REG - Tertiary Minerals - Audited Results for Year Ended 30 September 2024
28/01/2025 07:00
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RNS Number : 8653U Tertiary Minerals PLC 28 January 2025
("Tertiary" or "the Company")
28 January 2025
Audited Results for the year to 30 September 2024
Tertiary Minerals plc is pleased to announce its Chairman's Statement and
audited results for the year ended 30 September 2024.
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
Jen Clarke
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,
I am pleased to present your annual report for 2024 which covers a very active
reporting period as well as our post year-end activities.
Our focus is on exploration for copper in Zambia and for copper and gold in
Nevada, USA, both favourable mining jurisdictions that have a long history of
production for our target metals.
Calendar 2024 was very much a year of two halves. In the first part of the
year corporate activities dominated, as we rationalised our interests in
Zambia with our local partner Mwashia Resources Limited ("Mwashia"),
completing various joint venture negotiations and made preparations for
drilling in Zambia and Nevada. In the second half, following a successful
fundraising, multiple drill programmes were completed. Full details are given
in the Operating Review for 2024.
Zambia
An early development was the signing of an earn-in and joint venture agreement
with KoBold Metals ("KoBold") and our local partner Mwashia on the Konkola
West Copper Project where we are seeking the deep down-dip extensions to the
famous high-grade copper ore shale that, on adjoining mining leases, supports
the major Konkola and Lubambe copper mines. KoBold has already committed
substantial financial and technical resources to this exciting project and
drilling is in progress at the first of two planned drill sites.
In February 2024, we reached an agreement with Mwashia to restructure our
option/earn-in agreements over the Mukai, Mushima North and Jacks copper
projects in Zambia. This resulted in those projects being transferred to a new
company, Copernicus Minerals Limited ("Copernicus"), where our 96% owned
Zambian subsidiary, Tertiary Minerals (Zambia) Limited, is now a 90%
shareholder. This simplifies our corporate structure in Zambia and we thank
Mwashia for its efforts in bringing about this agreement.
Then, in August 2024, Copernicus signed an agreement with First Quantum
Minerals Limited ("FQM") over the Mukai Project which is strategically located
adjacent to the mining leases that cover FQM's 60 million tonnes per year
Sentinel Copper Mine and its recently opened Enterprise Nickel Mine. Under
this agreement FQM can earn up to an 80% interest in the project by proving up
and committing to mine a Mineral Resource containing at least 80,000 tonnes of
copper. FQM must continue sole funding of the project until receipt of
regulatory and governmental permits for the commencement of construction of a
mining project. FQM is also obliged to pay Copernicus up to $2,000,000 in
staged payments should it proceed that far. FQM is strongly motivated to
find additional ore feed for its Sentinel Copper Mine and, at Mukai, FQM has
wasted no time in starting exploration with an initial scout drilling
programme completed at the end of the last dry season to test beneath the
large soil anomaly defined by Tertiary in 2023 which is contiguous with FQM's
Tirosa Copper Prospect on the adjoining mining licence. Results are awaited.
In October 2024, at Mushima North, our first drill programme delivered
exciting results and demonstrated that the large copper-in-soil anomaly at
Target A1 is rooted in thick intervals of copper and zinc mineralisation over
a wide area. Many of the holes ended in mineralisation and the last hole in
the programme hit the highest grades achieved so far and which are similar to
those being mined elsewhere in northwest Zambia. Just recently, laboratory
assays have revealed that this mineralisation is associated with thick
intervals of silver mineralisation at potentially economic grades. So far we
have only scratched the surface at Mushima North and planning is now underway
for follow up drilling in the 2025 field season.
Elsewhere in Zambia, we completed smaller, earlier stage, programmes at our
Mupala and Jacks Copper Projects. Soil sampling at Mupala delineated a
copper-in-soil anomaly which extends up to the project's boundary with Arc
Minerals' Zambian Copper-Cobalt Project where Anglo American is spending
US$88.5 million to earn a 70% interest. At the Jacks Copper Project a
successful pitting programme has paved the way for a drilling programme in
2025.
Nevada
At our Brunton Pass project in Nevada, USA we completed a drilling programme
in late 2024 to test copper and gold targets defined by exploration over a
multi-year period. Four holes were drilled and analytical results are expected
before the end of February 2025.
Sweden, Storuman Fluorspar Project
At the Storuman Fluorspar Project in Sweden, after being directed by the
Swedish Government to reconsider its decision not to grant the exploitation
concession, the Mining Inspectorate reaffirmed its prior negative decision.
This new decision has been appealed once again to the Swedish Government and
the saga continues.
Annual General Meeting
Our next Annual General Meeting will be held in London on Thursday 6 March
2025 where Dr. Mike Armitage will be retiring and standing for re-election.
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 being passed the
Company cannot issue new shares while the passing of the second resolution
allows the Company to issue shares for cash other than by, for example, rights
issues. Rights issues are prohibitively expensive for small companies and
these resolutions will enable the directors to issue new shares to raise funds
as and when necessary, up to the limit specified.
I urge all shareholders to support and approve these resolutions as, until
such time as the Company is self-funding, the Company needs to be able to
issue new shares to raise funds to continue with its exploration programmes,
the success of which will generate shareholder returns, and to continue as a
going concern.
Outlook
In 2024, we saw a level of drilling activity unparalleled in the Company's
history and on a par with many much larger companies. Looking forward to 2025,
between our own programmes, and those of our joint venture partners, we
anticipate a continuing high level of activity in both Zambia and Nevada with
drilling already planned on a number of projects and with further joint
venture interest being shown in our 100% controlled projects.
I am grateful to all our partners, our staff in the UK and people on the
ground in Zambia. Their hard work has positioned the Company for growth and we
look forward to an exciting 2025.
Sincerely,
Patrick Cheetham
Executive Chairman
27 January 2025
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.
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. and in Sweden though a Swedish branch of UK registered subsidiary
Tertiary Gold Limited. In Zambia, the Group has two Zambian registered
companies, 96% owned Tertiary Minerals (Zambia) Limited and its 90% owned
subsidiary company, Copernicus Minerals Limited. A further 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 fix 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
Tertiary's head office overheads and staff costs. As at 30 September 2024,
Tertiary holds 0.44% 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 Services Agreement with Sunrise Resources plc ("Sunrise"),
payments from joint project arrangements 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 £550,934 for the year (2023: £541,341). This
included administration costs of £670,118 (2023: £572,604) and expensed
pre-licence and reconnaissance exploration costs of £43,691 (2023: £39,792).
Administration costs include a charge of £28,350 (2023: £17,784) relating to
share warrants held by employees and third parties as required by IFRS 2.
Revenue included £147,718 (2023: £166,429) for the provision of management,
administration and office services provided to Sunrise, to the benefit of both
companies through efficient utilisation of services. The Company also received
income of £14,940 from project arrangements.
The financial statements show that, as at 30 September 2024, the Group had net
current assets of £725,482 (2023: £166,410). 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.
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 the value
creation of a company involved in mineral exploration and which currently has
no turnover other than cost recovery and non-repeating project income. 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 set
out in the Strategic Report.
The Company seeks to reduce overhead costs, where practicable, but is
reporting higher administration costs this financial year of £670,118 (2023:
£572,604) in part due to an increase in audit and nominated adviser fees,
increases in staff costs and the inclusion of share-based payments associated
with the issue of share warrants during the year.
Fundraising
During the year to 30 September 2024, the Company raised a total of
£1,405,000 before expenses.
