REG - Tertiary Minerals - Audited Results for Year Ended 30 September 2023
15/01/2024 10:30
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RNS Number : 7026Z Tertiary Minerals PLC 15 January 2024
AIM
Announcement
15 January 2024
TERTIARY MINERALS PLC
("Tertiary" or "the Company")
Audited Results for the year to 30 September 2023
Tertiary Minerals plc is pleased to announce its Chairman's Statement and
audited results for the year ended 30 September 2023.
The Company will announce posting of its Annual Report and Financial
Statements which will also be published on the Company's website along with
Notice of the Annual General meeting in due course.
For more information please contact:
Tertiary Minerals plc:
Patrick Cheetham, Executive Chairman +44 (0) 1625 838 679
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
The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulations
(EU) No. 596/2014 as it forms part of UK domestic law by virtue of the
European Union (Withdrawal) Act 2018 ('MAR'). Upon the publication of this
announcement via Regulatory Information Service ('RIS'), this inside
information is now considered to be in the public domain.
Notes:
1. The information in this release has been reviewed by Mr. Patrick
Cheetham (MIMMM, M.Aus.IMM), Executive Chairman of Tertiary Minerals plc, who
is a qualified person for the purposes of the AIM Note for Mining and Oil
& Gas Companies. Mr. Cheetham is a Member of the Institute of Materials,
Minerals & Mining and also a member of the Australasian Institute of
Mining & Metallurgy.
2. This release may contain certain statements and expressions of belief,
expectation or opinion which are forward looking statements, and which relate,
inter alia, to the Company's proposed strategy, plans and objectives or to the
expectations or intentions of the Company's directors. Such forward-looking
statements involve known and unknown risks, uncertainties, and other important
factors beyond the control of the Company that could cause the actual
performance or achievements of the Company to be materially different from
such forward-looking statements. Accordingly, you should not rely on any
forward-looking statements and save as required by the AIM Rules for Companies
or by law, the Company does not accept any obligation to disseminate any
updates or revisions to such forward-looking statements.
Chairman's Statement
Dear Shareholder,
It is with much pleasure that I present your annual report for the year ended
30 September 2023.
In the reporting period we have continued to focus on our Zambian copper
projects in order to make best use of our financial resources and to meet our
option expenditure commitments to our local partner, Mwashia Resources Ltd.
Consequently, our projects in Nevada have assumed a lower priority as those
interests can be maintained indefinitely and at very low cost.
Our work in Zambia is taking place against a background of rising interest in
copper exploration globally and in Zambia in particular. Copper is the
workhorse of the clean energy transition and an essential metal in the
production of solar and wind power installations, electric vehicles and
battery storage. Copper supply from existing mines is falling and unless
exploration activity is increased significantly, and quickly, new discoveries
and new mine developments are not likely to meet the forecast rise in
consumption.
Zambia is a long-established producer of copper from its Copperbelt and
Northwest Provinces and President Hichilema's government is actively promoting
exploration and mine development with ambitious targets for increased copper
production. It is rolling back unfavourable fiscal conditions imposed by the
previous government and industry has responded with around US$10 billion
committed to new mine developments and expansions and the announcement of a
joint Zambian-Chinese plan to build a new US$15 billion copper smelter in the
Northwest Province where our Mukai and Mupala projects are located. Notably,
post the reporting period, on 22 December 2023 it was announced that UAE based
International Resources Holdings (IHG) intends to invest some US$1.1 billion
to secure a 51% stake in Mopani Copper Mines from ZCCM-IH.
Through our 96% owned Zambian subsidiary, Tertiary Minerals (Zambia) Limited
("TMZ"), we now have interests in five projects in Zambia, four of which are
held by local partner, Mwashia Resources Limited ("Mwashia"). All of these
projects are well located, being adjacent to existing mines and/or in very
active exploration areas where new copper discoveries are being made, and we
believe they have great potential.
A key objective in 2023 was to complete soil sampling on all of the projects
held under option from Mwashia, to define drill targets and prioritise
projects for drill testing with the objective of making a significant copper
discovery in 2024, and to drop those projects where such targets could not be
defined. This objective was met with soil sampling carried out at the Jacks,
Lubuila, Mukai, Konkola West and Mushima North projects in the reporting
period. Some 4,000 soil samples were collected, defining drill targets at all
projects with the exception of the Lubuila Project where our option was
surrendered back to Mwashia.
Our Mukai licence, in the Domes region of northwest Zambia, is strategically
located being surrounded by global copper producer, First Quantum Minerals'
("FQM") Trident Project licences which cover the large producing Sentinel
copper mine and the newly developed Enterprise nickel mine. At Mushima North
our targets are for copper and gold.
Our work at the Mukai and Mushima North projects continues to benefit from the
ongoing data sharing and technical cooperation agreement with FQM which has
helped us to focus our soil sampling programmes and define drill targets for
2024.
An important development in the financial year was the grant to the Company of
the Mupala exploration licence. This covers copper-prospective rocks adjoining
Arc Minerals' Zambian Copper-Cobalt Project where Anglo American is spending
US$88.5 million to earn a 70% interest and which contains a 16km long strike
length of prospective Lower Roan Subgroup rocks, the main host to copper
mineralisation in Zambia.
Just recently, post the reporting period, we were delighted to have announced
the signing of an agreement for our Konkola West Project with a subsidiary of
KoBold Metals Company ("KoBold") and TMZ's local partner, Mwashia. KoBold
Metals will earn-in to the project and has committed to a drilling programme
to test for deep extensions to the world class copper deposit mined on the
adjacent Konkola mining lease where Vedanta is currently investing over
US$1 billion in mine redevelopment. KoBold is a US-based, privately held,
mineral exploration company that couples geoscience, data science, machine
learning, and artificial intelligence to search for the critical minerals
needed for the clean energy transition and to accelerate growth in the
production of electric vehicles. KoBold is backed by technology investors
including Breakthrough Energy Ventures (initiated by Bill Gates) and a who's
who of Silicon Valley investors, pension funds and major mining companies.
Further details of this exciting project and the agreement with KoBold are
given in the Operating Review.
An unexpected development at the end of the reporting period came from our
long-suspended Storuman Fluorspar Project in Sweden when the government, after
4 years of deliberation, annulled the Mining Inspectorate's 2019 decision not
to grant the exploitation concession and the Mining Inspectorate has been
instructed to re-examine its decision. The Storuman Project once underpinned a
much higher market capitalisation for the Company and whilst there is no
immediate intention to allocate significant resources from other projects, the
re-emergence of the Storuman Project as a potential value catalyst is timely
as fluorine, sourced from fluorspar, is a component in the most common
electrolyte used in lithium-ion batteries today and the use of fluorine-ion
batteries is under active development.
Looking forward to 2024, we have drilling planned for Jacks, Mushima North and
Mukai in Zambia although, given the interest we have had from other companies
in these, we may seek to farm out this work to a joint venture partner at one
of these projects at least. In addition, at Konkola West, our joint venture
partner, KoBold has committed to commence a drilling programme by no later
than 14 May 2024 targeting deep extensions to the world class Konkola copper
deposit.
In Nevada, funds being available, we plan to drill at the Brunton Pass
Copper-Gold Project where a programme of trenching last year targeted a high
sulphidation epithermal gold deposit which we believe has been overprinted on
copper skarn which may also suggest the presence of a larger porphyry copper
target nearby.
A more detailed discussion of our exploration programmes and results can be
found in our Operating Report.
Our next Annual General Meeting will be held in London on 14 February 2024
where Mr. Donald McAlister will be retiring and standing for re-election as is
customary practice.
At this AGM we will be seeking approval for two resolutions to allow for the
issue of new shares and the disapplication of pre-emption rights respectively
as we usually do. Without the first of these resolutions the Company cannot
issue new shares while the second resolution allows the Company to issue
shares for cash other than strictly pro-rata to existing shareholders. For
example, it allows for rounding of entitlements and to exclude the issue of
shares to shareholders in jurisdictions where it would be illegal. Rights
issues are, in any event, prohibitively expensive for small companies and
these resolutions will allow the directors flexibility to issue new shares to
raise funds as and when necessary, up to the limit specified. I urge
shareholders to support these resolutions as, until such time as the Company
is self-funding, the Company needs to be able to issue shares to raise funds
to continue as a going concern.
That we were able to carry out significant field programmes in 2023 in
extremely difficult market conditions is due in no small part to our dedicated
teams in Zambia and the UK and our low-cost base. Your Board believes that the
foundations laid in 2023 should provide a platform for growth in 2024 and we
look forward to reporting further progress.
Sincerely,
Patrick Cheetham
Executive Chairman
12 January 2024
Strategic Report
Organisation Overview
Tertiary Minerals plc (ticker symbol 'TYM') is an AIM-traded mineral
exploration and development company exploring a portfolio of projects in
Zambia and Nevada (USA), with legacy interests in northern Europe.
Our strategic focus is to explore and develop energy transition and precious
metal projects in stable and democratic, mining-friendly jurisdictions.
The Company's current principal activities are the identification and
acquisition of prospective projects, and the exploration and development of
copper, gold and silver resources in Zambia and in Nevada.
Our aim is to increase shareholder value through the discovery and development
of valuable mineral deposits while optimising opportunity and minimising risk
through management of the Company's jurisdictional, permitting, technical and
commodity profile.
The Parent Company of the Group is Tertiary Minerals plc. The Group's projects
in Nevada are held through a Nevada registered subsidiary, Tertiary Minerals
US Inc., in Zambia through a 96% owned Zambian registered Company, Tertiary
Minerals (Zambia) Limited, and in Sweden though a Swedish branch of UK
registered subsidiary Tertiary Gold Limited. A fourth subsidiary, UK
registered Tertiary (Middle East) Limited, is inactive. The head office for
all Group companies is based in Macclesfield in the United Kingdom.
Company's Business Model
For exploration projects, the Group prefers to acquire majority or 100%
ownership of mineral assets at minimal cost. This involves either applying for
exploration licences from the relevant authority or negotiating rights with
existing project owners for initially low periodic payments and/or expenditure
commitments that rise over time as confidence in the project value increases.
The Group aims to maximise the funds spent on exploration and development, our
core value adding activities. The Company currently has five employees,
including the Executive Chairman, who work with and oversee carefully selected
and experienced consultants and contractors. The Board of Directors comprises
two independent Non-Executive Directors and the Executive Chairman.
Administration costs are shared through a Management Services Agreement with
Sunrise Resources plc ("Sunrise"), whereby Sunrise pays a share of the cost of
head office overheads and staff costs. As at 30 September 2023, Tertiary
holds 0.54% of the issued ordinary share capital of Sunrise.
The Company's activities are financed by periodic capital raisings, through
share placings or share related financial instruments. When projects become
more advanced, or as acquisition opportunities advance, the Board will seek to
secure additional funding from a range of various sources, for example debt
funding, pre-financing through off-take agreements and joint venture
partnerships.
Financial Review and Performance
The Group's assets are all in the earlier stages of the typical mining
development cycle and so the Group has no income other than cost recovery from
the management contract with Sunrise Resources plc ("Sunrise") and a small
amount of bank interest. Consequently, the Group is not expected to report
profits until it is able to profitably develop, dispose of, or otherwise
commercialise its exploration and development projects.
The Group reports a loss of £541,341 for the year (2022: £1,175,817). This
included administration costs of £572,604 (2022: £566,675), expensed
pre-licence and reconnaissance exploration costs of £39,792 (2022: £80,843),
and impairment of deferred exploration expenditure of £111,691 (2022:
699,484). Administration costs include a charge of £17,784 (2022: £31,387)
relating to share warrants held by employees and third parties as required by
IFRS 2.
Revenue included £166,429 (2022: £171,052) for the provision of management,
administration and office services provided to Sunrise, to the benefit of both
companies through efficient utilisation of services.
The financial statements show that, as at 30 September 2023, the Group had net
current assets of £166,410 (2022: £251,152). This represents the cash
position after allowing for receivables and trade and other payables. These
amounts are shown in the Consolidated and Company Statements of Financial
Position and are also components of the net assets of the Group. Net assets
also include various "intangible" assets of the Company. As the term suggests,
these intangible assets are not cash assets but include this year's and
previous years' accrued expenditure on mineral projects where that expenditure
meets the criteria set out in Note 1(d) (accounting policies) to the financial
statements. The intangible assets total £620,481 (2022: £542,907) and the
breakdown by project is shown in Note 2 to the Financial Statements.
Expenditure which does not meet the criteria for continued capitalisation set
out in Note 1(n), such as pre-licence and reconnaissance costs, are expensed
and add to the Company's loss. The loss reported in any year can also include
expenditure that was carried forward in previous reporting periods as an
intangible asset but which the Board determines is "impaired" in the reporting
period.
The extent to which expenditure is carried forward as intangible assets is a
measure of the extent to which the value of the Company's expenditure is
preserved.
The intangible asset value of a project does not equate to the realisable or
market value of a particular project which will, in the Directors' opinion, be
at least equal in value and often considerably higher. Hence the Company's
market capitalisation on AIM can be in excess of or less than the net asset
value of the Group.
Details of intangible assets, property, plant and equipment and investments
are set out in Notes 8, 9 and 10 of the financial statements.
The financial statements of a mineral exploration company can provide a moment
in time snapshot of the financial health of a company but the Company's
financial statements do not provide a reliable guide to the performance of the
Company or its Board and its long-term potential to create value.
Key Performance Indicators
The usual financial key performance indicators ("KPIs") relating to financial
performance are neither applicable nor appropriate to measure value creation
of a company involved in mineral exploration and which currently has no
turnover other than cost recovery. The applicable KPIs are predominantly
qualitative rather than quantitative and relate to the success, or otherwise,
of exploration and mineral discovery on the Group's projects which is
extensively covered in the Operating Review of the Strategic Report.
The Company does seek to reduce overhead costs, where practicable, but is
reporting slightly higher administration costs this financial year of
£572,604 (2022: £566,675) mainly due to the costs of an additional staff
member for a part of the year, an increase in audit fees and the inclusion of
share-based payments associated with the issue of share warrants during the
year.
Fundraising
During the year to 30 September 2023, the Company raised a total of £550,000
before expenses, as shown in Note 14 to the financial statements.
These funds were raised through:
· a share placing on 3 February 2023 to clients of the Company's
joint broker, Peterhouse Capital Limited, as detailed in Note 14 of the
financial statements; and
· a share placing on 13 April 2023 following interest from
professional investors via the Company's joint broker, Peterhouse Capital
Limited, as detailed in Note 14 of the financial statements.
The directors prepare annual budgets and cash flow projections that extend
beyond 12 months from the date of approval of this report. Given the Group's
cash position at the year-end (£121,813), these projections include the
proceeds of future fundraising necessary within the next 12 months to meet
overheads and planned discretionary project expenditure. The successful
raising of finance is required, based on projections for the Group and
Company, to meet their liabilities as they fall due and continue to operate on
a going concern basis.
Impairment
A biannual review is carried out by the directors to assess whether there are
any indications of impairment of the Group's assets.
Group
The carrying value of the Lubuila Project in Zambia (£40,624) and the Lucky
Project in Nevada, USA, (£71,066) were impaired in full as a result of the
year end impairment review. The underlying reasons were negative exploration
results at Lucky and the surrender of the Company's option to acquire an
interest in the Lubuila property following the receipt of unfavourable results
from exploration during the 2023 field season.
Company
Investments in share capital of subsidiary undertakings
The directors have reviewed the carrying value of the Company's investments in
shares of subsidiary undertakings and the impaired carrying value is £860, by
reference to estimated recoverable amounts. In turn, this requires an
assessment of the recoverability of underlying exploration assets in those
subsidiaries in accordance with IFRS 6.
Loans to Group undertakings
Amounts owed by subsidiary undertakings are unsecured and repayable in cash.
Loan interest is charged to US and Zambia subsidiaries on intercompany loans
with the Parent Company.
A review of the recoverability of loans to subsidiary undertakings has been
carried out. The review indicated potential credit losses arising in the year
relating to Tertiary Gold Limited and an additional provision of £156,594 was
made. The provisions made reflect the differences between the loan carrying
amounts and the value of the underlying project assets.
