REG - Tertiary Minerals - Audited Results for Year Ended 30 September 2022
12/12/2022 07:01
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RNS Number : 2844J Tertiary Minerals PLC 12 December 2022
12 December 2022
Tertiary Minerals plc
("Tertiary" or "the Company")
Audited Results for the Year Ended 30 September 2022
The Board of Tertiary Minerals plc (AIM: TYM) is pleased to announce audited
results for the year ended 30 September 2022.
Operational Summary:
ZAMBIA
· Completed first full year of exploration in Zambia targeting
copper, the key energy transition metal.
· Data sharing and technical cooperation agreement signed with
First Quantum Minerals ("FQM") covering Tertiary's Mukai and Mushima North
Project Interests.
· Earned 90% interest in Jacks Copper Project from local partner
Mwashia Resources Ltd ("Mwashia"); holding option to earn 90% in four other
licence areas from Mwashia.
· Planning underway for the 2023 exploration and drill programmes.
Jacks Copper Project, Zambia
· Four diamond drill holes completed at original Jacks prospect;
significant copper mineralisation intersected in all four diamond drillholes.
· Copper mineralisation has now been intersected over a strike
length of 350m and remains open along strike and at depth.
· Over 2,000 soil samples collected on four grids; multiple soil
anomalies defined by provisional portable XRF field analysis; results compare
favourably with soil anomalies in the vicinity of various ore zones at current
and past producing mines on the Copperbelt.
Other Projects, Zambia
· Initial prospectivity reviews completed by consultant Remote
Exploration Services (RES) of South Africa, based on historical data;
exploration planning underway with initial priority targets defined at:
Ø The Mukai Project. Directly adjacent to FQM's Trident Project which
includes the large Sentinel Copper Mine and the recently opened Enterprise
Nickel Mine. Mine host stratigraphy can be traced into the Mukai Licence where
there are both copper and nickel geochemical anomalies.
Ø The Mushima North Project. Prospective primarily for iron-oxide-copper-gold
(IOCG) mineralisation. 1960s historical drilling encountered wide zones of
low-grade copper-sulphide mineralisation.
NEVADA
Brunton Pass Copper Project
· Programmes of trenching, sampling, geochemical analysis,
petrological evaluation and field follow up completed.
· Wide intervals of low-grade copper observed in trenches in
association with widespread garnet-pyroxene skarn alteration adjacent to
diorite intrusives.
· Trenching of 1.2km long zone of mercury-arsenic soil anomalies
intersected substantial widths of hydrothermally altered rock with
approximately 1,000 times background content of the gold indicator elements,
arsenic and mercury.
· Drilling now planned to test targets for copper skarn and
epithermal precious metal mineralisation.
For more information please contact:
Tertiary Minerals plc
Patrick Cheetham, Executive Chairman +44 (0) 1625 838 679
SP Angel Corporate Finance LLP
Nominated Adviser and Broker
Richard Morrison +44 (0) 203 470 0470
Harry Davies-Ball
Peterhouse Capital Limited
Joint Broker
Lucy Williams + 44 (0) 207 469 0930
Duncan Vasey
Market Abuse Regulation (MAR) Disclosure:
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 which forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018 ("MAR"). Upon the publication of this
announcement via Regulatory Information Service ("RIS"), this inside
information is now considered to be in the public domain.
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. The news release may contain certain statements and expressions of
belief, expectation or opinion which are forward looking statements, and which
relate, inter alia, to the Company's proposed strategy, plans and objectives
or to the expectations or intentions of the Company's directors. Such
forward-looking statements involve known and unknown risks, uncertainties, and
other important factors beyond the control of the Company that could cause the
actual performance or achievements of the Company to be materially different
from such forward-looking statements. Accordingly, you should not rely on any
forward-looking statements and save as required by the AIM Rules for Companies
or by law, the Company does not accept any obligation to disseminate any
updates or revisions to such forward-looking statements.
Chairman's Statement
Dear Shareholder,
It is with great pleasure that I present the Annual Report for the year ended
30 September 2022. This has been our first full year of exploration for
copper in Zambia and a year of very pleasing progress on a number of fronts.
We continue to pursue a strategic focus on copper, a key energy transition
metal in the new green economy, and on precious metals. We remain bullish on
the outlook for the copper price and the associated market sentiment that has
supported our exploration efforts, and which we expect will reward exploration
success. This view is based on increasing long-term demand for copper and
projections of a future supply deficit, albeit that demand has been tempered
in the short term by weaker Chinese demand due to restrictive Covid policies.
Precious metal prices have been subdued this year, in US Dollar terms, due to
the strength of the US Dollar and following aggressive interest rate rises
imposed by the US Federal Reserve. That said, years of inflationary money
printing around the world supports a view that the gold price is set for a
rerating.
In Zambia we work through our 96% owned Zambian subsidiary, Tertiary Minerals
(Zambia) Limited ("TMZ") and have interests in five projects through various
agreements with our local partner, Mwashia Resources Ltd ("Mwashia"). Mwashia
has been instrumental in the tribal and stakeholder engagement process that
has allowed for the smooth running of our exploration in Zambia to date.
This exploration has focused on the Jacks Copper Project ("Jacks") where TMZ
now holds a 90% joint venture interest and an option to move to 100%
ownership. Our inaugural drilling programme at Jacks was successful with all
four holes hitting copper mineralisation. When considered alongside historical
drilling, this work has so far demonstrated mineralisation over a 350m strike
length open in both directions and at depth.
We also carried out a large soil sampling programme at Jacks, collecting over
2,000 samples on four detailed grids to follow up unresolved copper-in-soil
anomalies identified in wide spaced sampling by previous explorers. We are
delighted with the results obtained to date which, although provisional, have
defined multiple soil anomalies, mainly in favourable Lower Roan stratigraphy,
that are of the same order of magnitude as those reported to occur in the
vicinity of ore-zones at past and currently operating mines elsewhere in the
Copperbelt. The results also extend the target area at the original Jacks
copper prospect.
During the year we have been assessing data and the exploration priorities for
our other project interests in Zambia whilst awaiting the approval of
Environmental Project Briefs ("EPBs") to allow the start of exploration. Two
of these EPBs were recently granted and the approval process for the remaining
EPBs is at an advanced stage.
Our assessment process was boosted recently when we signed a data sharing and
technical cooperation agreement with global copper company First Quantum
Minerals Limited ("FQM") to work collaboratively with respect to advancing
exploration and development of the Company's Mukai and Mushima North
projects. As a result, we are set to benefit from FQM's extensive and
in-depth country experience, gained over many years of exploration and mine
development in Zambia and, importantly, its site-specific historical
exploration data in and around these two exciting projects.
Our Mukai licence, in the Domes region of northwest Zambia, is strategically
located, being surrounded by FQM's Trident Project licences which cover the
large producing Sentinel copper mine and the newly developed Enterprise nickel
mine. We are also located just east of Arc Minerals' Zambia Copper-Cobalt
Project where Anglo American is set to earn a 70% interest for expenditure of
US$88,500,000. At Mushima North our targets are for copper and gold.
Whilst our exploration operations in Nevada have yielded mixed results, we
remain enthusiastic about our project portfolio in Nevada and have further
drill programmes planned for 2023. This includes drilling at our Brunton Pass
Copper-Gold Project where a successful programme of trenching uncovered
substantial widths of skarn mineralisation anomalous in copper and
hydrothermally altered rock with up to 1,000x background values for gold
pathfinder elements, mercury and antimony, at two locations 900m apart and
with gold values up to 2.65g/t gold. We are now targeting a high sulphidation
epithermal gold deposit which we believe has been overprinted on a copper
skarn system which itself may also suggest the presence of a larger porphyry
copper target nearby.
A drilling programme earlier this year at our Pyramid Gold-Silver Project in
Nevada failed to demonstrate the continuity at depth of widespread silver
values found at surface and the decision was made to cut losses, terminate our
lease and return the property to the underlying owner.
In August we signed an agreement to sell our royalty interests in the
Kaaresselkä and Kiekerömaa Gold Projects in Finland which completes our exit
from projects in Finland, but as a result we will retain a small shareholding
in Aurion Resources Ltd and follow with interest its progress at the Risti and
Helmi gold discoveries in Finland which continue to deliver exciting
exploration results close to Rupert Resources' 4 million ounce Ikkari gold
discovery.
A more detailed discussion of our exploration programmes and results can be
found in our Operating Review.
Our Annual General Meeting for the year ended 30 September 2022 will be held
in London on 16 February 2023. We encourage shareholders who cannot attend to
appoint the Chairman as their proxy.