These funds were raised through three share placings on:
· 1 November 2023
· 12 February 2024, and
· 28 August 2024
to clients of 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 (£775,747), these projections include the
proceeds of future fundraising which will be required within the next 12
months to meet overheads and planned discretionary project expenditure.
Fundraisings in the future will be 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 review is carried out twice each year by the directors to assess whether
there are any indications of impairment of the Group's assets.
Group
The judgements in respect of each project have led the Board to conclude that
no projects were impaired in the reporting period.
Company
Investments in share capital of subsidiary undertakings
The directors have reviewed the carrying value of the Company's investments in
shares of subsidiary undertakings totalling £225,695, 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. No impairment was judged to be necessary.
Loans to Group undertakings
Amounts owed by subsidiary undertakings are unsecured and repayable in cash.
Loan interest is charged to US and Zambian 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 Tertiary (Middle East) Limited and an
additional provision of £7,449 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.
Copernicus Minerals Limited
Copernicus Minerals Limited is a 90% owned subsidiary of Tertiary Minerals
(Zambia) Limited which is fully financed by the Group Parent Company via
capital contributions.
Operating Review
Tertiary Minerals plc (the "Company") 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") and through Copernicus
Minerals Limited ("Copernicus"), a 90% TMZ owned joint venture entity which
was formed in 2024 with its Zambian partner Mwashia Resources Limited
("Mwashia") holding a 10% carried interest.
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 a Swedish branch of its wholly owned UK subsidiary, Tertiary Gold
Limited.
Zambia
In 2024, the Company signed a new joint venture agreement with Mwashia that
consolidated ownership of the Jacks Copper Project, the Mukai Copper Project
and the Mushima North Copper Project into a new Zambian company named
Copernicus Minerals Limited ("Copernicus"). Copernicus is 90% owned by
Tertiary's 96% owned subsidiary, TMZ, and 10% by Mwashia.
The Company also holds a 90% entitlement, via TMZ, to the Konkola West Copper
Project, which is currently held by Mwashia, and a 100% interest in the Mupala
Copper Project.
In 2024, the Company performed a ground magnetic survey and a Phase 1 combined
air core ("AC") and reverse circulation ("RC") drilling programme at Mushima
North. Through an agreement with First Quantum Minerals Limited ("FQM") and
KoBold Metals Limited ("KoBold"), diamond drilling has been conducted at Mukai
and Konkola West, respectively. At Jacks, a pitting programme was performed on
soil geochemical anomalies to inform drill targeting, and at Mupala, a licence
wide soil geochemical survey was conducted.
Mukai Copper Project
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 was successfully renewed in November 2024 for an additional 3
years and is now held by Copernicus.
The Licence is directly adjacent to FQM's Trident Project which includes the
recently opened Enterprise Nickel Mine and the Sentinel Copper Mine
(811 million tonnes ("Mt") grading 0.5% copper), which are 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 Mt of ore containing 386,250 tonnes of nickel. The
Sentinel Copper Mine has the capacity to process 60 Mt of ore per annum; 2023
production totalled 214,000 tonnes of copper with a value of US$1.93
billion.
Historical Exploration
Historic exploration at Mukai 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 joint venture in the early 2000s. Most of this work was
of a regional nature comprising stream sediment sampling and soil sampling.
The area of the Licence was also covered in regional exploration carried out
by FQM.
To date, FQM has provided the Company 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 has 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 at their
Tirosa Prospect.
A review of the regional soil sampling and drill data suggested that copper
mineralisation intersected at the Tirosa Prospect likely continues into the
Mukai Licence. This was confirmed when the Company performed a soil sampling
programme in 2023 which revealed a broad northwest striking copper anomaly
approximately 1,800m long and 800m wide.
First Quantum Minerals - Binding Letter of Agreement
In August 2024, the Company signed a Binding Letter of Agreement ("BLA")
through Copernicus that grants FQM the right to earn an 80% interest in the
Mukai Project. The BLA establishes an initial exploration due diligence period
of 24 months (Phase 1), during which FQM is committed to fund a minimum
exploration expenditure of US$1.5million including at least US$500,000 in the
first year.
If Phase 1 exploration is successful, FQM may enter into an earn-in agreement
with Copernicus. This would allow FQM to earn an initial 51% interest in the
Licence by demonstrating a Mineral Resource containing at least 80,000 tonnes
of contained copper within 24 months of the Transfer Date defined below (Phase
2). In the event that FQM elects to proceed to Phase 2, Copernicus will set up
a 100% owned special purpose vehicle ("SPV") and the Licence will be
transferred to the SPV. The date on which the Licence is transferred to the
SPV will be the "Transfer Date". Any equity to be acquired by FQM in the
Licence will be acquired via a shareholding in the SPV.
To progress to Phase 3, FQM must complete a Mining Study on the previously
defined resource (defined in Phase 2) and deliver a Notice of Intent to Mine
within 24 months of the completion of Phase 2. FQM and Copernicus will then
enter into a Joint Venture/Shareholder's Agreement ("JVA"), whereby FQM can
earn an additional 29% interest (total 80%) in the SPV.
FQM must continue sole funding of the project up to receipt of regulatory and
governmental permits for commencement of construction of a mining project. At
that point, Copernicus may either participate at a 20% contributing equity
level or dilute through to a 10% level, at which point the participating
interest automatically converts to a 1.5% Net Smelter Return Royalty ("NSR").
FQM must make payments to Copernicus totalling US$1 million at different
stages of the earn-in and has paid US$50,000 to date. FQM may elect to extend
Phase 3 by an additional 24 months by making a further payment of
US$1 million to Copernicus.
If FQM does not elect at the end of Phase 2 to continue with Phase 3 or fails
to deliver a Notice of Intent to Mine by the end of Phase 3, then 100%
ownership of the Licence will revert back to Copernicus.
Forest Permits and Tribal Consent (Access Approvals)
The Mukai Licence lies entirely within Musele Chiefdom (the "Chiefdom") and
the Bushingwe Forest. Therefore, physical access requires permissions from the
stakeholders, such as a Letter of Consent from the Chiefdom and an approval
letter from the Department of Forestry.
These consents have been received and a Memorandum of Understanding has been
signed with the Chiefdom which provides for the initiation of a Community
Development Fund to benefit the local community. Payments to the Community
Development Fund are based on 5% of monies received from FQM as set out in the
BLA.
First Quantum - Diamond Drilling Programme
Following receipt of access approvals, FQM was able to complete three diamond
drill holes for a total of 552m of drilling prior to the onset of the 2024-25
rainy season.
Drill core samples are being submitted for geochemical analysis and the data
collected in this short programme will feed back into the geological model for
the project and inform the exploration programme for 2025.
FQM has advised that drilling is provisionally planned to resume in the second
quarter of 2025, after the end of rainy season, subject to a review of
analytical results and the completion of further geological modelling.
Konkola West Copper Project
Exploration Licence 27067-HQ-LEL, which forms the Konkola West Project, covers
71.9km² and is located 18km northwest of Chingola in the Copperbelt Province.
The Licence, currently held by Mwashia, was successfully renewed in November
2024 for an additional 3 years and is subject to an Earn-in Agreement ("EIA")
between the TMZ, Mwashia and KoBold Metals ("KoBold").
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 may bring the
Lower Roan Subgroup closer 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 a 15km line of copper orebodies exploited
at the Konkola-Lubambe-Musoshi mines. This is also the focus of a deep
drilling programme by 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 in redeveloping the Konkola
Copper Mines.
Historical Exploration
The exploration history of the Licence is incomplete, however more recent
exploration information has been made available to the Company. This historic
data 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.