Tertiary Minerals (Zambia) Limited
Tertiary Minerals (Zambia) Limited is a 96% owned subsidiary which is fully
financed by the Parent Company via intercompany loans and capital
contributions. A recoverability review has raised no potential credit losses
arising in the year.
Operating Review
Tertiary Minerals plc is exploring for copper and precious metals in Zambia
and Nevada, USA, and has a legacy interest for the industrial mineral
fluorspar in Sweden.
The Company has been operating in Zambia since 2021 through a 96% owned
subsidiary, Tertiary Minerals (Zambia) Limited ("TMZ").
In Nevada, USA, the Company operates through its long established 100% owned
subsidiary Tertiary Minerals (US) Inc., whilst in Sweden its interest is held
through its wholly owned UK subsidiary, Tertiary Gold Limited.
Zambia
TMZ holds a 90% entitlement in the Jacks Copper Project ("Jacks") with local
partner Mwashia Resources Limited ("Mwashia") and has in place option
agreements with Mwashia to acquire up to a 90% joint venture interest in four
additional exploration licences considered prospective for copper. All of the
licences currently held by Mwashia are subject to renewal in November 2024.
The Company has no reason to believe that renewals will not be granted. In the
reporting period, TMZ also acquired its first 100% owned exploration licence,
32139-HQ-LEL ("Mupala").
Following a successful maiden drilling programme at Jacks last year, the
Company's main objective during the reporting period was to progress soil
sampling on all other licences. This objective was achieved with soil sampling
programmes conducted at Lubuila, Mukai, Konkola West and Mushima North. The
Company has now prioritised projects for drill testing in 2024.
UK & Foreign Investment in Zambia
During the reporting period, Zambia has seen a significant increase in direct
investment in the mining sector largely led by the increase in demand for
copper to support the green energy transition and the political and fiscal
initiatives introduced by President Hichilema's government.
The reporting period saw the announcement of nearly US$10 billion of new
investments in currently producing and mothballed copper mining operations in
Zambia. This includes First Quantum Minerals' approval of the US$1.25 billion
expansion of the Kansanshi Copper Mine, Vedanta's commitment to invest
approximately US$1 billion to restart production at the Konkola Mine, China's
state-owned China Non-Ferrous Metals Mining Corporation's US$1.3 billion
investment in the Chambishi Copper-Cobalt Mine and Barrick Gold's upcoming
expansion of the Lumwana Copper Mine which will see an investment of
approximately US$2 billion.
In addition, Zambia is attracting large-scale investment into infrastructure
development including the recently announced US$15 billion funding from China
to construct what will be Africa's largest copper smelter and the signing of a
Memorandum of Understanding between the African Development Bank and Africa
Finance Corporation with the United States and European governments to develop
the Lobito Rail Corridor. The Lobito Rail Corridor will connect the Copperbelt
of Zambia and the Democratic Republic of Congo to the port of Lobito in Angola
which will open up the mines of the interior to improved international
logistics.
Finally, during the period several large mining and investment groups
undertook due diligence work on the Mopani Copper Mines and, post the
reporting period, a US$1.1 billion bid by UAE based International Resources
Holdings (IHG) has since been made and accepted by the owner, ZCCM-IH.
Technical Cooperation with First Quantum Minerals Limited ("FQM")
The Company holds a Technical Cooperation and Data Sharing Agreement with FQM
that covers the Mukai Copper Project and Mushima North Copper Project. This
Agreement effectively harnesses the expertise of one of the world's largest
copper producers without cost to the Company in return for which FQM gains
first-hand knowledge of any new discoveries that the Company makes and is well
positioned should Tertiary seek an exploration or development partner in
future. However, the Agreement does not bind either company to any further
agreement or grant FQM any right of first refusal, so it is not commercially
restrictive for Tertiary.
FQM is a global copper company operating long life mines in several countries.
FQM's copper production from its Kansanshi and Sentinel mines represents
approximately 50% of the total Zambian copper output.
The Company has already received extensive exploration data from FQM which has
been of substantial benefit to the Company's 2023 exploration programmes.
Various Technical Committee meetings were held in 2023 between the Company and
FQM to present the Company's 2023 exploration results and discuss all
technical matters relating to the Mukai Copper Project and the Mushima North
Copper Project.
Konkola West Copper Project (Option Agreement to acquire up to a 90% joint
venture interest)
Exploration Licence 27067-HQ-LEL, which forms the Konkola West Project, covers
71.9km² and is located 18km northwest of Chingola in the Copperbelt Province.
Prospective Lower Roan Subgroup rocks are projected to be deeply buried in the
licence area but key fault structures, such as the Luansobe Fault extension
and the Cross Axis Fault Zone, may cross into Konkola West and bring the Lower
Roan Subgroup close to the surface. These fault structures are often
associated with an increased grade of copper mineralisation in the area.
The licence lies immediately west of the 15km long line of copper orebodies
exploited at the Konkola-Lubambe-Musoshi mines and which is also a focus of a
deep drilling programme by KoBold Metals ("KoBold") at its Mingomba Project
which is reported to be one of the world's largest currently undeveloped
copper deposits. During the reporting period, Vedanta, the major shareholder
of Konkola Copper Mines, committed to invest approximately US$1 billion
redeveloping the Konkola Copper Mine.
Geophysical Data Acquisition
During the reporting period, the Company acquired licence-wide airborne
geophysical data flown by KoBold in 2021. This comprises airborne gravity,
magnetics and radiometric data, interpretation of which has identified areas
in the north and northwest of the licence where the target Lower Roan
formation - the main host to copper mineralisation in the Zambian Copperbelt -
may be shallower and less steeply dipping than on the eastern side of the
licence.
Soil Sampling Programme
In August 2023, the Company contracted Geo-Junction Consulting Limited
("Geo-Junction") to conduct a reconnaissance soil sampling programme at the
Konkola West Copper Project to evaluate the possibility that copper
mineralisation may also occur in younger rocks at higher stratigraphic levels
than the main Lower Roan ore shale which is currently exploited to the east.
A total of 287 soil samples were collected from a depth of approximately 30cm
at the B-horizon. Samples were dry sieved to -180 micron and analysed by
portable X-ray Fluorescence ("pXRF"). Only minor occurrences of elevated
copper-in-soil were detected.
Earn-in Agreement with KoBold Metals
Following the end of the reporting period, on 19 December 2023, the Company
and its local partner, Mwashia, signed an Earn-in Agreement with a subsidiary
of KoBold Metals whereby KoBold commits in Stage 1 to a specified drilling
programme, to be completed within 14 months of signing the Earn-in Agreement
and to start no later than 14 May 2024, in order to earn an initial 51%
interest in the licence (39% Tertiary and 10% Mwashia). KoBold then has the
option to increase its interest to 70% in Stage 2 (20% Tertiary and 10%
Mwashia) by sole funding a cumulative US$6 million on exploration within 48
months of signing the Earn-in Agreement.
KoBold Metals is a US-based, privately held, mineral exploration company that
couples geoscience, data science, machine learning, and artificial
intelligence to search for the critical minerals needed for the clean energy
transition and to accelerate growth in electric vehicles. KoBold is backed by
technology investors including Breakthrough Energy Ventures (initiated by Bill
Gates) and Silicon Valley venture capital firm Andreessen Horowitz, as well as
institutional investors such as T. Rowe Price and the Canadian Pension Plan
Investment Board.
The objective of the initial drilling programme is to test for deep extensions
to the world class Konkola copper deposit.
Mukai Copper Project (Option Agreement to acquire up to a 90% joint venture
interest)
Exploration Licence 27066-HQ-LEL, which forms the Mukai Copper Project, covers
55.4km² 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 prospective Lower Roan Subgroup rocks on the southern
flank of the Kabompo Dome.
The licence is directly adjacent to FQM's Trident Project which includes the
recently opened Enterprise Nickel Mine and the large producing Sentinel
(Kalumbila) Copper Mine, located 8km south and 18km southeast of the licence,
respectively. Once in full production, Enterprise will be the largest nickel
mine in Africa with a total Measured and Indicated Resource of 37.5 million
tonnes of ore containing 386,250 tonnes of nickel. The US$2.1 billion
Sentinel Copper Mine has the capacity to treat 55 million tonnes ("Mt") of
ore per annum (Mineral Reserves - 657.6 Mt with a mean grade of 0.46% copper).
The Mukai Copper Project is subject to the Technical Cooperation and Data
Sharing Agreement between TMZ and FQM.
Historical Exploration
Historic exploration in the Mukai licence area was carried out for copper by
Roan Selection Trust Limited ("RST") in the 1960s, for uranium by Agip in the
1980s, and by an Equinox-Anglo American JV in the early 2000s. Most of this
work was of a regional nature comprising stream sediment sampling and soil
sampling.
To date, FQM has provided Tertiary with licence-wide geological mapping and
geophysical data including magnetic data, radiometric data and electromagnetic
data. FQM's mapping, in part based on this data, has traced the Enterprise and
Sentinel host rocks into the Mukai Licence where they occur in similar
proximity to the deep seated Kalumbila Fault Zone.
FQM also provided extensive soil sampling data for the surrounding area,
collected as part of the Trident Project, and drill data on the border of the
licence area from their Tirosa Prospect. Review of the regional soil sampling
and drill data suggested that copper mineralisation intersected at the Tirosa
Prospect continues into the Mukai licence area.
During the reporting period, the Company acquired historical exploration data
from Sinomine Resources Group relating to work conducted by Hua Yuan Mining
Limited which held the licence area from 2013-2020. The dataset is currently
being reviewed but it appears to be incomplete.
Forest Permits
The licence area lies entirely within Bushingwe National Forest and access is
restricted without prior consent from the Department of Forestry. After
several months of delays, permission to enter Bushingwe National Forest for
soil sampling was granted in late July 2023.
Soil Sampling Programme
The Company contracted Geo-Junction to perform a soil sampling programme at
Mukai, with work commencing in late August 2023. A total of 311 soil samples
were collected in a first pass soil sampling programme on north-south sampling
lines with a sample spacing of 100m and line spacing of 300m. Soil samples
were collected from the B-horizon, dried and sieved to -180 micron. The sieved
soil samples were analysed in the field using a pXRF instrument to guide
infill sampling.
Initial pXRF results were reviewed in the field and a total of 206 further
samples were collected by infilling the first pass grid at 150m line spacing
and an offset 100m sample spacing. In the areas of the most significant
copper-in-soil anomalies the infill samples were collected on a much tighter
50m by 100m grid.
The initial pXRF results revealed a broad northwest striking copper anomaly
approximately 1,800m long and 800m wide comprising 174 soil samples with
copper values in excess of 80ppm. Soil samples in this broad anomaly contain
an average copper value of 164ppm. Within this, a higher-grade core strikes
northwest, following the favourable stratigraphy, and has dimensions 1,300m
long and 400m wide comprising 71 soil samples averaging 226ppm copper and
having a peak value of 1,660ppm copper (0.16% copper).
Drill testing of the soil anomaly is warranted and the Company has received
expressions of joint venture interest for the Mukai Copper Project which are
now being considered.
Mushima North Copper Project (Option Agreement to acquire up to a 90% joint
venture interest)
Exploration Licence 27068-HQ-LEL, which forms the Mushima North Copper
Project, covers 701.3km² 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 mined in Zambia with high-grade ore in excess of 26% copper mined in the
1970s.
The Mushima North Copper Project is also subject to the Technical Cooperation
and Data Sharing Agreement between TMZ and FQM.
Historical Exploration
Historical exploration has focused on the eastern margin of a series of
syenitic-granitic intrusives. A number of historic copper prospects occur
within the licence and soil anomalies have been identified in RST soil
sampling programmes in the 1960s.
One of these anomalies was followed up by RST with a 154m deep drill hole,
RKN800, which intersected pyritic siltstone and sandstone containing
chalcopyrite (copper sulphide) in association with calcite veins.
As part of the Data Sharing and Technical Cooperation Agreement with FQM, the
Company was provided with licence wide soil sampling data (pXRF) and airborne
geophysical surveys which included magnetic and VTEM(TM) electromagnetic data.
In April 2023, the Company contracted JAW Consulting to conduct a
comprehensive historical data compilation and review of historical exploration
data. The work was presented in a Geophysical Interpretation Report and
Targeting Report which drew upon the data provided by FQM and other regional
work such an airborne Falcon Gravity Survey flown by BHP Billiton ("BHP"), a
Magnetic-Radiometric survey flown by African Minerals Limited and a SPECTRUM
Electromagnetic-Magnetic-Radiometric survey flown by Zamanglo Prospecting
Limited.
The Targeting Report presented a number of exploration targets with the two
highest priority for follow-up being target C1 and target A1.
Target C1 is a prominent gravity high defined by BHP's Falcon airborne gravity
survey with a coincident copper soil anomaly. Historical drill hole RKN800
sits on the margin of the gravity anomaly. Target A1 is a 1.7km long copper
soil anomaly with values up to 350ppm copper (pXRF) defined by 500m spaced
samples and supported by coincident arsenic and zinc anomalies.
Historical Drill Core Resampling
Drill core from RST drill hole RKN800 is stored at ZCCM-IH's core storage
facility in Kalulushi, Zambia. The core was logged, sampled and submitted to
SGS Laboratories in Kalulushi for analysis by independent contractor
Geo-Junction.
Preliminary analysis was performed on the drill core at the storage facility
using pXRF to provide a guide for core cutting and sampling. Although
low-level copper mineralisation was observed in the interval from 0-100m, it
was too intermittent and low level to warrant sampling and therefore only the
interval 100-155m was sampled. Drill core was cut to quarter core and sampled
on 1m lengths over this interval.
Drill core analysis was performed using SGS analytical method code ICP42S, a
4-acid digest, ICP-OES finish, providing results for a total of 33 elements.
Analytical results returned 33m grading 0.24% copper from 122m-155m downhole,
including 9m grading 0.43% copper from 140m-149m. The drill hole ended in
mineralisation grading 0.19% copper from 154-155m and lies on the edge of the
untested gravity anomaly defined and targeted by BHP for possible IOCG style
mineralisation.
Forest Permits
The licence area lies entirely within Ndenda National Forest and access is
restricted without prior consent from the Department of Forestry. After
several months of delays, permission to enter Ndenda National Forest was
granted in late July 2023.
Soil Sampling Programme
In September 2023, the Company contracted Geo-Junction to perform a soil
sampling programme at Mushima North to cover the C1, A1 and A2 targets.
A total of 572 samples were collected on or around target C1 with a sample
spacing of 200m. pXRF results from target C1 indicate a broad west-northwest
striking anomaly which, at a 60ppm copper cut off, covers an area
approximately 4km long by 1.25km wide. The peak copper value in soils is
216ppm at the western end of the anomaly, in the area of hole RKN800. This
area also contains the highest arsenic-in-soil values consistent with the
geochemical signature of copper mineralisation in drill hole RKN800. This
enhances the possibility that mineralisation of this style is present over a
wider area. The soil anomaly also appears to sit within a zone of
demagnetisation which may be indicative of magnetite destructive alteration
due to hydrothermal alteration. Drill planning will now follow and may include
a prior programme of ground geophysics as the sulphide mineralisation in
RKN800 is expected to be amenable to certain geophysical detection methods.
A total of 184 samples were collected on or around target A1 with a sample
spacing of 200m. Based on preliminary field pXRF analysis, infill sampling was
then carried out on 100m x 100m spacing with three 400m spaced lines sampled
at 50m spacing. pXRF results from target A1 revealed a broad northeast
striking copper-in-soil anomaly which, at a 80ppm copper cut off, covers an
area approximately 3km long by up to 1.5km wide. Within this area soil samples
average 148ppm and peak at 280ppm copper.
The A1 soil anomaly has a high-grade core at its north end where all soil
values are in excess of 200ppm copper over an area 400m x 150m and average
231ppm copper. pXRF results from target A2 show very high copper-in-soil
values of up to 1,239ppm. However, the high values are confined to organic
rich sediments at the edge of a dambo (an area of shallow wetland). It is most
likely that copper in these sediments is a result of hydromorphic
concentration of copper in groundwater sourced from a copper-rich area,
possibly the sources of the A1 copper anomaly some 3km distant.