At the AGM I will be standing for re-election and we will be proposing the
usual Ordinary Resolution to allow for the issue of shares and a Special
Resolution to allow for the issue of shares other than by way of a rights
issue. It is very important that these resolutions are passed as the Company
is currently reliant on raising funds periodically from the market by placing
shares to fund its exploration business and to continue as a going concern.
We are eager to continue our exploration in Nevada and to get back on the
ground in Zambia as soon as the wet season is over, and we look forward to
reporting back to shareholders on a full programme of exploration in 2023.
Patrick Cheetham
Executive Chairman
8 December 2022
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 2022, Tertiary holds
0.57% 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 £1,175,817 for the year (2021: £406,963) after
administration costs of £566,675 (2021: £486,171). The loss includes
impairment of the Pyramid Project of £497,581 and Royalty assets of £201,903
and expensed pre-licence and reconnaissance exploration costs of £80,843
(2021: £72,725). Administration costs include a charge of £31,387 (2021:
£12,754) relating to share warrants held by employees and third parties as
required by IFRS 2.
Revenue includes £171,052 (2021: £165,058) 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 2022, the Group had net
current assets of £251,152 (2021: £476,907). 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 £542,907 (2021: £754,110) and the
breakdown by project is shown in Note 2 to the Financial Statements.
Expenditure which does not meet the criteria set out in Notes 1(d) and 1(n),
such as pre-licence and reconnaissance costs, are expensed and add to the
Company's loss. The loss reported in any year can also include expenditure
that was carried forward in previous reporting periods as an intangible asset
but which the Board determines is "impaired" in the reporting period.
The extent to which expenditure is carried forward as intangible assets is a
measure of the extent to which the value of the Company's expenditure is
preserved.
The intangible asset value of a project does not equate to the realisable or
market value of a particular project which will, in the Directors' opinion, be
at least equal in value and often considerably higher. Hence the Company's
market capitalisation on AIM can be in excess of or less than the net asset
value of the Group.
Details of intangible assets, property, plant and equipment and investments
are set out in Notes 8, 9 and 10 of the financial statements.
The financial statements of a mineral exploration company can provide a moment
in time snapshot of the financial health of 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") are neither applicable
nor appropriate to measurement of the value creation of a company involved in
mineral exploration and which currently has no turnover other than cost
recovery. The directors consider that the detailed information in the
Operating Review is the best guide to the Group's progress and performance
during the year.
The Company does seek to reduce overhead costs, where practicable, but is
reporting higher administration costs this financial year of £566,675 (2021:
£486,171) mainly due to the costs of an additional staff members for a part
of the year and the inclusion of share-based payments associated with the
issue of share warrants during the year.
Fundraising
During the year to 30 September 2022 the Company raised a total of £600,000
before expenses, as shown in Note 14 to the financial statements.
These funds were raised through:
· a share placing and Broker Option on 19 January 2022 and 21
January 2022 to clients of the Company's joint broker, Peterhouse Capital
Limited, existing shareholders and three Directors of the Company 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 (£59,414), 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 Pyramid Project (£497,581) was impaired in full as
a result of the year-end impairment review due to the negative results of
exploration during the year and a decision to terminate the Group's lease
interest in the project mining claims. Royalty assets were impaired
(£201,903) to the recoverable amount of £165,594 with regards to completion
of the sale of the royalty assets to Aurion Resources on 3 October 2022.
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 totalling £225,749, 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 Minerals US Inc provision of
£543,526, Tertiary Gold Limited provision of £201,235 and release of
provision in Tertiary (Middle East) Limited of £2,564. The provisions made
reflect the differences between the loan carrying amounts and the value of the
underlying project assets.
Operating Review
Zambia
Tertiary Minerals (Zambia) Limited ("TMZ"), the Company's 96% owned Zambian
subsidiary, was established in 2021 to target copper exploration and
development opportunities in Zambia.
TMZ holds a 90% Joint Venture interest in the Jacks Copper Project ("Jacks")
and option agreements with Mwashia Resources Limited ("Mwashia") to acquire up
to a 90% joint venture interest in four additional exploration licences in
Zambia considered prospective for copper. These licences, currently held by
Mwashia, are licence numbers 27065-HQ-LEL ("Lubuila"), 27066-HQ-LEL ("Mukai"),
27067-HQ-LEL ("Konkola West") and 27068-HQ-LEL ("Mushima North").
Technical Cooperation with First Quantum Minerals Limited ("FQM")
Towards the end of the reporting period, Tertiary and FQM entered into a
technical cooperation and data sharing agreement that covers the Mukai and
Mushima North project interests. This agreement effectively harnesses the
expertise of one of the world's largest copper producers without cost to the
Company, and in return FQM will gain first-hand knowledge of any new
discoveries that the Company makes, and will be well positioned should
Tertiary seek an exploration or development partner in future. Nevertheless,
it is important to stress that the Agreement does not bind either company to
any further agreement or grant FQM any right of first refusal and so is not
commercially restrictive for Tertiary.
FQM is a global copper company operating long life mines in several countries.
It employs approximately 20,000 people world-wide. FQM is ranked the sixth
largest copper producer in the world and is forecasting global copper metal
production of at least 790,000 tonnes in 2022. Just under half of FQM's copper
production is expected to come from its Kansanshi and Sentinel mines in Zambia
which together represent approximately 50% of total Zambian copper output.
FQM & Tertiary have established a Technical Committee to advise and assist
the Company in relation to all technical matters relating to the Mukai and
Mushima North projects. As part of this agreement, FQM is providing Tertiary
with all of its historical exploration data for the two licence areas and
Tertiary will submit its exploration results to the Technical Committee on an
ongoing basis.
Jacks Copper Project (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. This covers 141.4km(2) and is located
85km south of Luanshya in the Central Province of Zambia.
Having met its expenditure obligations at Jacks, the Company has earned the
right to a 90% interest in the licence and subsequently TMZ and its partner,
Mwashia, have executed a full Joint Venture and Shareholders' Agreement for
27069-HQ-LEL . A new Zambian company will be formed to be owned 90% by TMZ and
10% by Mwashia to own the licence and manage the exploration. Mwashia will
transfer 27069-HQ-LEL into the name of the newly formed company. TMZ will hold
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 Roan Selection Trust Limited ("RST") in the
1960s who 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 ("CMC") and Cyprus AMAX Minerals
("Cyprus") 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 ("KPR") and FQM under
a JV Agreement who, between 2014‑2015, conducted lithological and structural
mapping, licence-wide 500 x 500 metre soil sampling and limited infill soil
sampling on a 250 x 250 metre grid. This identified a number of copper-in-soil
anomalies where follow up drilling was planned but never carried out.
Phase 1 Drill Programme - June 2022
The Company's first Zambian drill programme at Jacks was to confirm the
presence of, and assess the continuity of, copper mineralisation at the
original Jacks copper prospect.
The historical data had limitations on the positional accuracy so to assist
with drill targeting the Company conducted soil geochemical analysis using a
portable XRF ("pXRF") analyser along and between the profiles of historical
drilling. Several strong copper anomalies were identified which, when
correlated with historical soil geochemistry, allowed the interpreted
geological model to be spatially refined.
Four holes were completed for a total of 746m of drilling, two each on two
separate traverses spaced approximately 150m apart. During the drill programme
core orientation was conducted and preliminary analysis of core using pXRF
allowed real-time interpretation of drill intersections and facilitated the
positioning of subsequent holes. Drill core was cut on-site and 186 samples,
along with internal QA/QC samples, were delivered to SGS Laboratories in
Kalulushi, Zambia, for independent laboratory-based analysis. A table of
significant drill intersections is shown in Table 1.
Table 1: Analytical Results
( )
BHID Down Hole Interval (m) Copper (%) From (m) To (m)
22JKDD01 13.5 0.9 77.5 91.0
Including 22JKDD01 3.0 1.7 79.5 82.5
Including 22JKDD01 3.5 1.2 87.0 90.5
22JKDD02 7.0 0.6 54.0 61.0
22JKDD02 3.0 0.8 191.0 194.0
22JKDD03 6.0 1.8 105.0 111.0
Including 22JKDD03 4.0 2.4 106.0 110.0
22JKDD04 14.0 0.8 27.0 41.0
Including 22JKDD04 2.0 1.7 27.0 29.0
Including 22JKDD04 5.0 1.0 35.0 40.0
The Company considers that the presence of copper mineralisation has now been
demonstrated at the original Jacks copper prospect over a 350m strike length
and to depths up to 230m vertically below surface. It is open along strike and
may be thickening closer to the fold nose, as evidenced by historical
drillhole KJD10.