In August 2023, the Company conducted a reconnaissance soil sampling programme
at Konkola West. This was 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.
Only minor occurrences of elevated copper-in-soil were detected.
Earn-in Agreement with KoBold
In late 2023, the Company and its local partner, Mwashia, signed an Earn-In
Agreement ("EIA") with a subsidiary of KoBold, with the objective of
conducting deep drilling to explore for projected extensions of the high-grade
copper ore-shale, which is exploited on adjacent mining leases at the Konkola,
Lubambe, and Musoshi mines.
In Stage 1 of the EIA, KoBold committed to complete at least two drill holes
for a (minimum) total of 2,000m of drilling. On completion of Stage 1, the
parties will form a joint venture company ("JVC") to hold the Licence and
enter into a shareholder agreement, the form of which is set out in the EIA.
The initial JVC ownership will be KoBold 51%, TMZ 39% and Mwashia 10%.
Mwashia's equity interest will be free carried by KoBold and can be purchased
by KoBold at any time for US$3.5 million. KoBold may elect to increase its
ownership in the JVC to 70% in Stage 2 of the EIA (by sole funding a
cumulative expenditure of US$6 million on exploration within 4 years of
signing), after which TMZ will hold a 20% interest, and Mwashia will continue
to hold a 10% carried interest in the JVC.
After Stage 1 (or Stage 2 depending on KoBold's election at the end of Stage
1), TMZ may elect to contribute to the further costs of the JVC pro-rata with
its shareholding or dilute its interest in line with the customary joint
venture dilution formula. Should TMZ dilute down to 10% shareholding in the
JVC then TMZ's 10% interest will convert to a 1% NSR, payable for a 13-year
period following the start of commercial production.
TMZ's existing option agreement with Mwashia for the Konkola West Project was
terminated by the EIA. However, if the EIA terminates for any reason, the EIA
provides that the Licence may then be held 90% by TMZ and 10% by Mwashia.
Mwashia's interest at this point would be free carried by TMZ and TMZ would
hold an option to purchase that 10% interest for US$3.5 million.
KoBold Deep Drilling Programme
In April 2024, KoBold commenced diamond drilling at Konkola West upon receipt
of all required approvals. Drilling of the first of two planned holes,
KWDD001, is currently ongoing and has not yet reached the target horizon.
Drilling has proved to be slow due to the technical challenges and slow
penetration rates associated with deep drilling. KoBold has advised that
drilling can continue during the current rainy season due to the established
infrastructure in the area.
Mushima North Copper Project
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 was successfully renewed for an
additional 3 years in November 2024 and is now held by Copernicus.
The Licence encompasses basement rocks outside of the traditional Copperbelt
and the region is a focus of exploration for copper and 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 mine is currently scheduled to resume production after years of
litigation regarding ownership.
The Mushima North Licence is subject to a Data Sharing and Technical
Cooperation Agreement with FQM. During the reporting period, the Company
performed a Phase 1 combined AC/RC drilling programme and a ground magnetic
survey.
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 several soil anomalies were identified in RST soil
sampling programmes during 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
historical soil sampling data (pXRF) and airborne geophysical surveys which
included magnetic and VTEM(TM) electromagnetic data.
In 2023, the Company commissioned a comprehensive compilation and review of
historical exploration data, with work presented in a Geophysical
Interpretation Report and a Targeting Report. Both reports 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 priorities for follow-up
being targets A1 and C1.
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.
Target C1 is a prominent gravity high defined by BHP's Falcon airborne gravity
survey, with a coincident copper-in-soil anomaly. Target C1 also hosts
historical drill hole RKN800, where analysis 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.
In September 2023, the Company conducted a soil sampling programme to cover
the C1, A1 and A2 targets.
Soil sampling at Target A1 revealed a broad northeast striking copper-in-soil
anomaly which, at 80ppm copper cut-off, covers an area approximately 3km long
by up to 1.5km wide. The anomaly has a favourable structural setting for
mineralisation and was selected as a high priority target for drilling.
Soil sampling results from Target C1 indicated a broad west-northwest striking
anomaly which, at 60ppm copper cut off, covers an area approximately 4km long
by 1.25km wide. The peak copper value in soils here is 216ppm at the western
end of the anomaly, in proximity to hole RKN800. This area also contains the
highest arsenic-in-soil values consistent with the geochemical signature of
copper mineralisation in drill hole RKN800.
Forest Permits
The Licence area lies entirely within Ndenda National Forest and access is
restricted without prior consent from the Department of Forestry. In early
2024, the Department of Forestry granted approval for the proposed programme
of exploration operation under a work area clearance procedure.
Combined AC/RC Drill Programme (Targets A1 and C1)
In October 2024, the Company commenced drilling at Target A1 and Target C1
with drilling conducted using a combination of AC and RC methods. Three
east-west profiles were drilled at Target A1 and one north-south profile was
drilled at Target C1.
At Target A1, drill Traverse 1 was completed over the northern part of the
anomaly and initially comprised 5 holes drilled at 100m intervals at an angle
of -60 degrees to the east. Samples were collected at 1m intervals and
analysed using pXRF. Additional holes were sited to infill the hole spacing at
50m intervals on the eastern half of the traverse and the traverse was
extended to the east. Wide zones of copper and zinc mineralisation were
intersected over the majority of holes on Traverse 1. The final hole in the
programme (24TMN024) was drilled vertically 170m south of Traverse 1 and
intersected the highest grades of the programme (up to 1% copper), grades
similar to those being mined at major mining operations elsewhere in northwest
Zambia. Unfortunately, there was insufficient time to drill further holes in
the programme prior to the start of the rainy season.
Preliminary logging of drill samples indicates that the geological sequence
intersected at Target A1 on Traverse 1 is a series of altered ferruginous
sandstones, siltstones and conglomerates, with mineralisation hosted primarily
in ferruginous and graphitic conglomerates. Many of the clasts are highly
weathered or leached out (vuggy), suggesting the possibility that leaching of
copper may have occurred. This is a permissive lithological setting for
economic copper deposits in northwest Zambia and is similar to that hosting
copper mineralisation at the Kalengwa mine.
The association of zinc and copper mineralisation at Mushima North requires
further evaluation. Arsenic is also highly anomalous in some holes (up to
0.4%). The mineralisation intersected on Traverse 1 is best developed on the
western side of the soil anomaly and continues beyond the soil anomaly to the
east where it is open ended.
During check analysis, significant silver values were found throughout Hole
24TMNAC004, on Traverse 1, in broad association with the copper and zinc
mineralisation, whilst significantly anomalous cobalt and nickel was found in
Hole 24TMNAC024 with the highest cobalt grades accompanying the highest copper
grades. A re-evaluation of soil samples revealed a subtle, but distinct,
silver-in-soil anomaly that extends northeast-southwest within the larger
copper-in-soil anomaly for at least 1.3km across all of the three check lines.
This anomaly is open ended in both of these directions.
Drill Traverse 2 comprised five 100m spaced holes (24TMN006 to 24TMN010) in
the western part of the A1 soil anomaly, approximately 500m south of Traverse
1. A sedimentary sequence similar to that in Traverse 1 was intersected, and
whilst copper values on this traverse were lower, all holes were consistently
anomalous in copper in the low-mid 100s of parts per million copper
throughout. It is believed that these holes were placed too far to the west
and this traverse should be extended to the east in future.
Drill Traverse 3 was located approximately 750m south of Traverse 2 and
comprised four 100m spaced AC holes (24TMN011 to 24TMN014). The pXRF results
on Traverse 3 were similar to those on Traverse 2, Traverse 3 also needs to be
extended to the east in future programmes.
