pXRF
results from target A1 revealed a broad northeast striking
copper-in-soil anomaly which, at a 80ppm copper cut off, covers an
area approximately 3km long by up to 1.5km wide. Within this area
soil samples average 148ppm and peak at 280ppm copper.
The A1 soil anomaly has a high-grade core at its north end where
all soil values are in excess of 200ppm copper over an area 400m x
150m and average 231ppm copper. pXRF results from target A2 show
very high copper-in-soil values of up to 1,239ppm. However, the
high values are confined to organic rich sediments at the edge of a
dambo (an area of shallow wetland). It is most likely that copper
in these sediments is a result of hydromorphic concentration of
copper in groundwater sourced from a copper-rich area, possibly the
sources of the A1 copper anomaly some 3km distant.
The A1 and A2 copper-in-soil anomalies have a favourable
structural setting for mineralisation and the A1 anomaly is a
further high priority for follow up drilling. During the field work
at targets A1 and A2, samples containing visible spotty copper
minerals malachite and chrysocolla were found when field checking
an area 2km west of target A1 where an electrical conductor had
been identified by a previous explorer in an area underlain by
iron-rich conglomerates. These conglomerates stretch over a 6km
strike length and are coincident with a low-level gravity anomaly.
Surface samples contained up to 0.43% copper (average of three pXRF
readings per sample). Soil samples around this new occurrence were
not anomalous, but the new find warrants further follow-up mapping
and sampling.
Jacks Copper Project (Right to 90% Joint Venture interest,
Option to Increase to 100%)
The original Jacks copper prospect, discovered in the 1960s,
lies within the Jacks Exploration Licence 27069-HQ-LEL which covers
141.4km(2) and is located 85km south of Luanshya in the Central
Province of Zambia.
The Company has a right to a 90% interest in the licence and
holds an option, exercisable at any time, to purchase Mwashia's 10%
interest for payment of US$3.5 million.
Geology and Historic Exploration
The host rocks in the licence comprise synclinally folded basal
Katangan Supergroup sediments which include the Lower Roan
Subgroup, the main copper mineralised rock sequence in the Central
African Copperbelt.
The area was first explored by RST in the 1960s which drilled a
series of wide spaced core holes in the area of copper showings at
the original Jacks prospect which occurs within the nose of a
synclinal fold structure.
In the 1990s, Caledonia Mining Corporation and Cyprus AMAX
Minerals explored the area under a JV Agreement. The exploration
programme included geochemical sampling, ground-based magnetics and
drilling. One drill hole of note, KJD10, was reported to have
intersected 23.95m (222.05 - 246.00m) grading 1.26% copper which
includes 1.88m (230.12 - 232.00m) grading 2.93% copper.
The area was further explored by KPR Investments Limited and FQM
under a JV Agreement which, between 2014--2015, conducted
lithological and structural mapping, licence-wide 500 x 500m soil
sampling and limited infill soil sampling on a 250 x 250m grid.
This identified a number of copper-in-soil anomalies where
follow-up drilling was planned but never carried out.
Tertiary Minerals Exploration
Drilling
The Company's first drilling programme in 2022 at Jacks
confirmed and relocated copper mineralisation originally discovered
in the 1960s. Four holes were completed for a total of 746m of
drilling, two each on two separate traverses spaced approximately
150m apart. This yielded significant intersections including 13.5m
grading 0.9% copper (22JKDD01) and 6.0m grading 1.8% copper
(22JKDD03).
Copper mineralisation has now been drilled over a 350m strike
length and to depths up to 230m vertically below surface. This
mineralised zone is open along strike and may be thickening closer
to the fold nose, as evidenced by historical drill hole KJD10 which
intersected 24.0m grading 1.3% copper.
Soil Sampling Programme
A soil sampling programme was commissioned following the Phase 1
Drilling Programme. Over 2,000 samples were collected on four
separate grids (A-D) with Areas A, B and C targeting copper
anomalies identified in the wide spaced historical soil
sampling.
In Area B, a 600m long x 600m wide copper-in-soil anomaly was
defined with a peak of 325ppm copper and 197ppm nickel in different
samples and in Area C, a north--northeast striking copper anomaly
approximately 1,100m long and 400m wide was identified with a peak
value of 257ppm copper. Area D covered approximately 4km of strike
length at the original Jacks copper prospect (Phase 1 Drilling
Programme area). A peak value of 525ppm copper was observed within
a 600m x 400m anomaly. Further to the southwest a second anomaly
was defined with dimensions of 600m x 500m and a peak value of
173ppm copper.
Soil Check Sampling Results
In the reporting period, check samples from key soil lines on
all four grids (Areas A-D) were sent to the ALS Laboratory in
Johannesburg for multi-element analysis by ICP-MS (Method code:
ME--MS61). A total of 107 samples were analysed.
The laboratory results for copper showed an excellent
correlation (correlation coefficient of 0.98) with field pXRF
results and when samples above the 80ppm anomaly threshold are
considered, the average difference between ICP-MS copper results
and pXRF copper results is just 4%.
Published data from soil sampling by FQM in Zambia shows that a
soil copper:scandium ("Cu:Sc") ratio greater than 8 successfully
delineated the now operating giant Sentinel Copper Deposit and
suggested that high Cu:Sc ratios are indicative of hydrothermal
copper mineralisation of economic interest, rather than high
background copper levels of no economic interest. This threshold
has been used in evaluating the Company's analytical results.
A total of 34 samples were analysed by ICP-MS at Area D along a
profile which covered the soil anomaly associated with the original
Jacks copper prospect which was successfully drilled by Tertiary
during the Phase 1 Drilling Programme in 2022.
Above threshold anomalous Cu:Sc ratios were obtained across the
full width of the Area D soil anomaly, supporting the relevance of
the Cu:Sc ratio to mineralisation in the wider Jacks Copper
Project.
At Area C, a total of 31 samples from one soil profile along the
anomaly were analysed by ICP-MS and 27 contiguous samples show
above threshold Cu:Sc ratios indicating a possible mineralised
strike length of approximately 1km.
At Area B, of 22 samples analysed by ICP-MS, only 2 samples had
anomalous Cu:Sc ratios which downgrades the priority of the copper
anomaly in this area.
A total of 20 samples were analysed from Area A and were
selected as a baseline due to the relatively low-level and narrow
width of the copper-in-soil anomalism compared to areas B, C and
D.
Follow-up drilling is now planned to test for extensions to the
known copper mineralisation at the original Jacks copper prospect
(Area D) and the priority soil anomaly at Area C.
Lubuila Project (Option Agreement to acquire up to a 90% joint
venture interest)
The Lubuila Project, formed by exploration licence 27065-HQ-LEL,
is situated on the western flank of the Kabuche Dome on the
southwest margin of the Kafue Anticline. Located approximately 90km
west of Luanshya in the Copperbelt Province, the licence covers
334.8km(2) which is partially underlain by the prospective Lower
Roan arenite. Approximately 70km to the northwest lies the
currently producing Chambishi Southeast copper-cobalt mine.
In November 2022, the Company received approval of the
Environmental Project Brief ("EPB") by the Zambian Environmental
Management Agency ("ZEMA") and a soil sampling programme was
carried out at the start of the 2023 dry season.
Interpretation of the analytical results suggested lateritic
enrichment of soils rather than in-situ copper mineralisation and,
following a review of project data and project priorities, the
Company's option to acquire an interest in the Lubuila Project has
been surrendered.
Mupala Project
The Company was recently awarded Exploration Licence
32139-HQ-LEL covering 41.2km(2) in the Domes Region in the
Northwestern Province of Zambia.
The licence, which is underlain by the prospective Lower Roan
Subgroup stratigraphy, is located approximately 15km to the east of
the Company's Mukai Copper Project and FQM's Trident Project and
directly adjacent to Anglo American/Arc Minerals' joint venture
licence block where Anglo American has the right to earn a 70%
interest through expenditure of US$88.5 million.
The Company has recently completed pegging of the exploration
licence and has submitted the first draft of the EPB to ZEMA. Both
tasks are prerequisites to field exploration.
The Company is currently sourcing and compiling technical data
for the Project and anticipates that exploration will commence with
a licence-wide soil sampling programme.
Nevada, USA
Brunton Pass Copper-Gold Project (100% owned)
The Company holds 24 mining claims on the east side of the
Paradise Range, just north of State Highway 91, 190km southwest of
Reno, Nevada. Regionally, the Brunton Pass Copper-Gold Project sits
on the north-east side of a large granite batholith around which
there are a number of epithermal gold and porphyry copper-gold
deposits including the high sulphidation Paradise Peak gold
deposit, located 25km southwest of Brunton Pass, which produced
over 1.6 million ounces of gold and over 44 million ounces of
silver and at least 457 tons of mercury.
The Project area is underlain by Triassic-age limestone,
sandstone, and siltstone which have been intruded by diorite and
quartz monzonite. The sedimentary rocks are strongly altered
locally and appear as a window in fault contact with Tertiary-age
volcanic rock (rhyolite) bounding on all sides.
Mercury was discovered in the claim area in 1945 and a small
amount of mercury was produced. In 1991, the US Bureau of Mines
collected 14 rock chip samples and 8 of these contained values
above 1% copper and up to 6.91% copper including a chip sample over
12ft (3.66m) grading 1.36% copper.
To date, the Company has conducted extensive rock chip sampling,
soil sampling, trenching and has flown a high-resolution
drone--based magnetic-photogrammetric survey.
Several copper-in-soil anomalies with individual grades of up to
953ppm copper are present within the project area. The largest of
these anomalies has dimensions of 340m x 310m and they are mainly
coincident with areas of rock samples containing percent-level
copper values. Two large mercury-in-soil anomalies were also
defined with values up to 52ppm mercury with the largest of these
extending over an area approximately 500m x 500m.
In late July 2022, six trenches were excavated for a total of
386.2m over the zones of anomalous copper, arsenic and mercury.
Trenches 1, 2 and 11 targeted the mercury-arsenic anomaly.
Geochemical analysis showed high-level arsenic ("As") and mercury
("Hg") values with a 9.1m section in Trench 1 containing 1,930ppm
As and 102ppm Hg and a 32m section in Trench 11 grading 1622ppm As
and 110ppm Hg. Trench 2 intersected 2.7m grading 2.65 g/t gold.
Trenches 7, 8 and 10 tested copper-in-soil anomalies in the
southwest of the project area. Trench 7 cut 27.4m grading 1,010ppm
copper (0.1% Cu) within a 45.7m wide intersection grading 814ppm
copper and Trench 8 returned 77.7m averaging 473ppm copper for the
full length of the trench.
The copper values are highly anomalous and open-ended with the
mineralogy and alteration exposed in the trenches closely
resembling the upper levels of high sulphidisation epithermal gold
deposits.
No exploration was conducted during the reporting period as the
Company focused exploration expenditure on its Zambian copper
projects. An exploration budget has been assigned for 2024 to
include drill testing.
Other Projects
No work was conducted on the Company's Paymaster and Mt. Tobin
projects in Nevada during the year due to the Company's focus on
its Zambian copper projects, but further work is budgeted for 2024.
The Company's interest in the Lucky Project was impaired due to
unsatisfactory exploration results.
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.
The Storuman Fluorspar Project has a JORC Compliant Mineral
Resource of 27.7 Mt at 10.21% CaF(2) as shown in Table 1.
Table 1: JORC Compliant Mineral Resource
Classification Million Tonnes (Mt) Fluorspar (CaF(2)
%)
Indicated 25.0 10.28
-------------------- ------------------
Inferred 2.7 9.57
-------------------- ------------------
Total 27.7 10.21
-------------------- ------------------
Exploitation (Mine) Permit
The Company submitted a Mine Permit application for the Storuman
deposit in July 2014 to the Swedish Mining Inspectorate and
following an extensive consultation process a 25-year Exploitation
(Mine) Permit was granted on 18 February 2016.
However, as a consequence of the Supreme Court's decision to
overturn the grant of a third-party mining company's Mine Permit in
the south of Sweden (Norra Karr Mine Permit - rare earth element
project, owned by Leading Edge Minerals), the Government returned
the Storuman Mine Permit case, along with many other cases, back to
the Swedish Mining Inspectorate for re-assessment in December 2016.
The re-assessment required the Mining Inspectorate to consider the
impact of mining in the mine permit application area on the wider
surrounding area.