Soil Sampling Programme
A soil sampling programme was commissioned following the Phase 1 Drill
Programme. Over 2,000 samples were collected on four separate grids (A-D) at
40m intervals on north-south lines spaced 200m apart. Preliminary analysis was
performed by pXRF in the field.
As a guide to the significance of soil sampling results, the Company notes
that soil anomalies for freely drained soils in the vicinity of various ore
zones at current and past producing mines on the Copperbelt have thresholds in
the range 50 to 150 parts per million ("ppm") copper, averaging 80ppm copper
and peak values in the range 100-450ppm copper and averaging 210ppm copper.
Areas A, B and C targeted copper anomalies identified in the wide spaced
historical soil sampling. Preliminary pXRF results identified areas for
immediate follow-up in areas B, C and D as follows:
In Area B, a 600m long x 600m wide copper-in-soil anomaly was defined with a
peak of 325 ppm copper and 197ppm nickel in different samples. The trace
element signature of the anomaly is atypical for Copperbelt style
mineralisation and further evaluation of this is required to determine its
significance.
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. The Area
C anomaly demonstrated elevated Cu:Sc ratios in FQM's original sampling.
Scandium is considered immobile in hydrothermal ore forming systems and so the
Cu:Sc ratio is a useful tool to discriminate between copper anomalies caused
by hydrothermal concentration of copper in sulphide minerals from those caused
by rocks with naturally high background concentrations of copper.
Area D covered approximately 4km of strike length at the original Jacks copper
prospect which was the target of the Phase 1 Drill Programme. A peak value of
525ppm copper was observed in the Phase 1 drilling area 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.
As pXRF results do not have the same accuracy or precision as traditional
laboratory chemical analysis, the results are considered provisional. A subset
of samples will now be selected for analysis using traditional wet geochemical
methods and the results will form the basis of geochemical interpretation and
drill planning.
Mukai Project (Option Agreement to acquire up to a 90% joint venture interest)
Exploration Licence 27066-HQ-LEL, which forms the Mukai Project, covers
55.4km² 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 Lower Roan Subgroup rocks which are part of the southern
flank of the Kabompo Dome.
The licence is directly adjacent to FQM's Trident Project licences which
include the recently opened Enterprise nickel mine and the large producing
Sentinel (Kalumbila) copper mine, located 8km south and 18km southeast of the
licence, respectively. Enterprise will be the largest nickel mine in Africa
with a total Measured and Indicated Resource of 40 million tonnes of ore
containing 431,000 tonnes of nickel. FQM has invested US$2.1 billion in the
Sentinel copper mine where the plant has the capacity to treat 55 Mt of ore
per annum (Mineral Reserves - 721.7 million tonnes ("Mt") with a mean grade of
0.46% copper). The Mukai Project is also located west of Arc Minerals project
area on the opposite flank of the Kabompo Dome where Anglo American plc can
earn a 70% interest from Arc Minerals plc through expenditure of US$88.5
million including US$14.5 million in cash payments.
The Mukai Project is subject to the Technical Cooperation and Data Sharing
Agreement between TMZ and FQM.
Historic exploration in the Mukai licence area has been carried out for copper
by Roan Selection Trust ("RST") in the 1960s, for uranium by Agip in the
1980s, and by an Equinox- Anglo American JV ("Zamanglo") 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 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 Kalumbia Fault Zone.
A copper soil anomaly was identified within the Mukai licence by RST in the
1960s close to the boundary with FQM's licences and is seen to continue into
FQM's adjacent licence as a copper and copper:scandium anomaly (high
copper:scandium ratios are seen as an indicator of copper sulphide
mineralisation as opposed to enhanced background level of copper in the rock).
This is a high priority target for follow-up exploration.
Nickel anomalies have also been identified in the licence area, in soils by
Zamanglo and in stream sediments by the Zambian Geological Survey. Data
interpretation and targeting is ongoing.
The Mukai Licence contains an area of designated forest, which, although
affording a higher level of environmental protection, does not exclude
exploration or mining.
Mushima North Project (Option Agreement to acquire up to a 90% joint venture
interest)
Exploration Licence 27068-HQ-LEL, which forms the Mushima North Project,
covers 701.3km² 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 to be mined in
Zambia with high grade ore in excess of 26% copper mined in the 1970s.
The Mushima North Project is also subject to the Technical Cooperation and
Data Sharing Agreement between TMZ and FQM.
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 1960's. One of these anomalies was followed up with
a 154m deep drill hole, RKN 800, which intersected pyritic siltstone and
sandstone containing chalcopyrite (copper sulphide) in association with
calcite veins. Sampling of drill cores was very rudimentary with random
samples taken at the end of each core run. Nevertheless, copper values were
anomalous throughout with many samples grading more than 0.3% copper (0.3%
being the upper limit on the graphical scale of analytical results presented
with the drill log). This is an immediate target for follow-up exploration.
FQM has so far provided the Company with airborne magnetic and VTEM
electromagnetic survey data for the Mushima North licence. This data will be
processed with a view to additional target generation and data compilation and
reviews are ongoing.
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 334.8km² which is partially underlain by the
prospective Lower Roan arenite. Approximately 70km to the northwest lies the
currently producing Chambishi Southeast copper-cobalt mine.
Konkola West (Option Agreement to acquire up to a 90% joint venture interest)
Exploration Licence 27067-HQ-LEL, which forms the Konkola West Project, covers
71.9km² and is located 18km northwest of Chingola in the Copperbelt Province.
The licence lies immediately west of the Konkola and Musoshi copper deposits
which are under active exploitation at the Konkola and Lubambe copper mining
complexes.
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. These fault
structures are often associated with copper mineralisation in the area.
Environmental Project Briefs ("EPBs"), which are required to conduct mineral
exploration activities, have been approved by the Zambia Environmental
Management Agency ("ZEMA") for the Lubuila and Konkola West Projects, and the
Company expects they will be granted within the coming weeks for the Mukai and
Mushima North Projects.
Nevada, USA
Brunton Pass Copper 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.
Geology, Mineralisation and Past Exploration
Regionally the Brunton Pass Copper 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, that 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 1948. The area south of the mercury workings was drilled by
Phillips Uranium Corp. in 1978 to test a reportedly large scintillometer
anomaly but no further records can be found.
In 1991, the area was mapped and sampled by the US Bureau of Mines ("USBM")
who collected a total of 14 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.
Company Exploration
Prior to the reporting period, Company reconnaissance sampling in 2020 had
confirmed the USBM records of widespread copper mineralisation. As follow-up
in 2021, the Company conducted a high-resolution drone‑based
aeromagnetic-photogrammetric survey, a soil sampling programme and additional
rock chip sampling.
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 52 ppm mercury with the largest
of these extending over an area approximately 500m x 500m, with the combined
anomalies extending over approximately 1km.
Structural and geological interpretation of the magnetic data was also
conducted to define structures that could be potential pathways for
mineralisation.
Trenching Programme
In late July 2022, six trenches were excavated for a total of 386.2m over the
zones of anomalous copper, arsenic and mercury. All trenches were geologically
mapped and sampled throughout at 10ft (3m) intervals. Three were excavated
in the eastern half of the project area in the area of the mercury-arsenic
anomalies and three trenches targeted the copper soil anomalies in the
southwest quadrant of the project.
Multiple rock samples from trenches and outcrop were sent for thin section,
polished thin section and XRD evaluation to evaluate the styles of
mineralisation and so provide context for trench sampling analytical results.
Trenches were labelled according to a broader plan, therefore the trench
numbers below do not run sequentially.
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. The As and Hg values are
approximately 1000x background. Trench 2 intersected 2.7 metres grading 2.65
g/t gold in a north trending shear zone that parallels the strike of the soil
anomaly suggesting it was mobilised from a deeper part of the same structural
zone. The similar argillic alteration assemblages (smectite+quartz+/-opal)
seen in Trench 1 and Trench 11 closely resemble those observed in the upper
levels of high sulphidisation epithermal gold deposits.
Trenches 7, 8 and 10 tested copper-in-soil anomalies in the southwest quadrant
of the project area. Beneath the peak copper-in-soil anomaly, Trench 7 cut
27.4m grading 1,010ppm copper (0.1% Cu) within a 45.7m wide intersection
grading 814ppm copper and Trench 8, 40m south of Trench 7, returned 77.7m
averaging 473ppm copper for the full length of the trench. The copper values
are highly anomalous and open ended.
The work undertaken during this field season suggests the possible presence of
a copper skarn-porphyry copper target and epithermal gold mineralisation at
deeper levels and the Company believes that drill testing of these copper and
gold targets is now warranted.