Drilling at Target C1 was suspended due to slow penetration rates with the AC
method and the desire to preserve budgeted drilling metres for additional
drilling at Target A1.
Ground Magnetic Survey (Target A1)
Following completion of the drilling programme, the Company commissioned a
ground based magnetic survey at Target A1. A total of 87 line-km was
surveyed along 100m spaced east-west oriented profiles. The survey was
performed using two field magnetometers in "Walk Mode" and a fixed base
station magnetometer to record diurnal variations.
An interpretation report has been provided to the Company and an integrated
review of the data will be undertaken in due course.
Jacks Copper Project
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 Licence has been transferred to Copernicus and has been renewed for an
additional 3 years.
Copper mineralisation at Jacks occurs within the southern limb of a large
asymmetric synclinal fold structure. Historical drilling and four holes
drilled by Tertiary suggests that copper occurs in two separate mineralised
horizons, which may be discrete mineralised zones but could alternatively be
one refolded horizon.
Historic Exploration
The area was first explored by RST in the 1960s. RST drilled a series of
wide-spaced core holes in an area of observed copper mineralisation at the
original Jacks copper 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 to 246.00m) grading 1.26%
copper which includes 1.88m (230.12 to 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.
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
depths up to 230m 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.
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. 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.
Pitting Programme
In September 2024, the Company conducted a pitting programme with a total of 7
pits excavated at Area B and 18 pits at Area C. The objective of the pitting
programme was to determine if the copper mineralisation extends downwards into
the regolith and also to attempt to gain structural control for drill
planning.
The Company is satisfied that the anomalies continue below surface, which
provides justification for follow up exploration in the 2025 exploration
season, which is when the Company intends to drill test these anomalies.
Mupala Copper Project
Exploration Licence 32139-HQ-LEL forms the Mupala Copper Project which covers
41.2km(2) in the Domes Region in the Northwestern Province of Zambia. It is
100% owned by TMZ.
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. It is also 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.
During the reporting period, the Company received a Letter of Consent from
Sailunga Chiefdom, in which the Licence is located. The Company subsequently
received approval of the Environmental Project Brief from the Zambia
Environmental Management Agency which is a prerequisite for conducting
exploration activities in Zambia. The Company commenced exploration with a
Licence-wide soil sampling programme.
Historic Exploration
The Company has attempted to build an exploration history for the Mupala
Project; however it remains incomplete. Mwinilunga Mines Ltd conducted soil
and stream sediment sampling in the area in the 1960s, this identified a
number of copper-in-soil anomalies which provided an initial focus for the
Company's exploration of the Licence area.
Soil Sampling Programme
First pass soil samples were taken on a 300m x 300m offset grid over the
Licence area, with samples collected from a depth of approximately 30cm in the
B-horizon of the soil profile and dry-sieved to -180 micron. A subsample of
the minus soil fraction was then placed into a plastic sample cup and analysed
in the field by pXRF. A total of 452 first pass soil samples were collected.
Analytical results were relayed from the field and infill sampling was
conducted in the areas of anomalous copper-in-soil. Infill sampling tightened
the grid to 150m x 150m in areas of anomalous copper-in-soil and a total of
232 infill samples were collected.
The main copper-in-soil anomaly is approximately 1,800m long and 600m wide
with a peak value of 422ppm, and is broadly coincident with a surface
geochemical anomaly defined by Mwinilunga Mines in the 1960s. Further
exploration is planned in the 2025 exploration season.
Nevada, USA
Brunton Pass Copper-Gold Project (100% owned)
The Company holds a 100% interest in 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. This includes 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.
Historical Exploration
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.
Prior to the reporting period, the Company conducted extensive rock chip
sampling, soil sampling and 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. These anomalies 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
and mercury values, with a 9.1m section in Trench 1 containing 1,930ppm
arsenic and 102ppm mercury, and a 32m section in Trench 11 grading 1622ppm
arsenic and 110ppm mercury. Trench 2 intersected 2.7m grading 2.65 g/t gold.
Trenches 7, 8 and 10 tested copper soil anomalies in the southwest of the
project area. Trench 7 cut 27.4m grading 1,010ppm copper (0.1% ) 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 upper levels of textbook
high sulphidation epithermal gold deposits.
Induced Polarisation/Resistivity Survey
An Induced Polarisation ("IP") and resistivity survey was conducted using a
dipole-dipole electrode configuration with 100m dipole spacing. The objective
of the survey was to differentiate between areas of Tertiary volcanics from
the older skarn altered limestones that host mineralisation and to attempt to
map conductive mineralisation disseminated in the rock, as is typical in many
epithermal and porphyry copper deposits.
The survey was made up of three 200m spaced lines in the southern part of the
property, which cut across the soil anomalies previously tested by trenches
T7, T8 and T10, as well as the soil anomaly tested by Trench T11. A fourth
line was surveyed 500m to the north across the northern part of the soil
anomaly tested by trenches T1 and T2.
The IP and Resistivity field data was "inverted" in order to generate the
subsurface distribution of electrical properties in 2D along each survey line.
A substantial chargeability anomaly was defined and this anomaly directly
underlies, and is likely related to, previously defined soil anomalies, the
intense rock alteration seen in Trench T11 (where pathfinder elements are at
1,000 times background) and on the northern line beneath the gold‑bearing
zone in Trench T2. The Chargeability anomaly extends through all of the
surveyed lines, over a minimum strike length of 700m and a width of up to
460m.
Reverse Circulation Percussion Drill Programme
In November-December 2024, the Company completed four RC drill holes to test
the coincident geochemical and geophysical anomalies. Drill samples have been
submitted for analysis and results are expected before the end of February
2025.
Other Projects
No work was conducted on the Company's Paymaster and Mount Tobin projects in
Nevada this year. This is due to the Company's focus on its Zambian copper
projects and the Brunton Pass Project in Nevada.
Storuman Fluorspar Project, Sweden
The Company's 100% owned Storuman Project is located in north-central Sweden,
it is linked by the E12 highway to the port city of Mo-i-Rana in Norway by
road and by rail to the port of Umeå on the Gulf of Bothnia.
The Storuman Fluorspar Project has a JORC Compliant Mineral Resource
(Indicated and Inferred) of 27.7 Mt at 10.21% CaF(2).
Exploitation (Mine) Permit
The Company submitted a mine permit application for the Storuman deposit to
the Swedish Mining Inspectorate in July 2014, 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 meant the Mining
Inspectorate must consider the impact of mining on the area surrounding mining
permit.
Early in 2017, the Swedish Mining Inspectorate requested additional
information from the Company relating to the original Environmental Impact
Assessment ("EIA"). 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. This was in response to opposing submissions from the Sámi
community of reindeer herders and the County Administration Board ("CAB").
Reindeer herding is a land use that is 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 co-exist with reindeer husbandry, the Storuman deposit area of
National Interest did not extend to the area of the tailings dam and
associated infrastructure. The area of the tailings dam and associated
infrastructure is considered by both the Sámi community 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, not just the immediate area of the
mineralisation, as otherwise the deposit could never be developed. The
Government had annulled the Mining Inspectorate's decision not to grant the
mining concession application and instructed the Mining Inspectorate to make a
decision based on a balanced consideration of the competing National
Interests, those being the project development as a whole and reindeer
husbandry.
In September 2024, the Swedish Mining Inspectorate again refused the Company's
application for a mining concession and the Company lodged an appeal on the
Mining Inspectorate's decision.