Early in 2017, the Swedish Mining Inspectorate requested
additional information from the Company relating to the original
Environmental Impact Assessment ("EIA") and the wider area and this
information was provided to the Swedish Mining Inspectorate, in the
form of an updated EIA, in May of that year.
Subsequently, comprehensive supplementary reports by the
Company's consultants and a legal statement were prepared and
submitted to the Swedish Mining Inspectorate in April 2018 in
response to opposing submissions from the Sami Village (reindeer
herders) and the County Administration Board ("CAB"). Reindeer
herding is a land use that is also considered to be of National
Interest and is thus potentially a conflicting National Interest
with the development of the Storuman fluorspar deposit.
Where there are competing National Interests, a balanced
consideration is required in reaching a decision on land use
priorities.
In January 2019, the Swedish Mining Inspectorate rejected the
Company's revised application on the basis that, whilst the area of
the proposed mine workings could coexist with reindeer husbandry,
the Storuman deposit National Interest did not extend to the area
of the tailings dam and associated infrastructure which was
considered by the Sami Village and the CAB to be important to
reindeer herding and husbandry. This decision was appealed by the
Company in February 2019 and referred to the Government for a
decision.
Government Decision
In August 2023, the Government ruled that the Swedish Mining
Inspectorate was wrong to consider the tailings area separately and
that the National Interest of the Storuman deposit should extend to
include the deposit and the processing infrastructure as a whole
and not just the immediate area of the mineralisation, as otherwise
the deposit could never be developed.
The Government has annulled the Mining Inspectorate's decision
not to grant the mining concession application and has instructed
the Mining Inspectorate to make a decision based on a balanced
consideration of the competing National Interests, being the
project development as a whole and reindeer husbandry.
This decision is in line with the Company's legal submissions to
the Government which also contend that a balance of consideration
of competing National Interests should favour the development of
the Storuman deposit. The Company is currently awaiting guidance
from the Mining Inspectorate on any forthcoming requirements.
Lassedalen Fluorspar Project, Norway
Although the Company no longer holds mineral rights at the
Lassedalen Project, during the year it sold copies of its data on
the Project to a third-party for GBP15,000 and the Company is
entitled to further payments should that third-party acquire
mineral rights at Lassedalen in future.
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 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.
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 The directors bring many years
exploration and evaluation which of combined mining and exploration
are speculative activities. experience and an established
There is no certainty that the track record in mineral discovery.
Group will be successful in
the definition of economic mineral The Company maintains a portfolio
deposits, or that it will proceed of exploration projects, including
to the development of any of projects at the drill stage,
its projects or otherwise realise in order to spread the risk
their value. associated with mineral exploration.
--------------------------------------------
Resource/Reserve Risk
All mineral projects have risk When relevant, Mineral Resources
associated with defined grade and Reserves are estimated by
and continuity. Mineral Resources independent specialists on behalf
and Reserves are always subject of the Group and reported in
to uncertainties in the underlying accordance with accepted industry
assumptions which include the standards and codes. The directors
quality of the underlying data, are realistic in the use of
geological interpretations, mineral price forecasts and
technical assumptions and price impose rigorous practices in
forecasts. the QA/QC programmes that support
its independent estimates.
--------------------------------------------
Development Risk
Delays in permitting, or changes In order to reduce development
in permit legislation and/or risk in future, the directors
regulation, financing and commissioning will ensure that its permit
a project may result in delays application processes and financing
to the Group meeting production applications are robust and
targets or even the Company thorough.
ultimately not receiving the
required permits and in extreme
cases loss of title.
--------------------------------------------
Commodity Risk
Changes in commodity prices The Company consistently reviews
can affect the economic viability commodity prices and trends
of mining projects and affect for its key projects throughout
decisions on continuing exploration the development cycle.
activity.
--------------------------------------------
Mining and Processing Technical
Risk
From the earliest stages of
Notwithstanding the completion exploration, the directors look
of metallurgical testwork, test to use consultants and contractors
mining and pilot studies indicating who are leaders in their field
the technical viability of a and in future will seek to strengthen
mining operation, variations the executive management and
in mineralogy, mineral continuity, the Board with additional technical
ground stability, groundwater and financial skills as the
conditions and other geological Company transitions from exploration
conditions may still render to production.
a mining and processing operation
economically or technically
non-viable.
--------------------------------------------
Environmental and Social Governance
(ESG) Risk
The Company has adopted an Environmental,
Exploration and development Social and Governance Policy
of a project can be adversely (the "ESG Policy") and avoids
affected by environmental and the acquisition of projects
social legislation and the unforeseen where liability for legacy environmental
results of environmental and issues might fall upon the Company.
social impact studies carried
out during evaluation of a project. Mineral exploration carries
Once a project is in production a lower level of environmental
unforeseen events can give rise and social liability than mining.
to environmental liabilities.
The ESG Policy will be updated
in the future to reflect the
status of the Company's projects.
--------------------------------------------
Political Risk
All countries carry political The Company's strategy currently
risk that can lead to interruption restricts its activities to
of activity. Politically stable stable, democratic and mining-friendly
countries can have enhanced jurisdictions.
environmental and social permitting
risks, risks of strikes and The Company has adopted a strong
changes to taxation, whereas Bribery & Anti-corruption Policy
less developed countries can and a Code of Conduct and these
have, in addition, risks associated are strictly enforced.
with changes to the legal framework,
civil unrest, and government When working in less developed
expropriation of assets. countries the Company undertakes
a higher level of due diligence
with respect to partners and
suppliers.
--------------------------------------------
Partner Risk
Whilst there has been no past The Company currently maintains
evidence of this, the Group control of certain key projects
can be adversely affected if so that it can control the pace
joint venture partners are unable of exploration and reduce partner
or unwilling to perform their risk.
obligations or fund their share
of future developments. For projects where other parties
are responsible for critical
payments and expenditures, the
Company's agreements legislate
that such payments and expenditures
are met.
Where appropriate, the Company
carries out Due Diligence and
Know Your Customer checks on
potential business partners.
--------------------------------------------
Financing & Liquidity Risk
Liquidity risk is the risk that The Company maintains a good
the Company will not be able network of contacts in the capital
to raise working capital for markets which has historically
its ongoing activities. met its financing requirements.
The Group's goal is to finance The Company's low overheads
its exploration and evaluation and cost-effective exploration
activities from future cash strategies help reduce its funding
flows, but until that point requirements. Nevertheless,
is reached the Company is reliant further equity issues will be
on raising working capital from required over the next 12 months.
equity markets or from industry
sources. There is no certainty
such funds will be available
when needed.
--------------------------------------------
Financial Instruments
Details of risks associated The directors are responsible
with the Group ' s Financial for the Group's systems of internal
Instruments are given in Note financial control. Although
19 to the financial statements. 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.
Section 172 (1) Statement
Section 172 of the Companies Act 2006 requires a director of a
company to act in the way he or she considers, in good faith, would
be most likely to promote the success of the Company for the
benefit of its members as a whole. This requires a director to have
regard, among other matters, to: the likely consequences of any
decision in the long term; the interests of the Company's
employees; the need to foster the Company's business relationships
with suppliers, clients, joint arrangement partners and others; the
impact of the Company's operations on the community and the
environment; the desirability of the Company maintaining a
reputation for high standards of business conduct; and the need to
act fairly with members of the Company.
The Company's directors give careful consideration to these
factors in discharging their duties. The stakeholders we consider
are our shareholders, employees, suppliers (including consultants
and contractors), our joint arrangement partners, the regulatory
bodies that we engage with and those that live in the societies and
geographical areas in which we operate. The directors recognise
that building strong, responsible and sustainable relationships
with our stakeholders will help us to deliver our strategy in line
with our long-term objectives.
Having regard to:
The likely consequences of any decision in the long-term:
The Company's Aims and Business Model are set out at the head of
this Strategic Report and in the Chairman's Statement. The
Company's mineral exploration and development business is, by its
very nature, long-term and so the decisions of the Board always
consider the likely long-term consequences and take into
consideration, for example, trends in metal and minerals supply and
demand, the long-term political stability of the countries in which
the Company operate and the potential impact of its decisions on
its stakeholders and the environment. The Board's approach to
general strategy and long-term risk management are set out in the
Corporate Governance Statement (Principle 1) and the section on
Risks and Uncertainties.
The interests of the Company's employees:
All of the Company's employees have daily access to the
executive director(s) and to the non-executive directors and there
is a continuous and transparent dialogue on all employment matters.
Further details on the Board's employment policies, the Health and
Safety Policy and employee engagement are given in the Corporate
Governance Statement (Principle 8).
The need to foster the Company's business relationships with its
stakeholders:
The sustainability of the Company's business long-term is
dependent on maintaining strong relationships with its
stakeholders. The factors governing the Company's decision making
and the details of stakeholder engagement are set out in the
Corporate Governance Statement (Principles 2, 3, 8 and 10).
The impact of the Company's operations on the community and the
environment:
The Company requires a "social licence" to operate sustainably
in the mining industry and so the Board makes careful consideration
of any potential impacts of its activities on the local community
and the environment. The Board strives to maintain good relations
with the local communities in which it operates and with local
businesses. The executive director(s) and/or local partners meet
with regulators and community representatives when promulgating the
Company's plans for exploration and development and take their
comments into consideration wherever possible. Further discussion
of these activities can be found in the Environmental, Social and
Governance ("ESG") Policy and in the Corporate Governance Statement
(Principle 3).
The desirability of the Company maintaining a reputation for
high standards of business conduct:
The Board recognises that its reputation is key to its long-term
success and depends on maintaining high standards of corporate
governance. It has adopted the QCA Code of Corporate Governance and
sets out in detail how it has complied with the 10 key principles
of the QCA Code in the Corporate Governance Statement. This
contains details of various Company policies designed to maintain
high standards of business conduct such as the Share Dealing
Policy, the Health and Safety Policy, the ESG Policy, the Social
Media Policy and the Bribery & Anti-Corruption Policy and Code
of Conduct.
The need to act fairly between Members of the Company:
The Board ensures that it takes decisions in the interests of
the members (shareholders) as a whole and aims to keep shareholders
fully informed of significant developments, ensuring that all
shareholders receive Company news at the same time. The directors
devote time to answering genuine shareholder queries and ensure
that no individual or group of shareholders is given preferential
treatment. Further information is provided in the Corporate
Governance Statement (Principles 2 and 10).
This Strategic Report was approved by the Board on 12 January
2024 and signed on its behalf.
Patrick Cheetham
Executive Chairman
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 a company for each financial year. Under that law
the directors have elected to prepare the Group and Company
financial statements in accordance with applicable law and UK
adopted International Accounting Standards. 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 the 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 whose securities are traded
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
applicable law and UK adopted International Accounting
Standards;
-- 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 Directors' Report and other information included in
the Annual Report and financial statements are 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. 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 the Directors' Report
The directors are pleased to submit their Annual Report and
audited financial statements for the year ended 30 September
2023.
The Strategic Report contains details of the principal
activities of the Company and includes the Operating Review 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 through share
placings. 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. Given
the Group's cash position at the year-end (GBP121,813), these
projections include the estimated proceeds of future fundraising
deemed necessary within the next 12 months to meet the Company's
and the Group's overheads and planned discretionary project
expenditures and to maintain the Company and the 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, since the year-end,
raised further funds as disclosed below and have a reasonable
expectation that they will secure additional funding when required
to continue meeting corporate overheads and exploration costs for
the foreseeable future. Therefore, the directors believe that the
going concern basis is appropriate for the preparation of the
financial statements.
Dividend
The directors do not 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 during the year were:
Mr P L Cheetham
Mr D A R McAlister
Dr M G Armitage
Attendance at Board and Committee Meetings
The Board retains control of the Group with day-to-day
operational control delegated to the Executive Chairman. The full
Board meets four times a year and on any other occasions it
considers necessary.
Board Meetings Nomination Audit Committee Remuneration Committee
Committee
-----------------
Director Attended Held Attended Held Attended Held Attended Held
---------- ----- --------- ----- ----------- ----- --------------- --------
P L Cheetham 8 8 1 1 3 3 1 1
---------- ----- --------- ----- ----------- ----- --------------- --------
D A R McAlister 8 1 3 1
---------- ----- --------- ----- ----------- ----- --------------- --------
Dr M Armitage 8 1 3 1
---------- ----- --------- ----- ----------- ----- --------------- --------
The directors' shareholdings are shown in Note 17 to the
financial statements.