Pyramid Project, Nevada, USA
The Pyramid Project is located 25 miles northwest of Reno in the Pyramid
Mining District. During the reporting period, the Company conducted a Phase 2
Trenching Programme followed by a reverse circulation percussion drill
programme to follow up on favourable results of earlier exploration
programmes. However, drilling results were disappointing and could not
replicate the wide intervals of mineralisation sampled at surface and in view
of upcoming lease payments, the company lease agreement on the Pyramid Project
was terminated and the Project returned to the lessor.
Other Projects
No work was conducted on the Company's Paymaster, Mt Tobin and Lucky projects
in Nevada during the year due to the focus on the Brunton Pass and Pyramid
Projects, but further work is budgeted for 2023.
Kaaresselkä and Kiekerömaa Gold Royalties, Finland
During the reporting period, the Company accepted a binding offer from Aurion
Resources Ltd ("Aurion") for the purchase of its royalty interests associated
with the Kaaresselkä and Kiekerömaa gold projects in Finland.
Aurion assigned all of its rights in the sale agreement to B2Fingold Oy ("B2
Fingold"), (a Finnish company in which Aurion holds an interest) insofar as
they relate to the Kiekerömaa Property and consequently separate agreements
were executed with Aurion in respect of the Kaaresselkä royalty interest and
with B2Fingold Oy in respect of the Kiekerömaa royalty interest.
The consideration paid on closing of the formal sale and purchase agreement
was CAD$200,000 in cash and the issue to Tertiary of 83,333 common shares in
Aurion. The transaction completed in October 2022, following the reporting
year-end.
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 27.7Mt
at 10.21% CaF(2) as shown in Table 2.
Table 2: 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
No work was carried out in 2022 and the Company continues to wait for feedback
from the Swedish Government in response to its appeal against the decision by
the Swedish Mining Inspectorate to reject Tertiary's Exploitation (Mine)
Permit in its current form.
The appeal was lodged on 3 May 2019 and following exploitation concession
awards to other mineral exploration companies in Sweden during the reporting
period, the Company remains hopeful that the Swedish Government will respond
to our appeal. There is, however, still no timeline for a response from the
Swedish Government. Expenditure on the Storuman Project remains fully
impaired.
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 exploration and evaluation which are The directors bring many years of combined mining and exploration experience
speculative activities. There is no certainty that the Group will be and an established track record in mineral discovery.
successful in the definition of economic mineral deposits, or that it will
proceed to the development of any of its projects or otherwise realise their
value.
The Company maintains a portfolio of exploration projects, including projects
at the drill stage, in order to spread the risk associated with mineral
exploration.
Resource/Reserve Risk
When relevant, Mineral Resources and Reserves are estimated by independent
specialists on behalf of the Group and reported in accordance with accepted
All mineral projects have risk associated with defined grade and continuity. industry standards and codes. The directors are realistic in the use of
Mineral Resources and Reserves are always subject to uncertainties in the mineral price forecasts and impose rigorous practices in the QA/QC programmes
underlying assumptions which include the quality of the underlying data, that support its independent estimates.
geological interpretations, technical assumptions and price forecasts.
Development Risk
Delays in permitting, or changes in permit legislation and/or regulation, In order to reduce development risk in future, the directors will ensure that
financing and commissioning a project may result in delays to the Group its permit application processes and financing applications are robust and
meeting production targets or even the Company ultimately not receiving the thorough.
required permits and in extreme cases loss of title.
Commodity Risk
Changes in commodity prices can affect the economic viability of mining The Company consistently reviews commodity prices and trends for its key
projects and affect decisions on continuing exploration activity. projects throughout the development cycle.
Mining and Processing Technical Risk
Notwithstanding the completion of metallurgical testwork, test mining and From the earliest stages of exploration the directors look to use consultants
pilot studies indicating the technical viability of a mining operation, and contractors who are leaders in their field and in future will seek to
variations in mineralogy, mineral continuity, ground stability, groundwater strengthen the executive management and the Board with additional technical
conditions and other geological conditions may still render a mining and and financial skills as the Company transitions from exploration to
processing operation economically or technically non-viable. production.
Environmental and Social Governance (ESG) Risk
Exploration and development of a project can be adversely affected by The Company has adopted an Environmental, Social and Governance Policy (the
environmental and social legislation and the unforeseen results of "ESG Policy") and avoids the acquisition of projects where liability for
environmental and social impact studies carried out during evaluation of a legacy environmental issues might fall upon the Company.
project. Once a project is in production unforeseen events can give rise to
environmental liabilities.
Mineral exploration carries a lower level of environmental and social
liability than mining.
The ESG Policy will be updated in the future to reflect the status of the
Company's projects.
Political Risk
All countries carry political risk that can lead to interruption of activity. The Company's strategy currently restricts its activities to stable,
Politically stable countries can have enhanced environmental and social democratic and mining-friendly jurisdictions.
permitting risks, risks of strikes and changes to taxation, whereas less
developed countries can have, in addition, risks associated with changes to
the legal framework, civil unrest, and government expropriation of assets.
The Company has adopted a strong Bribery & Anti-corruption Policy and a
Code of Conduct and these are strictly enforced.
When working in less developed countries the Company undertakes a higher level
of due diligence with respect to partners and suppliers.
Partner Risk
Whilst there has been no past evidence of this, the Group can be adversely The Company currently maintains control of certain key projects so that it can
affected if joint venture partners are unable or unwilling to perform their control the pace of exploration and reduce partner 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 will not be able to raise working The Company maintains a good network of contacts in the capital markets which
capital for its ongoing activities. has historically met its financing requirements.
The Group's goal is to finance its exploration and evaluation activities from The Company's low overheads and cost-effective exploration strategies help
future cash flows, but until that point is reached the Company is reliant on reduce its funding requirements. Nevertheless, further equity issues will be
raising working capital from equity markets or from industry sources. There is required over the next 12 months.
no certainty such funds will be available when needed.
Financial Instruments
The directors are responsible for the Group's systems of internal financial
control. Although no systems of internal financial control can provide
Details of risks associated with the Group's Financial Instruments are given absolute assurance against material misstatement or loss, the Group's systems
in Note 19 to the financial statements. 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 directors
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, 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).
Having regard to 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 directors 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 contact:
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, Health and Safety Policy, ESG Policy and 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 8 December 2022 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 Company and of the profit or loss of the Group for that
period. The directors are also required to prepare financial statements in
accordance with the AIM Rules of the London Stock Exchange for companies
trading securities on the AIM market.
In preparing these financial statements, the directors are required to:
· select suitable accounting policies and then apply them
consistently;
· make judgements and accounting estimates that are reasonable
and prudent;
· state whether they have been prepared in accordance with
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 2022.
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 (£59,414), these projections include the proceeds of
future fundraising deemed necessary within the next 12 months to meet the
Company's and Group's overheads and planned discretionary project expenditures
and to maintain the Company and Group as going concerns. Although the Company
has been successful in raising finance in the past, there is no assurance that
it will obtain adequate finance in the future. This represents a material
uncertainty related to events or conditions which may cast significant doubt
on the Group and Company's ability to continue as going concerns and,
therefore, that they may be unable to realise their assets and discharge their
liabilities in the normal course of business. However, the directors have a
reasonable expectation that they will secure additional funding when required
to continue meeting corporate overheads and exploration costs for the
foreseeable future and therefore believe that the going concern basis is
appropriate for the preparation of the financial statements.
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 P B Cullen (Resigned 13 June 2022)
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 Committee Audit Committee Remuneration Committee
Director Attended Held Attended Held Attended Held Attended Held
P L Cheetham 10 10 2 2 3 3 1 1
P B Cullen* 8 1 2 0
D A R McAlister 10 2 3 1
Dr M Armitage 10 2 3 1
*Resigned 13 June 2022 and so only eligible to attend 10 Board and one
Committee meeting during the reporting period.
The directors' shareholdings are shown in Note 17 to the financial statements.
Events After the Year-End
The sale of Kaaresselkä and Kiekerömaa royalties agreed on 8 August 2022 was
completed on 7 October 2022.
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 shares % of share capital
As at 8 December 2022
JIM Nominees Limited JARVIS 217,000,058 14.13
Interactive Investor Services Nominees Limited SMKTISAS 151,720,071 9.88
Hargreaves Lansdown (Nominees) Limited 15942 132,656,092 8.63
Interactive Investor Services Nominees Limited SMKNOMS 89,595,700 5.83
Barclays Direct Investing Nominees Limited CLIENT1 88,940,254 5.79
Hargreaves Lansdown (Nominees) Limited HLNOM 83,930,360 5.46
Vidacos Nominees Limited IGUKCLT 70,822,848 4.61
Aurora Nominees Limited 2288700 51,843,059 3.37
HSDL Nominees Limited 51,441,257 3.35
Hargreaves Lansdown (Nominees) Limited VRA 50,430,440 3.28
HSDL Nominees Limited MAXI 49,163,992 3.20
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 Thursday, 16 February
2023, 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 2022, Tertiary Minerals plc held 0.57% of the issued share
capital of Sunrise Resources plc and the Chairman of Tertiary Minerals plc is
also Chairman of Sunrise Resources plc. Tertiary Minerals plc also provides
management services to Sunrise Resources plc, in the search, evaluation and
acquisition of new projects.