Lassedalen Fluorspar Project, Norway
Although the Company no longer holds mineral rights at the Lassedalen Project,
the Company has previously sold copies of its data on the Project to a
third-party 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 development 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 metal
geological interpretations, technical assumptions and price forecasts. and mineral price forecasts and impose rigorous practices in the QA/QC
programmes that support its independent estimates.
Development and Marketing 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 restricts its activities to stable, democratic and
Politically stable countries can have enhanced environmental and social 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 Bribery & Anti-corruption Policy and 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.
Fraud Risk The Company and its employees have a strong working awareness of potential
avenues for fraud which is supported through regular anti-fraud training
through the Company's IT provider and ad hoc anti-fraud training as provided
by banking partners and third-parties.
Whilst there has been no past evidence of fraudulent activity in the Group,
Group companies can be adversely affected financially and reputationally
should they not have appropriate IT training and financial controls in place
which are regularly reviewed and communicated to all employees. The directors are responsible for the Group's systems of internal financial
control. Although no systems of internal financial control can provide
absolute assurance against material misstatement or loss, the Group's systems
are designed to provide reasonable assurance that problems are identified on a
timely basis and dealt with appropriately.
The Financial Controls are assessed for suitability on an annual basis.
Financing & Liquidity Risk
The Group's goal is to finance its exploration and evaluation activities from In carrying out their responsibilities, the directors have put in place a
future cash flows, but until that point is reached the Company is reliant on framework of controls to ensure as far as possible that ongoing financial
raising working capital from equity markets or from industry sources. There is performance is monitored in a timely manner, that corrective action is taken
no certainty such funds will be available when needed. and that risk is identified as early as practically possible, and they have
reviewed the effectiveness of internal financial controls.
The Company maintains a good network of contacts in the capital markets which
has historically met its financing requirements.
The Company's low overheads and cost-effective exploration strategies help
reduce its funding requirements. Nevertheless, further equity issues will be
required over the next 12 months.
Exchange Rate Risk
The value of the Company's assets held in overseas subsidiaries will vary with The Company's project expenditures are discretionary and subject to constant
exchange rate fluctuations, especially in the US Dollar and Kwacha to Pound review and changing priorities.
Sterling exchange rates.
The Company does not, therefore, speculate on exchange rates or hedge its
As much of the Company's exploration costs are incurred in US Dollars, the foreign currency exposures but will consider doing so once expenditures and
Company's budget costs will be subject to exchange rate variations when revenue become more predictable and locked in.
actually incurred.
Further information on risks associated with the Group's Financial Instruments
is given in Note 19 to the financial statements.
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 the Company's 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 27 January 2025 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.
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 2024.
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 (£775,747), 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 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 11 11 1 1 3 3 3 3
D A R McAlister 11 1 3 3
Dr M Armitage 11 1 3 3
The directors' shareholdings are shown in Note 17 to the financial statements.
Events After the Year-End
Executive Chairman's Bonus for calendar year ended 31 December 2023
On 29 October 2024, the Board awarded Mr P L Cheetham with a bonus of
£27,677 paid gross in shares at a price of 0.0725 pence per share for the
year ended 30 September 2023. The shares are subject to a hold period of two
years, except in the event that there is a takeover offer for the entire
issued share capital of the Company.
The bonus payment has not been included in the financial statements for the
year ended 30 September 2024 as it has been treated as a non-adjusting event.
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 27 January 2025
Interactive Investor Services Nominees Limited SMKTISAS 333,615,928 8.99
Hargreaves Lansdown (Nominees) Limited 15942 300,687,638 8.10
Jim Nominees Limited SHARD 293,090,000 7.89
Vidacos Nominees Limited IGUKCLT 257,505,393 6.94
Hargreaves Lansdown (Nominees) Limited VRA 189,449,607 5.10
Interactive Investor Services Nominees Limited SMKNOMS 189,288,837 5.10
HSDL Nominees Limited 155,324,071 4.18
Barclays Direct Investing Nominees Limited CLIENT1 151,682,157 4.09
HSDL Nominees Limited MAXI 134,509,439 3.62
Morgan Stanley Client Securities SEG 128,202,893 3.45
Hargreaves Lansdown (Nominees) Limited HLNOM 118,533,839 3.19
James Brearley Crest Nominees Limited WALPOLE 116,557,000 3.14
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 in London on Thursday
6 March 2025, 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 2024, Tertiary Minerals plc held 0.44% 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 27 January 2025 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
Non-Executive Director of Kavango Resources plc.
* 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 SRK UK, Director of PLC.
SRK Exploration Services and SRK Australia and SRK Group Chairman.
· Experienced in both Corporate Finance and Corporate Broking.
· Chair of the Geological Society Business Forum and Honorary Chair
of the Critical Minerals Association.
External Appointments
External Appointments Company Secretary for Sunrise Resources plc and other corporate clients of
City Group PLC.
Executive Director of Sarn Helen Gold Limited. Executive Director of TREO
Minerals Ltd.
Executive Director of Celtic Syndicate Ltd.
Executive Director of Mike Armitage Consulting 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 ("QCA") in 2018 the most suitable code for the Company for
the year ended 30 September 2024. Accordingly, the Company has to date
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. In November 2023, the QCA published a
revised Code which will apply for financial years beginning on or after 1
April 2024, with initial disclosures against the 2023 QCA Code to be published
during 2025. The 2023 QCA Code will be adopted by the Company for the year
ending 30 September 2025 and disclosures relating to the revised principles
under the 2023 QCA Code will be made in the Company's next Annual Report and
will also be set out in the Company's website.
The Company's Corporate Governance Statement was reviewed and amended by the
Board on 27 January 2025. The Company has set out on its website and in its
Corporate Governance Statement the ten principles of the QCA Code and details
of the Company's compliance.
Patrick Cheetham, in his capacity as Chairman, has overall responsibility for
the corporate governance of the Company and the Board is responsible for
delivering on our well-defined business strategy having due regard for the
associated risks and opportunities. The Company's corporate governance
arrangements now in place are designed to deliver a corporate culture that
understands and meets shareholder and stakeholder needs and expectations
whilst delivering long-term value for shareholders.
The Board recognises that its principal activity, mineral exploration and
development, has potential to impact on the local environment and communities,
and consequently has adopted an Environmental, Social and Governance ("ESG")
Policy to ensure that the Group's activities have minimal environmental and
social impact. 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
prior 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 a 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 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. 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 (rebranded in 2024 from
e3 Plus to Driving Responsible Exploration, or DRE) 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, its Bribery & Anti-Corruption
Policy and its 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, contractors 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 the Company's 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, and for
our Mukai and Mushima North Projects we have entered into Memorandums of
Understanding to govern our interaction with the affected Chiefdoms.
Respecting Human Rights
The Company's exploration activities 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. We also work closely with the Department
of Forestry where our projects affect National Forests to minimise the impact
of our activities and ensure appropriate reclamation. 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
The Company's activities are carried out in accordance with its Health and
Safety Policy, which adheres to all applicable laws.
Corporate Governance Statement
The Company has set out on its website, and below, the ten principles of the
2018 QCA Code ("the Code") with an explanation of how the Company applies each
principle and/or the reasons for any aspect of non-compliance. The QCA Code
was updated in 2023 and the revised QCA Code is designed to apply to companies
whose financial years start on or after 1 April 2024, accordingly the Board
proposes to adopt the 2023 QCA Code in the next reporting period, being the
year ending 30 September 2025.
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 Code.
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. Patrick Cheetham is also currently the
Chairman and Chief Executive Officer of Sunrise Resources plc ("Sunrise").