Events After the Year-End
On 1 November 2023, the Company raised a total of GBP150,000
before expenses through a share placing to clients of the Company's
joint broker, Peterhouse Capital Limited.
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:
Number of % of share
As at 12 January 2024 shares capital
Interactive Investor Services Nominees Limited
SMKTISAS 200,435,756, 9.52
-------------- -----------
Hargreaves Lansdown (Nominees) Limited 15942 176,927,001 8.40
-------------- -----------
Interactive Investor Services Nominees Limited
SMKNOMS 162,329,088 7.71
-------------- -----------
Barclays Direct Investing Nominees Limited
CLIENT1 139,082,234 6.60
-------------- -----------
Morgan Stanley Client Securities SEG 131,702,893 6.25
-------------- -----------
Hargreaves Lansdown (Nominees) Limited VRA 108,580,012 5.16
-------------- -----------
Hargreaves Lansdown (Nominees) Limited HLNOM 106,261,541 5.05
-------------- -----------
Vidacos Nominees Limited IGUKCLT 80,242,735 3.81
-------------- -----------
HSDL Nominees Limited MAXI 69,809,165 3.31
-------------- -----------
HSDL Nominees Limited 64,980,274 3.09
-------------- -----------
Disclosure of Audit Information
Each of the directors has confirmed that so far as they are
aware, there is no relevant audit information of which the
Company's Auditor is unaware, and that they have taken all the
steps that they ought to have taken as a director in order to make
themselves 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 U.K. 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
The Company's Annual General Meeting will be held on Wednesday
14 February 2024, at 10.00 a.m.
Conflicts of Interest
The Companies Act 2006 permits directors of public companies to
authorise directors' conflicts and potential conflicts, where
appropriate, where the Articles of Association contain a provision
to this effect. The Company's Articles contain such a
provision.
At 30 September 2023, Tertiary Minerals plc held 0.54% of the
issued ordinary 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.
Approved by the Board on 12 January 2024 and signed on its
behalf.
Patrick Cheetham
Executive Chairman
Board of Directors
The directors and officers of the Company during the financial
year were:
Patrick Cheetham Donald McAlister
Chairman* Non-Executive Director**
Key Experience Key Experience
* Geologist. * Accountant.
* More than 40 years' experience in mineral * Previously Finance Director at Mwana Africa plc,
exploration. Ridge Mining plc, Reunion Mining and Moxico Resources
plc.
* More than 35 years' experience in public company
management. * Over 25 years' experience in all financial aspects of
the resource industry, including metal hedging, tax
planning, economic modelling/evaluation, project
* Founder of the Company, Dragon Mining Ltd, Archaean finance and IPOs.
Gold NL and Sunrise Resources plc.
* Founding director of the Company.
External Appointments
Chairman and founder of Sunrise
Resources plc. External Appointments
None.
* Currently Chair of the Nomination
Committee. ** Currently Chair of the Audit
Committee.
Dr Michael Armitage Rod Venables - City Group PLC
Non-Executive Director*** Company Secretary
Key Experience Key Experience
* Over 30 years' experience producing resource * Qualified company/commercial solicitor.
estimates, competent persons reports and feasibility
studies with SRK Consulting.
* Director and Head of Company Secretarial Services at
City Group PLC.
* Previously Managing Director and Chairman of the SRK
UK, Director of SRK's Exploration Services, and SRK
Group Chairman. * Experienced in both Corporate Finance and Corporate
Broking.
* Chair of the Applied Earth Science Division of IMMM,
Chair of the Geological Society Business Forum and
Honorary Chair of the Critical Minerals Association. External Appointments
Company Secretary for Sunrise
Resources plc and other corporate
clients of City Group PLC.
External Appointments
Executive Director of Sarn Helen
Gold Limited. Executive Director
of TREO Minerals Ltd. Non-Executive
Director of Central Asia Metals
plc.
***Currently Chair of the Remuneration
Committee
Corporate Governance
Chairman's Overview
There is no prescribed corporate governance code for AIM
companies and the London Stock Exchange prefers to give companies
the flexibility to choose from a range of codes which suit their
specific stage of development, sector and size.
The Board considers the corporate governance code published by
the Quoted Companies Alliance in 2018 the most suitable code for
the Company. Accordingly, the Company has adopted the principles
set out in the QCA Corporate Governance Code (the "QCA Code") and
applies these principles wherever possible, and where appropriate
to its size and available resources.
The Company's Corporate Governance Statement was reviewed and
amended by the Board on 12 January 2024. The Company has set out on
its website and in its Corporate Governance Statement the ten
principles of the QCA Code and details of the Company's compliance.
The Code was updated post year-end and the 2023 QCA Code is
designed to apply to companies whose financial years start on or
after 1 April 2024.
Patrick Cheetham, in his capacity as Chairman, has overall
responsibility for the corporate governance of the Company and the
Board is responsible for delivering on our well-defined business
strategy having due regard for the associated risks and
opportunities. The Company's corporate governance arrangements now
in place are designed to deliver a corporate culture that
understands and meets shareholder and stakeholder needs and
expectations whilst delivering long-term value for
shareholders.
The Board recognises that its principal activity, mineral
exploration and development, has potential to impact on the local
environment and communities, and consequently has adopted an
Environmental, Social and Governance ("ESG") Policy to ensure that
the Group's activities have minimal environmental and social
impact. Where appropriate the Group's contracts with suppliers and
contractors legally bind those suppliers and contractors to do the
same. The Group's activities, carried out in accordance with the
ESG Policy, have had only minimal environmental and social impact
at present and this policy is regularly reviewed. Where
appropriate, all work is carried out after advance consultation
with affected parties.
The Board recognises the benefits that social media engagement
can have in helping the Company reach out to shareholders and other
stakeholders, but it also recognises that misuse or abuse of social
media can bring the Company into disrepute. To facilitate the
responsible use of social media the Company has adopted a Social
Media Policy applicable to all officers and employees of the
Company.
The Board has also adopted a Share Dealing Code for dealings in
shares of the Company by directors and employees and a Bribery
& Anti-Corruption Policy and Code of Conduct applicable to
employees, 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 19 days of average daily purchases (2022:
17 days). This amount is calculated by dividing the creditor
balance at the year-end by the average daily Group spend in the
year.
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
employees and other stakeholders. The Company has developed a
Health and Safety Policy to clearly define roles and
responsibilities and in order to identify and manage risk.
Your Board currently comprises three directors of which two are
non-executive and considered by the Board to be independent. We
believe that this balance provides an appropriate level of
independent oversight. The Board has the ability to seek
independent advice although none was deemed necessary in the year
under review.
The Board is aware of the need to refresh its membership from
time to time and to match its skill set to those required for the
development of its mineral interests and will consider appointing
additional independent non-executive directors in the future.
Patrick Cheetham
Executive Chairman
Environmental, Social and Governance Statement
Tertiary Minerals plc practises responsible exploration as
reflected in our Environmental, Social and Governance ("ESG")
policy statement and our activities. By doing so we reduce project
risk, avoid adverse environmental and social impacts, optimising
benefits for all stakeholders while adding value to our
projects.
Our business associates, consultants and contractors perform
much of our primary activities at our projects and therefore we
require that all representatives and contractors working on our
behalf or for our subsidiaries accept and adhere to the principles
set out in this policy. We encourage input from those with local
knowledge and we review this policy on a regular basis.
Our ESG policy is guided by the Prospectors & Developers
Association of Canada's (PDAC) Framework for Responsible
Exploration (known as e3 Plus) which encourages mineral exploration
companies to compliment and improve social, environmental and
health and safety performance across all exploration activities
around the world.
Adopting Responsible Governance and Management
Tertiary is committed to environmentally and socially
responsible mineral exploration and has developed and implemented
policies and procedures for corporate governance and ethics. We
ensure that all staff and key associates are familiar with these
and have appropriate levels of knowledge of these policies and
procedures.
The Company employs persons and engages contractors with the
required experience and qualifications relevant to their specific
tasks and, where necessary, seeks the advice of specialists to
improve understanding and management of social, environmental,
human rights and security, and health and safety.
Tertiary's Corporate Governance Statement and its Bribery &
Anti-Corruption Policy and Code of Conduct can be viewed on our
website here:
www.tertiaryminerals.com/corporate-governance-statement.
Applying Ethical Business Practices
As well as our shareholders and staff, our stakeholders include
local communities and local leadership, government and regulatory
authorities, suppliers, contactors and consultants, our local
business partners and other interested parties. Our corporate
culture and policies require honesty, integrity, transparency and
accountability in all aspects of our work and when interacting with
all stakeholders.
We ensure that our contractors, consultants and local partners
are aware of and adhere to our Bribery & Anti-Corruption Policy
and Code of Conduct.
The Company takes all necessary steps to ensure that activities
in the field minimise or mitigate any adverse impacts on both the
environment and on local communities.
Commitment to Project Due Diligence and Risk Assessment
We make sure we are informed of the laws, regulations, treaties
and standards that are applicable with respect to our activities.
We ensure that relevant parties are informed and prepared before
going into the field in order to minimise the risk of
miscommunication, unnecessary costs and conflict, and to understand
the potential for creating opportunities with local communities
where possible.
Engaging Host Communities and Other Affected and Interested
Parties
Tertiary is committed to engaging positively with local
communities, regulatory authorities, suppliers and other
stakeholders in its project locations, and encourages feedback
through this engagement. Through this process the Company develops
and fosters the relationships on which our business relies for
success.
For example, in Zambia, we work together with our local partner,
Mwashia Resources Limited, to ensure that the appropriate tribal
and local government organisations are consulted before initiating
any exploration work.
Respecting Human Rights
The exploration activities of Tertiary are carried out in line
with applicable laws on human rights and the Company does not
engage in activities that have adverse human rights impacts.
Protecting the Environment
We are committed to ensuring that environmental standards are
met or exceeded in the course of our exploration activities.
Applicable laws and local guidelines in all project jurisdictions
are followed diligently and exploration programmes are only carried
out once relevant permits and approvals have been secured from the
appropriate regulatory bodies.
In Zambia, we work with the Zambian Environmental Management
Agency ("ZEMA") and are required to submit Environmental Project
Briefs ("EPBs") for approval by ZEMA before starting exploration.
In Nevada, USA, most of our exploration is carried out on Federally
owned land administered by the Bureau of Land Management ("BLM")
which requires the submission of financial bonds for reclamation of
exploration activities and which holds the Company to account.
Provisions are made in the financial statements for reclamation
costs in accordance with calculations set by the BLM. When
operating on private lands, the Company applies the same rigorous
standards for reclamation.
Tertiary is committed to good practices in rehabilitation and
repair during its mineral exploration activities and, where
possible, choose less impactful exploration methods to limit
disturbance.
Safeguarding the Health and Safety of Workers and the Local
Population
Company activities are carried out in accordance with its Health
and Safety Policy, which adheres to all applicable laws.
Corporate Governance Statement
The Board of Tertiary Minerals plc comprises three members.
Nevertheless, there are Audit, Remuneration and Nomination
Committees to ensure proper governance in compliance with the QCA
Code. The QCA Code sets out ten principles which should be applied.
The principles are listed below with an explanation of how the
Company applies each principle and/or the reasons for any aspect of
non-compliance.
Principle One: Establish a strategy and business model which
promotes long-term value for shareholders.
The Company has a clearly defined strategy and business model
that has been adopted by the Board and is set out in the Strategic
Report. Details of the challenges to the execution of the Company's
strategy and business model and how those will be addressed can be
found in Risks and Uncertainties in the Strategic Report.
Principle Two: Seek to understand and meet shareholder needs and
expectations.
The Board is committed to maintaining good communication with
its shareholders and investors. The Chairman and members of the
Board from time to time meet with shareholders and investors
directly or through arrangements with the Company's brokers to
understand their investment requirements and expectations and to
address their enquiries and concerns.
All shareholders are encouraged to attend the Company's Annual
General Meeting where they can meet and directly communicate with
the Board. After the close of business at the Annual General
Meeting, the Chairman makes an up-to-date corporate presentation
and opens the floor to questions from shareholders.
Shareholders are also welcome to contact the Company via email
at info@tertiaryminerals.com with any specific queries.