The A1 and A2 copper-in-soil anomalies have a favourable structural setting
for mineralisation and the A1 anomaly is a further high priority for follow up
drilling. During the field work at targets A1 and A2, samples containing
visible spotty copper minerals malachite and chrysocolla were found when field
checking an area 2km west of target A1 where an electrical conductor had been
identified by a previous explorer in an area underlain by iron-rich
conglomerates. These conglomerates stretch over a 6km strike length and are
coincident with a low-level gravity anomaly. Surface samples contained up to
0.43% copper (average of three pXRF readings per sample). Soil samples around
this new occurrence were not anomalous, but the new find warrants further
follow-up mapping and sampling.
Jacks Copper Project (Right to 90% Joint Venture interest, Option to Increase
to 100%)
The original Jacks copper prospect, discovered in the 1960s, lies within the
Jacks Exploration Licence 27069-HQ-LEL which covers 141.4km(2) and is located
85km south of Luanshya in the Central Province of Zambia.
The Company has a right to a 90% interest in the licence and holds an option,
exercisable at any time, to purchase Mwashia's 10% interest for payment of
US$3.5 million.
Geology and Historic Exploration
The host rocks in the licence comprise synclinally folded basal Katangan
Supergroup sediments which include the Lower Roan Subgroup, the main copper
mineralised rock sequence in the Central African Copperbelt.
The area was first explored by RST in the 1960s which drilled a series of wide
spaced core holes in the area of copper showings at the original Jacks
prospect which occurs within the nose of a synclinal fold structure.
In the 1990s, Caledonia Mining Corporation and Cyprus AMAX Minerals explored
the area under a JV Agreement. The exploration programme included geochemical
sampling, ground-based magnetics and drilling. One drill hole of note, KJD10,
was reported to have intersected 23.95m (222.05 - 246.00m) grading 1.26%
copper which includes 1.88m (230.12 - 232.00m) grading 2.93% copper.
The area was further explored by KPR Investments Limited and FQM under a JV
Agreement which, between 2014‑2015, conducted lithological and structural
mapping, licence-wide 500 x 500m soil sampling and limited infill soil
sampling on a 250 x 250m grid. This identified a number of copper-in-soil
anomalies where follow-up drilling was planned but never carried out.
Tertiary Minerals Exploration
Drilling
The Company's first drilling programme in 2022 at Jacks confirmed and
relocated copper mineralisation originally discovered in the 1960s. Four holes
were completed for a total of 746m of drilling, two each on two separate
traverses spaced approximately 150m apart. This yielded significant
intersections including 13.5m grading 0.9% copper (22JKDD01) and 6.0m grading
1.8% copper (22JKDD03).
Copper mineralisation has now been drilled over a 350m strike length and to
depths up to 230m vertically below surface. This mineralised zone is open
along strike and may be thickening closer to the fold nose, as evidenced by
historical drill hole KJD10 which intersected 24.0m grading 1.3% copper.
Soil Sampling Programme
A soil sampling programme was commissioned following the Phase 1 Drilling
Programme. Over 2,000 samples were collected on four separate grids (A-D) with
Areas A, B and C targeting copper anomalies identified in the wide spaced
historical soil sampling.
In Area B, a 600m long x 600m wide copper-in-soil anomaly was defined with a
peak of 325ppm copper and 197ppm nickel in different samples and in Area C, a
north‑northeast striking copper anomaly approximately 1,100m long and 400m
wide was identified with a peak value of 257ppm copper. Area D covered
approximately 4km of strike length at the original Jacks copper prospect
(Phase 1 Drilling Programme area). A peak value of 525ppm copper was observed
within a 600m x 400m anomaly. Further to the southwest a second anomaly was
defined with dimensions of 600m x 500m and a peak value of 173ppm copper.
Soil Check Sampling Results
In the reporting period, check samples from key soil lines on all four grids
(Areas A-D) were sent to the ALS Laboratory in Johannesburg for multi-element
analysis by ICP-MS (Method code: ME‑MS61). A total of 107 samples were
analysed.
The laboratory results for copper showed an excellent correlation (correlation
coefficient of 0.98) with field pXRF results and when samples above the 80ppm
anomaly threshold are considered, the average difference between ICP-MS copper
results and pXRF copper results is just 4%.
Published data from soil sampling by FQM in Zambia shows that a soil
copper:scandium ("Cu:Sc") ratio greater than 8 successfully delineated the now
operating giant Sentinel Copper Deposit and suggested that high Cu:Sc ratios
are indicative of hydrothermal copper mineralisation of economic interest,
rather than high background copper levels of no economic interest. This
threshold has been used in evaluating the Company's analytical results.
A total of 34 samples were analysed by ICP-MS at Area D along a profile which
covered the soil anomaly associated with the original Jacks copper prospect
which was successfully drilled by Tertiary during the Phase 1 Drilling
Programme in 2022.
Above threshold anomalous Cu:Sc ratios were obtained across the full width of
the Area D soil anomaly, supporting the relevance of the Cu:Sc ratio to
mineralisation in the wider Jacks Copper Project.
At Area C, a total of 31 samples from one soil profile along the anomaly were
analysed by ICP-MS and 27 contiguous samples show above threshold Cu:Sc ratios
indicating a possible mineralised strike length of approximately 1km.
At Area B, of 22 samples analysed by ICP-MS, only 2 samples had anomalous
Cu:Sc ratios which downgrades the priority of the copper anomaly in this area.
A total of 20 samples were analysed from Area A and were selected as a
baseline due to the relatively low-level and narrow width of the
copper-in-soil anomalism compared to areas B, C and D.
Follow-up drilling is now planned to test for extensions to the known copper
mineralisation at the original Jacks copper prospect (Area D) and the priority
soil anomaly at Area C.
Lubuila Project (Option Agreement to acquire up to a 90% joint venture
interest)
The Lubuila Project, formed by exploration licence 27065-HQ-LEL, is situated
on the western flank of the Kabuche Dome on the southwest margin of the Kafue
Anticline. Located approximately 90km west of Luanshya in the Copperbelt
Province, the licence covers 334.8km² which is partially underlain by the
prospective Lower Roan arenite. Approximately 70km to the northwest lies the
currently producing Chambishi Southeast copper-cobalt mine.
In November 2022, the Company received approval of the Environmental Project
Brief ("EPB") by the Zambian Environmental Management Agency ("ZEMA") and a
soil sampling programme was carried out at the start of the 2023 dry season.
Interpretation of the analytical results suggested lateritic enrichment of
soils rather than in-situ copper mineralisation and, following a review of
project data and project priorities, the Company's option to acquire an
interest in the Lubuila Project has been surrendered.
Mupala Project
The Company was recently awarded Exploration Licence 32139-HQ-LEL covering
41.2km(2) in the Domes Region in the Northwestern Province of Zambia.
The licence, which is underlain by the prospective Lower Roan Subgroup
stratigraphy, is located approximately 15km to the east of the Company's Mukai
Copper Project and FQM's Trident Project and directly adjacent to Anglo
American/Arc Minerals' joint venture licence block where Anglo American has
the right to earn a 70% interest through expenditure of US$88.5 million.
The Company has recently completed pegging of the exploration licence and has
submitted the first draft of the EPB to ZEMA. Both tasks are prerequisites to
field exploration.
The Company is currently sourcing and compiling technical data for the Project
and anticipates that exploration will commence with a licence-wide soil
sampling programme.
Nevada, USA
Brunton Pass Copper-Gold Project (100% owned)
The Company holds 24 mining claims on the east side of the Paradise Range,
just north of State Highway 91, 190km southwest of Reno, Nevada. Regionally,
the Brunton Pass Copper-Gold Project sits on the north-east side of a large
granite batholith around which there are a number of epithermal gold and
porphyry copper-gold deposits including the high sulphidation Paradise Peak
gold deposit, located 25km southwest of Brunton Pass, which produced over 1.6
million ounces of gold and over 44 million ounces of silver and at least 457
tons of mercury.
The Project area is underlain by Triassic-age limestone, sandstone, and
siltstone which have been intruded by diorite and quartz monzonite. The
sedimentary rocks are strongly altered locally and appear as a window in fault
contact with Tertiary-age volcanic rock (rhyolite) bounding on all sides.
Mercury was discovered in the claim area in 1945 and a small amount of mercury
was produced. In 1991, the US Bureau of Mines collected 14 rock chip samples
and 8 of these contained values above 1% copper and up to 6.91% copper
including a chip sample over 12ft (3.66m) grading 1.36% copper.
To date, the Company has conducted extensive rock chip sampling, soil
sampling, trenching and has flown a high-resolution drone‑based
magnetic-photogrammetric survey.
Several copper-in-soil anomalies with individual grades of up to 953ppm copper
are present within the project area. The largest of these anomalies has
dimensions of 340m x 310m and they are mainly coincident with areas of rock
samples containing percent-level copper values. Two large mercury-in-soil
anomalies were also defined with values up to 52ppm mercury with the largest
of these extending over an area approximately 500m x 500m.
In late July 2022, six trenches were excavated for a total of 386.2m over the
zones of anomalous copper, arsenic and mercury.
Trenches 1, 2 and 11 targeted the mercury-arsenic anomaly. Geochemical
analysis showed high-level arsenic ("As") and mercury ("Hg") values with a
9.1m section in Trench 1 containing 1,930ppm As and 102ppm Hg and a 32m
section in Trench 11 grading 1622ppm As and 110ppm Hg. Trench 2 intersected
2.7m grading 2.65 g/t gold.
Trenches 7, 8 and 10 tested copper-in-soil anomalies in the southwest of the
project area. Trench 7 cut 27.4m grading 1,010ppm copper (0.1% Cu) within a
45.7m wide intersection grading 814ppm copper and Trench 8 returned 77.7m
averaging 473ppm copper for the full length of the trench.
The copper values are highly anomalous and open-ended with the mineralogy and
alteration exposed in the trenches closely resembling the upper levels of high
sulphidisation epithermal gold deposits.
No exploration was conducted during the reporting period as the Company
focused exploration expenditure on its Zambian copper projects. An exploration
budget has been assigned for 2024 to include drill testing.
Other Projects
No work was conducted on the Company's Paymaster and Mt. Tobin projects in
Nevada during the year due to the Company's focus on its Zambian copper
projects, but further work is budgeted for 2024. The Company's interest in the
Lucky Project was impaired due to unsatisfactory exploration results.
Storuman Fluorspar Project, Sweden
The Company's 100% owned Storuman Project is located in north-central Sweden
and is linked by the E12 highway to the port city of Mo-i-Rana in Norway and
by road and rail to the port of Umeå on the Gulf of Bothnia.
The Storuman Fluorspar Project has a JORC Compliant Mineral Resource of 27.7
Mt at 10.21% CaF(2) as shown in Table 1.
Table 1: JORC Compliant Mineral Resource
Classification Million Tonnes (Mt) Fluorspar (CaF(2) %)
Indicated 25.0 10.28
Inferred 2.7 9.57
Total 27.7 10.21
Exploitation (Mine) Permit
The Company submitted a Mine Permit application for the Storuman deposit in
July 2014 to the Swedish Mining Inspectorate and following an extensive
consultation process a 25-year Exploitation (Mine) Permit was granted on 18
February 2016.
However, as a consequence of the Supreme Court's decision to overturn the
grant of a third-party mining company's Mine Permit in the south of Sweden
(Norra Karr Mine Permit - rare earth element project, owned by Leading Edge
Minerals), the Government returned the Storuman Mine Permit case, along with
many other cases, back to the Swedish Mining Inspectorate for re-assessment in
December 2016. The re-assessment required the Mining Inspectorate to consider
the impact of mining in the mine permit application area on the wider
surrounding area.
Early in 2017, the Swedish Mining Inspectorate requested additional
information from the Company relating to the original Environmental Impact
Assessment ("EIA") and the wider area and this information was provided to the
Swedish Mining Inspectorate, in the form of an updated EIA, in May of that
year.
Subsequently, comprehensive supplementary reports by the Company's consultants
and a legal statement were prepared and submitted to the Swedish Mining
Inspectorate in April 2018 in response to opposing submissions from the Sami
Village (reindeer herders) and the County Administration Board ("CAB").
Reindeer herding is a land use that is also considered to be of National
Interest and is thus potentially a conflicting National Interest with the
development of the Storuman fluorspar deposit.
Where there are competing National Interests, a balanced consideration is
required in reaching a decision on land use priorities.
In January 2019, the Swedish Mining Inspectorate rejected the Company's
revised application on the basis that, whilst the area of the proposed mine
workings could coexist with reindeer husbandry, the Storuman deposit National
Interest did not extend to the area of the tailings dam and associated
infrastructure which was considered by the Sami Village and the CAB to be
important to reindeer herding and husbandry. This decision was appealed by the
Company in February 2019 and referred to the Government for a decision.
Government Decision
In August 2023, the Government ruled that the Swedish Mining Inspectorate was
wrong to consider the tailings area separately and that the National Interest
of the Storuman deposit should extend to include the deposit and the
processing infrastructure as a whole and not just the immediate area of the
mineralisation, as otherwise the deposit could never be developed.
The Government has annulled the Mining Inspectorate's decision not to grant
the mining concession application and has instructed the Mining Inspectorate
to make a decision based on a balanced consideration of the competing National
Interests, being the project development as a whole and reindeer husbandry.
This decision is in line with the Company's legal submissions to the
Government which also contend that a balance of consideration of competing
National Interests should favour the development of the Storuman deposit. The
Company is currently awaiting guidance from the Mining Inspectorate on any
forthcoming requirements.
Lassedalen Fluorspar Project, Norway
Although the Company no longer holds mineral rights at the Lassedalen Project,
during the year it sold copies of its data on the Project to a third-party for
£15,000 and the Company is entitled to further payments should that
third-party acquire mineral rights at Lassedalen in future.
Health and Safety
The Group has maintained strict compliance with its Health and Safety Policy
and is pleased to report there have been no lost time accidents during the
year.
Environment
No Group company has had or been notified of any instance of non-compliance
with environmental legislation in any of the countries in which they work.
Risks & Uncertainties
The Board regularly reviews the risks to which the Group is exposed and
ensures through its meetings and regular reporting that these risks are
minimised as far as possible.
The principal risks and uncertainties facing the Group at this stage in its
development and in the foreseeable future are detailed below together with
risk mitigation strategies employed by the Board.
RISK MITIGATION STRATEGIES
Exploration Risk
The Group's business is mineral 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
All mineral projects have risk associated with defined grade and continuity. When relevant, Mineral Resources and Reserves are estimated by independent
Mineral Resources and Reserves are always subject to uncertainties in the specialists on behalf of the Group and reported in accordance with accepted
underlying assumptions which include the quality of the underlying data, industry standards and codes. The directors are realistic in the use of
geological interpretations, technical assumptions and price forecasts. mineral price forecasts and impose rigorous practices in the QA/QC programmes
that support its independent estimates.
Development Risk
Delays in permitting, or changes in permit legislation and/or regulation, 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
Details of risks associated with the Group's Financial Instruments are given The directors are responsible for the Group's systems of internal financial
in Note 19 to the financial statements. control. Although no systems of internal financial control can provide
absolute assurance against material misstatement or loss, the Group's systems
are designed to provide reasonable assurance that problems are identified on a
timely basis and dealt with appropriately.
In carrying out their responsibilities, the directors have put in place a
framework of controls to ensure as far as possible that ongoing financial
performance is monitored in a timely manner, that corrective action is taken
and that risk is identified as early as practically possible, and they have
reviewed the effectiveness of internal financial control.
The Board, subject to delegated authority, reviews capital investment,
property sales and purchases, additional borrowing facilities, guarantees and
insurance arrangements.
Forward-Looking Statements
This Annual Report may contain certain statements and expressions of belief,
expectation or opinion which are forward-looking statements, and which relate,
inter alia, to the Company's proposed strategy, plans and objectives or to the
expectations or intentions of the Company's directors. Such forward-looking
statements involve known and unknown risks, uncertainties and other important
factors beyond the control of the Company that could cause the actual
performance or achievements of the Company to be materially different from
such forward-looking statements.