Procedures are in place in order to avoid any conflict of interest between the
Company and Sunrise Resources plc.
Approved by the Board on 8 December 2022 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
Chairman
Key Strengths and Experience
· Geologist.
· 40 years' experience in mineral exploration.
· 35 years' experience in public company management.
· Founder of the Company, Dragon Mining Ltd, Archaean Gold NL and
Sunrise Resources plc.
External Appointments
Chairman and founder of Sunrise Resources plc.
Donald McAlister
Non-Executive Director*
Key Strengths and Experience
· Accountant.
· Previously Finance Director at Mwana Africa plc, Ridge Mining
plc, Reunion Mining and Moxico Resources plc.
· 27 years' experience in all financial aspects of the resource
industry, including metal hedging, tax planning, economic
modelling/evaluation, project finance and IPOs.
· Founding director of the Company.
External Appointments
None,
* Currently Chair of the Audit Committee.
Dr Michael Armitage
Non-Executive Director**
Key Strengths and Experience
· Over 30 years' experience producing resource estimates, competent
persons reports and feasibility studies with SRK Consulting.
· Previously Managing Director and Chairman of the SRK UK, Director
of SRK's Exploration Services, and SRK Group Chairman.
· 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
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
Rod Venables - City Group PLC
Company Secretary
Key Strengths and Experience
· Qualified company/commercial solicitor.
· Director and Head of Company Secretarial Services at City Group
PLC.
· Experienced in both Corporate Finance and Corporate Broking.
External Appointments
Company Secretary for Sunrise Resources plc and other corporate clients of
City Group PLC.
Patrick Cullen
Managing Director, Resigned 13 June 2022
Corporate Governance
Chairman's Overview
There is no prescribed corporate governance code for AIM companies and 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 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 8 December 2022. 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.
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 5 days of average daily purchases (2021: 14 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 of management. 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 level 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 Bribery & Anti-Corruption
policies 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 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 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
Meetings 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
Twitter. 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.
The Board met ten times during the year to consider such matters. Further
details 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, Mr McAlister would normally seek annual re-election rather than
every third year as per the Articles of Association. However, as another of
the three current directors is up for re-election at this next annual general
meeting Mr McAlister will not be retiring and offering himself for re-election
this next time.
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 directors' 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: Health and Safety
Policy; Environmental, Social and Governance Policy ("ESG Policy"); Share
Dealing Policy; Bribery & Anti-Corruption Policy and Code of Conduct;
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, and quarterly budget 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 external auditors.
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 auditors, 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 it 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 9 December
2021, 25 May 2022 and 4 August 2022.
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 Pyramid Project
expenditure should be fully impaired. The review of the recoverability of
loans to subsidiary undertakings was also carried out and it was decided to
write off the Loan to Tertiary Middle East Ltd due to the write off in the
underlying investment in the Ghurayyah joint venture.
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 Chairman 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 4
August 2022, to review the Committee Terms of Reference and ensure their
continued suitability.
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 non-executive
directors and non-executive directors. Performance evaluation should be used
to assess whether the executive directors 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 twice during the period under
review.
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 2022 or 2021. The
financial information for 2021 is derived from the Statutory Accounts for
2021. Full audited accounts in respect of that financial period have been
delivered to the Registrar of Companies. The Statutory Accounts for 2022 will
be delivered to the Registrar of Companies following the Company's Annual
General Meeting. The Auditors have reported on the 2022 and 2021 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 2022 will be uploaded to the Shareholders Documents section of the
Company's website on or around 22 December 2022:
https://www.tertiaryminerals.com/shareholder-documents.
Consolidated Income Statement
for the year ended 30 September 2022
Notes 2022 2021
£ £
Revenue 2,17 171,052 165,058
Administration costs (566,675) (486,171)
Pre-licence exploration costs (80,843) (72,725)
Impairment of deferred exploration expenditure 8 (699,484) (13,179)
Operating loss (1,175,950) (407,017)
Interest receivable 133 54
Loss before taxation 3 (1,175,817) (406,963)
Tax on loss 7 - -
Loss for the year attributable to equity holders of the parent (1,175,817) (406,963)
Loss per share - basic and diluted (pence) 6 (0.08) (0.038)
All amounts relate to continuing activities.
Consolidated Statement of Comprehensive Income
for the year ended 30 September 2022
2022 2021
£ £
Loss for the year (1,175,817) (406,963)
Items that could be reclassified subsequently to the income statement:
Foreign exchange translation differences on foreign currency net investments
in subsidiaries
136,753 (1,758)
136,753 (1,758)
Items that will not be reclassified to the income statement:
Changes in the fair value of other investments (26,346) (5,489)
(26,346) (5,489)
Total comprehensive income/(loss) for the year attributable to
equity holders of the parent (1,065,410) (414,210)
Consolidated and Company Statements of Financial Position
at 30 September 2022
Company Number 03821411 Notes Group Company Group Company
2022 2022 2021 2021
£ £ £ £
Non-current assets
Intangible assets 8 542,907 - 754,110 -
Property, plant & equipment 9 2,398 2,398 3,953 3,953
Investment in subsidiaries 10 - 681,526 - 839,108
Other investments 10 24,150 24,150 50,496 50,496
569,455 708,074 808,559 893,557
Current assets
Receivables 11 272,667 64,785 81,024 52,522
Cash and cash equivalents 12 59,414 48,165 472,733 456,126
332,081 112,950 553,757 508,648
Current liabilities
Trade and other payables 13 (80,929) (45,076) (76,850) (52,185)
Net current assets 251,152 67,874 476,907 456,463
Provisions for liabilities and charges 20 (15,158) - (15,994) -
Net assets 805,449 775,948 1,269,472 1,350,020
Equity
Called up share capital 14 153,626 153,626 118,332 118,332
Share premium account 12,101,761 12,101,761 11,567,055 11,567,055
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 14 101,985 101,985 80,048 80,048
Fair value reserve (17,016) (17,016) 9,330 9,330
Foreign currency reserve 14 460,469 - 323,716 -
Accumulated losses (14,770,533) (14,339,565) (13,604,166) (13,199,902)
Equity attributable to the owners of the parent 805,449 775,948 1,269,472 1,350,020
The Company reported a loss for the year ended 30 September 2022 of
£1,149,113 (2021: £302,543).
These financial statements were approved and authorised for issue by the Board
on 8 December 2022 and were signed on its behalf.