The Company also provides regulatory, financial and business
news updates through the Regulatory News Service (RNS) and various
media channels such as X, formerly known as Twitter, and LinkedIn.
Shareholders also have access to information through the Company's
website, www.tertiaryminerals.com , which is updated on a regular
basis and which includes the latest corporate presentation on the
Group. Contact details are also provided on the website.
Principle Three: Take into account wider stakeholder and social
responsibilities and their implications for long-term success.
The Board takes regular account of the significance of social,
environmental and ethical matters affecting the business of the
Group. The Board has adopted an Environmental, Social and
Governance ("ESG") Policy, which can be found on the Company
website and an ESG Statement can be found in this Annual Report.
The Company engages positively with local communities, regulatory
authorities, suppliers and other stakeholders in its project
locations and encourages feedback through this engagement. Through
this process the Company identifies the key resources and fosters
the relationships on which the business relies.
Principle Four: Embed effective risk management, considering
both opportunities and threats, throughout the organisation.
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 whilst recognising
that its business opportunities carry an inherently high level of
risk. The principal risks and uncertainties facing the Group at
this stage in its development and in the foreseeable future are
detailed in Risks and Uncertainties in the Strategic Report,
together with risk mitigation strategies employed by the Board.
Principle Five: Maintain the board as a well-functioning,
balanced team led by the chair.
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 formally four times a year for these purposes and holds
additional meetings when necessary to transact other business. The
Board receives regular and timely reports for consideration on all
significant strategic, operational and financial matters. Relevant
information for consideration by the Board is circulated in advance
of its meetings.
Further details on the Board's meetings are provided in the
Directors' Report. The Board is supported by the Audit,
Remuneration and Nomination Committees.
The Board currently consists of the Executive Chairman (Patrick
Cheetham) and two non-executive directors (Donald McAlister and Dr
Mike Armitage). The Board considers that the Board structure is
acceptable having regard to the fact that it is not yet
revenue-earning.
The non-executive directors have committed the time necessary to
fulfil their roles during the year. The attendance record of the
directors at Board and Board Committee meetings are detailed in the
Directors' Report.
Non-executive directors are considered independent if they are
independent of management and free from any business or other
relationship which could materially interfere with the exercise of
their independent judgement. Despite serving as a non-executive
director for more than nine years, Donald McAlister is considered
to be independent using these criteria. In compliance with good
practice, he will continue to seek annual re-election where
practicable, rather than every third year as per the Articles of
Association.
Principle Six: Ensure that between them the directors have the
necessary up-to-date experience, skills and capabilities.
The Board considers the current balance of sector, financial and
public market skills and experience of its directors are relevant
to the Company's business and are appropriate for the current size
and stage of development of the Company and the Board considers
that it has the skills and experience necessary to execute the
Company's strategy and business plan and discharge its duties
effectively.
The directors maintain their skills through membership of
various professional bodies, attendance at mining conferences and
through their various external appointments.
All Directors have access to the advice and services of the
Company Secretary who is responsible for ensuring that Board
procedures and applicable rules and regulations are observed. All
directors are able to take independent professional advice, if
required, in relation to their duties and at the Company's
expense.
Principle Seven: Evaluate Board performance based on clear and
relevant objectives, seeking continuous improvement.
The ultimate measure of the effectiveness of the Board is the
Company's progress against the long-term strategy and aims of the
business. This progress is reviewed in Board meetings held at least
four times a year. The executive director(s)' performance is
regularly reviewed by the rest of the Board.
The Nomination Committee, currently consisting of the Chairman
and the two non-executive directors, meets at least once a year to
lead the formal process of rigorous and transparent procedures for
Board appointments. During its meetings the Nomination Committee
reviews the structure, size and composition of the Board;
succession planning; leadership; key strategic and commercial
issues; conflicts of interest; time required from non-executive
directors to execute their duties effectively; overall
effectiveness of the Board and its own terms of reference.
Under the Articles of Association, new directors appointed to
the Board must stand for election at the first Annual General
Meeting of the Company following their appointment. Under the
Articles of Association, existing directors retire by rotation and
may offer themselves for re-election.
Principle Eight: Promote a corporate culture that is based on
ethical values and behaviours.
The Board recognises and strives to promote a corporate culture
based on strong ethical and moral values.
The Group will give 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 Tertiary's
employees' interests when making decisions, and suggestions from
those employees aimed at improving the Group's performance are
welcomed.
The corporate culture of the Company is promoted to Tertiary's
employees, suppliers and contractors and is underpinned by the
implementation and regular review, enforcement and documentation of
various policies: the Health and Safety Policy; the Environmental,
the Social and Governance Policy ("ESG Policy"); the Share Dealing
Policy; the Bribery & Anti-Corruption Policy and Code of
Conduct; the Privacy and Cookies Policy and Social Media Policy.
These procedures enable the Board to determine that ethical values
are recognised and respected.
The Board recognises that its principal activity, mineral
exploration and development, has potential to impact on local
environments and communities, as such the ESG Policy was developed
with this in mind and this replaces the previous Environmental
Policy to ensure that, wherever they take place, the Group's
activities have minimal environmental and social impact. Where
appropriate the Group's contracts with suppliers and contractors
legally bind those suppliers and contractors to do the same. The
Group's activities carried out in accordance with the ESG Policy
have had only minimal environmental and social impact, and this
policy is regularly reviewed. Where appropriate, all work is
carried out after advance consultation with affected parties.
Principle Nine: Maintain governance structures and processes
that are fit for purpose and support good decision-making by the
Board.
The Board has overall responsibility for all aspects of the
business. The Chairman is responsible for overseeing the running of
the Board, ensuring that no individual or group dominates the
Board's decision-making, and that the non-executive directors are
properly briefed on all operational and financial matters. The
Chairman has overall responsibility for corporate governance
matters in the Group and chairs the Nomination Committee. The
Executive Chairman has the responsibility for implementing the
strategy of the Board and managing the day-to-day business
activities of the Group. The Company Secretary is responsible for
ensuring that Board procedures are followed, and applicable rules
and regulations are complied with. Key operational and financial
decisions are reserved for the Board through quarterly project
reviews, annual budgets, quarterly budgets and cash-flow forecasts
and on an ad hoc basis where required.
The two non-executive directors are responsible for bringing
independent and objective judgement to Board decisions. The Board
has established Audit, Remuneration and Nomination Committees with
formally delegated duties and responsibilities. Donald McAlister
currently chairs the Audit Committee, Dr. Mike Armitage chairs the
Remuneration Committee and Patrick Cheetham chairs the Nomination
Committee.
This Corporate Governance statement will be reviewed at least
annually to ensure that the Company's corporate governance
framework evolves in line with the Company's strategy and business
plan.
Principle Ten: Communicate how the Company is governed and is
performing by maintaining a dialogue with shareholders and other
relevant stakeholders.
The Company regularly communicates with, and encourages feedback
from, its shareholders who are its key stakeholder group. The
Company's website is regularly updated and users, including all
stakeholders, can register to be alerted via email when material
announcements are made. The Company's contact details are on the
website should stakeholders wish to make enquiries of
management.
The Group's financial reports for at least the past five years
can be found here:
www.tertiaryminerals.com/investor-media/financial-reports and
contains past Notices of Annual General Meetings.
The results of voting on all resolutions in general meetings are
posted to the Company's website, including any actions to be taken
as a result of resolutions for which votes against have been
received from at least 20 per cent of independent votes.
Audit Committee Report
The Audit Committee is a sub-committee of the Board, comprised
of the independent non-executive directors 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 auditors
taking account of any non-audit services provided by them. Donald
McAlister is Chair of the Audit Committee.
The specific objectives of the Committee are to:
(a) maintain adequate quality and effective scope of the
external audit of the Group including its branches where applicable
and review the independence and objectivity of the auditors.
(b) ensure that the Board of Directors has adequate knowledge of
issues discussed with its external auditor.
(c) ensure the financial information and reports issued by the
Company to AIM, shareholders and other recipients are accurate and
contain proper disclosure at all times.
(d) maintain the integrity of the Group's administrative,
operating and accounting controls and internal control
principles.
(e) ensure proper accounting policies are adhered to by the
Group.
The Committee has unlimited access to the external auditor, to
senior management of the Group and to any external party deemed
necessary for the proper discharge of its duties. The Committee may
consult independent experts where it considers necessary to perform
its duties.
The Audit Committee reviews the financial controls of the
Company on a regular basis and is satisfied that the Group's
financial controls and reporting procedures are robust and
sufficient to ordinarily prevent fraud and ensure that senior
management, the Committee and the Board are fully aware of the
Company's financial position at all times.
The Audit Committee met three times in the last financial year,
on 8 December 2022, 30 May 2023 and 8 August 2023.
The Committee reviewed the carrying values of the Group projects
and the Group inter-company loans and carried out impairment
reviews. The project carrying values are assessed against the IFRS
6 criteria set out in Note 1(n). Loans to Group undertakings are
assessed for impairment under IFRS 9.
As a result of the year-end review, it was judged that the
Lubuila Project and the Lucky Project expenditure should be fully
impaired. Following a review of the recoverability of loans to
subsidiary undertakings, it was decided that no impairment was
required.
Going Concern
The Committee also considered the Going Concern basis on which
the accounts have been prepared (see Note 1(b)). The directors are
satisfied that the Going Concern basis is appropriate for the
preparation of the financial statements.
Donald McAlister
Chair - Audit Committee
Remuneration Committee Report
The Remuneration Committee is a sub-committee of the Board and
comprises the two non-executive directors. Dr Mike Armitage is
Chair of the Remuneration Committee.
The primary objective of the Committee is to review the
performance of the executive directors and review the basis of
their service agreements and make recommendations to the Board
regarding the scale and structure of their remuneration.
The Remuneration Committee met once in the financial year under
review, on 8 August 2023, to review the Committee Terms of
Reference and ensure their continued suitability, and to review the
remuneration of the Executive Chairman.
Dr Mike Armitage
Chair - Remuneration Committee
Nomination Committee Report
The Nomination Committee comprises the Executive Chairman and
the two non-executive directors. Patrick Cheetham is Chair of the
Nomination Committee.
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.
The Committee is required, amongst other things, to:
(a) Review the structure, size and composition (including the
skills, knowledge, experience and diversity) of the Board and make
recommendations to the Board with regard to Board appointments and
any Board changes.
(b) Give full consideration to succession planning for directors
and other senior executives in the course of its work, taking into
account the challenges and opportunities facing the Company, and
the skills and expertise needed on the Board in the future.
(c) Keep under review the leadership needs of the organisation
to compete effectively in the marketplace.
(d) Review annually the time required from executive director(s)
and non-executive directors. Performance evaluation should be used
to assess whether the executive director(s) and non-executive
directors are spending enough time in fulfilling their duties.
(e) Arrange periodic reviews of the Committee's own performance
and, at least annually, review its constitution and terms of
reference to ensure it is operating at maximum effectiveness and
recommend any changes it considers necessary to the Board for
approval.
(f) Ensure that prior to the appointment of a director, the
proposed appointee should be required to disclose any other
business interests that may result in a conflict of interest and be
required to report any future business interests that may result in
a conflict of interest.
The Committee carries out its duties for the Parent Company,
major subsidiary undertakings and the Group as a whole and met once
during the period under review, on 2 May 2023.
The Committee is satisfied that the current Board has a depth of
experience and level and range of skills appropriate to the Company
at this stage in its development. It is however recognised that the
Company is likely to need additional expertise as it moves forward
into commercial production and so the composition of the Board will
be kept under careful review to ensure that the Board can deliver
long-term growth in shareholder value.
Patrick Cheetham
Chair - Nomination Committee
Publication of Statutory Accounts
The financial information set out in this announcement does not
constitute the Company's Annual Accounts for the period ended 30
September 2023 or 2022. The financial information for 2022 is
derived from the Statutory Accounts for 2022. Full audited accounts
in respect of that financial period have been delivered to the
Registrar of Companies. The Statutory Accounts for 2023 will be
delivered to the Registrar of Companies following the Company's
Annual General Meeting. The Auditors have reported on the 2023 and
2022 accounts. Neither set of accounts contain a statement under
section 498(2) of (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.
Availability of Financial Statements
The Annual Report containing the full financial statements for
the year to 30 September 2023 will be uploaded to the Shareholders
Documents section of the Company's website on or around 18 January
2024: https://www.tertiaryminerals.com/shareholder-documents.