Section 172 (1) Statement
Section 172 of the Companies Act 2006 requires a director of a company to act
in the way he or she considers, in good faith, would be most likely to promote
the success of the Company for the benefit of its members as a whole. This
requires a director to have regard, among other matters, to: the likely
consequences of any decision in the long term; the interests of the Company's
employees; the need to foster the Company's business relationships with
suppliers, clients, joint arrangement partners and others; the impact of the
Company's operations on the community and the environment; the desirability of
the Company maintaining a reputation for high standards of business conduct;
and the need to act fairly with members of the Company.
The Company's directors give careful consideration to these factors in
discharging their duties. The stakeholders we consider are our shareholders,
employees, suppliers (including consultants and contractors), our joint
arrangement partners, the regulatory bodies that we engage with and those that
live in the societies and geographical areas in which we operate. The
directors recognise that building strong, responsible and sustainable
relationships with our stakeholders will help us to deliver our strategy in
line with our long-term objectives.
Having regard to:
The likely consequences of any decision in the long-term:
The Company's Aims and Business Model are set out at the head of this
Strategic Report and in the Chairman's Statement. The Company's mineral
exploration and development business is, by its very nature, long-term and so
the decisions of the Board always consider the likely long-term consequences
and take into consideration, for example, trends in metal and minerals supply
and demand, the long-term political stability of the countries in which the
Company operate and the potential impact of its decisions on its stakeholders
and the environment. The Board's approach to general strategy and long-term
risk management are set out in the Corporate Governance Statement (Principle
1) and the section on Risks and Uncertainties.
The interests of the Company's employees:
All of the Company's employees have daily access to the executive director(s)
and to the non-executive directors and there is a continuous and transparent
dialogue on all employment matters. Further details on the Board's employment
policies, the Health and Safety Policy and employee engagement are given in
the Corporate Governance Statement (Principle 8).
The need to foster the Company's business relationships with its stakeholders:
The sustainability of the Company's business long-term is dependent on
maintaining strong relationships with its stakeholders. The factors governing
the Company's decision making and the details of stakeholder engagement are
set out in the Corporate Governance Statement (Principles 2, 3, 8 and 10).
The impact of the Company's operations on the community and the environment:
The Company requires a "social licence" to operate sustainably in the mining
industry and so the Board makes careful consideration of any potential impacts
of its activities on the local community and the environment. The Board
strives to maintain good relations with the local communities in which it
operates and with local businesses. The executive director(s) and/or local
partners meet with regulators and community representatives when promulgating
the Company's plans for exploration and development and take their comments
into consideration wherever possible. Further discussion of these activities
can be found in the Environmental, Social and Governance ("ESG") Policy and in
the Corporate Governance Statement (Principle 3).
The desirability of the Company maintaining a reputation for high standards of
business conduct:
The Board recognises that its reputation is key to its long-term success and
depends on maintaining high standards of corporate governance. It has adopted
the QCA Code of Corporate Governance and sets out in detail how it has
complied with the 10 key principles of the QCA Code in the Corporate
Governance Statement. This contains details of various Company policies
designed to maintain high standards of business conduct such as the Share
Dealing Policy, the Health and Safety Policy, the ESG Policy, the Social Media
Policy and the Bribery & Anti-Corruption Policy and Code of Conduct.
The need to act fairly between Members of the Company:
The Board ensures that it takes decisions in the interests of the members
(shareholders) as a whole and aims to keep shareholders fully informed of
significant developments, ensuring that all shareholders receive Company news
at the same time. The directors devote time to answering genuine shareholder
queries and ensure that no individual or group of shareholders is given
preferential treatment. Further information is provided in the Corporate
Governance Statement (Principles 2 and 10).
This Strategic Report was approved by the Board on 12 January 2024 and signed
on its behalf.
Patrick Cheetham
Executive Chairman
Directors' Responsibilities
The directors are responsible for preparing the Strategic Report, the
Directors' Report and the financial statements in accordance with applicable
law and regulations.
Company law requires the directors to prepare financial statements for a
company for each financial year. Under that law the directors have elected
to prepare the Group and Company financial statements in accordance with
applicable law and UK adopted International Accounting Standards. Under
company law the directors must not approve the financial statements unless
they are satisfied that they give a true and fair view of the state of affairs
of the Group and the Company and of the profit or loss of the Group for that
period. The directors are also required to prepare financial statements in
accordance with the AIM Rules of the London Stock Exchange for companies whose
securities are traded on the AIM market.
In preparing these financial statements, the directors are required to:
· select suitable accounting policies and then apply them
consistently;
· make judgements and accounting estimates that are reasonable and
prudent;
· state whether they have been prepared in accordance with
applicable law and UK adopted International Accounting Standards;
· subject to any material departures disclosed and explained in the
financial statements; and
· prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Company and the Group will
continue in business.
The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the Company's transactions and disclose with
reasonable accuracy at any time the financial position of the Company and
enable them to ensure that the financial statements comply with the
requirements of the Companies Act 2006. They are also responsible for
safeguarding the assets of the Company and hence for taking reasonable steps
for the prevention and detection of fraud and other irregularities.
They are further responsible for ensuring that the Strategic Report and the
Directors' Report and other information included in the Annual Report and
financial statements are prepared in accordance with applicable law in the
United Kingdom.
Website Publication
The maintenance and integrity of the Tertiary Minerals plc website is the
responsibility of the directors. Legislation in the United Kingdom governing
the preparation and dissemination of the accounts and the other information
included in annual reports may differ from legislation in other jurisdictions.
Information from the Directors' Report
The directors are pleased to submit their Annual Report and audited financial
statements for the year ended 30 September 2023.
The Strategic Report contains details of the principal activities of the
Company and includes the Operating Review which provides detailed information
on the development of the Group's business during the year and indications of
likely future developments.
Going Concern
In common with many exploration companies, the Company raises finance for its
exploration and appraisal activities through share placings. Further funding
is raised as and when required. When any of the Group's projects move to the
development stage, specific project financing will be required.
The directors prepare annual budgets and cash flow projections that extend
beyond 12 months from the date of this report. Given the Group's cash
position at the year-end (£121,813), these projections include the estimated
proceeds of future fundraising deemed necessary within the next 12 months to
meet the Company's and the Group's overheads and planned discretionary project
expenditures and to maintain the Company and the Group as going concerns.
Although the Company has been successful in raising finance in the past, there
is no assurance that it will obtain adequate finance in the future. This
represents a material uncertainty related to events or conditions which may
cast significant doubt on the Group and Company's ability to continue as going
concerns and, therefore, that they may be unable to realise their assets and
discharge their liabilities in the normal course of business. However, the
directors have, since the year-end, raised further funds as disclosed below
and have a reasonable expectation that they will secure additional funding
when required to continue meeting corporate overheads and exploration costs
for the foreseeable future. Therefore, the directors believe that the going
concern basis is appropriate for the preparation of the financial statements.
Dividend
The directors do not recommend the payment of a dividend.
Financial Instruments & Other Risks
Details of the Group's financial instruments and risk management objectives
and of the Group's exposure to risk associated with its financial instruments
is given in Note 19 to the financial statements.
The business of mineral exploration and evaluation has inherent risks. Details
of risks and uncertainties that affect the Group's business are given in Risks
and Uncertainties.
Directors
The directors holding office during the year were:
Mr P L Cheetham
Mr D A R McAlister
Dr M G Armitage
Attendance at Board and Committee Meetings
The Board retains control of the Group with day-to-day operational control
delegated to the Executive Chairman. The full Board meets four times a year
and on any other occasions it considers necessary.
Board Meetings Nomination Committee Audit Committee Remuneration Committee
Director Attended Held Attended Held Attended Held Attended Held
P L Cheetham 8 8 1 1 3 3 1 1
D A R McAlister 8 1 3 1
Dr M Armitage 8 1 3 1
The directors' shareholdings are shown in Note 17 to the financial statements.
Events After the Year-End
On 1 November 2023, the Company raised a total of £150,000 before expenses
through a share placing to clients of the Company's joint broker, Peterhouse
Capital Limited.
Shareholders
As at the date of this report the following interests of 3% or more in the
issued share capital of the Company appeared in the share register:
Number of shares % of share capital
As at 12 January 2024
Interactive Investor Services Nominees Limited SMKTISAS 200,435,756, 9.52
Hargreaves Lansdown (Nominees) Limited 15942 176,927,001 8.40
Interactive Investor Services Nominees Limited SMKNOMS 162,329,088 7.71
Barclays Direct Investing Nominees Limited CLIENT1 139,082,234 6.60
Morgan Stanley Client Securities SEG 131,702,893 6.25
Hargreaves Lansdown (Nominees) Limited VRA 108,580,012 5.16
Hargreaves Lansdown (Nominees) Limited HLNOM 106,261,541 5.05
Vidacos Nominees Limited IGUKCLT 80,242,735 3.81
HSDL Nominees Limited MAXI 69,809,165 3.31
HSDL Nominees Limited 64,980,274 3.09
Disclosure of Audit Information
Each of the directors has confirmed that so far as they are aware, there is no
relevant audit information of which the Company's Auditor is unaware, and that
they have taken all the steps that they ought to have taken as a director in
order to make themselves aware of any relevant audit information and to
establish that the Company's Auditor is aware of that information.
Auditor
A resolution to re-appoint Crowe U.K. LLP as Auditor of the Company and the
Group will be proposed at the forthcoming Annual General Meeting.
Charitable and Political Donations
During the year, the Group made no charitable or political donations.
Annual General Meeting
The Company's Annual General Meeting will be held on Wednesday 14 February
2024, at 10.00 a.m.
Conflicts of Interest
The Companies Act 2006 permits directors of public companies to authorise
directors' conflicts and potential conflicts, where appropriate, where the
Articles of Association contain a provision to this effect. The Company's
Articles contain such a provision.
At 30 September 2023, Tertiary Minerals plc held 0.54% of the issued ordinary
share capital of Sunrise Resources plc and the Chairman of Tertiary Minerals
plc is also Chairman of Sunrise Resources plc. Tertiary Minerals plc also
provides management services to Sunrise Resources plc, in the search,
evaluation and acquisition of new projects.
Procedures are in place in order to avoid any conflict of interest between the
Company and Sunrise Resources plc.
Approved by the Board on 12 January 2024 and signed on its behalf.
Patrick Cheetham
Executive Chairman
Board of Directors
The directors and officers of the Company during the financial year were:
Patrick Cheetham Donald McAlister
Chairman* Non-Executive Director**
Key Experience Key Experience
· Geologist. · Accountant.
· More than 40 years' experience in mineral exploration. · Previously Finance Director at Mwana Africa plc, Ridge Mining
plc, Reunion Mining and Moxico Resources plc.
· More than 35 years' experience in public company management.
· Over 25 years' experience in all financial aspects of the
· Founder of the Company, Dragon Mining Ltd, Archaean Gold NL and resource industry, including metal hedging, tax planning, economic
Sunrise Resources plc. modelling/evaluation, project finance and IPOs.
· Founding director of the Company.
External Appointments
Chairman and founder of Sunrise Resources plc. External Appointments
None.
* Currently Chair of the Nomination Committee.
** Currently Chair of the Audit Committee.
Dr Michael Armitage Rod Venables - City Group PLC
Non-Executive Director*** Company Secretary
Key Experience Key Experience
· Over 30 years' experience producing resource estimates, competent · Qualified company/commercial solicitor.
persons reports and feasibility studies with SRK Consulting.
· Director and Head of Company Secretarial Services at City Group
· Previously Managing Director and Chairman of the SRK UK, Director PLC.
of SRK's Exploration Services, and SRK Group Chairman.
· Experienced in both Corporate Finance and Corporate Broking.
· Chair of the Applied Earth Science Division of IMMM, Chair of the
Geological Society Business Forum and Honorary Chair of the Critical Minerals
Association.
External Appointments
Company Secretary for Sunrise Resources plc and other corporate clients of
External Appointments City Group PLC.
Executive Director of Sarn Helen Gold Limited. Executive Director of TREO
Minerals Ltd. Non-Executive Director of Central Asia Metals plc.
***Currently Chair of the Remuneration Committee
Corporate Governance
Chairman's Overview
There is no prescribed corporate governance code for AIM companies and the
London Stock Exchange prefers to give companies the flexibility to choose from
a range of codes which suit their specific stage of development, sector and
size.
The Board considers the corporate governance code published by the Quoted
Companies Alliance in 2018 the most suitable code for the Company.
Accordingly, the Company has adopted the principles set out in the QCA
Corporate Governance Code (the "QCA Code") and applies these principles
wherever possible, and where appropriate to its size and available resources.
The Company's Corporate Governance Statement was reviewed and amended by the
Board on 12 January 2024. The Company has set out on its website and in its
Corporate Governance Statement the ten principles of the QCA Code and details
of the Company's compliance. The Code was updated post year-end and the 2023
QCA Code is designed to apply to companies whose financial years start on or
after 1 April 2024.
Patrick Cheetham, in his capacity as Chairman, has overall responsibility for
the corporate governance of the Company and the Board is responsible for
delivering on our well-defined business strategy having due regard for the
associated risks and opportunities. The Company's corporate governance
arrangements now in place are designed to deliver a corporate culture that
understands and meets shareholder and stakeholder needs and expectations
whilst delivering long-term value for shareholders.
The Board recognises that its principal activity, mineral exploration and
development, has potential to impact on the local environment and communities,
and consequently has adopted an Environmental, Social and Governance ("ESG")
Policy to ensure that the Group's activities have minimal environmental and
social impact. Where appropriate the Group's contracts with suppliers and
contractors legally bind those suppliers and contractors to do the same. The
Group's activities, carried out in accordance with the ESG Policy, have had
only minimal environmental and social impact at present and this policy is
regularly reviewed. Where appropriate, all work is carried out after advance
consultation with affected parties.
The Board recognises the benefits that social media engagement can have in
helping the Company reach out to shareholders and other stakeholders, but it
also recognises that misuse or abuse of social media can bring the Company
into disrepute. To facilitate the responsible use of social media the Company
has adopted a Social Media Policy applicable to all officers and employees of
the Company.
The Board has also adopted a Share Dealing Code for dealings in shares of the
Company by directors and employees and a Bribery & Anti-Corruption Policy
and Code of Conduct applicable to employees, suppliers and contractors.
The Group recognises that the goodwill of its contractors, consultants and
suppliers is important to its business success and seeks to build and maintain
this goodwill through fair dealings. The Group has a prompt payment policy and
seeks to settle all agreed liabilities within the terms agreed with suppliers.
The amount shown in the Consolidated and Company Statements of Financial
Position in respect of trade payables at the end of the financial year
represents 19 days of average daily purchases (2022: 17 days). This amount is
calculated by dividing the creditor balance at the year-end by the average
daily Group spend in the year.
The Board recognises it has a responsibility to provide strategic leadership
and direction in the development of the Group's health and safety strategy in
order to protect all of its employees and other stakeholders. The Company has
developed a Health and Safety Policy to clearly define roles and
responsibilities and in order to identify and manage risk.
Your Board currently comprises three directors of which two are non-executive
and considered by the Board to be independent. We believe that this balance
provides an appropriate level of independent oversight. The Board has the
ability to seek independent advice although none was deemed necessary in the
year under review.
The Board is aware of the need to refresh its membership from time to time and
to match its skill set to those required for the development of its mineral
interests and will consider appointing additional independent non-executive
directors in the future.
Patrick Cheetham
Executive Chairman
Environmental, Social and Governance Statement
Tertiary Minerals plc practises responsible exploration as reflected in our
Environmental, Social and Governance ("ESG") policy statement and our
activities. By doing so we reduce project risk, avoid adverse environmental
and social impacts, optimising benefits for all stakeholders while adding
value to our projects.
Our business associates, consultants and contractors perform much of our
primary activities at our projects and therefore we require that all
representatives and contractors working on our behalf or for our subsidiaries
accept and adhere to the principles set out in this policy. We encourage input
from those with local knowledge and we review this policy on a regular basis.