P L
Cheetham
D A R McAlister
Executive
Chairman
Director
Consolidated Statement of Changes in Equity
Group Ordinary share Share Capital redemption reserve Merger Share Fair value Foreign Accumulated Total
capital premium £ reserve option reserve currency losses £
£ account £ reserve £ reserve £
£ £ £
At 30 September 2020 83,164 10,740,972 2,644,061 131,096 71,897 14,819 325,474 (13,201,806) 809,677
Loss for the period - - - - - - - (406,963) (406,963)
Change in fair value - - - - - (5,489) - - (5,489)
Exchange differences - - - - - - (1,758) - (1,758)
Total comprehensive loss for the year - - - - - (5,489) (1,758) (406,963) (414,210)
Share issue 35,168 826,083 - - - - - - 861,251
Share based payments expense - - - - 12,754 - - - 12,754
Transfer of expired warrants - - - - (4,603) - - 4,603 -
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
Company Statement of Changes in Equity
Company Ordinary share Share Capital redemption reserve Merger Share Fair value Accumulated Total
capital premium £ reserve option reserve losses £
£ account £ reserve £ £
£ £
At 30 September 2020 83,164 10,740,972 2,644,061 131,096 71,897 14,819 (12,901,962) 784,047
Loss for the period - - - - - - (302,543) (302,543)
Change in fair value - - - - - (5,489) - (5,489)
Total comprehensive - - - - (5,489) (302,543) (308,032)
loss for the year
-
Share issue 35,168 826,083 - - - - - 861,251
Share based payments expense - - - - 12,754 - - 12,754
Transfer of expired warrants - - - - (4,603) - 4,603 -
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 - - - - (26,346) (1,149,113) (1,175,459)
loss for the year
-
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
Consolidated and Company Statements of Cash Flows
for the year ended 30 September 2022
Notes Group Company Group Company
2022 2022 2021 2021
£ £ £ £
Operating activity
Operating (loss)/profit (1,175,950) (1,178,456) (407,017) (316,374)
Depreciation charge 9 1,661 1,661 1,691 1,691
Share based payment charge 31,387 31,387 12,754 12,754
Impairment charge - deferred exploration asset 8 699,484 - 13,179 -
Increase/(decrease) in provision for impairment of loans to subsidiaries 10 - 742,199 - 29,090
Reclamation liability 8 - - (15,994) -
(Increase)/decrease in receivables 11 (35,049) (12,263) (9,328) 112
Increase/(decrease) in payables 13 4,079 (7,109) 32,936 (14,004)
Net cash outflow from operating activity (474,388) (422,581) (355,785) (286,731)
Investing activity
Interest received 133 29,344 54 32,983
Exploration and development expenditures 8 (561,431) - (235,051) -
Purchase of property, plant & equipment 9 (107) (107) (2,276) (2,276)
Additional loans to subsidiaries 10 - (584,617) - (326,240)
Net cash outflow from investing activity (561,405) (555,380) (237,276) (295,533)
Financing activity
Issue of share capital (net of expenses) 570,000 570,000 861,251 861,251
Share subscription loan - - (420,000) (420,000)
Net cash inflow from financing activity 570,000 570,000 441,251 441,251
Net (decrease)/increase this year (465,793) (407,961) (151,810) (141,013)
Cash and cash equivalents at start of year 472,733 456,126 622,859 597,139
Exchange differences 52,474 - 1,684 -
Cash and cash equivalents at 30 September 12 59,414 48,165 472,733 456,126
Notes to the Financial Statements
for the year ended 30 September 2022
Background
Tertiary Minerals plc is a public company incorporated and domiciled in
England. It is traded on the AIM market of the London Stock Exchange - EPIC:
TYM.
The Company is a holding company for a number of companies (together, "the
Group"). The Group's financial statements are presented in Pounds Sterling
(£) which is also the functional currency of the Company.
The following accounting policies have been applied consistently in dealing
with items which are considered material in relation to the Group's financial
statements.
1. Accounting policies
(a) Basis of preparation
The financial statements have been prepared on the basis of the recognition
and measurement requirements of 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 £1,149,113 (2021:
£302,543). The loss for 2022 includes provision for impairment of its
investment in subsidiary undertakings in the amount of £744,761 (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 (£59,414), these projections include the proceeds of future
fundraising necessary within the next 12 months to meet the Company's and
Group's overheads and planned discretionary project expenditures and to
maintain the Company and Group as going concerns. Although the Company has
been successful in raising finance in the past, there is no assurance that it
will obtain adequate finance in the future. This represents a material
uncertainty related to events or conditions which may cast significant doubt
on the Group and Company's ability to continue as going concerns and,
therefore, that they may be unable to realise their assets and discharge their
liabilities in the normal course of business. However, the directors have a
reasonable expectation that they will secure additional funding when required
to continue meeting corporate overheads and exploration costs for the
foreseeable future and therefore believe that the going concern basis is
appropriate for the preparation of the financial statements.
(c) Basis of consolidation
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 (Zambia) Limited is 96% controlled subsidiary by Tertiary
Minerals plc and has 4% non-controlling interest from other parties. Further
details are in the 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 2022 and 30 September 2022.
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 with a maturity of three months or less.
(i) Deferred taxation
Deferred taxation, if applicable, is provided in full in respect of taxation
deferred by temporary differences between the treatment of certain items for
taxation and accounting purposes.
Deferred tax assets are recognised to the extent that they are regarded as
recoverable.
(j) Revenue
Revenue is 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
(£), 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, associated undertakings and
joint arrangements, that have a functional currency different from the Group's
presentation currency, are translated at the closing exchange rates. Income
statements of overseas subsidiaries, that have a functional currency different
from the Group's presentation currency, are translated at exchange rates at
the date of transaction. Exchange differences arising on opening reserves are
taken to the foreign currency reserve 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
Royalty assets representing the Company's rights to future royalties based
upon the extraction of mineral resources by a third party are amortised based
upon units of production. The directors review throughout the year to consider
whether there are any indications of impairment and considerations are
documented at board meetings. If such indications exist a full impairment
review is undertaken and if it is concluded that an impairment provision is
required, this is charged to the income statement.
Impairment
Impairment reviews for deferred exploration and evaluation costs are carried
out on a project-by-project basis, with each project representing a potential
single cash generating unit. The 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;
The Pyramid Project costs were fully impaired in the amount of £497,481 as
exploration gave negative results.
The Brunton Pass Project in Nevada has been an active exploration project
during the financial year. Positive results have been obtained and drilling is
now warranted.
Whilst no work was carried out at the Paymaster, Mt Tobin or Lucky projects
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 Company has carried out exploration on the Jacks Project and has
intersected copper mineralisation in drilling and further evaluation is
required. The Company's Zambian subsidiary, Tertiary Minerals (Zambia)
Limited, has earned a 90% interest in the Jacks licence which will now be
transferred to a jointly owned company with 10% holder Mwashia Resources Ltd.
The Company holds options to acquire up to a 90% interest in four further
licences in Zambia, namely Mukai, Mushima North, Lubuila, and Konkola West.
Exploration is planned in each case and is awaiting approval of Environmental
Project Briefs by the Zambian Environmental Management Agency. All licence
payments have been made to maintain the licences in good standing.
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 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.
Share warrants, share options and share based payments
The estimates of costs recognised in connection with the fair value of share
options and share warrants require that management selects an appropriate
valuation model and make decisions on various inputs into the model, including
the volatility of its own share price, the probable life of the warrants and
options before exercise, and behavioural considerations of warrant holders.
(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
recognized, the corresponding cost is capitalized as an intangible asset,
representing part of the cost of acquiring the future economic benefits of the
operation. The capitalized cost of closure and environmental rehabilitation
activities is recognized in mining interests and, from the commencement of
commercial production is amortized 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.
2022 Exploration Head Total
projects office £
£ £
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)
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
2. Segmental analysis (continued)
2021 Exploration Head Total
projects office £
£ £
Consolidated Income Statement
Revenue - 165,058 165,058
Pre-licence exploration costs (72,725) - (72,725)
Impairment of deferred exploration asset (13,179) - (13,179)
Share-based payments - (12,754) (12,754)
Administration costs and other expenses - (473,417) (473,417)
Operating Loss (85,904) (321,113) (407,017)
Bank interest received - 54 54
Loss before income tax (85,904) (321,059) (406,963)
Income tax - - -
Loss for the year attributable to equity holders (85,904) (321,059) (406,963)
Non-current assets
Intangible assets:
Royalty assets:
Kaaresselkä Gold Project, Finland 260,490 - 260,490
Kiekerömaa Gold Project, Finland 97,339 - 97,339
357,829 - 357,829
Deferred exploration costs:
Paymaster, USA 51,376 - 51,376
Pyramid, USA 203,577 - 203,577
Brunton Pass, USA 49,101 - 49,101
Mt Tobin, USA 27,668 - 27,668
Lucky, USA 61,495 - 61,495
Jacks, Zambia 3,064 - 3,064
396,281 - 396,281
Property, plant & equipment - 3,953 3,953
Other investments - 50,496 50,496
754,110 54,449 808,559
Current assets
Receivables 25,364 55,660 81,024
Cash and cash equivalents - 472,733 472,733
25,364 528,393 553,757
Current liabilities
Trade and other payables (18,211) (58,639) (76,850)
Reclamation liability (15,994) - (15,994)
(34,205) (58,639) (92,844)
Net current assets (8,841) 469,754 460,913
Net assets 745,269 524,203 1,269,472
Other data
Deferred exploration additions 219,057 - 219,057
Exchange rate adjustments to deferred exploration costs (7,965) - (7,965)
Exchange rate adjustments to royalty assets (1,755) - (1,755)
3. Loss before income tax
2022 2021
£ £
The operating loss is stated after charging
Costs relating to leases expiring within 12 months 21,263 17,625
Depreciation - owned assets 1,661 1,691
Fees payable to the Group's Auditor for:
The audit of the Group's annual accounts 8,885 6,151
The audit of the Group's subsidiaries, pursuant to legislation 5,923 3,872
Fees payable to the Group's Auditor and its associates for other services:
Interim review of accounts 1,200 1,050
Corporation tax compliance fees 1,770 5,415
4. Directors' emoluments
Remuneration in respect of directors was as follows:
Net cost Income from recharge to
to Group Sunrise Resources plc Total Total
2022 2022 2022 2021
£ £ £ £
P L Cheetham (salary) 46,916 76,079 122,995 118,979
P B Cullen (salary) 72,322 - 72,322 4,432
(Resigned June 2022)
M G Armitage (salary) 19,110 - 19,110 12,466
D A R McAlister (salary) 19,110 - 19,110 18,486
157,458 76,079 233,537 154,363
Patrick Cullen was appointed as Managing Director in September 2021 and
resigned in June 2022. 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 £5,984 (2021: £4,791) or
Employer's National Insurance contributions of £27,702 (2021: £17,910).