Consolidated Income Statement
For the year ended 30 September 2023
Notes 2023 2022
GBP GBP
------------------------------------------------ ------ ---------- ------------------
Revenue 2 181,429 171,052
------------------------------------------------ ------ ---------- ------------------
Administration costs (572,604) (566,675)
Pre-licence exploration costs (39,792) (80,843)
Impairment of deferred exploration expenditure 8 (111,691) (699,484)
------------------------------------------------ ------ ---------- ------------------
Operating loss (542,658) (1,175,950)
Interest receivable 1,317 133
------------------------------------------------ ------ ---------- ------------------
Loss before taxation 3 (541,341) (1,175,817)
Tax on loss 7 - -
------------------------------------------------ ------ ---------- ------------------
Loss for the year attributable to equity
holders of the parent (541,341) (1,175,817)
------------------------------------------------ ------ ---------- ------------------
Loss per share - basic and diluted (pence) 6 (0.03) (0.08)
------------------------------------------------ ------ ---------- ------------------
All amounts relate to continuing activities.
Consolidated Statement of Comprehensive Income
for the year ended 30 September 2023
2023 2022
GBP GBP
------------------------------------------------------ ------------ --------------
Loss for the year (541,341) (1,175,817)
------------------------------------------------------ ------------ --------------
Items that could be reclassified subsequently
to the income statement:
Foreign exchange translation differences
on foreign currency net investments in subsidiaries (23,612) 136,753
Items that will not be reclassified to the
income statement:
Changes in the fair value of other investments (5,184) (26,346)
------------------------------------------------------ ------------ --------------
Total comprehensive income/(loss) for the
year attributable to
equity holders of the parent (570,137) (1,065,410)
------------------------------------------------------ ------------ --------------
Consolidated and Company Statements of Financial Position
at 30 September 2023
Group Company Group Company
2023 2023 2022 2022
Company Number 03821411 Notes GBP GBP GBP GBP
---------------------------- ------ ------------- ------------- ------------- -------------
Non-current assets -
Intangible assets 8 620,481 - 542,907 -
Property, plant &
equipment 9 3,234 3,234 2,398 2,398
Investment in subsidiaries 10 - 661,472 - 681,526
Other investments 10 16,466 16,466 24,150 24,150
---------------------------- ------ ------------- ------------- ------------- -------------
640,181 681,172 569,455 708,074
---------------------------- ------ ------------- ------------- ------------- -------------
Current assets
Receivables 11 114,432 70,399 272,667 64,785
Cash and cash equivalents 12 121,813 100,215 59,414 48,165
---------------------------- ------ ------------- ------------- ------------- -------------
236,245 170,614 332,081 112,950
---------------------------- ------ ------------- ------------- ------------- -------------
Current liabilities
Trade and other payables 13 (69,835) (54,615) (80,929) (45,076)
---------------------------- ------ ------------- ------------- ------------- -------------
Net current assets 166,410 115,999 251,152 67,874
---------------------------- ------ ------------- ------------- ------------- -------------
Provisions for liabilities 20 (11,496) - (15,158) -
---------------------------- ------ ------------- ------------- ------------- -------------
Net assets 795,095 797,171 805,449 775,948
---------------------------- ------ ------------- ------------- ------------- -------------
Equity
Called up share capital 14 198,108 198,108 153,626 153,626
Share premium account 12,599,278 12,599,278 12,101,761 12,101,761
Capital redemption
reserve 14 2,644,061 2,644,061 2,644,061 2,644,061
Merger reserve 131,096 131,096 131,096 131,096
Share option reserve 14 88,562 88,562 101,985 101,985
Fair value reserve (22,200) (22,200) (17,016) (17,016)
Foreign currency
reserve 14 436,857 - 460,469 -
Accumulated losses (15,280,667) (14,841,734) (14,770,533) (14,339,565)
---------------------------- ------ ------------- ------------- ------------- -------------
Equity attributable
to the owners of
the parent 795,095 797,171 805,449 775,948
---------------------------- ------ ------------- ------------- ------------- -------------
The Company reported a loss for the year ended 30 September 2023
of GBP533,376 (2022: GBP1,149,113).
These financial statements were approved and authorised for
issue by the Board on 12 January 2024 and were signed on its
behalf.
P L Cheetham D A R McAlister
Executive Chairman Director
Consolidated Statement of Changes in Equity
Ordinary Share Capital Share Fair Foreign
share premium redemption Merger option value currency Accumulated
capital account reserve reserve reserve reserve reserve losses Total
Group GBP GBP GBP GBP GBP GBP GBP GBP GBP
--------------- --------- ----------- ----------- -------- --------- --------- --------- ------------- ------------
At 30
September
2021 118,332 11,567,055 2,644,061 131,096 80,048 9,330 323,716 (13,604,166) 1,269,472
--------------- --------- ----------- ----------- -------- --------- --------- --------- ------------- ------------
Loss for
the period - - - - - - - (1,175,817) (1,175,817)
Change
in fair
value - - - - - (26,346) - - (26,346)
Exchange
differences - - - - - - 136,753 - 136,753
--------------- --------- ----------- ----------- -------- --------- --------- --------- ------------- ------------
Total
comprehensive
loss for
the year - - - - - (26,346) 136,753 (1,175,817) (1,065,410)
--------------- --------- ----------- ----------- -------- --------- --------- --------- ------------- ------------
Share issue 35,294 534,706 - - - - - - 570,000
Share based
payments
expense - - - - 31,387 - - - 31,387
Transfer
of expired
warrants - - - - (9,450) - - 9,450 -
--------------- --------- ----------- ----------- -------- --------- --------- --------- ------------- ------------
At 30
September
2022 153,626 12,101,761 2,644,061 131,096 101,985 (17,016) 460,469 (14,770,533) 805,449
--------------- --------- ----------- ----------- -------- --------- --------- --------- ------------- ------------
Loss for
the period - - - - - - - (541,341) (541,341)
Change
in fair
value - - - - - (5,184) - - (5,184)
Exchange
differences - - - - - - (23,612) - (23,612)
--------------- --------- ----------- ----------- -------- --------- --------- --------- ------------- ------------
Total
comprehensive
loss for
the year - - - - - (5,184) (23,612) (541,341) (570,137)
--------------- --------- ----------- ----------- -------- --------- --------- --------- ------------- ------------
Share issue 44,482 497,517 - - - - - - 541,999
Share based
payments
expense - - - - 17,784 - - - 17,784
Transfer
of expired
warrants - - - - (31,207) - - 31,207 -
--------------- --------- ----------- ----------- -------- --------- --------- --------- ------------- ------------
At 30
September
2023 198,108 12,599,278 2,644,061 131,096 88,562 (22,200) 436,857 (15,280,667) 795,095
--------------- --------- ----------- ----------- -------- --------- --------- --------- ------------- ------------
Company Statement of Changes in Equity
Ordinary Share Capital Share Fair
share premium redemption Merger option value Accumulated
capital account reserve reserve reserve reserve losses Total
Company GBP GBP GBP GBP GBP GBP GBP GBP
---------------- --------- ----------- ------------ --------- --------- --------- ------------- ------------
At 30
September
2021 118,332 11,567,055 2,644,061 131,096 80,048 9,330 (13,199,902) 1,350,020
---------------- --------- ----------- ------------ --------- --------- --------- ------------- ------------
Loss for
the period - - - - - - (1,149,113) (1,149,113)
Change
in fair
value - - - - - (26,346) - (26,346)
---------------- --------- ----------- ------------ --------- --------- --------- ------------- ------------
Total
comprehensive
loss for
the year - - - - - (26,346) (1,149,113) (1,175,459)
---------------- --------- ----------- ------------ --------- --------- --------- ------------- ------------
Share issue 35,294 534,706 - - - - - 570,000
Share based
payments
expense - - - - 31,387 - - 31,387
Transfer
of expired
warrants - - - - (9,450) - 9,450 -
---------------- --------- ----------- ------------ --------- --------- --------- ------------- ------------
At 30
September
2022 153,626 12,101,761 2,644,061 131,096 101,985 (17,016) (14,339,565) 775,948
---------------- --------- ----------- ------------ --------- --------- --------- ------------- ------------
Loss for
the period - - - - - - (533,376) (533,376)
Change
in fair
value - - - - - (5,184) - (5,184)
---------------- --------- ----------- ------------ --------- --------- --------- ------------- ------------
Total
comprehensive
loss for
the year - - - - - (5,184) (533,376) (538,560)
---------------- --------- ----------- ------------ --------- --------- --------- ------------- ------------
Share issue 44,482 497,517 - - - - - 541,999
Share based
payments
expense - - - - 17,784 - - 17,784
Transfer
of expired
warrants - - - - (31,207) - 31,207 -
---------------- --------- ----------- ------------ --------- --------- --------- ------------- ------------
At 30
September
2023 198,108 12,599,278 2,644,061 131,096 88,562 (22,200) (14,841,734) 797,171
---------------- --------- ----------- ------------ --------- --------- --------- ------------- ------------
Consolidated and Company Statements of Cash Flows
for the year ended 30 September 2023
Group Company Group Company
2023 2023 2022 2022
Notes GBP GBP GBP GBP
------------------------------------ ------ ---------- ---------- ------------ ------------
Operating activity
Operating (loss)/profit (542,658) (566,147) (1,175,950) (1,178,456)
Depreciation charge 9 1,793 1,793 1,661 1,661
Share based payment charge 17,784 17,784 31,387 31,387
Impairment charge - deferred
exploration asset 8 111,691 - 699,484 -
Increase/(decrease) in provision
for impairment of loans to
subsidiaries 10 - 156,594 - 742,199
Reclamation liability 8 - - - -
Decrease/(increase) in receivables 11 1,642 (5,614) (35,049) (12,263)
Increase/(decrease) in payables 13 (11,094) 9,539 4,079 (7,109)
Net cash outflow from operating
activity (420,842) (386,051) (474,388) (422,581)
------------------------------------ ------ ---------- ---------- ------------ ------------
Investing activity
Interest received 1,317 55,325 133 29,344
Proceeds on disposal of royalty
assets 156,594 - - -
Exploration and development
expenditures 8 (236,808) - (561,431) -
Purchase of property, plant
& equipment 9 (2,630) (2,630) (107) (107)
Additional loans to subsidiaries 10 - (156,594) - (584,617)
------------------------------------ ------ ---------- ---------- ------------ ------------
Net cash outflow from investing
activity (81,527) (103,899) (561,405) (555,380)
------------------------------------ ------ ---------- ---------- ------------ ------------
Financing activity
Issue of share capital (net
of expenses) 541,999 542,000 570,000 570,000
Share subscription loan - - - -
Net cash inflow from financing
activity 541,999 542,000 570,000 570,000
------------------------------------ ------ ---------- ---------- ------------ ------------
Net increase/(decrease)
this year 39,631 52,050 (465,793) (407,961)
------------------------------------ ------ ---------- ---------- ------------ ------------
Cash and cash equivalents
at start of year 59,414 48,165 472,733 456,126
Exchange differences 22,769 - 52,474 -
------------------------------------ ------ ---------- ---------- ------------ ------------
Cash and cash equivalents
at 30 September 12 121,813 100,215 59,414 48,165
------------------------------------ ------ ---------- ---------- ------------ ------------
Notes to the Financial Statements
for the year ended 30 September 2023
Background
Tertiary Minerals plc is a public company incorporated and
domiciled in England. Its shares are 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 (GBP) 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 applicable law and UK
adopted International Accounting Standards.
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 GBP533,376 (2022: GBP1,149,113). The loss
for 2023 includes provision for impairment of its investment in
subsidiary undertakings in the amount of GBP156,594 (Note 10).
(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. Given
the Group's cash position at year end (GBP121,813), these
projections include the proceeds of future fundraising necessary
within the next 12 months to meet the Company's and the Group's
overheads and planned discretionary project expenditures and to
maintain the Company and the 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 the
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 the directors believe that the going concern basis is
appropriate for the preparation of the financial statements. In
considering the longer term financial outlook of the Group, the
continued viability of the most significant exploration and
evaluation assets as set out in Note 1(n) is critical to this
assessment.
(c) Basis of consolidation
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.
Tertiary Minerals plc owns 96% of the equity of Tertiary
Minerals (Zambia) Limited and the 4% non-controlling interest is
not considered to be material. Further details are set out in Note
10.