Our ESG policy is guided by the Prospectors & Developers Association of
Canada's (PDAC) Framework for Responsible Exploration (known as e3 Plus) which
encourages mineral exploration companies to compliment and improve social,
environmental and health and safety performance across all exploration
activities around the world.
Adopting Responsible Governance and Management
Tertiary is committed to environmentally and socially responsible mineral
exploration and has developed and implemented policies and procedures for
corporate governance and ethics. We ensure that all staff and key associates
are familiar with these and have appropriate levels of knowledge of these
policies and procedures.
The Company employs persons and engages contractors with the required
experience and qualifications relevant to their specific tasks and, where
necessary, seeks the advice of specialists to improve understanding and
management of social, environmental, human rights and security, and health and
safety.
Tertiary's Corporate Governance Statement and its Bribery &
Anti-Corruption Policy and Code of Conduct can be viewed on our website here:
www.tertiaryminerals.com/corporate-governance-statement.
Applying Ethical Business Practices
As well as our shareholders and staff, our stakeholders include local
communities and local leadership, government and regulatory authorities,
suppliers, contactors and consultants, our local business partners and other
interested parties. Our corporate culture and policies require honesty,
integrity, transparency and accountability in all aspects of our work and when
interacting with all stakeholders.
We ensure that our contractors, consultants and local partners are aware of
and adhere to our Bribery & Anti-Corruption Policy and Code of Conduct.
The Company takes all necessary steps to ensure that activities in the field
minimise or mitigate any adverse impacts on both the environment and on local
communities.
Commitment to Project Due Diligence and Risk Assessment
We make sure we are informed of the laws, regulations, treaties and standards
that are applicable with respect to our activities. We ensure that relevant
parties are informed and prepared before going into the field in order to
minimise the risk of miscommunication, unnecessary costs and conflict, and to
understand the potential for creating opportunities with local communities
where possible.
Engaging Host Communities and Other Affected and Interested Parties
Tertiary is committed to engaging positively with local communities,
regulatory authorities, suppliers and other stakeholders in its project
locations, and encourages feedback through this engagement. Through this
process the Company develops and fosters the relationships on which our
business relies for success.
For example, in Zambia, we work together with our local partner, Mwashia
Resources Limited, to ensure that the appropriate tribal and local government
organisations are consulted before initiating any exploration work.
Respecting Human Rights
The exploration activities of Tertiary are carried out in line with applicable
laws on human rights and the Company does not engage in activities that have
adverse human rights impacts.
Protecting the Environment
We are committed to ensuring that environmental standards are met or exceeded
in the course of our exploration activities. Applicable laws and local
guidelines in all project jurisdictions are followed diligently and
exploration programmes are only carried out once relevant permits and
approvals have been secured from the appropriate regulatory bodies.
In Zambia, we work with the Zambian Environmental Management Agency ("ZEMA")
and are required to submit Environmental Project Briefs ("EPBs") for approval
by ZEMA before starting exploration. In Nevada, USA, most of our exploration
is carried out on Federally owned land administered by the Bureau of Land
Management ("BLM") which requires the submission of financial bonds for
reclamation of exploration activities and which holds the Company to account.
Provisions are made in the financial statements for reclamation costs in
accordance with calculations set by the BLM. When operating on private lands,
the Company applies the same rigorous standards for reclamation.
Tertiary is committed to good practices in rehabilitation and repair during
its mineral exploration activities and, where possible, choose less impactful
exploration methods to limit disturbance.
Safeguarding the Health and Safety of Workers and the Local Population
Company activities are carried out in accordance with its Health and Safety
Policy, which adheres to all applicable laws.
Corporate Governance Statement
The Board of Tertiary Minerals plc comprises three members. Nevertheless,
there are Audit, Remuneration and Nomination Committees to ensure proper
governance in compliance with the QCA Code. The QCA Code sets out ten
principles which should be applied. The principles are listed below with an
explanation of how the Company applies each principle and/or the reasons for
any aspect of non-compliance.
Principle One: Establish a strategy and business model which promotes
long-term value for shareholders.
The Company has a clearly defined strategy and business model that has been
adopted by the Board and is set out in the Strategic Report. Details of the
challenges to the execution of the Company's strategy and business model and
how those will be addressed can be found in Risks and Uncertainties in the
Strategic Report.
Principle Two: Seek to understand and meet shareholder needs and expectations.
The Board is committed to maintaining good communication with its shareholders
and investors. The Chairman and members of the Board from time to time meet
with shareholders and investors directly or through arrangements with the
Company's brokers to understand their investment requirements and expectations
and to address their enquiries and concerns.
All shareholders are encouraged to attend the Company's Annual General Meeting
where they can meet and directly communicate with the Board. After the close
of business at the Annual General Meeting, the Chairman makes an up-to-date
corporate presentation and opens the floor to questions from shareholders.
Shareholders are also welcome to contact the Company via email at
info@tertiaryminerals.com (mailto:info@tertiaryminerals.com) with any specific
queries.
The Company also provides regulatory, financial and business news updates
through the Regulatory News Service (RNS) and various media channels such as
X, formerly known as Twitter, and LinkedIn. Shareholders also have access to
information through the Company's website, www.tertiaryminerals.com
(http://www.tertiaryminerals.com) , which is updated on a regular basis and
which includes the latest corporate presentation on the Group. Contact details
are also provided on the website.
Principle Three: Take into account wider stakeholder and social
responsibilities and their implications for long-term success.
The Board takes regular account of the significance of social, environmental
and ethical matters affecting the business of the Group. The Board has adopted
an Environmental, Social and Governance ("ESG") Policy, which can be found on
the Company website and an ESG Statement can be found in this Annual Report.
The Company engages positively with local communities, regulatory authorities,
suppliers and other stakeholders in its project locations and encourages
feedback through this engagement. Through this process the Company identifies
the key resources and fosters the relationships on which the business relies.
Principle Four: Embed effective risk management, considering both
opportunities and threats, throughout the organisation.
The Board regularly reviews the risks to which the Group is exposed and
ensures through its meetings and regular reporting that these risks are
minimised as far as possible whilst recognising that its business
opportunities carry an inherently high level of risk. The principal risks and
uncertainties facing the Group at this stage in its development and in the
foreseeable future are detailed in Risks and Uncertainties in the Strategic
Report, together with risk mitigation strategies employed by the Board.
Principle Five: Maintain the board as a well-functioning, balanced team led by
the chair.
The Board's role is to agree the Group's long-term direction and strategy and
monitor achievement of its business objectives. The Board meets formally four
times a year for these purposes and holds additional meetings when necessary
to transact other business. The Board receives regular and timely reports for
consideration on all significant strategic, operational and financial matters.
Relevant information for consideration by the Board is circulated in advance
of its meetings.
Further details on the Board's meetings are provided in the Directors'
Report. The Board is supported by the Audit, Remuneration and Nomination
Committees.
The Board currently consists of the Executive Chairman (Patrick Cheetham) and
two non-executive directors (Donald McAlister and Dr Mike Armitage). The Board
considers that the Board structure is acceptable having regard to the fact
that it is not yet revenue-earning.
The non-executive directors have committed the time necessary to fulfil their
roles during the year. The attendance record of the directors at Board and
Board Committee meetings are detailed in the Directors' Report.
Non-executive directors are considered independent if they are independent of
management and free from any business or other relationship which could
materially interfere with the exercise of their independent judgement. Despite
serving as a non-executive director for more than nine years, Donald McAlister
is considered to be independent using these criteria. In compliance with good
practice, he will continue to seek annual re-election where practicable,
rather than every third year as per the Articles of Association.
Principle Six: Ensure that between them the directors have the necessary
up-to-date experience, skills and capabilities.
The Board considers the current balance of sector, financial and public market
skills and experience of its directors are relevant to the Company's business
and are appropriate for the current size and stage of development of the
Company and the Board considers that it has the skills and experience
necessary to execute the Company's strategy and business plan and discharge
its duties effectively.
The directors maintain their skills through membership of various professional
bodies, attendance at mining conferences and through their various external
appointments.
All Directors have access to the advice and services of the Company Secretary
who is responsible for ensuring that Board procedures and applicable rules and
regulations are observed. All directors are able to take independent
professional advice, if required, in relation to their duties and at the
Company's expense.
Principle Seven: Evaluate Board performance based on clear and relevant
objectives, seeking continuous improvement.
The ultimate measure of the effectiveness of the Board is the Company's
progress against the long-term strategy and aims of the business. This
progress is reviewed in Board meetings held at least four times a year. The
executive director(s)' performance is regularly reviewed by the rest of the
Board.
The Nomination Committee, currently consisting of the Chairman and the two
non-executive directors, meets at least once a year to lead the formal process
of rigorous and transparent procedures for Board appointments. During its
meetings the Nomination Committee reviews the structure, size and composition
of the Board; succession planning; leadership; key strategic and commercial
issues; conflicts of interest; time required from non-executive directors to
execute their duties effectively; overall effectiveness of the Board and its
own terms of reference.
Under the Articles of Association, new directors appointed to the Board must
stand for election at the first Annual General Meeting of the Company
following their appointment. Under the Articles of Association, existing
directors retire by rotation and may offer themselves for re-election.
Principle Eight: Promote a corporate culture that is based on ethical values
and behaviours.
The Board recognises and strives to promote a corporate culture based on
strong ethical and moral values.
The Group will give full and fair consideration to applications for employment
received regardless of age, gender, colour, ethnicity, disability,
nationality, religious beliefs, transgender status or sexual orientation. The
Board takes account of Tertiary's employees' interests when making decisions,
and suggestions from those employees aimed at improving the Group's
performance are welcomed.
The corporate culture of the Company is promoted to Tertiary's employees,
suppliers and contractors and is underpinned by the implementation and regular
review, enforcement and documentation of various policies: the Health and
Safety Policy; the Environmental, the Social and Governance Policy ("ESG
Policy"); the Share Dealing Policy; the Bribery & Anti-Corruption Policy
and Code of Conduct; the Privacy and Cookies Policy and Social Media Policy.
These procedures enable the Board to determine that ethical values are
recognised and respected.
The Board recognises that its principal activity, mineral exploration and
development, has potential to impact on local environments and communities, as
such the ESG Policy was developed with this in mind and this replaces the
previous Environmental Policy to ensure that, wherever they take place, the
Group's activities have minimal environmental and social impact. Where
appropriate the Group's contracts with suppliers and contractors legally bind
those suppliers and contractors to do the same. The Group's activities carried
out in accordance with the ESG Policy have had only minimal environmental and
social impact, and this policy is regularly reviewed. Where appropriate, all
work is carried out after advance consultation with affected parties.
Principle Nine: Maintain governance structures and processes that are fit for
purpose and support good decision-making by the Board.
The Board has overall responsibility for all aspects of the business. The
Chairman is responsible for overseeing the running of the Board, ensuring that
no individual or group dominates the Board's decision-making, and that the
non-executive directors are properly briefed on all operational and financial
matters. The Chairman has overall responsibility for corporate governance
matters in the Group and chairs the Nomination Committee. The Executive
Chairman has the responsibility for implementing the strategy of the Board and
managing the day-to-day business activities of the Group. The Company
Secretary is responsible for ensuring that Board procedures are followed, and
applicable rules and regulations are complied with. Key operational and
financial decisions are reserved for the Board through quarterly project
reviews, annual budgets, quarterly budgets and cash-flow forecasts and on an
ad hoc basis where required.
The two non-executive directors are responsible for bringing independent and
objective judgement to Board decisions. The Board has established Audit,
Remuneration and Nomination Committees with formally delegated duties and
responsibilities. Donald McAlister currently chairs the Audit Committee, Dr.
Mike Armitage chairs the Remuneration Committee and Patrick Cheetham chairs
the Nomination Committee.
This Corporate Governance statement will be reviewed at least annually to
ensure that the Company's corporate governance framework evolves in line with
the Company's strategy and business plan.
Principle Ten: Communicate how the Company is governed and is performing by
maintaining a dialogue with shareholders and other relevant stakeholders.
The Company regularly communicates with, and encourages feedback from, its
shareholders who are its key stakeholder group. The Company's website is
regularly updated and users, including all stakeholders, can register to be
alerted via email when material announcements are made. The Company's contact
details are on the website should stakeholders wish to make enquiries of
management.
The Group's financial reports for at least the past five years can be found
here: www.tertiaryminerals.com/investor-media/financial-reports
(http://www.tertiaryminerals.com/investor-media/financial-reports) and
contains past Notices of Annual General Meetings.
The results of voting on all resolutions in general meetings are posted to the
Company's website, including any actions to be taken as a result of
resolutions for which votes against have been received from at least 20 per
cent of independent votes.
Audit Committee Report
The Audit Committee is a sub-committee of the Board, comprised of the
independent non-executive directors and assists the Board in meeting
responsibilities in respect of external financial reporting and internal
controls. The Audit Committee also keeps under review the scope and results of
the audit. It also considers the cost-effectiveness, independence and
objectivity of the auditors taking account of any non-audit services provided
by them. Donald McAlister is Chair of the Audit Committee.
The specific objectives of the Committee are to:
(a) maintain adequate quality and effective scope of the external audit of
the Group including its branches where applicable and review the independence
and objectivity of the auditors.
(b) ensure that the Board of Directors has adequate knowledge of issues
discussed with its external auditor.
(c) ensure the financial information and reports issued by the Company to
AIM, shareholders and other recipients are accurate and contain proper
disclosure at all times.
(d) maintain the integrity of the Group's administrative, operating and
accounting controls and internal control principles.
(e) ensure proper accounting policies are adhered to by the Group.
The Committee has unlimited access to the external auditor, to senior
management of the Group and to any external party deemed necessary for the
proper discharge of its duties. The Committee may consult independent experts
where it considers necessary to perform its duties.
The Audit Committee reviews the financial controls of the Company on a regular
basis and is satisfied that the Group's financial controls and reporting
procedures are robust and sufficient to ordinarily prevent fraud and ensure
that senior management, the Committee and the Board are fully aware of the
Company's financial position at all times.
The Audit Committee met three times in the last financial year, on 8 December
2022, 30 May 2023 and 8 August 2023.
The Committee reviewed the carrying values of the Group projects and the Group
inter-company loans and carried out impairment reviews. The project carrying
values are assessed against the IFRS 6 criteria set out in Note 1(n). Loans to
Group undertakings are assessed for impairment under IFRS 9.
As a result of the year-end review, it was judged that the Lubuila Project and
the Lucky Project expenditure should be fully impaired. Following a review of
the recoverability of loans to subsidiary undertakings, it was decided that no
impairment was required.
Going Concern
The Committee also considered the Going Concern basis on which the accounts
have been prepared (see Note 1(b)). The directors are satisfied that the Going
Concern basis is appropriate for the preparation of the financial statements.
Donald McAlister
Chair - Audit Committee
Remuneration Committee Report
The Remuneration Committee is a sub-committee of the Board and comprises the
two non-executive directors. Dr Mike Armitage is Chair of the Remuneration
Committee.
The primary objective of the Committee is to review the performance of the
executive directors and review the basis of their service agreements and make
recommendations to the Board regarding the scale and structure of their
remuneration.
The Remuneration Committee met once in the financial year under review, on 8
August 2023, to review the Committee Terms of Reference and ensure their
continued suitability, and to review the remuneration of the Executive
Chairman.
Dr Mike Armitage
Chair - Remuneration Committee
Nomination Committee Report
The Nomination Committee comprises the Executive Chairman and the two
non-executive directors. Patrick Cheetham is Chair of the Nomination
Committee.
The Nomination Committee meets at least once per year to lead the formal
process of rigorous and transparent procedures for Board appointments and to
make recommendations to the Board in accordance with best practice and other
applicable rules and regulations, insofar as they are appropriate to the Group
at this stage in its development.
The Committee is required, amongst other things, to:
(a) Review the structure, size and composition (including the skills,
knowledge, experience and diversity) of the Board and make recommendations to
the Board with regard to Board appointments and any Board changes.