No bonuses were awarded for the year 2022.
Pension contributions made during the year on behalf of Directors amounted to
£Nil (2021: £Nil).
The directors are also the key management personnel. If all benefits are
taken into account, the total key management personnel compensation would be
£239,521 (2021: £159,154).
After recharge to Sunrise Resources plc, if all benefits are taken into
account, the key management personnel net compensation cost to the Group would
be £163,442 (2021: £98,705).
5. Staff costs
Total staff costs for the Group and Company, including directors, were as
follows:
Net cost Income from recharge to
to Group Sunrise Resources plc Total Total
2022 2022 2022 2021
£ £ £ £
Wages and salaries 230,703 129,395 360,098 286,073
Social security costs 22,092 17,124 39,216 30,435
Share-based payments 5,984 - 5,984 6,085
258,779 146,519 405,298 322,593
The average monthly number of part-time and full-time employees, including 2022 2021
directors, employed by the Group and Company during the year was as follows:
Number Number
Technical employees 3 2
Administration employees (including non-executive directors) 5 5
8 7
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.
2022 2021
Loss (£) (1,175,817) (406,963)
Weighted average ordinary shares in issue (No.) 1,428,608,504 1,064,955,671
Basic and diluted loss per ordinary share (pence) (0.08) (0.038)
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 (2021: £Nil).
2022 2021
£ £
Tax reconciliation
Loss before income tax (1,175,817) (406,963)
Tax at 19% (2021: 19%) (223,405) (77,323)
Fixed asset timing differences 1,028 (1,226)
Expenditure not deductible for tax purposes 31,510 12,754
Pre-trading expenditure not deductible for tax purposes 32,799 40,978
Unrelieved tax losses carried forward 158,068 24,817
Tax charge/credit for year - -
Total losses carried forward for tax purposes (12,493,824) 11,383,344
Factors that may affect future tax charges
The Group has total losses carried forward of £12,493,824 (2021:
£11,383,344). This amount would be available (subject to a maximum of
£5million 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
Group Deferred Royalty Total Deferred Royalty Total
exploration assets 2022 exploration assets 2021
expenditure 2022 £ expenditure 2021 £
2022 £ 2021 £
£ £
Cost 6,218,473 357,829 6,576,302 5,991,387 359,584 6,350,971
At start of year
Additions 565,233 - 565,233 219,057 - 219,057
Reclamation cost (3,802) - (3,802) 15,994 - 15,994
Exchange adjustments 82,776 668 83,444 (7,965) (1,755) (9,721)
Transfer to assets held for sale - (358,497) (358,497) - - -
At 30 September 6,862,680 - 6,862,680 6,218,473 357,829 6,576,302
Impairment (5,822,192) - (5,822,192) (5,809,013) - (5,809,013)
At start of year
Impairment losses during year (497,581) (201,903) (699,484) (13,179) - (13,179)
Transfer to assets held for sale - 201,903 201,903 - - -
At 30 September (6,319,773) - (6,319,773) (5,822,192) - (5,822,192)
Net book value
At 30 September 542,907 - 542,907 396,281 357,829 754,110
At start of year 396,281 357,829 754,110 182,374 359,584 541,958
The directors carried out an impairment review which, with reference to
IFRS6.20(b), resulted in an impairment charge of £497,581, relating to the
Tertiary Minerals US Inc. Pyramid Project, being recognised in the
Consolidated Income Statement as part of operating expenses. Refer to
accounting policy 1(d) and 1(n) for a description of the considerations used
in the impairment review.
During the year negotiations for the sale of royalty assets resulted in an
agreement in August 2022 and completion on 7October 2022. The royalty assets
have been written down to their recoverable amount £156,594 and re-classified
in the financial statements as assets held for sale under current assets
(receivables), Note 11.
9. Property, plant & equipment
Group Company Group Company
fixtures fixtures fixtures fixtures
and fittings and fittings and fittings and fittings
2022 2022 2021 2021
£ £ £ £
Cost 51,465 36,707 49,189 34,431
At start of year
Additions 107 107 2,276 2,276
Disposals 0 0 0 0
At 30 September 51,572 36,814 51,465 36,707
Depreciation (47,513) (32,755) (45,820) (31,061)
At start of year
Charge for the year (1,661) (1,661) (1,694) (1,694)
Disposals 0 0 0 0
At 30 September (49,174) (34,416) (47,513) (32,755)
Net Book Value
At 30 September 2,398 2,398 3,952 3,952
At start of year 3,952 3,952 3,369 3,369
10. Investments
Subsidiary undertakings
Company Country of Type and percentage Principal activity
incorporation/ of shares held at
registration 30 September 2022
Tertiary Gold Limited England & Wales 100% of ordinary shares Mineral exploration
Tertiary (Middle East) Limited England & Wales 100% of ordinary shares Mineral exploration
Tertiary Minerals US Inc. Nevada, USA 100% of ordinary shares Mineral exploration
Tertiary Minerals (Zambia) Limited (*formerly Luangwa Minerals Limited) Zambia 96% of ordinary 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.
* With effect from 7 December 2021, the name of Luangwa Minerals Limited was
changed to Tertiary Minerals (Zambia) Limited. The registered office of
Tertiary Minerals (Zambia) Limited is 491/492 Akapelwa Street/Town Area,
Livingstone Southern Province, Zambia.
Tertiary Minerals (Zambia) Limited
Tertiary Minerals (Zambia) Limited is a 96% controlled subsidiary of Tertiary
Minerals plc. Deferred exploration assets held by subsidiary are £251,006.
The subsidiary is fully financed by the parent company via intercompany loan,
the loan amounted to £229,587 and loan interest £2,584. The net assets
amount to -£32,491 and the loss for the year was -£24,862.
Investment in subsidiary undertakings Company Company
2022 2021
£ £
Value at start of year 839,108 541,958
Additions 584,617 326,240
Movement in provision (742,199) (29,090)
At 30 September 681,526 839,108
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 £225,749, 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 Minerals US Inc provision
of £543,526, Tertiary Gold Limited provision of £201,235 and release of
provision in Tertiary (Middle East) Limited of £2,564. The provisions made
reflect the differences between the loan carrying amounts and the value of the
underlying project assets.
Other investments - listed investments
Company Country of Type and percentage Principal activity
incorporation/ of shares held at
registration 30 September 2022
Sunrise Resources plc England & Wales 0.57% of ordinary shares Mineral exploration
Investment designated at fair value through OCI Group Company Group Company
2022 2022 2021 2021
£ £ £ £
Value at start of year 50,496 50,496 55,985 55,985
Additions - - - -
Disposal - - - -
Movement in valuation (26,346) (26,346) (5,489) (5,489)
At 30 September 24,150 24,150 50,496 50,496
The fair value of each investment is equal to the market value of its shares
at 30 September 2022, 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
2022 2022 2021 2021
£ £ £ £
Amounts owed by related undertakings 46,232 46,232 44,147 44,147
Other receivables 46,133 1,727 26,224 841
Royalty assets held for sale 156,594 - - -
Prepayments 23,708 16,826 10,653 7,534
At 30 September 272,667 64,785 81,024 52,522
The Group aged analysis of trade receivables is as follows:
Not 30 days Over Total
impaired or less 30 days carrying
£ £ £ amount
£
2022 Trade receivables 46,232 46,232 - 46,232
2021 Trade receivables 44,147 44,147 - 44,147
12. Cash and cash equivalents
Group Company Group Company
2022 2022 2021 2021
£ £ £ £
Cash at bank and in hand 31,995 20,746 48,147 31,540
Short-term bank deposits 27,419 27,419 424,586 424,586
At 30 September 59,414 48,165 472,733 456,126
13. Trade and other payables
Group Company Group Company
2022 2022 2021 2021
£ £ £ £
Trade payables 12,149 11,503 17,186 9,692
Other taxes and social security costs 10,453 10,453 14,556 14,556
Accruals 57,491 22,284 43,714 26,543
Other payables 836 836 1,394 1,394
At 30 September 80,929 45,076 76,850 52,185
14. Share capital and reserves
2022 2022 2021 2021
No. £ No. £
Ordinary shares - Allotted, called up and fully paid
Balance at start of year 1,183,322,445 118,332 831,647,037 83,164
Shares issued in the year 352,941,176 35,294 351,675,408 35,168
Balance at 30 September 1,536,263,621 153,626 1,183,322,445 118,332
Share issues
During the year to 30 September 2022 the following share issues took place:
An issue of 294,117,647 0.01p Ordinary Shares at 0.17p per share, by way of
placing, for a total consideration of £500,000 before expenses (19 January
2022).