(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 biannual review is carried out by the directors to consider
whether there are any indications of impairment in capitalised
exploration and development costs. Full impairment reviews were
carried out in order to assess the carrying values of each project
as at 31 March 2023 and 30 September 2023. This involved
consideration of changes in circumstances and evidence including
and exploration results, changes in tenure of mineral rights,
economic circumstances such as market prices, opportunities for
realisation such as sale or joint ventures and viability, comparing
anticipated future costs with expected recoverable value. For each
project, based upon the relevant considerations, the directors
formed a view regarding the recoverability of capitalised
expenditure and continued compliance with the IFRS 6 criteria for
recognition and deferral.
Where an indication of impairment is identified, the relevant
value is written off to the income statement in the period for
which the impairment was identified. An impairment of exploration
and development costs may be subsequently reversed in later periods
should conditions allow.
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) Financial assets designated at fair value through OCI
Upon initial recognition, the Group can elect to classify
irrevocably its equity investments as equity instruments designated
at fair value through OCI when they meet the definition of equity
under IAS 32 Financial Instruments: Presentation and are not held
for trading. The classification is determined on an
instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled to
profit or loss. Dividends are recognised as other income in the
statement of profit or loss when the right of payment has been
established, except when the Group benefits from such proceeds as a
recovery of part of the cost of the financial asset, in which case,
such gains are recorded in OCI. Equity instruments designated at
fair value through OCI are not subject to impairment
assessment.
The Group elected to classify irrevocably its listed equity
investments under this category.
(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.
(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 recognised as the fair value of management services
provided to Sunrise Resources plc and relates to expenditure
incurred and recharged. The Company recognises revenue as
contractual performance obligations are satisfied. Revenue is net
of discounts, VAT and other sales-related taxes.
(k) Foreign currencies
The Group's consolidated financial statements are presented in
Pounds Sterling (GBP), 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 reporting date.
For consolidation purposes, the net investment in foreign
operations and the assets and liabilities of overseas subsidiaries
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 in equity.
(l) Leases
The general policy adopted in relation to leased assets is IFRS
16, which requires the recognition of lease commitments as right of
use assets and a corresponding liability.
The Company only has short term leases, which do not require
recognition as right of use assets having a duration of 12 months
or less and without a renewal commitment. Leasing costs are
therefore 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. The fair value of the warrants and
options is recognised as a charge measured at fair value on the
date of grant and determined in accordance with IFRS 2, 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.
The Company also issues shares and/or warrants in order to
settle certain liabilities, including partial payment of fees to
directors. The fair value of shares issued is based on the closing
mid-market price of the shares on the AIM market on the day prior
to the date of settlement and it is expensed on the date of
settlement with a corresponding increase in equity.
(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
IFRS 6 "Exploration for and Evaluation of Mineral Resources"
requires that exploration and evaluation assets shall be assessed
for impairment when facts and circumstances suggest that the
carrying amount may exceed recoverable amount.
In practical terms, this requires that project carrying values
are regularly monitored and assessed for recoverability whether
from future exploitation of resources or realised by sale to a
third party.
Where activities have not reached a stage which permits
reasonable confirmation of the existence of mineral reserves, the
directors must form a judgement whether future exploration and
evaluation should continue. This requires management to use their
sector experience, apply their specialist expertise and form a
conclusive judgement as to whether or not, on the balance of
evidence that further exploration is justified to determine if an
economically viable mining operation can be established in future.
Such estimates, judgements and assumptions are likely to change as
new information and evidence becomes available. If it becomes
apparent, in the judgement of the directors, that recovery of
capitalised expenditure is unlikely, the carrying value should be
considered as impaired as detailed below.
Royalty assets
Following disposals reflected in the financial statements for
2022, the Group had no remaining royalty interests at 30 September
2023, but does have agreements in place which may possibly give
rise to royalties in future.
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 directors
are required to continually monitor and review the carrying values
by reference to new developments, stages in the exploration process
and new circumstances. Assessment of the potential impairment of
assets requires an updated judgement of the probability of adequate
future cash flows from the relevant project. It includes
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) Whether substantive expenditure on further exploration for
and evaluation of mineral resources for the specific project is
either budgeted or planned.
(c) Whether exploration for and evaluation of mineral resources
on the specific project has led to the discovery of commercially
viable quantities of mineral resources and whether the entity has
decided to discontinue such activities on the project.
(d) Whether 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 likely
to be recovered in full from successful development of a mine or by
the sale of the project.
The judgements in respect of key projects are;
Whilst the Lucky Project is still retained, the project costs
were fully impaired in the amount of GBP71,066 as exploration has
not been sufficiently positive so far.
Whilst no work was carried out at the Paymaster, Mt Tobin or
Brunton Pass projects in Nevada during the financial year, the
Company's rights to explore these projects have been maintained
through claim payments and further exploration is planned to follow
up on previous exploration results.
In Zambia, the Lubuila Project costs were fully impaired in the
amount of GBP40,624, with the surrender of the Company's option to
acquire an interest in the Lubuila licence following negative
exploration results.
Following successful exploration programmes on four further
licences in Zambia, namely Konkola West, Mukai, Mushima North and
Jacks Project, further exploration is planned for 2024.
The Mupala Project licence was awarded to the Company during the
reporting period and the Company is awaiting the grant of the
Environmental Project Brief to commence exploration programmes on
this Project.
Based upon these developments in the reporting period and in
their confidence regarding the likely outcome of exploration, the
Directors have concluded that the carrying value of these projects
is not impaired.
Going concern
The preparation of financial statements requires an assessment
of the validity of the going concern assumption. This in turn 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.
(o) Reclamation costs
The Group's mining and exploration activities are subject to
various governmental laws and regulations relating to the
protection of the environment. The Group records a liability for
the estimated future rehabilitation costs and decommissioning of
its development projects at the time a constructive obligation is
determined.
When provisions for closure and environmental rehabilitation are
initially recognised, the corresponding cost is capitalised as an
intangible asset, representing part of the cost of acquiring the
future economic benefits of the operation. The capitalised cost of
closure and environmental rehabilitation activities is recognised
in mining interests and, from the commencement of commercial
production is amortised over the expected useful life of the
operation to which it relates. Any change in the value of the
estimated expenditure is reflected in an adjustment to the
provision and asset.
(p) Investments in subsidiaries
Investments, including long-term loans, in subsidiaries are
valued at the lower of cost or recoverable amount, with an ongoing
review for impairment.
(q) Standards, amendments and interpretations not yet effective
At the date of authorisation of these financial statements,
there are no amended reporting standards and interpretations that
impact the Group as they are either not relevant to the Group's
activities or require accounting which is consistent with the
current accounting policies.
2. Segmental analysis
The Chief Operating Decision Maker is the Board. The Board
considers the business has one reporting 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.
2. Segmental analysis (continued)
Exploration Head
projects office Total
2023 GBP GBP GBP
----------------------------------------------- ------------ ---------- ----------
Consolidated Income Statement
Revenue 15,000 166,429 181,429
----------------------------------------------- ------------ ---------- ----------
Pre-licence exploration costs (39,792) - (39,792)
Impairment of deferred exploration
asset (111,691) - (111,691)
Share-based payments - (17,784) (17,784)
Administration costs and other expenses - (554,820) (554,820)
----------------------------------------------- ------------ ---------- ----------
Operating Loss (136,483) (406,175) (542,658)
Bank interest received - 1,317 1,317
----------------------------------------------- ------------ ---------- ----------
Loss before tax (136,483) (404,858) (541,341)
Taxation - - -
----------------------------------------------- ------------ ---------- ----------
Loss for the year attributable
to equity holders (136,483) (404,858) (541,341)
----------------------------------------------- ------------ ---------- ----------
Consolidated Statement of Financial
Position
Non-current assets
Intangible assets:
Deferred exploration costs:
Paymaster, USA 60,683 - 60,683
Brunton Pass, USA 121,559 - 121,559
Mt Tobin, USA 33,530 - 33,530
Jacks, Zambia 260,218 - 260,218
Konkola West, Zambia 40,108 - 40,108
Mushima North, Zambia 52,626 - 52,626
Mukai, Zambia 44,419 - 44,419
Mupala, Zambia 7,339 - 7,339
-------- ------------------------------------- ------------ ----------
620,481 - 620,481
Property, plant & equipment - 3,234 3,234
Other investments - 16,466 16,466
----------------------------------------------- ------------ ---------- ----------
620,481 19,700 640,181
----------------------------------------------- ------------ ---------- ----------
Current assets
Receivables 41,259 73,173 114,432
Cash and cash equivalents - 121,813 121,813
----------------------------------------------- ------------ ---------- ----------
41,259 194,986 236,245
----------------------------------------------- ------------ ---------- ----------
Current liabilities
Trade and other payables (3,979) (65,857) (69,835)
----------------------------------------------- ------------ ---------- ----------
Net current assets 37,280 129,129 166,410
----------------------------------------------- ------------ ---------- ----------
Provision for liabilities and charges
Reclamation liability (11,496) - (11,496)
----------------------------------------------- ------------ ---------- ----------
Net assets 646,265 148,829 795,095
----------------------------------------------- ------------ ---------- ----------
Other data
Deferred exploration additions 236,808 - 236,808
Exchange rate adjustments to deferred
exploration costs (47,543) - (47,543)
Exchange rate adjustments to royalty - - -
assets
----------------------------------------------- ------------ ---------- ----------
2. Segmental analysis (continued)
Exploration Head
projects office Total
2022 GBP GBP GBP
------------------------------------------------ ------------ ---------- ------------
Consolidated Income Statement
Revenue - 171,052 171,052
------------------------------------------------ ------------ ---------- ------------
Pre-licence exploration costs (80,843) - (80,843)
Impairment of deferred exploration asset (699,484) - (699,484)
Share-based payments - (31,387) (31,387)
Administration costs and other expenses - (535,288) (535,288)
------------------------------------------------ ------------ ---------- ------------
Operating Loss (780,327) (395,623) (1,175,950)
Bank interest received - 133 133
------------------------------------------------ ------------ ---------- ------------
Loss before tax (780,327) (395,490) (1,175,817)
Taxation - - -
------------------------------------------------ ------------ ---------- ------------
Loss for the year attributable to equity
holders (780,327) (395,490) (1,175,817)
------------------------------------------------ ------------ ---------- ------------
Consolidated Statement of Financial
Position
Non-current assets
Intangible assets:
Deferred exploration costs:
Paymaster, USA 65,143 - 65,143
Brunton Pass, USA 116,290 - 116,290
Mt Tobin, USA 35,091 - 35,091
Lucky, USA 75,377 - 75,377
Jacks, Zambia 231,050 - 231,050
Konkola West, Zambia 2,489 - 2,489
Mushima North, Zambia 6,458 - 6,458
Lubuila, Zambia 8,624 - 8,624
Mukai, Zambia 2,385 - 2,385
-------- -------------------------------------- ------------ ----------
542,907 - 542,907
Property, plant & equipment - 2,398 2,398
Other investments - 24,150 24,150
------------------------------------------------ ------------ ---------- ------------
542,907 26,548 569,455
------------------------------------------------ ------------ ---------- ------------
Current assets
Receivables 201,779 70,888 272,667
Cash and cash equivalents - 59,414 59,414
------------------------------------------------ ------------ ---------- ------------
201,779 130,302 332,081
------------------------------------------------ ------------ ---------- ------------
Current liabilities
Trade and other payables (20,966) (59,963) (80,929)
------------------------------------------------ ------------ ---------- ------------
Net current assets 180,813 70,339 251,152
------------------------------------------------ ------------ ---------- ------------
Provision for liabilities and charges
Reclamation liability (15,158) - (15,158)
------------------------------------------------ ------------ ---------- ------------
Net assets 708,562 96,887 805,449
------------------------------------------------ ------------ ---------- ------------
Other data
Deferred exploration additions 565,233 - 565,233
Exchange rate adjustments to deferred
exploration costs 82,776 - 82,776
Exchange rate adjustments to royalty
assets 668 - 668
------------------------------------------------ ------------ ---------- ------------
3. Loss before income tax
2023 2022
GBP GBP
---------------------------------------------------------- -------- --------
The operating loss is stated after charging
Impairment of intangible assets - deferred exploration
expenditure 111,691 699,484
Costs relating to leases expiring within 12
months 21,900 21,263
Depreciation - owned assets 1,793 1,661
Fees payable to the Group's Auditor for:
The audit of the Group's annual accounts 14,150 8,885
The audit of the Group's subsidiaries, pursuant
to legislation 6,174 5,923
Fees payable to the Group's Auditor and its
associates for other services:
Interim review of accounts 1,950 1,200
Corporation tax compliance fees 3,991 1,770
--------------------------------------------------------- -------- --------
4. Directors' emoluments
Remuneration in respect of directors was as follows:
Recharged to
Total Sunrise Resources Total before
cost plc Net cost recharges
2023 2023 2023 2022
GBP GBP GBP GBP
-------------------------- -------- ------------------- --------- -------------
P L Cheetham (salary) 129,928 (59,407) 70,521 122,995
P B Cullen (salary) - - - 72,322
M G Armitage (salary) 20,188 - 20,188 19,110
D A R McAlister (salary) 20,187 - 20,187 19,110
-------------------------- -------- ------------------- --------- -------------
170,303 (59,407) 110,896 233,537
-------------------------- -------- ------------------- --------- -------------
The above remuneration amounts do not include non-cash
share-based payments charged in these financial statements in
respect of share warrants issued to the directors amounting to
GBP1,954 (2022: GBP5,984) or Employer's National Insurance
contributions of GBP19,778 (2022: GBP27,702).