(b) Give full consideration to succession planning for directors and other
senior executives in the course of its work, taking into account the
challenges and opportunities facing the Company, and the skills and expertise
needed on the Board in the future.
(c) Keep under review the leadership needs of the organisation to compete
effectively in the marketplace.
(d) Review annually the time required from executive director(s) and
non-executive directors. Performance evaluation should be used to assess
whether the executive director(s) and non-executive directors are spending
enough time in fulfilling their duties.
(e) Arrange periodic reviews of the Committee's own performance and, at least
annually, review its constitution and terms of reference to ensure it is
operating at maximum effectiveness and recommend any changes it considers
necessary to the Board for approval.
(f) Ensure that prior to the appointment of a director, the proposed
appointee should be required to disclose any other business interests that may
result in a conflict of interest and be required to report any future business
interests that may result in a conflict of interest.
The Committee carries out its duties for the Parent Company, major subsidiary
undertakings and the Group as a whole and met once during the period under
review, on 2 May 2023.
The Committee is satisfied that the current Board has a depth of experience
and level and range of skills appropriate to the Company at this stage in its
development. It is however recognised that the Company is likely to need
additional expertise as it moves forward into commercial production and so the
composition of the Board will be kept under careful review to ensure that the
Board can deliver long-term growth in shareholder value.
Patrick Cheetham
Chair - Nomination Committee
Publication of Statutory Accounts
The financial information set out in this announcement does not constitute the
Company's Annual Accounts for the period ended 30 September 2023 or 2022. The
financial information for 2022 is derived from the Statutory Accounts for
2022. Full audited accounts in respect of that financial period have been
delivered to the Registrar of Companies. The Statutory Accounts for 2023 will
be delivered to the Registrar of Companies following the Company's Annual
General Meeting. The Auditors have reported on the 2023 and 2022 accounts.
Neither set of accounts contain a statement under section 498(2) of (3) the
Companies Act 2006 and both received an unqualified audit opinion. However,
there was an emphasis of matter in relation to a requirement that the Company
raise funds in the future to continue as a going concern.
Availability of Financial Statements
The Annual Report containing the full financial statements for the year to 30
September 2023 will be uploaded to the Shareholders Documents section of the
Company's website on or around 18 January 2024:
https://www.tertiaryminerals.com/shareholder-documents.
Consolidated Income Statement
For the year ended 30 September 2023
Notes 2023 2022
£ £
Revenue 2 181,429 171,052
Administration costs (572,604) (566,675)
Pre-licence exploration costs (39,792) (80,843)
Impairment of deferred exploration expenditure 8 (111,691) (699,484)
Operating loss (542,658) (1,175,950)
Interest receivable 1,317 133
Loss before taxation 3 (541,341) (1,175,817)
Tax on loss 7 - -
Loss for the year attributable to equity holders of the parent (541,341) (1,175,817)
Loss per share - basic and diluted (pence) 6 (0.03) (0.08)
All amounts relate to continuing activities.
Consolidated Statement of Comprehensive Income
for the year ended 30 September 2023
2023 2022
£ £
Loss for the year (541,341) (1,175,817)
Items that could be reclassified subsequently to the income statement:
Foreign exchange translation differences on foreign currency net investments
in subsidiaries
(23,612) 136,753
Items that will not be reclassified to the income statement:
Changes in the fair value of other investments (5,184) (26,346)
Total comprehensive income/(loss) for the year attributable to
equity holders of the parent (570,137) (1,065,410)
Consolidated and Company Statements of Financial Position
at 30 September 2023
Company Number 03821411 Notes Group Company Group Company
2023 2023 2022 2022
£ £ £ £
Non-current assets -
Intangible assets 8 620,481 - 542,907 -
Property, plant & equipment 9 3,234 3,234 2,398 2,398
Investment in subsidiaries 10 - 661,472 - 681,526
Other investments 10 16,466 16,466 24,150 24,150
640,181 681,172 569,455 708,074
Current assets
Receivables 11 114,432 70,399 272,667 64,785
Cash and cash equivalents 12 121,813 100,215 59,414 48,165
236,245 170,614 332,081 112,950
Current liabilities
Trade and other payables 13 (69,835) (54,615) (80,929) (45,076)
Net current assets 166,410 115,999 251,152 67,874
Provisions for liabilities 20 (11,496) - (15,158) -
Net assets 795,095 797,171 805,449 775,948
Equity
Called up share capital 14 198,108 198,108 153,626 153,626
Share premium account 12,599,278 12,599,278 12,101,761 12,101,761
Capital redemption reserve 14 2,644,061 2,644,061 2,644,061 2,644,061
Merger reserve 131,096 131,096 131,096 131,096
Share option reserve 14 88,562 88,562 101,985 101,985
Fair value reserve (22,200) (22,200) (17,016) (17,016)
Foreign currency reserve 14 436,857 - 460,469 -
Accumulated losses (15,280,667) (14,841,734) (14,770,533) (14,339,565)
Equity attributable to the owners of the parent 795,095 797,171 805,449 775,948
The Company reported a loss for the year ended 30 September 2023 of £533,376
(2022: £1,149,113).
These financial statements were approved and authorised for issue by the Board
on 12 January 2024 and were signed on its behalf.
P L Cheetham
D A R McAlister
Executive
Chairman
Director
Consolidated Statement of Changes in Equity
Group Ordinary Share Capital Merger Share Fair Foreign Accumulated Total
share premium redemption reserve option value currency losses £
capital account reserve £ reserve reserve reserve £
£ £ £ £ £ £
At 30 September 2021 118,332 11,567,055 2,644,061 131,096 80,048 9,330 323,716 (13,604,166) 1,269,472
Loss for the period - - - - - - - (1,175,817) (1,175,817)
Change in fair value - - - - - (26,346) - - (26,346)
Exchange differences - - - - - - 136,753 - 136,753
Total comprehensive loss for the year - - - - - (26,346) 136,753 (1,175,817) (1,065,410)
Share issue 35,294 534,706 - - - - - - 570,000
Share based payments expense - - - - 31,387 - - - 31,387
Transfer of expired warrants - - - - (9,450) - - 9,450 -
At 30 September 2022 153,626 12,101,761 2,644,061 131,096 101,985 (17,016) 460,469 (14,770,533) 805,449
Loss for the period - - - - - - - (541,341) (541,341)
Change in fair value - - - - - (5,184) - - (5,184)
Exchange differences - - - - - - (23,612) - (23,612)
Total comprehensive loss for the year - - - - - (5,184) (23,612) (541,341) (570,137)
Share issue 44,482 497,517 - - - - - - 541,999
Share based payments expense - - - - 17,784 - - - 17,784
Transfer of expired warrants - - - - (31,207) - - 31,207 -
At 30 September 2023 198,108 12,599,278 2,644,061 131,096 88,562 (22,200) 436,857 (15,280,667) 795,095
Company Statement of Changes in Equity
Company Ordinary Share Capital Merger Share Fair Accumulated Total
share premium redemption reserve option value losses £
capital account reserve £ reserve reserve £
£ £ £ £ £
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
Loss for the period - - - - - - (533,376) (533,376)
Change in fair value - - - - - (5,184) - (5,184)
Total comprehensive - - - - - (5,184) (533,376) (538,560)
loss for the year
Share issue 44,482 497,517 - - - - - 541,999
Share based payments expense - - - - 17,784 - - 17,784
Transfer of expired warrants - - - - (31,207) - 31,207 -
At 30 September 2023 198,108 12,599,278 2,644,061 131,096 88,562 (22,200) (14,841,734) 797,171
Consolidated and Company Statements of Cash Flows
for the year ended 30 September 2023
Notes Group Company Group Company
2023 2023 2022 2022
£ £ £ £
Operating activity
Operating (loss)/profit (542,658) (566,147) (1,175,950) (1,178,456)
Depreciation charge 9 1,793 1,793 1,661 1,661
Share based payment charge 17,784 17,784 31,387 31,387
Impairment charge - deferred exploration asset 8 111,691 - 699,484 -
Increase/(decrease) in provision for impairment of loans to subsidiaries 10 - 156,594 - 742,199
Reclamation liability 8 - - - -
Decrease/(increase) in receivables 11 1,642 (5,614) (35,049) (12,263)
Increase/(decrease) in payables 13 (11,094) 9,539 4,079 (7,109)
Net cash outflow from operating activity (420,842) (386,051) (474,388) (422,581)
Investing activity
Interest received 1,317 55,325 133 29,344
Proceeds on disposal of royalty assets 156,594 - - -
Exploration and development expenditures 8 (236,808) - (561,431) -
Purchase of property, plant & equipment 9 (2,630) (2,630) (107) (107)
Additional loans to subsidiaries 10 - (156,594) - (584,617)
Net cash outflow from investing activity (81,527) (103,899) (561,405) (555,380)
Financing activity
Issue of share capital (net of expenses) 541,999 542,000 570,000 570,000
Share subscription loan - - - -
Net cash inflow from financing activity 541,999 542,000 570,000 570,000
Net increase/(decrease) this year 39,631 52,050 (465,793) (407,961)
Cash and cash equivalents at start of year 59,414 48,165 472,733 456,126
Exchange differences 22,769 - 52,474 -
Cash and cash equivalents at 30 September 12 121,813 100,215 59,414 48,165
Notes to the Financial Statements
for the year ended 30 September 2023
Background
Tertiary Minerals plc is a public company incorporated and domiciled in
England. Its shares are traded on the AIM market of the London Stock Exchange
- EPIC: TYM.
The Company is a holding company for a number of companies (together, the
"Group"). The Group's financial statements are presented in Pounds Sterling
(£) 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 £533,376 (2022:
£1,149,113). The loss for 2023 includes provision for impairment of its
investment in subsidiary undertakings in the amount of £156,594 (Note 10).
(b) Going concern
In common with many exploration companies, the Company raises finance for its
exploration and appraisal activities in discrete tranches. Further funding is
raised as and when required. When any of the Group's projects move to the
development stage, specific project financing will be required.
The directors prepare annual budgets and cash flow projections that extend
beyond 12 months from the date of this report. Given the Group's cash position
at year end (£121,813), these projections include the proceeds of future
fundraising necessary within the next 12 months to meet the Company's and the
Group's overheads and planned discretionary project expenditures and to
maintain the Company and the Group as going concerns. Although the Company has
been successful in raising finance in the past, there is no assurance that it
will obtain adequate finance in the future. This represents a material
uncertainty related to events or conditions which may cast significant doubt
on the Group and the Company's ability to continue as going concerns and,
therefore, that they may be unable to realise their assets and discharge their
liabilities in the normal course of business. However, the directors have a
reasonable expectation that they will secure additional funding when required
to continue meeting corporate overheads and exploration costs for the
foreseeable future and therefore the directors believe that the going concern
basis is appropriate for the preparation of the financial statements. In
considering the longer term financial outlook of the Group, the continued
viability of the most significant exploration and evaluation assets as set out
in Note 1(n) is critical to this assessment.
(c) Basis of consolidation
The Group's financial statements consolidate the financial statements of
Tertiary Minerals plc and its subsidiary undertakings using the acquisition
method and eliminate intercompany balances and transactions.
Tertiary Minerals plc owns 96% of the equity of Tertiary Minerals (Zambia)
Limited and the 4% non-controlling interest is not considered to be material.
Further details are set out in Note 10.
(d) Intangible assets
Exploration and evaluation
Accumulated exploration and evaluation costs incurred in relation to separate
areas of interest (which may comprise more than one exploration licence or
exploration licence applications) are capitalised and carried forward where:
(1) such costs are expected to be recouped through
successful exploration and development of the area, or alternatively by its
sale; or
(2) exploration and/or evaluation activities in the area
have not yet reached a stage which permits a reasonable assessment of the
existence or otherwise of economically recoverable reserves, and active and
significant operations in, or in relation to the areas are continuing.
A biannual review is carried out by the directors to consider whether there
are any indications of impairment in capitalised exploration and development
costs. Full impairment reviews were carried out in order to assess the
carrying values of each project as at 31 March 2023 and 30 September 2023.
This involved consideration of changes in circumstances and evidence including
and exploration results, changes in tenure of mineral rights, economic
circumstances such as market prices, opportunities for realisation such as
sale or joint ventures and viability, comparing anticipated future costs with
expected recoverable value. For each project, based upon the relevant
considerations, the directors formed a view regarding the recoverability of
capitalised expenditure and continued compliance with the IFRS 6 criteria for
recognition and deferral.
Where an indication of impairment is identified, the relevant value is written
off to the income statement in the period for which the impairment was
identified. An impairment of exploration and development costs may be
subsequently reversed in later periods should conditions allow.
Accumulated costs, where the Group does not yet have an exclusive exploration
licence and in respect of areas of interest which have been abandoned, are
written off to the income statement in the year in which the pre-licence
expense was incurred or in which the area was abandoned.
Development
Exploration, evaluation and development costs are carried at the lower of cost
and expected net recoverable amount. On reaching a mining development
decision, exploration and evaluation costs are reclassified as development
costs and all development costs on a specific area of interest will be
amortised over the useful economic life of the projects, once they become
income generating and the costs can be recouped.
(e) Property, plant & equipment
All property, plant and equipment assets are stated at cost less accumulated
depreciation. Depreciation is provided by the Group on all property, plant and
equipment, at rates calculated to write off the cost, less estimated residual
value, of each asset evenly over its expected useful life, as follows:
Fixtures and fittings
20% to 33% per annum Straight-line
basis
Computer equipment 33% per
annum
Straight-line basis
Useful life and residual value are reassessed annually.
(f) Financial assets designated at fair value through
OCI
Upon initial recognition, the Group can elect to classify irrevocably its
equity investments as equity instruments designated at fair value through OCI
when they meet the definition of equity under IAS 32 Financial Instruments:
Presentation and are not held for trading. The classification is determined on
an instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled to profit or
loss. Dividends are recognised as other income in the statement of profit or
loss when the right of payment has been established, except when the Group
benefits from such proceeds as a recovery of part of the cost of the financial
asset, in which case, such gains are recorded in OCI. Equity instruments
designated at fair value through OCI are not subject to impairment assessment.
The Group elected to classify irrevocably its listed equity investments under
this category.
(g) Trade and other receivables and payables
Trade and other receivables and payables are measured at initial recognition
at fair value and subsequently measured at amortised cost.
(h) Cash and cash equivalents
Cash and cash equivalents consist of cash at bank and in hand and short-term
bank deposits.
(i) Deferred taxation
Deferred taxation, if applicable, is provided in full in respect of taxation
deferred by temporary differences between the treatment of certain items for
taxation and accounting purposes.
Deferred tax assets are recognised to the extent that they are regarded as
recoverable.
(j) Revenue
Revenue is recognised as the fair value of management services provided to
Sunrise Resources plc and relates to expenditure incurred and recharged. The
Company recognises revenue as contractual performance obligations are
satisfied. Revenue is net of discounts, VAT and other sales-related taxes.
(k) Foreign currencies
The Group's consolidated financial statements are presented in Pounds Sterling
(£), being the functional currency of the Company, and the currency of the
primary economic environment in which the Company operates. Monetary assets
and liabilities denominated in foreign currencies are translated at the rate
of exchange ruling at the reporting date.
For consolidation purposes, the net investment in foreign operations and the
assets and liabilities of overseas subsidiaries that have a functional
currency different from the Group's presentation currency, are translated at
the closing exchange rates. Income statements of overseas subsidiaries, that
have a functional currency different from the Group's presentation currency,
are translated at exchange rates at the date of transaction. Exchange
differences arising on opening reserves are taken to the foreign currency
reserve in equity.
(l) Leases
The general policy adopted in relation to leased assets is IFRS 16, which
requires the recognition of lease commitments as right of use assets and a
corresponding liability.
The Company only has short term leases, which do not require recognition as
right of use assets having a duration of 12 months or less and without a
renewal commitment. Leasing costs are therefore charged to the income
statement on a straight line basis.