An issue of 58,823,529 0.01p Ordinary Shares at 0.17p per share, by way of
broker option, for a total consideration of £100,000 before expenses (21
January 2022).
During the year to 30 September 2021 a total of 351,675,408 0.01p ordinary
shares were issued, at an average price of 0.25p, for a total consideration of
£861,250 net of expenses.
The total amount of transaction fees debited to the Share Premium account in
the year was £30,000 (2021: £22,500).
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 2022
Issue date Exercise Number Exercisable Expiry
price dates
31/01/2018 1.875p 1,000,000 Any time before expiry 31/01/2023
21/02/2019 0.50p 3,500,000 Any time before expiry 21/02/2024
21/02/2019 0.35p 5,000,000 Any time before expiry 21/02/2024
26/11/2019 0.336p 22,000,000 Any time before expiry 26/11/2023
27/02/2020 0.34p 8,100,000 Any time from 27/02/2021 27/02/2025
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
19/01/2022 0.34p 147,058,823 Any time before expiry 24/07/2023
19/01/2022 0.17p 14,705,882 Any time before expiry 24/01/2023
21/01/2022 0.34p 29,411,765 Any time before expiry 26/07/2023
21/01/2022 0.17p 2,941,176 Any time before expiry 26/01/2023
Total 245,817,646
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 147,058,823 warrants at an exercise price of 0.34p, as part of
placing (19 January 2022).
A grant of 14,705,882 warrants at an exercise price of 0.17p, as part of a
fundraising, to Peterhouse Capital Limited (19 January 2022).
A grant of 29,411,765 warrants at an exercise price of 0.34p, as part of
broker option (21 January 2022).
A grant of 2,941,176 warrants at an exercise price of 0.17p, as part of a
fundraising, to Peterhouse Capital Limited (21 January 2022).
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:
2022 2021
Number of Weighted Number of Weighted
share warrants average share warrants average
and share exercise and share exercise
options price options price
Pence Pence
Outstanding at start of year 61,353,846 0.47 46,600,000 0.415
Granted during the year 194,117,646 0.325 20,753,846 0.593
Exercised during the year - - (5,000,000) 0.275
Forfeited during the year - - - -
Expired during the year (9,653,846) 0.339 (1,000,000) 1.4
Outstanding at 30 September 245,817,646 0.36 61,353,846 0.47
Exercisable at 30 September 245,817,646 0.36 49,253,846 0.382
The warrants outstanding at 30 September 2022 had a weighted average exercise
price of 0.36p (2021: 0.47p), a weighted average fair value of 0.03p (2021:
0.11p) and a weighted average remaining contractual life of 1.02 years (2021:
2.56 years).
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 £27,632. In the year ended 30 September
2021, warrants were granted on 26 January 2021 and 26 June 2021. The aggregate
of the estimated fair values of the warrants granted on these dates is
£17,252.
The inputs into the Black-Scholes-Merton Pricing Model were for warrants
granted in the year and are as follows:
2022 2021
Weighted average share price 0.17p 0.34p
Weighted average exercise price 0.325p 0.593p
Expected volatility 70.0% 72.0%
Expected life 1.45 years 2.75 years
Risk-free rate 0.76% 0.12%
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 £31,387 and £12,754
related to equity-settled share-based payment transactions in 2022 and 2021
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 lease agreement.
Future minimum lease payments under non-cancellable operating leases are:
2022 2021
Land & buildings Land & buildings
£ £
Office accommodation:
Within one year 16,200 15,863
The Company does not sub-let any of its leased premises.
Lease payments recognised in loss for the period amounted to
£21,263 (2021: £17,625).
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 2022 At 30 September 2021
Shares number Share warrants Warrants Warrants Shares Share warrants
number exercise expiry number number
price date
P L Cheetham* 21,465,000 2,000,000 0.500p 21/02/2024 12,641,471 13,000,000
2,000,000 0.340p 27/02/2025
3,000,000 0.500p 28/06/2026
3,000,000 1.00p 28/06/2026
3,000,000 1.50p 28/06/2026
4,411,765 0.34p 24/07/2023
P B Cullen 5,882,353 2,941,177 0.34p 24/07/2023 - -
(Resigned June 2022)
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
Dr M G Armitage 8,823,529 4,411,765 0.34p 24/07/2023 N/A N/A
* 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 2022.
Details of the Parent Company's investment in subsidiary undertakings are
shown in Note 10.
Sunrise Resources plc
During the year the Company charged costs of £171,052 (2021: £165,058) to
Sunrise Resources plc being shared overheads of £24,766 (2021: £19,700),
costs refunded to Sunrise Resources plc of £233 (2021: £4,644), staff salary
costs of £60,253 (2021: £72,540) and directors' salary costs of £86,266
(2021: £68,174), comprising P L Cheetham £86,266 (2021: £68,174). All
salary costs include employer's National Insurance and Pension contributions.
The salary costs in Notes 4 and 5 include these charges.
At the reporting date an amount of £46,232 (2021: £44,147)
was due from Sunrise Resources plc.
P L Cheetham, a director of the Company, is also a director of
Sunrise Resources plc.
Shares and warrants held in Sunrise Resources plc by the Company's directors
are as follows:
At 30 September 2022 At 30 September 2021
Shares Warrants Warrants Warrants Shares Warrants
number number Exercise expiry date number number
price
P L Cheetham* 247,532,996 30,000,000 0.195p 05/08/2025 234,293,916 30,000,000
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, the loan
amounted to £229,587 and loan interest £2,584. 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 2022, the Group's and Company's financial assets consisted of
listed investments, trade receivables and cash and cash equivalents. At the
same date, the Group and 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 Company's financial assets and
liabilities.
The carrying amounts for each category of financial instruments held at 30
September 2022, as defined in IFRS 9, are as follows:
Group Company Group Company
2022 2022 2021 2021
£ £ £ £
Financial assets at amortised cost 308,373 96,124 543,745 501,753
Financial assets at fair value through other comprehensive income 24,150 24,150 50,496 50,496
Financial liabilities at amortised cost 86,470 34,623 78,288 37,628
Risk management
The principal risks faced by the Group and Company resulting
from financial instruments are liquidity risk, foreign currency risk and, to a
lesser extent, interest rate risk and credit risk. The Directors review and
agree policies for managing each of these risks as summarised below. The
policies have remained unchanged from previous periods as these risks remain
unchanged.
Liquidity risk
The Group holds cash balances in Sterling, US Dollars 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
2022 2021 2022 2021
£ £ £ £
United Kingdom Sterling 45,044 457,601 42,291 455,731
United States Dollar 12,729 14,172 5,410 73
Other 1,641 960 464 322
59,414 472,733 48,165 456,126
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 2022 would increase or
decrease by £636 for each 5% increase or decrease in the value of Sterling
against the Dollar.
Neither the Company nor the Group is exposed to material
transactional currency risk.
Interest rate risk
The Group and Company finance their operations through equity
fundraising and therefore do not carry borrowings.
Fluctuating interest rates have the potential to affect the
loss and equity of the Group and the Company insofar as they affect the
interest paid on financial instruments held for the benefit of the Group. The
directors do not consider the effects to be material to the reported loss or
equity of the Group or the Company presented in the financial statements.
Credit risk
The Company has exposure to credit risk through receivables
such as VAT refunds, invoices issued to related parties and its joint
arrangements for management charges. The amounts outstanding from time to time
are not material other than for VAT refunds which are considered by the
directors to be low risk.
The Company has exposure to credit risk in respect of its cash
deposits with NatWest bank and this exposure is considered by the directors to
be low.
20. Provisions for liabilities and charges
Group 2022 2021
£ £
Reclamation provision 15,994 -
At start of year
Additions 7,041 15,994
Reduction/reversal (10,843) -
Exchange adjustments 2,966 -
At 30 September 15,158 15,994
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.
21. Events after the Year-End
The sale of Kaaresselkä and Kiekerömaa royalties agreed on 8 August 2022 was
completed on 7 October 2022.
The consideration paid on closing of the formal sale and purchase agreement
was CAD$200,000 in cash and the issue to Tertiary of 83,333 common shares in
Aurion.
Within these financial statements, the royalty assets have been impaired to
recoverable amounts and re-stated as assets held for sale (Note 11).
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