No bonuses were awarded for the year 2023.
Pension contributions made during the year on behalf of
Directors amounted to GBPNil (2022: GBPNil).
The directors are also the key management personnel. If all
benefits are taken into account, the total key management personnel
compensation would be GBP172,257 (2022: GBP239,521).
As set out in Note 17, relevant staff costs are recharged to a
related undertaking, Sunrise Resources plc. Taking account of all
benefits in kind, the key management personnel net compensation
cost to the Group was GBP113,376 (2022: GBP163,442).
5. Staff costs
Total staff costs for the Group and Company, including
directors, were as follows:
Total Staff costs
staff recharged to
costs Sunrise Resources Total before
to Group plc Net cost recharges
2023 2023 2023 2022
GBP GBP GBP GBP
Wages and salaries 318,476 (115,400) 203,076 360,098
Social security costs 33,766 (14,758) 19,008 39,216
Share-based payments 2,480 - 2,480 5,984
----------------------- ---------- ------------------- --------- -------------
354,722 (130,158) 224,564 405,298
----------------------- ---------- ------------------- --------- -------------
As set out in Note 17, relevant staff costs are recharged to a
related undertaking, Sunrise Resources plc.
The average monthly number of part-time and full-time employees,
including directors, employed by the Group and Company during the
year was as follows:
2023 2022
Number Number
--------------------------------------------------- -------- --------
Technical employees 2 3
Administration employees (including non-executive
directors) 5 5
--------------------------------------------------- -------- --------
7 8
--------------------------------------------------- -------- --------
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 ordinary shares in issue during the year.
2023 2022
--------------------------------------------------- -------------- --------------
Loss (GBP) (541,341) (1,175,817)
Weighted average ordinary shares in issue (No.) 1,791,815,969 1,428,608,504
Basic and diluted loss per ordinary share (pence) (0.03) (0.08)
--------------------------------------------------- -------------- --------------
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. Taxation
No liability to corporation tax arises for the year due to the
Group recording a taxable loss (2022: GBPNil).
2023 2022
GBP GBP
------------------------------------------------ ------------- -------------
Tax reconciliation
Loss before income tax (541,341) (1,175,817)
------------------------------------------------ ------------- -------------
Tax at 19% (2022: 19%) (102,855) (223,405)
------------------------------------------------ ------------- -------------
Fixed asset timing differences (1,268) 1,028
Expenditure not deductible for tax purposes 17,784 31,510
Pre-trading expenditure not deductible for tax
purposes 43,167 32,799
------------------------------------------------ ------------- -------------
Unrelieved tax losses carried forward 43,171 158,068
------------------------------------------------ ------------- -------------
Tax charge/credit for year - -
------------------------------------------------ ------------- -------------
Total losses carried forward for tax purposes (12,975,482) (12,493,824)
------------------------------------------------ ------------- -------------
Factors that may affect future tax charges
The Group has total losses carried forward of GBP12,975,482
(2022: GBP12,493,824). This amount would be available (subject to a
maximum of GBP5million per annum) to set against future taxable
profits of the Company. 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
Deferred Deferred
exploration Royalty exploration Royalty
expenditure assets Total expenditure assets Total
2023 2023 2023 2022 2022 2022
Group GBP GBP GBP GBP GBP GBP
---------------------- ------------- -------- ------------ ------------- ---------- ------------
Cost
At start of year 6,862,680 - 6,862,680 6,218,473 357,829 6,576,302
Additions 236,808 - 236,808 565,233 - 565,233
Reclamation cost - - - (3,802) - (3,802)
Exchange adjustments (47,543) - (47,543) 82,776 668 83,444
---------------------- ------------- -------- ------------ ------------- ---------- ------------
Transfer to assets
held for sale - - - - (358,497) (358,497)
---------------------- ------------- -------- ------------ ------------- ---------- ------------
At 30 September 7,051,945 - 7,051,945 6,862,680 - 6,862,680
---------------------- ------------- -------- ------------ ------------- ---------- ------------
Impairment
At start of year (6,319,773) - (6,319,773) (5,822,192) - (5,822,192)
Impairment losses
during year (111,691) - (111,691) (497,581) (201,903) (699,484)
Transfer to assets
held for sale - - - - 201,903 201,903
---------------------- ------------- -------- ------------ ------------- ---------- ------------
At 30 September (6,431,464) - (6,431,464) (6,319,773) - (6,319,773)
---------------------- ------------- -------- ------------ ------------- ---------- ------------
Net book value
At 30 September 620,481 - 620,481 542,907 - 542,907
---------------------- ------------- -------- ------------ ------------- ---------- ------------
At start of year 542,907 - 542,907 396,281 357,829 754,110
---------------------- ------------- -------- ------------ ------------- ---------- ------------
Details of the impairment assessments relating to intangible
assets, including the specific reasons for the impairments in the
year, key judgements and assumptions are given in Note 1(n).
9. Property, plant & equipment
Group Company Group Company
fixtures fixtures fixtures fixtures
and fittings and fittings and fittings and fittings
2023 2023 2022 2022
GBP GBP GBP GBP
--------------------- -------------- -------------- -------------- --------------
Cost
At start of year 51,571 36,813 51,465 36,707
Additions 2,630 2,630 107 107
At 30 September 54,201 39,443 51,572 36,814
--------------------- -------------- -------------- -------------- --------------
Depreciation
At start of year (49,174) (34,416) (47,513) (32,755)
Charge for the year (1,793) (1,793) (1,661) (1,661)
At 30 September (50,967) (36,209) (49,174) (34,416)
--------------------- -------------- -------------- -------------- --------------
Net Book Value
At 30 September 3,234 3,234 2,398 2,398
--------------------- -------------- -------------- -------------- --------------
At start of year 2,398 2,398 3,952 3,952
--------------------- -------------- -------------- -------------- --------------
10. Investments
Subsidiary undertakings
Type and percentage
of shares held
Country of at
incorporation/ 30 September
Company registration 2023 Principal activity
-------------------- ---------------- -------------------- --------------------
Tertiary Gold 100% of ordinary
Limited England & Wales shares Mineral exploration
Tertiary (Middle 100% of ordinary
East) Limited England & Wales shares Mineral exploration
Tertiary Minerals 100% of ordinary
US Inc. Nevada, USA shares Mineral exploration
Tertiary Minerals
(Zambia) Limited
(*formerly Luangwa 96% of ordinary
Minerals Limited) Zambia shares Mineral exploration
-------------------- ---------------- -------------------- --------------------
The registered office of Tertiary Gold Limited and Tertiary
(Middle East) Limited is the same as the Parent Company, being
Sunrise House, Hulley Road, Macclesfield, Cheshire, SK10 2LP.
The registered office of Tertiary Minerals US Inc. is 241 Ridge
Street, Suite 210, Reno, NV 89501, USA.
The registered office of Tertiary Minerals (Zambia) Limited is
491/492 Akapelwa Street/Town Area, Livingstone Southern Province,
Zambia.
Tertiary Minerals (Zambia) Limited
96% of the equity of Tertiary Minerals (Zambia) Limited is owned
by Tertiary Minerals plc and the 4% non-controlling interest is not
material. Deferred exploration assets held by the subsidiary are
GBP445,334. The subsidiary is fully financed by the parent company
via intercompany loan and capital contribution, the loan amounted
to GBP305,071, loan interest of GBP13,589 and capital contribution
amounted to GBP190,367. The net assets amount to GBP123,027 and the
loss for the year was GBP37,694.
Company Company
2023 2022
Investment in subsidiary undertakings GBP GBP
--------------------------------------- ---------- ----------
Value at start of year 681,526 839,108
Additions 136,540 584,617
Movement in provision (156,594) (742,199)
--------------------------------------- ---------- ----------
At 30 September 661,472 681,526
--------------------------------------- ---------- ----------
Investments in share capital of subsidiary undertakings
The directors have reviewed the carrying value of the Company's
investments in shares of subsidiary undertakings totalling GBP860,
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
Amounts owed by subsidiary undertakings are unsecured and
repayable in cash. Loan interest is charged to US and Zambia
subsidiaries on intercompany loans with Parent Company.
A review of the recoverability of loans to subsidiary
undertakings has been carried out. The review indicated potential
credit losses arising in the year which have been provided for as
follows: Tertiary Gold Limited provision of GBP156,594. The
provisions made reflect the differences between the loan carrying
amounts and the value of the underlying project assets.
Other investments - listed investments
Type and percentage
of shares held
Country of at
incorporation/ 30 September
Company registration 2023 Principal activity
------------------ ---------------- -------------------- --------------------
Sunrise Resources 0.54% of ordinary
plc England & Wales shares Mineral exploration
------------------ ---------------- -------------------- --------------------
Group and Company
Group Company Group Company
Investment designated at fair 2023 2023 2022 2022
value through OCI GBP GBP GBP GBP
------------------------------- -------- -------- --------- ---------
Value at start of year 24,150 24,150 50,496 50,496
Additions - - - -
Disposal - - - -
Movement in valuation (7,684) (7,684) (26,346) (26,346)
------------------------------- -------- -------- --------- ---------
At 30 September 16,466 16,466 24,150 24,150
------------------------------- -------- -------- --------- ---------
The fair value of each investment is equal to the market value
of its shares at 30 September 2023, based on the closing mid-market
price of shares on its equity exchange market.
These are level one inputs for the purpose of the IFRS 13 fair
value hierarchy.
11. Receivables
Group Company Group Company
2023 2023 2022 2022
GBP GBP GBP GBP
-------------------------------------- -------- -------- -------- --------
Amounts owed by related undertakings 50,753 50,753 46,232 46,232
Other receivables 40,907 1,275 46,133 1,727
Royalty assets held for sale - - 156,594 -
Prepayments 22,772 18,372 23,708 16,826
-------------------------------------- -------- -------- -------- --------
At 30 September 114,432 70,400 272,667 64,785
-------------------------------------- -------- -------- -------- --------
The Group aged analysis of amounts owed by related undertakings
(all relating to a single debtor) is as follows:
Total
30 days Over 30 carrying
Not impaired or less days amount
GBP GBP GBP GBP
----- ------------- --------- -------- ----------
2023 50,753 50,753 - 50,753
2022 46,232 46,232 - 46,232
----- ------------- --------- -------- ----------
12. Cash and cash equivalents
Group Company Group Company
2023 2023 2022 2022
GBP GBP GBP GBP
-------------------------- -------- -------- ------- --------
Cash at bank and in hand 57,545 35,947 31,995 20,746
Short-term bank deposits 64,268 64,268 27,419 27,419
-------------------------- -------- -------- ------- --------
At 30 September 121,813 100,215 59,414 48,165
-------------------------- -------- -------- ------- --------
13. Trade and other payables
Group Company Group Company
2023 2023 2022 2022
GBP GBP GBP GBP
--------------------------------- ------- -------- ------- --------
Trade payables 16,829 17,812 12,149 11,503
Other taxes and social security
costs 12,536 12,536 10,453 10,453
Accruals 40,191 23,988 57,491 22,284
Other payables 279 279 836 836
--------------------------------- ------- -------- ------- --------
At 30 September 69,835 54,615 80,929 45,076
--------------------------------- ------- -------- ------- --------
14. Share capital and reserves
2023 2023 2022 2022
No. GBP No. GBP
----------------------------- -------------- -------- -------------- --------
Ordinary shares - Allotted,
called up and fully paid
Balance at start of year 1,536,263,621 153,626 1,183,322,445 118,332
Shares issued in the year 444,821,428 44,482 352,941,176 35,294
----------------------------- -------------- -------- -------------- --------
Balance at 30 September 1,981,085,049 198,108 1,536,263,621 153,626
----------------------------- -------------- -------- -------------- --------
Share issues
During the year to 30 September 2023 the following share issues
took place:
250,000,000 0.01p Ordinary Shares at 0.12p per share, by way of
a share placing, for a total consideration of GBP300,000 before
expenses (3 February 2023).