(m) Share warrants and share-based payments
The Company issues warrants and options to employees (including directors) and
third parties. The fair value of the warrants and options is recognised as a
charge measured at fair value on the date of grant and determined in
accordance with IFRS 2, adopting the Black-Scholes-Merton model. The fair
value is charged to administrative expenses on a straight-line basis over the
vesting period, together with a corresponding increase in equity, based on the
management's estimate of shares that will eventually vest. The expected life
of the options and warrants is adjusted based on management's best estimates,
for the effects of non-transferability, exercise restrictions and behavioural
considerations. The details of the calculation are shown in Note 15.
The Company also issues shares and/or warrants in order to settle certain
liabilities, including partial payment of fees to directors. The fair value of
shares issued is based on the closing mid-market price of the shares on the
AIM market on the day prior to the date of settlement and it is expensed on
the date of settlement with a corresponding increase in equity.
(n) Judgements and estimations in applying accounting policies
In the process of applying the Group's accounting policies above, the Group
has identified the judgemental areas that have the most significant effect on
the amounts recognised in the financial statements:
Intangible assets - exploration and evaluation
IFRS 6 "Exploration for and Evaluation of Mineral Resources" requires that
exploration and evaluation assets shall be assessed for impairment when facts
and circumstances suggest that the carrying amount may exceed recoverable
amount.
In practical terms, this requires that project carrying values are regularly
monitored and assessed for recoverability whether from future exploitation of
resources or realised by sale to a third party.
Where activities have not reached a stage which permits reasonable
confirmation of the existence of mineral reserves, the directors must form a
judgement whether future exploration and evaluation should continue. This
requires management to use their sector experience, apply their specialist
expertise and form a conclusive judgement as to whether or not, on the balance
of evidence that further exploration is justified to determine if an
economically viable mining operation can be established in future. Such
estimates, judgements and assumptions are likely to change as new information
and evidence becomes available. If it becomes apparent, in the judgement of
the directors, that recovery of capitalised expenditure is unlikely, the
carrying value should be considered as impaired as detailed below.
Royalty assets
Following disposals reflected in the financial statements for 2022, the Group
had no remaining royalty interests at 30 September 2023, but does have
agreements in place which may possibly give rise to royalties in future.
Impairment
Impairment reviews for deferred exploration and evaluation costs are carried
out on a project by project basis, with each project representing a potential
single cash generating unit. The directors are required to continually monitor
and review the carrying values by reference to new developments, stages in the
exploration process and new circumstances. Assessment of the potential
impairment of assets requires an updated judgement of the probability of
adequate future cash flows from the relevant project. It includes
consideration of:
(a) The period for which the entity has the right to
explore in the specific area and whether this right will expire in the near
future, and whether the right is expected to be renewed.
(b) Whether substantive expenditure on further exploration
for and evaluation of mineral resources for the specific project is either
budgeted or planned.
(c) Whether exploration for and evaluation of mineral
resources on the specific project has led to the discovery of commercially
viable quantities of mineral resources and whether the entity has decided to
discontinue such activities on the project.
(d) Whether sufficient data exist to indicate that,
although a development on the specific project is likely to proceed, the
carrying amount of the exploration and evaluation asset is likely to be
recovered in full from successful development of a mine or by the sale of the
project.
The judgements in respect of key projects are;
Whilst the Lucky Project is still retained, the project costs were fully
impaired in the amount of £71,066 as exploration has not been sufficiently
positive so far.
Whilst no work was carried out at the Paymaster, Mt Tobin or Brunton Pass
projects in Nevada during the financial year, the Company's rights to explore
these projects have been maintained through claim payments and further
exploration is planned to follow up on previous exploration results.
In Zambia, the Lubuila Project costs were fully impaired in the amount of
£40,624, with the surrender of the Company's option to acquire an interest in
the Lubuila licence following negative exploration results.
Following successful exploration programmes on four further licences in
Zambia, namely Konkola West, Mukai, Mushima North and Jacks Project, further
exploration is planned for 2024.
The Mupala Project licence was awarded to the Company during the reporting
period and the Company is awaiting the grant of the Environmental Project
Brief to commence exploration programmes on this Project.
Based upon these developments in the reporting period and in their confidence
regarding the likely outcome of exploration, the Directors have concluded that
the carrying value of these projects is not impaired.
Going concern
The preparation of financial statements requires an assessment of the validity
of the going concern assumption. This in turn is dependent on finance being
available for the continuing working capital requirements of the Group. Based
on the assumption that such finance will become available, the directors
believe that the going concern basis is appropriate for these accounts.
(o) Reclamation costs
The Group's mining and exploration activities are subject to various
governmental laws and regulations relating to the protection of the
environment. The Group records a liability for the estimated future
rehabilitation costs and decommissioning of its development projects at the
time a constructive obligation is determined.
When provisions for closure and environmental rehabilitation are initially
recognised, the corresponding cost is capitalised as an intangible asset,
representing part of the cost of acquiring the future economic benefits of the
operation. The capitalised cost of closure and environmental rehabilitation
activities is recognised in mining interests and, from the commencement of
commercial production is amortised over the expected useful life of the
operation to which it relates. Any change in the value of the estimated
expenditure is reflected in an adjustment to the provision and asset.
(p) Investments in subsidiaries
Investments, including long-term loans, in subsidiaries are valued at the
lower of cost or recoverable amount, with an ongoing review for impairment.
(q) Standards, amendments and interpretations not yet
effective
At the date of authorisation of these financial statements, there are no
amended reporting standards and interpretations that impact the Group as they
are either not relevant to the Group's activities or require accounting which
is consistent with the current accounting policies.
2. Segmental analysis
The Chief Operating Decision Maker is the Board. The Board considers the
business has one reporting segment, the management of exploration projects,
which is supported by a Head Office function. For the purpose of measuring
segmental profits and losses the exploration segment bears only those direct
costs incurred by or on behalf of those projects. No Head Office cost
allocations are made to this segment. The Head Office function recognises all
other costs.
2. Segmental analysis (continued)
2023 Exploration Head Total
projects office £
£ £
Consolidated Income Statement
Revenue 15,000 166,429 181,429
Pre-licence exploration costs (39,792) - (39,792)
Impairment of deferred exploration asset (111,691) - (111,691)
Share-based payments - (17,784) (17,784)
Administration costs and other expenses - (554,820) (554,820)
Operating Loss (136,483) (406,175) (542,658)
Bank interest received - 1,317 1,317
Loss before tax (136,483) (404,858) (541,341)
Taxation - - -
Loss for the year attributable to equity holders (136,483) (404,858) (541,341)
Consolidated Statement of Financial Position
Non-current assets
Intangible assets:
Deferred exploration costs:
Paymaster, USA 60,683 - 60,683
Brunton Pass, USA 121,559 - 121,559
Mt Tobin, USA 33,530 - 33,530
Jacks, Zambia 260,218 - 260,218
Konkola West, Zambia 40,108 - 40,108
Mushima North, Zambia 52,626 - 52,626
Mukai, Zambia 44,419 - 44,419
Mupala, Zambia 7,339 - 7,339
620,481 - 620,481
Property, plant & equipment - 3,234 3,234
Other investments - 16,466 16,466
620,481 19,700 640,181
Current assets
Receivables 41,259 73,173 114,432
Cash and cash equivalents - 121,813 121,813
41,259 194,986 236,245
Current liabilities
Trade and other payables (3,979) (65,857) (69,835)
Net current assets 37,280 129,129 166,410
Provision for liabilities and charges
Reclamation liability (11,496) - (11,496)
Net assets 646,265 148,829 795,095
Other data
Deferred exploration additions 236,808 - 236,808
Exchange rate adjustments to deferred exploration costs (47,543) - (47,543)
Exchange rate adjustments to royalty assets - - -
2. Segmental analysis (continued)
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)
Consolidated Statement of Financial Position
Non-current assets
Intangible assets:
Deferred exploration costs:
Paymaster, USA 65,143 - 65,143
Brunton Pass, USA 116,290 - 116,290
Mt Tobin, USA 35,091 - 35,091
Lucky, USA 75,377 - 75,377
Jacks, Zambia 231,050 - 231,050
Konkola West, Zambia 2,489 - 2,489
Mushima North, Zambia 6,458 - 6,458
Lubuila, Zambia 8,624 - 8,624
Mukai, Zambia 2,385 - 2,385
542,907 - 542,907
Property, plant & equipment - 2,398 2,398
Other investments - 24,150 24,150
542,907 26,548 569,455
Current assets
Receivables 201,779 70,888 272,667
Cash and cash equivalents - 59,414 59,414
201,779 130,302 332,081
Current liabilities
Trade and other payables (20,966) (59,963) (80,929)
Net current assets 180,813 70,339 251,152
Provision for liabilities and charges
Reclamation liability (15,158) - (15,158)
Net assets 708,562 96,887 805,449
Other data
Deferred exploration additions 565,233 - 565,233
Exchange rate adjustments to deferred exploration costs 82,776 - 82,776
Exchange rate adjustments to royalty assets 668 - 668
3. Loss before income tax
2023 2022
£ £
The operating loss is stated after charging 111,691 699,484
Impairment of intangible assets - deferred exploration expenditure
Costs relating to leases expiring within 12 months 21,900 21,263
Depreciation - owned assets 1,793 1,661
Fees payable to the Group's Auditor for:
The audit of the Group's annual accounts 14,150 8,885
The audit of the Group's subsidiaries, pursuant to legislation 6,174 5,923
Fees payable to the Group's Auditor and its associates for other services:
Interim review of accounts 1,950 1,200
Corporation tax compliance fees 3,991 1,770
4. Directors' emoluments
Remuneration in respect of directors was as follows:
Total cost Recharged to Net cost Total before
2023 Sunrise Resources plc 2023 recharges
£ 2023 £ 2022
£ £
P L Cheetham (salary) 129,928 (59,407) 70,521 122,995
P B Cullen (salary) - - - 72,322
M G Armitage (salary) 20,188 - 20,188 19,110
D A R McAlister (salary) 20,187 - 20,187 19,110
170,303 (59,407) 110,896 233,537
The above remuneration amounts do not include non-cash share-based payments
charged in these financial statements in respect of share warrants issued to
the directors amounting to £1,954 (2022: £5,984) or Employer's National
Insurance contributions of £19,778 (2022: £27,702).
No bonuses were awarded for the year 2023.
Pension contributions made during the year on behalf of Directors amounted to
£Nil (2022: £Nil).
The directors are also the key management personnel. If all benefits are
taken into account, the total key management personnel compensation would be
£172,257 (2022: £239,521).
As set out in Note 17, relevant staff costs are recharged to a related
undertaking, Sunrise Resources plc. Taking account of all benefits in kind,
the key management personnel net compensation cost to the Group was £113,376
(2022: £163,442).
5. Staff costs
Total staff costs for the Group and Company, including directors, were as
follows:
Total staff Staff costs Net cost Total before
costs recharged to 2023 recharges
to Group Sunrise Resources plc £ 2022
2023 2023 £
£ £
Wages and salaries 318,476 (115,400) 203,076 360,098
Social security costs 33,766 (14,758) 19,008 39,216
Share-based payments 2,480 - 2,480 5,984
354,722 (130,158) 224,564 405,298
As set out in Note 17, relevant staff costs are recharged to a related
undertaking, Sunrise Resources plc.
The average monthly number of part-time and full-time employees, including
directors, employed by the Group and Company during the year was as follows:
2023 2022
Number Number
Technical employees 2 3
Administration employees (including non-executive directors) 5 5
7 8
6. Loss per share
Loss per share has been calculated using the loss for the year attributable to
equity holders of the parent and the weighted average number of ordinary
shares in issue during the year.
2023 2022
Loss (£) (541,341) (1,175,817)
Weighted average ordinary shares in issue (No.) 1,791,815,969 1,428,608,504
Basic and diluted loss per ordinary share (pence) (0.03) (0.08)
The loss attributable to ordinary shareholders and weighted average number of
ordinary shares for the purpose of calculating the diluted earnings per
ordinary share are identical to those used for the basic earnings per ordinary
share. This is because the exercise of share warrants and options would have
the effect of reducing the loss per ordinary share and is therefore
anti-dilutive.
7. Taxation
No liability to corporation tax arises for the year due to the Group recording
a taxable loss (2022: £Nil).
2023 2022
£ £
Tax reconciliation
Loss before income tax (541,341) (1,175,817)
Tax at 19% (2022: 19%) (102,855) (223,405)
Fixed asset timing differences (1,268) 1,028
Expenditure not deductible for tax purposes 17,784 31,510
Pre-trading expenditure not deductible for tax purposes 43,167 32,799
Unrelieved tax losses carried forward 43,171 158,068
Tax charge/credit for year - -
Total losses carried forward for tax purposes (12,975,482) (12,493,824)
Factors that may affect future tax charges
The Group has total losses carried forward of £12,975,482 (2022:
£12,493,824). 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 2023 exploration assets 2022
expenditure 2023 £ expenditure 2022 £
2023 £ 2022 £
£ £
Cost 6,862,680 - 6,862,680 6,218,473 357,829 6,576,302
At start of year
Additions 236,808 - 236,808 565,233 - 565,233
Reclamation cost - - - (3,802) - (3,802)
Exchange adjustments (47,543) - (47,543) 82,776 668 83,444
Transfer to assets held for sale - - - - (358,497) (358,497)
At 30 September 7,051,945 - 7,051,945 6,862,680 - 6,862,680
Impairment (6,319,773) - (6,319,773) (5,822,192) - (5,822,192)
At start of year
Impairment losses during year (111,691) - (111,691) (497,581) (201,903) (699,484)
Transfer to assets held for sale - - - - 201,903 201,903
At 30 September (6,431,464) - (6,431,464) (6,319,773) - (6,319,773)
Net book value
At 30 September 620,481 - 620,481 542,907 - 542,907
At start of year 542,907 - 542,907 396,281 357,829 754,110
Details of the impairment assessments relating to intangible assets, including
the specific reasons for the impairments in the year, key judgements and
assumptions are given in Note 1(n).
9. Property, plant & equipment
Group Company Group Company
fixtures fixtures fixtures fixtures
and fittings and fittings and fittings and fittings
2023 2023 2022 2022
£ £ £ £
Cost 51,571 36,813 51,465 36,707
At start of year
Additions 2,630 2,630 107 107
At 30 September 54,201 39,443 51,572 36,814
Depreciation (49,174) (34,416) (47,513) (32,755)
At start of year
Charge for the year (1,793) (1,793) (1,661) (1,661)
At 30 September (50,967) (36,209) (49,174) (34,416)
Net Book Value
At 30 September 3,234 3,234 2,398 2,398
At start of year 2,398 2,398 3,952 3,952
10. Investments
Subsidiary undertakings
Company Country of Type and percentage Principal activity
incorporation/ of shares held at
registration 30 September 2023
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.
The registered office of Tertiary Minerals (Zambia) Limited is 491/492
Akapelwa Street/Town Area, Livingstone Southern Province, Zambia.
Tertiary Minerals (Zambia) Limited
96% of the equity of Tertiary Minerals (Zambia) Limited is owned by Tertiary
Minerals plc and the 4% non-controlling interest is not material. Deferred
exploration assets held by the subsidiary are £445,334. The subsidiary is
fully financed by the parent company via intercompany loan and capital
contribution, the loan amounted to £305,071, loan interest of £13,589 and
capital contribution amounted to £190,367. The net assets amount to £123,027
and the loss for the year was £37,694.
Investment in subsidiary undertakings Company Company
2023 2022
£ £
Value at start of year 681,526 839,108
Additions 136,540 584,617
Movement in provision (156,594) (742,199)
At 30 September 661,472 681,526
Investments in share capital of subsidiary undertakings
The directors have reviewed the carrying value of the Company's investments in
shares of subsidiary undertakings totalling £860, by reference to estimated
recoverable amounts. In turn, this requires an assessment of the
recoverability of underlying exploration assets in those subsidiaries in
accordance with IFRS 6.
Loans to Group undertakings
Amounts owed by subsidiary undertakings are unsecured and repayable in cash.
Loan interest is charged to US and Zambia subsidiaries on intercompany loans
with Parent Company.