Patrick Cheetham has a service contract as Chairman of Sunrise and his
services as Chief Executive Officer of Sunrise are provided to the Company, at
cost, through a Management Services Agreement with the Company. In 2024,
Patrick Cheetham dedicated over 59% of his working time to the Company.
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.
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 and codes: the
Health and Safety Policy; the Environmental, Social and Governance Policy
("ESG Policy"); the Share Dealing Policy; the Bribery & Anti-Corruption
Policy and the Company's Code of Conduct; the Privacy and Cookies Policy and
the Social Media Policy. These policies and codes 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
Company's previous Environmental Policy to ensure that, wherever they take
place, the Group's activities have minimal environmental and social impact.
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 prior 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 as set out in their respective Terms of Reference. 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 the
Company's website 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 appropriate 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 12 January
2024, 29 May 2024 and 7 August 2024.
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 no projects were
impaired. 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 Tertiary (Middle East) Limited
and an additional provision of £7,449 was made. The provisions made reflect
the differences between the loan carrying amounts and the value of the
underlying project assets.
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
27 January 2025
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 three times in the financial year under review,
on 1 November 2023, 14 February 2024 and 7 August 2024, to review the
Committee Terms of Reference and ensure their continued suitability, and to
review the remuneration of the Executive Chairman.
Post year-end, on 29 October 2024, the Remuneration Committee recommended to
the Board the adoption of a discretionary salary bonus scheme (the
"Recommended Scheme") to be considered annually for the Company's Chief
Executive Officer ("CEO") to apply for calendar years commencing 1 January
2023. No such scheme has been in existence up to this point.
Under the Recommended Scheme, a bonus award, if any, will, ordinarily, be for
a total amount of up to an equivalent of 30% of annual salary and will,
ordinarily, be payable in shares (at the then market price, net of employee
income tax & NI). The Remuneration Committee will have the discretion to
recommend that 25% of any bonus is paid in cash. Any shares issued pursuant to
a bonus award will be subject to a hold period of two years, except in the
event that there is a takeover offer for the entire share issued capital of
the Company.
Fifty percent of any discretionary bonus amount will be based on the
Remuneration Committee's assessment of the CEO's performance during the
relevant calendar year in the administration and management of the Company and
its subsidiaries and 50% of any bonus will be assessed against the achievement
in respect of specific short-term target outcomes during the calendar year
where the CEO is able to influence those outcomes. While the bonus assessment
will be focused on short-term targets, medium-term, long-term and
non-timeframe specific targets have and will be set by the Remuneration
Committee reflecting the Company's overarching aims and with the intent that
medium-term and long-term targets will likely become short-term targets over
time.
In extraordinary circumstances, and for transformational outcomes, it is
proposed that the bonus could be increased in any calendar year up to 100% of
salary at the Remuneration Committee's discretion.
At the 29 October 2024 meeting, the Remuneration Committee recommended that
the current CEO, Mr Patrick Cheetham, be awarded a bonus equal to 21% of his
2023 salary in respect of the 2023 calendar year (the "2023 Bonus"). Mr
Cheetham requested that the 2023 Bonus be paid gross in shares on the basis
that he pay over to the Company the associated employee PAYE and employee NI.
The Board agreed to this request as it resulted in a lower cash cost to the
Company for the 2023 Bonus.
At the Board Meeting held on 18 November 2024, the Recommended Scheme was
approved and it was agreed to issue 38,174,524 new Ordinary Shares at a price
of 0.0725 pence per share to Mr Cheetham being the closing mid-market price
on Friday 15 November 2024.
Dr Mike Armitage
Chair - Remuneration Committee
27 January 2025
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 14 February 2024 to review the Terms of Reference for the
Committee and to consider their continuing suitability.
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
27 January 2025
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 2024 or 2023. The
financial information for 2023 is derived from the Statutory Accounts for
2023. Full audited accounts in respect of that financial period have been
delivered to the Registrar of Companies. The Statutory Accounts for 2024 will
be delivered to the Registrar of Companies following the Company's Annual
General Meeting. The Auditors have reported on the 2024 and 2023 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 2024 will be uploaded to the Shareholders Documents section of the
Company's website on or around 7 February 2025:
https://www.tertiaryminerals.com/shareholder-documents.
Consolidated Income Statement
for the year ended 30 September 2024
Notes 2024 2023
£ £
Revenue 2 162,658 181,429
Administration costs (670,118) (572,604)
Pre-licence exploration costs (43,691) (39,792)
Impairment of deferred exploration expenditure 8 - (111,691)
Operating loss (551,151) (542,658)
Interest receivable 217 1,317
Loss before taxation 3 (550,934) (541,341)
Tax on loss 7 - -
Loss for the year attributable to equity holders of the parent (550,934) (541,341)
Loss per share - basic and diluted (pence) 6 (0.02) (0.03)
All amounts relate to continuing activities.
Consolidated Statement of Comprehensive Income
for the year ended 30 September 2024
2024 2023
£ £
Loss for the year (550,934) (541,341)
Items that could be reclassified subsequently to the income statement:
Foreign exchange translation differences on foreign currency net investments
in subsidiaries
(17,057) (23,612)
Items that will not be reclassified to the income statement:
Changes in the fair value of other investments (6,038) (5,184)
Total comprehensive income/(loss) for the year attributable to
equity holders of the parent (574,029) (570,137)
Consolidated and Company Statements of Financial Position
at 30 September 2024
Company Number 03821411 Notes Group Company Group Company
2024 2024 2023 2023
£ £ £ £
Non-current assets
Intangible assets 8 845,385 - 620,481 -
Property, plant & equipment 9 8,300 8,300 3,234 3,234
Investment in subsidiaries 10 - 774,273 - 661,472
Other investments 10 10,428 10,428 16,466 16,466
864,113 793,001 640,181 681,172
Current assets
Receivables 11 90,081 55,484 114,432 70,399
Cash and cash equivalents 12 775,747 765,747 121,813 100,215
865,828 821,231 236,245 170,614
Current liabilities
Trade and other payables 13 (140,346) (87,864) (69,835) (54,615)
Net current assets 725,482 733,367 166,410 115,999
Provisions for liabilities 20 (9,143) - (11,496) -
Net assets 1,580,452 1,526,368 795,095 797,171
Equity
Called up share capital 14 367,483 367,483 198,108 198,108
Share premium account 13,760,938 13,760,938 12,599,278 12,599,278
Capital redemption reserve 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 67,941 67,941 88,562 88,562
Fair value reserve (28,238) (28,238) (22,200) (22,200)
Foreign currency reserve 419,801 - 436,857 -
Accumulated losses (15,782,630) (15,416,913) (15,280,667) (14,841,734)
Equity attributable to the owners of the parent 1,580,452 1,526,368 795,095 797,171
The Company reported a loss for the year ended 30 September 2024 of £624,150
(2023: £533,376).