16,250,000 0.1p Ordinary Shares at 0.12p per share, as
settlement of broker commission fees, for a total consideration of
GBP19,500 before expenses (3 February 2023).
178,571,428 0.01p Ordinary Shares at 0.14p per share, by way of
a share placing, for a total consideration of GBP250,000 before
expenses (13 April 2023).
During the year to 30 September 2022 a total of 352,941,176
0.01p ordinary shares were issued, at an average price of 0.16p,
for a total consideration of GBP570,000 net of expenses.
The total amount of transaction fees debited to the Share
Premium account in the year was GBP27,500 (2022: GBP30,000).
Nature and purpose of reserves
Capital redemption reserve
Non distributable reserve into which amounts are transferred
following the redemption or the purchase of a company's own shares.
The provisions relating to the capital redemption reserve are set
out in section 733 of the Companies Act 2006.
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
Company'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 third parties and 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.
Fair value reserve
Fair value reserve represents the cumulative fair value changes
of available-for-sale equity investment assets.
15. Warrants granted
Warrants not exercised at 30 September 2023
Exercise Expiry
Issue date price Number Exercisable dates
------------ --------- ------------ ------------------------- -----------
21/02/2019 0.50p 3,500,000 Any time from 21/02/2020 21/02/2024
21/02/2019 0.35p 5,000,000 Any time from 21/02/2020 21/02/2024
27/02/2020 0.34p 8,100,000 Any time from 27/02/2021 27/02/2025
19/11/2020 0.34p 22,000,000 Any time from 19/11/2019 19/11/2023
28/06/2021 0.34p 3,100,000 Any time from 28/06/2022 28/06/2026
28/06/2021 0.50p 3,000,000 Any time from 28/06/2022 28/06/2026
28/06/2021 1.00p 3,000,000 Any time from 28/06/2023 28/06/2026
28/06/2021 1.50p 3,000,000 Any time from 28/06/2024 28/06/2026
Any time before
02/02/2023 0.24p 133,125,000 expiry 08/02/2024
Any time before
02/02/2023 0.12p 12,500,000 expiry 08/02/2024
16/02/2023 0.123p 10,000,000 Any time from 16/02/2024 16/02/2028
Any time before
13/04/2023 0.28p 89,285,714 expiry 13/04/2024
Any time before
13/04/2023 0.14p 8,928,571 expiry 13/04/2024
Total 304,539,285
------------ --------- ------------ ------------------------- -----------
Warrants are issued for nil consideration and are exercisable as
disclosed above. They are exchangeable on a one for one basis for
each ordinary share at the exercise price on the date of
conversion.
A grant of 133,125,000 warrants at an exercise price of 0.24p,
as part of a share placing (3 February 2023).
A grant of 12,500,000 warrants at an exercise price of 0.12p, as
part of a share placing, to Peterhouse Capital Limited (3 February
2023).
A grant of 10,000,000 warrants at an exercise price of 0.123p,
to employees and directors of the Company (16 February 2023).
A grant of 89,285,714 warrants at an exercise price of 0.28p, as
part of a share placing (13 April 2023).
A grant of 8,928,571 warrants at an exercise price of 0.14p, as
part of a share placing, to Peterhouse Capital Limited (13 April
2023).
Share-based payments
The Company issues warrants to directors and employees on
varying terms and conditions.
Details of the share warrants outstanding during the year are as
follows:
2023 2022
Number Number
of Weighted of Weighted
share average share average
warrants exercise warrants exercise
and share price and share price
options Pence options Pence
------------------------------ -------------- ---------- ------------ ----------
Outstanding at start of year 245,817,646 0.36 61,353,846 0.47
Granted during the year 253,839,285 0.244 194,117,646 0.325
Exercised during the year - - - -
Forfeited during the year - - - -
Expired during the year (195,117,646) 0.33 (9,653,846) 0.339
------------------------------ -------------- ---------- ------------ ----------
Outstanding at 30 September 304,539,285 0.28 245,817,646 0.36
------------------------------ -------------- ---------- ------------ ----------
Exercisable at 30 September 195,325,000 0.27 245,817,646 0.36
------------------------------ -------------- ---------- ------------ ----------
The warrants outstanding at 30 September 2023 had a weighted
average exercise price of 0.26p (2022: 0.36p), a weighted average
fair value of 0.02p (2022: 0.03p) and a weighted average remaining
contractual life of 0.66 years (2022: 1.02 years).
In the year ended 30 September 2023, warrants were granted on 3
February 2023, 16 February 2023 and 13 April 2023. The aggregate of
the estimated fair values of the warrants granted on these dates is
GBP21,953. In the year ended 30 September 2022, warrants were
granted on 19 January 2022 and 21 January 2022. The aggregate of
the estimated fair values of the warrants granted on these dates is
GBP27,632.
The inputs into the Black-Scholes-Merton Pricing Model were for
warrants granted in the year and are as follows:
2023 2022
--------------------------------- ----------- -----------
Weighted average share price 0.14p 0.17p
Weighted average exercise price 0.223p 0.325p
Expected volatility 70.0% 70.0%
Expected life 1.19 years 1.45 years
Risk-free rate 0.34% 0.76%
Expected dividend yield 0% 0%
--------------------------------- ----------- -----------
Expected volatility was determined by calculating the historical
volatility of the Company's share price over the previous three
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 GBP17,784 and GBP31,387
related to equity-settled share-based payment transactions in 2023
and 2022 respectively. The fair value is charged to administrative
expenses and where there is a vesting period it is charged 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.
16. Leases
The Company rents office premises under a short-term, low value
lease agreement.
Future minimum lease payments are:
2023 2022
Land & buildings Land & buildings
GBP GBP
----------------------- ------------------ ------------------
Office accommodation:
Within one year 17,100 16,200
----------------------- ------------------ ------------------
Lease payments recognised in loss for the period amounted to
GBP23,638 (2022: GBP21,263).
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 2023 At 30 September
2022
Share Warrants Warrants Share
Shares warrants exercise expiry Shares warrants
number number price date number number
----------------- ----------- ---------- ---------- ----------- ----------- -----------
P L Cheetham* 21,465,000 2,000,000 0.500p 21/02/2024 21,465,000 17,411,765
2,000,000 0.340p 27/02/2025
3,000,000 0.500p 28/06/2026
3,000,000 1.000p 28/06/2026
3,000,000 1.500p 28/06/2026
2,000,000 0.123p 16/02/2028
----------------- ----------- ---------- ---------- ----------- ----------- -----------
D A R McAlister 2,937,609 1,500,000 0.500p 21/02/2024 2,937,609 4,500,000
1,500,000 0.340p 27/02/2025
1,500,000 0.340p 28/06/2026
2,000,000 0.123p 16/02/2028
----------------- ----------- ---------- ---------- ----------- ----------- -----------
Dr M G Armitage 8,823,529 2,000,000 0.123p 16/02/2028 8,823,529 4,411,765
----------------- ----------- ---------- ---------- ----------- ----------- -----------
* 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 2023.
Details of the Parent Company's investment in subsidiary
undertakings are shown in Note 10.
Sunrise Resources plc
Sunrise Resources plc is considered to be a related party
because P L Cheetham is a director and Executive Chairman of both
companies.
During the year the Company charged costs of GBP166,429 (2022:
GBP171,052) to Sunrise Resources plc being shared overheads of
GBP35,142 (2022: GBP24,766), costs paid on behalf of Sunrise
Resources plc of GBP1,129 (2022: GBP233), staff salary costs of
GBP63,120 (2022: GBP60,253) and directors' salary costs of
GBP67,038 (2022: GBP86,266), comprising P L Cheetham GBP67,038
(2022: GBP86,266).
At the reporting date, Note 11 includes amounts receivable of
GBP50,753 (2022: GBP46,232) owed by Sunrise Resources plc.
Shares and warrants held in Sunrise Resources plc by the
Company's directors are as follows:
At 30 September
At 30 September 2023 2022
Share Warrants Warrants Share
Shares warrants exercise expiry Shares warrants
number number price date number number
----------------- ------------ ----------- ---------- ----------- ------------ -----------
P L Cheetham* 255,785,016 15,000,000 0.195p 05/08/2025 247,532,996 30,000,000
15,000,000 0.195p 05/08/2025
25,000,000 0.150p 24/03/2028
D A R McAlister 550,000 - - - 550,000 -
----------------- ------------ ----------- ---------- ----------- ------------ -----------
* Includes 5,500,000 shares held by K E Cheetham, wife of P L
Cheetham.
Tertiary Minerals (Zambia) Limited (formerly Luangwa Minerals
Limited)
Tertiary Minerals (Zambia) Limited is a 96% controlled
subsidiary of Tertiary Minerals plc, incorporated on 28 June 2021.
Tertiary Minerals (Zambia) Limited is fully financed by Tertiary
Minerals plc via intercompany loan and capital contribution, the
loan amounted to GBP305,071, loan interest GBP13,589 and capital
contribution amounted to GBP190,367. D A R McAlister, a director of
Tertiary Minerals plc, is also the director of Tertiary Minerals
(Zambia) Limited.
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 2023, the Group's and the Company's financial
assets consisted of listed investments, trade receivables and cash
and cash equivalents. At the same date, the Group and the Company
had financial liabilities of trade and other payables due within
one year. There is no material difference between the carrying and
fair values of the Group and the Company's financial assets and
liabilities.
The carrying amounts for each category of financial instruments
held at 30 September 2023, as defined in IFRS 9, are as
follows:
Group Company Group Company
2023 2023 2022 2022
GBP GBP GBP GBP
------------------------------------- -------- -------- -------- --------
Financial assets at amortised
cost 213,474 152,243 308,373 96,124
Financial assets at fair value
through other comprehensive income 16,466 16,466 24,150 24,150
Financial liabilities at amortised
cost 68,796 42,080 86,470 34,623
------------------------------------- -------- -------- -------- --------
Risk management
The principal risks faced by the Group and the 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 and other
currencies to provide funding for exploration and evaluation
activity. The Group and the Company are dependent on equity
fundraising through share 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
2023 2022 2023 2022
GBP GBP GBP GBP
------------------------- -------- ------- -------- -------
United Kingdom Sterling 97,495 45,044 80,968 42,291
United States Dollar 22,957 12,729 18,722 5,410
Other 1,361 1,641 525 464
------------------------- -------- ------- -------- -------
121,813 59,414 100,215 48,165
------------------------- -------- ------- -------- -------
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 exchange
rates 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 2023 would
increase or decrease by GBP1,148 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 the 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. Provisions for liabilities
2023 2022
Group GBP GBP
----------------------- -------- ---------
Reclamation provision
At start of year 15,158 15,994
Additions - 7,041
Reduction/reversal (2,492) (10,843)
Exchange adjustments (1,170) 2,966
----------------------- -------- ---------
At 30 September 11,496 15,158
----------------------- -------- ---------
The Group makes provision for future reclamation costs relating
to exploration projects. Provisions are calculated based upon
internal estimates and expected costs based upon past experience
and expert guidance where appropriate. The timing of the required
reclamation and associated cash outflows is uncertain, depending
upon progress with exploration projects. In some jurisdictions
bonds are payable to the authorities and are carried with other
receivables.
21. Post balance sheet events
On 1 November 2023, the Company raised GBP150,000, before
expenses by a placing of Ordinary Shares through the Company's
Joint Broker, Peterhouse Capital Limited.
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END
FR BELFFZFLBBBE
(END) Dow Jones Newswires
January 15, 2024 05:15 ET (10:15 GMT)
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