A review of the recoverability of loans to subsidiary undertakings has been
carried out. The review indicated potential credit losses arising in the year
which have been provided for as follows: Tertiary Gold Limited provision of
£156,594. 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 2023
Sunrise Resources plc England & Wales 0.54% of ordinary shares Mineral exploration
Group and Company
Investment designated at fair value through OCI Group Company Group Company
2023 2023 2022 2022
£ £ £ £
Value at start of year 24,150 24,150 50,496 50,496
Additions - - - -
Disposal - - - -
Movement in valuation (7,684) (7,684) (26,346) (26,346)
At 30 September 16,466 16,466 24,150 24,150
The fair value of each investment is equal to the market value of its shares
at 30 September 2023, based on the closing mid-market price of shares on its
equity exchange market.
These are level one inputs for the purpose of the IFRS 13 fair value
hierarchy.
11. Receivables
Group Company Group Company
2023 2023 2022 2022
£ £ £ £
Amounts owed by related undertakings 50,753 50,753 46,232 46,232
Other receivables 40,907 1,275 46,133 1,727
Royalty assets held for sale - - 156,594 -
Prepayments 22,772 18,372 23,708 16,826
At 30 September 114,432 70,400 272,667 64,785
The Group aged analysis of amounts owed by related undertakings (all relating
to a single debtor) is as follows:
Not impaired 30 days Over 30 Total
£ or less days carrying
£ £ amount
£
2023 50,753 50,753 - 50,753
2022 46,232 46,232 - 46,232
12. Cash and cash equivalents
Group Company Group Company
2023 2023 2022 2022
£ £ £ £
Cash at bank and in hand 57,545 35,947 31,995 20,746
Short-term bank deposits 64,268 64,268 27,419 27,419
At 30 September 121,813 100,215 59,414 48,165
13. Trade and other payables
Group Company Group Company
2023 2023 2022 2022
£ £ £ £
Trade payables 16,829 17,812 12,149 11,503
Other taxes and social security costs 12,536 12,536 10,453 10,453
Accruals 40,191 23,988 57,491 22,284
Other payables 279 279 836 836
At 30 September 69,835 54,615 80,929 45,076
14. Share capital and reserves
2023 2023 2022 2022
No. £ No. £
Ordinary shares - Allotted, called up and fully paid
Balance at start of year 1,536,263,621 153,626 1,183,322,445 118,332
Shares issued in the year 444,821,428 44,482 352,941,176 35,294
Balance at 30 September 1,981,085,049 198,108 1,536,263,621 153,626
Share issues
During the year to 30 September 2023 the following share issues took place:
250,000,000 0.01p Ordinary Shares at 0.12p per share, by way of a share
placing, for a total consideration of £300,000 before expenses (3 February
2023).
16,250,000 0.1p Ordinary Shares at 0.12p per share, as settlement of broker
commission fees, for a total consideration of £19,500 before expenses (3
February 2023).
178,571,428 0.01p Ordinary Shares at 0.14p per share, by way of a share
placing, for a total consideration of £250,000 before expenses (13 April
2023).
During the year to 30 September 2022 a total of 352,941,176 0.01p ordinary
shares were issued, at an average price of 0.16p, for a total consideration of
£570,000 net of expenses.
The total amount of transaction fees debited to the Share Premium account in
the year was £27,500 (2022: £30,000).
Nature and purpose of reserves
Capital redemption reserve
Non distributable reserve into which amounts are transferred following the
redemption or the purchase of a company's own shares. The provisions relating
to the capital redemption reserve are set out in section 733 of the Companies
Act 2006.
Foreign currency reserve
Exchange differences relating to the translation of the net assets of the
Group's foreign operations, which relate to subsidiaries only, from their
functional currency into the Parent Company's functional currency, being
Sterling, are recognised directly in the foreign currency reserve.
Share option reserve
The share option reserve is used to recognise the fair value of share-based
payments provided to third parties and employees, including key management
personnel, by means of share options and share warrants issued as part of
their remuneration. Refer to Note 15 for further details.
Fair value reserve
Fair value reserve represents the cumulative fair value changes of
available-for-sale equity investment assets.
15. Warrants granted
Warrants not exercised at 30 September 2023
Issue date Exercise Number Exercisable Expiry
price dates
21/02/2019 0.50p 3,500,000 Any time from 21/02/2020 21/02/2024
21/02/2019 0.35p 5,000,000 Any time from 21/02/2020 21/02/2024
27/02/2020 0.34p 8,100,000 Any time from 27/02/2021 27/02/2025
19/11/2020 0.34p 22,000,000 Any time from 19/11/2019 19/11/2023
28/06/2021 0.34p 3,100,000 Any time from 28/06/2022 28/06/2026
28/06/2021 0.50p 3,000,000 Any time from 28/06/2022 28/06/2026
28/06/2021 1.00p 3,000,000 Any time from 28/06/2023 28/06/2026
28/06/2021 1.50p 3,000,000 Any time from 28/06/2024 28/06/2026
02/02/2023 0.24p 133,125,000 Any time before expiry 08/02/2024
02/02/2023 0.12p 12,500,000 Any time before expiry 08/02/2024
16/02/2023 0.123p 10,000,000 Any time from 16/02/2024 16/02/2028
13/04/2023 0.28p 89,285,714 Any time before expiry 13/04/2024
13/04/2023 0.14p 8,928,571 Any time before expiry 13/04/2024
Total 304,539,285
Warrants are issued for nil consideration and are exercisable as disclosed
above. They are exchangeable on a one for one basis for each ordinary share at
the exercise price on the date of conversion.
A grant of 133,125,000 warrants at an exercise price of 0.24p, as part of a
share placing (3 February 2023).
A grant of 12,500,000 warrants at an exercise price of 0.12p, as part of a
share placing, to Peterhouse Capital Limited (3 February 2023).
A grant of 10,000,000 warrants at an exercise price of 0.123p, to employees
and directors of the Company (16 February 2023).
A grant of 89,285,714 warrants at an exercise price of 0.28p, as part of a
share placing (13 April 2023).
A grant of 8,928,571 warrants at an exercise price of 0.14p, as part of a
share placing, to Peterhouse Capital Limited (13 April 2023).
Share-based payments
The Company issues warrants to directors and employees on varying terms and
conditions.
Details of the share warrants outstanding during the year are as follows:
2023 2022
Number of Weighted Number of Weighted
share average share average
warrants exercise warrants exercise
and share price and share price
options Pence options Pence
Outstanding at start of year 245,817,646 0.36 61,353,846 0.47
Granted during the year 253,839,285 0.244 194,117,646 0.325
Exercised during the year - - - -
Forfeited during the year - - - -
Expired during the year (195,117,646) 0.33 (9,653,846) 0.339
Outstanding at 30 September 304,539,285 0.28 245,817,646 0.36
Exercisable at 30 September 195,325,000 0.27 245,817,646 0.36
The warrants outstanding at 30 September 2023 had a weighted average exercise
price of 0.26p (2022: 0.36p), a weighted average fair value of 0.02p (2022:
0.03p) and a weighted average remaining contractual life of 0.66 years (2022:
1.02 years).
In the year ended 30 September 2023, warrants were granted on 3 February 2023,
16 February 2023 and 13 April 2023. The aggregate of the estimated fair values
of the warrants granted on these dates is £21,953. In the year ended 30
September 2022, warrants were granted on 19 January 2022 and 21 January 2022.
The aggregate of the estimated fair values of the warrants granted on these
dates is £27,632.
The inputs into the Black-Scholes-Merton Pricing Model were for warrants
granted in the year and are as follows:
2023 2022
Weighted average share price 0.14p 0.17p
Weighted average exercise price 0.223p 0.325p
Expected volatility 70.0% 70.0%
Expected life 1.19 years 1.45 years
Risk-free rate 0.34% 0.76%
Expected dividend yield 0% 0%
Expected volatility was determined by calculating the historical volatility of
the Company's share price over the previous three years. The expected life
used in the model has been adjusted based on management's best estimate for
the effects of non-transferability, exercise restrictions and behavioural
considerations.
The Company recognised total expenses of £17,784 and £31,387 related to
equity-settled share-based payment transactions in 2023 and 2022 respectively.
The fair value is charged to administrative expenses and where there is a
vesting period it is charged on a straight-line basis over the vesting period,
together with a corresponding increase in equity, based on the management's
estimate of shares that will eventually vest.
16. Leases
The Company rents office premises under a short-term, low value lease
agreement.
Future minimum lease payments are:
2023 2022
Land & buildings Land & buildings
£ £
Office accommodation:
Within one year 17,100 16,200
Lease payments recognised in loss for the period amounted to £23,638 (2022:
£21,263).
17. Related party transactions
Key management personnel
The directors holding office in the period and their warrants held in the
share capital of the Company are:
At 30 September 2023 At 30 September 2022
Shares Share Warrants Warrants Shares Share
number warrants exercise expiry number warrants
number price date number
P L Cheetham* 21,465,000 2,000,000 0.500p 21/02/2024 21,465,000 17,411,765
2,000,000 0.340p 27/02/2025
3,000,000 0.500p 28/06/2026
3,000,000 1.000p 28/06/2026
3,000,000 1.500p 28/06/2026
2,000,000 0.123p 16/02/2028
D A R McAlister 2,937,609 1,500,000 0.500p 21/02/2024 2,937,609 4,500,000
1,500,000 0.340p 27/02/2025
1,500,000 0.340p 28/06/2026
2,000,000 0.123p 16/02/2028
Dr M G Armitage 8,823,529 2,000,000 0.123p 16/02/2028 8,823,529 4,411,765
* Includes 2,843,625 shares held by K E Cheetham, wife of P L Cheetham.
The directors have no beneficial interests in the shares of the Company's
subsidiary undertakings as at 30 September 2023.
Details of the Parent Company's investment in subsidiary undertakings are
shown in Note 10.
Sunrise Resources plc
Sunrise Resources plc is considered to be a related party because P L Cheetham
is a director and Executive Chairman of both companies.
During the year the Company charged costs of £166,429 (2022: £171,052) to
Sunrise Resources plc being shared overheads of £35,142 (2022: £24,766),
costs paid on behalf of Sunrise Resources plc of £1,129 (2022: £233), staff
salary costs of £63,120 (2022: £60,253) and directors' salary costs of
£67,038 (2022: £86,266), comprising P L Cheetham £67,038 (2022: £86,266).
At the reporting date, Note 11 includes amounts receivable of £50,753 (2022:
£46,232) owed by Sunrise Resources plc.
Shares and warrants held in Sunrise Resources plc by the Company's directors
are as follows:
At 30 September 2023 At 30 September 2022
Shares Share Warrants Warrants Shares Share
number warrants exercise expiry number warrants
number price date number
P L Cheetham* 255,785,016 15,000,000 0.195p 05/08/2025 247,532,996 30,000,000
15,000,000 0.195p 05/08/2025
25,000,000 0.150p 24/03/2028
D A R McAlister 550,000 - - - 550,000 -
* Includes 5,500,000 shares held by K E Cheetham, wife of P L Cheetham.
Tertiary Minerals (Zambia) Limited (formerly Luangwa Minerals Limited)
Tertiary Minerals (Zambia) Limited is a 96% controlled subsidiary of Tertiary
Minerals plc, incorporated on 28 June 2021. Tertiary Minerals (Zambia) Limited
is fully financed by Tertiary Minerals plc via intercompany loan and capital
contribution, the loan amounted to £305,071, loan interest £13,589 and
capital contribution amounted to £190,367. D A R McAlister, a director of
Tertiary Minerals plc, is also the director of Tertiary Minerals (Zambia)
Limited.
18. Capital management
The Group's capital requirements are dictated by its project and overhead
funding requirements from time to time. Capital requirements are reviewed by
the Board on a regular basis.
The Group manages its capital to ensure that entities within the Group will be
able to continue as going concerns, to increase the value of the assets of the
business and to provide an adequate return to shareholders in the future when
exploration assets are taken into production.
The Group manages the capital structure and makes adjustments to it in the
light of changes in economic conditions and the risk characteristics of its
assets. In order to maintain or adjust the capital structure the possibilities
open to the Group in future include issuing new shares, consolidating shares,
returning capital to shareholders, taking on debt, selling assets and
adjusting the amount of dividends paid to the shareholders.
19. Financial instruments
At 30 September 2023, the Group's and the Company's financial assets consisted
of listed investments, trade receivables and cash and cash equivalents. At
the same date, the Group and the Company had financial liabilities of trade
and other payables due within one year. There is no material difference
between the carrying and fair values of the Group and the Company's financial
assets and liabilities.
The carrying amounts for each category of financial instruments held at 30
September 2023, as defined in IFRS 9, are as follows:
Group Company Group Company
2023 2023 2022 2022
£ £ £ £
Financial assets at amortised cost 213,474 152,243 308,373 96,124
Financial assets at fair value through other comprehensive income 16,466 16,466 24,150 24,150
Financial liabilities at amortised cost 68,796 42,080 86,470 34,623
Risk management
The principal risks faced by the Group and the Company resulting from
financial instruments are liquidity risk, foreign currency risk and, to a
lesser extent, interest rate risk and credit risk. The directors review and
agree policies for managing each of these risks as summarised below. The
policies have remained unchanged from previous periods as these risks remain
unchanged.
Liquidity risk
The Group holds cash balances in Sterling, US Dollars and other currencies to
provide funding for exploration and evaluation activity. The Group and the
Company are dependent on equity fundraising through share placings which the
directors regard as the most cost-effective method of fundraising. The
directors monitor cash flow in the context of their expectations for the
business to ensure sufficient liquidity is available to meet foreseeable
needs.
Currency risk
The Group's financial risk management objective is broadly to seek to make
neither profit nor loss from exposure to currency risk. The Group is exposed
to transactional foreign exchange risk and takes profits and losses as they
arise as, in the opinion of the directors, the cost of hedging against
fluctuations would be greater than the related benefit from doing so.
Bank and cash balances were held in the following denominations:
Group Company
2023 2022 2023 2022
£ £ £ £
United Kingdom Sterling 97,495 45,044 80,968 42,291
United States Dollar 22,957 12,729 18,722 5,410
Other 1,361 1,641 525 464
121,813 59,414 100,215 48,165
Surplus Sterling funds are placed with NatWest bank on short-term treasury
deposits at variable rates of interest.
The Company and the Group are exposed to changes in exchange rates mainly in
the Sterling value of US Dollar denominated financial assets.
Sensitivity analysis shows that the Sterling value of its US Dollar
denominated financial assets at 30 September 2023 would increase or decrease
by £1,148 for each 5% increase or decrease in the value of Sterling against
the Dollar.
Neither the Company nor the Group is exposed to material transactional
currency risk.
Interest rate risk
The Group and the Company finance their operations through equity fundraising
and therefore do not carry borrowings.
Fluctuating interest rates have the potential to affect the loss and equity of
the Group and the Company insofar as they affect the interest paid on
financial instruments held for the benefit of the Group. The directors do not
consider the effects to be material to the reported loss or equity of the
Group or the Company presented in the financial statements.
Credit risk
The Company has exposure to credit risk through receivables such as VAT
refunds, invoices issued to related parties and its joint arrangements for
management charges. The amounts outstanding from time to time are not material
other than for VAT refunds which are considered by the directors to be low
risk.
The Company has exposure to credit risk in respect of its cash deposits with
NatWest bank and this exposure is considered by the directors to be low.
20. Provisions for liabilities
Group 2023 2022
£ £
Reclamation provision 15,158 15,994
At start of year
Additions - 7,041
Reduction/reversal (2,492) (10,843)
Exchange adjustments (1,170) 2,966
At 30 September 11,496 15,158
The Group makes provision for future reclamation costs relating to exploration
projects. Provisions are calculated based upon internal estimates and expected
costs based upon past experience and expert guidance where appropriate. The
timing of the required reclamation and associated cash outflows is uncertain,
depending upon progress with exploration projects. In some jurisdictions bonds
are payable to the authorities and are carried with other receivables.
21. Post balance sheet events
On 1 November 2023, the Company raised £150,000, before expenses by a placing
of Ordinary Shares through the Company's Joint Broker, Peterhouse Capital
Limited.
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