These financial statements were approved and authorised for issue by the Board
on 27 January 2025 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 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
Loss for the period - - - - - - - (550,934) (550,934)
Change in fair value - - - - - (6,038) - - (6,038)
Exchange differences - - - - - - (17,056) - (17,056)
Total comprehensive loss for the year - - - - - (6,038) (17,056) (550,934) (574,028)
Share issue 169,375 1,161,660 - - - - - - 1,331,035
Share based payments expense - - - - 28,350 - - - 28,350
Transfer of expired warrants - - - - (48,971) - - 48,971 -
At 30 September 2024 367,483 13,760,938 2,644,061 131,096 67,941 (28,238) 419,801 (15,782,630) 1,580,452
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 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
Loss for the period - - - - - - (624,150) (624,150)
Change in fair value - - - - - (6,038) - (6,038)
Total comprehensive - - - - - (6,038) (624,150) (630,188)
loss for the year
Share issue 169,375 1,161,660 - - - - - 1,331,035
Share based payments expense - - - - 28,350 - - 28,350
Transfer of expired warrants - - - - (48,971) - 48,971 -
At 30 September 2024 367,483 13,760,938 2,644,061 131,096 67,941 (28,238) (15,416,913) 1,526,368
Consolidated and Company Statements of Cash Flows
for the year ended 30 September 2024
Notes Group Company Group Company
2024 2024 2023 2023
£ £ £ £
Operating activity
Operating (loss)/profit (551,151) (624,586) (542,658) (566,147)
Depreciation charge 9 2,298 2,298 1,793 1,793
Share based payment charge 28,350 28,350 17,784 17,784
Impairment charge - deferred exploration asset 8 - - 111,691 -
Increase/(decrease) in provision for impairment of loans to subsidiaries 10 - 7,449 - 156,594
Reclamation liability 8 (1,494) - - -
Decrease/(increase) in receivables 11 24,351 14,915 1,642 (5,614)
Increase/(decrease) in payables 13 70,511 33,250 (11,094) 9,539
Net cash outflow from operating activity (427,135) (538,324) (420,842) (386,051)
Investing activity
Interest received 217 217 1,317 55,325
Proceeds on disposal of royalty assets - - 156,594 -
Exploration and development expenditures 8 (279,853) - (236,808) -
Purchase of property, plant & equipment 9 (7,364) (7,364) (2,630) (2,630)
Additional loans to subsidiaries 10 - (120,032) - (156,594)
Net cash outflow from investing activity (287,000) (127,179) (81,527) (103,899)
Financing activity
Issue of share capital (net of expenses) 1,331,035 1,331,035 542,000 542,000
Share subscription loan - - - -
Net cash inflow from financing activity 1,331,035 1,331,035 542,000 542,000
Net increase this year 616,900 665,532 39,631 52,050
Cash and cash equivalents at start of year 121,813 100,215 59,414 48,165
Exchange differences 37,034 - 22,769 -
Cash and cash equivalents at 30 September 12 775,747 765,747 121,814 100,215
Notes to the Financial Statements
for the year ended 30 September 2024
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. Material accounting policies
(a) Basis of preparation
The Group and Company 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 £624,150 (2023:
£533,376). The loss for 2024 includes provision for impairment of its
investment in subsidiary undertakings in the amount of £7,449 (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 (£775,747), 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 controlled entities made up to 30 September each
year. The prior year comparatives are for the year ended 30 September 2023.
Where the Group controls an entity it is classified as a subsidiary.
Generally, there is a presumption that a majority of voting rights results in
control. Control is also achieved where the Group has power over the entity,
is exposed or has rights to variable returns from its involvement with the
entity and has the ability to affect those returns through its power over the
entity. The Group re-assess whether or not it controls an entity if facts
and circumstances indicate that there are changes to one for more of these
elements of control.
Subsidiaries acquired during the reporting period are incorporated under the
acquisition method of accounting and their results consolidated from the date
of acquisition. They are deconsolidated from the date that the Group ceases to
control the subsidiary.
The consolidated financial statements present the results of the Group as if
they formed a single entity. All intra-group transactions and balances
between Group companies are eliminated in full.
Details of the Group's subsidiaries during the reporting period 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 2024 and 30 September 2024.
This involved consideration of changes in circumstances and evidence including
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 (including computer equipment) 20% to 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
highly liquid deposits with a maturity of three month or less, that are held
for the purpose of meeting short-term cash commitments and are readily
convertible to a known amount of cash and subject to an insignificant risk of
changes in value..
(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 for the Group is derived from the provision of management services to
Sunrise Resources plc and relates to expenditure incurred and recharged. The
primary performance obligation relates to the provision of the services of the
Group's staff and administration facilities.
Revenue is recognised over time on a straight-line basis as the services are
performed.
Revenue is net of VAT and other sales-related taxes. Services are invoiced
quarterly in arrears with a credit term of 30 days.
(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.
Impairment
Impairment reviews for deferred exploration and evaluation costs are carried
out on a project-by-project basis. 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 no work was carried out at the Paymaster and Mt Tobin 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.
At Brunton Pass in Nevada, further exploration activities were carried out
during the reporting period and post year-end a drilling programme was
completed.
In Zambia, the Konkola West Project is being drilled by Joint Venture partner
KoBold Metals. The deep drill hole was started during the reporting period and
drilling continues past year-end.
At the Mukai Project, Joint Venture partner First Quantum Minerals is carrying
out a drilling programme post year-end.
At the Mushima North Project, the Company carried out a drilling programme
which resulted in the discovery of wide zones of copper-zinc mineralisation
which requires follow-up exploration, therefore this project is not impaired.
During the reporting period, a pitting programme was carried out at the Jacks
Project by the Company and follow-up drilling is budgeted in 2025.
Following the grant of the Environmental Project Brief for the Mupala Project,
soil sampling was carried out which defined a soil anomaly. As follow up
exploration is justified, this project is not impaired.
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, Note
1(b) refers.
(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. Revenue
Note 2024 2023
£ £
Sunrise Resources plc management recharge 17 128,673 131,871
Sunrise Resources plc overhead recharge 17 19,045 34,558
Other revenue 14,940 15,000
162,658 181,429
3. Loss before income tax
2024 2023
£ £
The operating loss is stated after charging - 111,691
Impairment of intangible assets - deferred exploration expenditure
Costs relating to leases expiring within 12 months 23,256 21,900
Depreciation - owned assets 2,298 1,793
Fees payable to the Group's Auditor for:
The audit of the Group's annual accounts 23,333 14,150
The audit of the Group's subsidiaries, pursuant to legislation 6,440 6,174
Fees payable to the Group's Auditor and its associates for other services:
Interim review of accounts 2,180 1,950
Corporation tax compliance fees 2,384 3,991
4. Directors' emoluments
Remuneration in respect of directors was as follows:
Total cost Recharged to Net cost Total before
2024 Sunrise Resources plc 2024 recharges
£ 2024 £ 2023
£ £
P L Cheetham (salary) 135,747 (55,165) 80,582 129,928
M G Armitage (salary) 21,091 - 21,091 20,188
D A R McAlister (salary) 21,091 - 21,091 20,187
177,929 (55,165) 122,764 170,303
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 £3,081 (2023: £1,954) or Employer's National
Insurance contributions of £20,996 (2023: £19,778).
Pension contributions made during the year on behalf of Directors amounted to
£Nil (2023: £Nil).
The directors are also the key management personnel. If all benefits are
taken into account, the total key management personnel compensation would be
£181,011 (2023: £172,257).
After recharges to Sunrise Resources plc and taking account of all
benefits in kind, the key management personnel net compensation cost to the
Group was £125,846 (2023: £113,376).
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 2024 recharges
to Group Sunrise Resources plc £ 2023
2024 2024 £
£ £
Wages and salaries 339,262 (113,818) 225,444 318,476
Social security costs 37,070 (14,855) 22,215 33,766
Share-based payments 4,948 - 4,948 2,480
381,280 (128,673) 252,607 354,722
As set out in Note 17, relevant staff costs are recharged to 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:
2024 2023
Number Number
Technical employees 3 2
Administration employees (including non-executive directors) 5 5
8 7
6. Loss per share
Loss per share has been calculated using the loss for the year attributable to
equity holders of the parent and the weighted average number of ordinary
shares in issue during the year.
2024 2023
Loss (£) (550,934) (541,341)
Weighted average ordinary shares in issue (No.) 2,489,386,949 1,791,815,969
Basic and diluted loss per ordinary share (pence) (0.02) (0.03)
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 (2023: £Nil).
2024 2023
£ £
Tax reconciliation
Loss before income tax (550,933) (541,341)
Tax at 19% (2023: 19%) (104,677) (102,855)
Fixed asset timing differences (1,030) (241)
Expenditure not deductible for tax purposes 5,386 3,379
Pre-trading expenditure not deductible for tax purposes - 8,202
Unrelieved tax losses carried forward 100,321 91,515
Tax charge/credit for year -
Total losses carried forward for tax purposes (13,503,484) (12,975,482)
Factors that may affect future tax charges
The Group has total losses carried forward of £13,503,484 (2023:
£12,975,482). 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 Exploration Total Exploration Total
evaluation 2024 evaluation 2023
assets £ assets £
2024 2023
£ £
Cost 7,051,945 7,051,945 6,862,680 6,862,680
At start of year
Additions 281,347 281,347 236,808 236,808
Reclamation cost (1,494) (1,494) - -
Exchange adjustments (54,949) (54,949) (47,543) (47,543)
At 30 September 7,276,849 7,276,849 7,051,945 7,051,945
Impairment (6,431,464) (6,431,464) (6,319,773) (6,319,773)
At start of year
Impairment losses during year - - (111,691) (111,691)
At 30 September (6,431,464) (6,431,464) (6,431,464) (6,431,464)
Net book value
At 30 September 845,385 845,385 620,481 620,481
At start of year 620,481 620,481 542,907 542,907
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
2024 2024 2023 2023
£ £ £ £
Cost 54,201 39,443 51,571 36,813
At start of year
Additions 7,364 7,364 2,630 2,630
At 30 September 61,565 46,807 54,201 39,443
Depreciation 50,968 36,209 (49,174) (34,416)
At start of year
Charge for the year 2,297 2,298 (1,793) (1,793)
At 30 September 53,265 38,507 (50,967) (36,209)
Net Book Value
At 30 September 8,300 8,300 3,234 3,234
At start of year 3,234 3,234 2,398 2,398
10. Investments
Subsidiary undertakings
Company Country of Type and percentage Direct/ Principal activity
incorporation/ of shares held at indirect
registration 30 September 2024 holding
Tertiary Gold Limited England & Wales 100% of ordinary shares Direct Mineral exploration
Tertiary (Middle East) Limited England & Wales 100% of ordinary shares Direct Mineral exploration
Tertiary Minerals US Inc. Nevada, USA 100% of ordinary shares Direct Mineral exploration
Tertiary Minerals (Zambia) Limited Zambia 96% of ordinary shares Direct Mineral exploration
Copernicus Minerals Limited Zambia 90% owned subsidiary of Tertiary Minerals (Zambia) Limited Indirect 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.
The registered office of Copernicus Minerals Limited is Sable House, 11 Sable
Road, Kabulonga, Lusaka, Lusaka Province, Zambia.
The following subsidiary undertakings have claimed exemption from audit under
section 479A of the companies Act 2006:
Subsidiary undertaking Company number
Tertiary Gold Limited 03098061
Tertiary (Middle East) Limited 04212670
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 held by two private
shareholder. Deferred exploration assets held by the subsidiary are £577,903.
The subsidiary is fully financed by the Parent Company via intercompany loan
and capital contribution, the loan amounted to £278,055, loan interest of
£23,545 and capital contribution amounted to £438,325. The net assets amount
to £277,372 and the loss for the year was £62,591.
Copernicus Minerals Limited
Copernicus Minerals Limited is a second-tier subsidiary of Tertiary Minerals
plc (Group Parent Company). 90% of the equity of Copernicus Minerals Limited
is owned by Tertiary Minerals (Zambia) Limited and the 10% non-controlling
interest is held by Mwashia Resources Limited. The subsidiary is fully
financed by the Group Parent Company via capital contribution, which amounted
to £62,062 and the deferred exploration assets held by the second-tier
subsidiary are £93,507. The net assets amount to £61,848 and the loss for
the year was £683.
Investment in subsidiary undertakings Equity Loans Company Company
2024 2024 2024 2023
£ £ £ £
Value at start of year 225,477 435,995 661,472 681,526
Additions 218 120,032 120,250 136,540
Movement in provision - (7,449) (7,449) (156,594)
At 30 September 225,695 548,578 774,273 661,472
Investments in share capital of subsidiary undertakings
The directors have reviewed the carrying value of the Company's investments in
shares of subsidiary undertakings totalling £225,695, 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 and Tertiary
(Middle East) Limited provision of £38,814 and £541 respectively. 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 2024
Sunrise Resources plc England & Wales 0.44% of ordinary shares Mineral exploration
Group and Company
Investment designated at fair value through OCI Group Company Group Company
2024 2024 2023 2023
£ £ £ £
Value at start of year 16,466 - 24,150 24,150
Additions - - - -
Disposal - - - -
Movement in valuation (6,038) - (7,684) (7,684)
At 30 September 10,428 - 16,466 16,466
The fair value of the investment is equal to the market value of its shares at
30 September 2024, 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
2024 2024 2023 2023
£ £ £ £
Amounts owed by related undertakings 25,958 25,958 50,753 50,753
Other receivables 32,235 6,125 40,907 1,275
Prepayments 31,888 23,401 22,772 18,372
At 30 September 90,081 55,484 114,432 70,400
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
£
2024 25,958 25,958 - 25,958
2023 50,753 50,753 - 50,753
12. Cash and cash equivalents
Group Company Group Company
2024 2024 2023 2023
£ £ £ £
Cash at bank and in hand 774,261 764,261 57,545 35,947
Short-term bank deposits 1,486 1,486 64,268 64,268
At 30 September 775,747 765,747 121,813 100,215
13. Trade and other payables
Group Company Group Company
2024 2024 2023 2023
£ £ £ £
Trade payables 32,563 28,832 16,829 17,812
Other taxes and social security costs 25,134 25,134 12,536 12,536
Accruals 79,066 30,315 40,191 23,988
Other payables 3,583 3,583 279 279
At 30 September 140,346 87,864 69,835 54,615
14. Share capital and reserves
2024 2024 2023 2023
No. £ No. £
Ordinary shares - Allotted, called up and fully paid
Balance at start of year 1,981,085,049 198,108 1,536,263,621 153,626
Shares issued in the year 1,693,750,000 169,375 444,821,428 44,482
Balance at 30 September 3,674,835,049 367,483 1,981,085,049 198,108
Share issues
During the year to 30 September 2024 the following share issues took place:
125,000,000 0.01p Ordinary Shares at 0.12p per share, by way of a share
placing for a total consideration of £150,000 before expenses (1 November
2023).
468,750,000 0.1p Ordinary Shares at 0.08p per share, by way of a share placing
for a total consideration of £375,000 before expenses (12 February 2024).
1,100,000,000 0.01p Ordinary Shares at 0.08p per share, by way of a share
placing for a total consideration of £880,000 before expenses (28 August
2024).
During the year to 30 September 2023 a total of 444,821,428 0.01p Ordinary
Shares were issued, at an average price of 0.12p, for a total consideration of
£525,018 net of expenses.
The total amount of transaction fees debited to the Share Premium account in
the year was £73,965 (2023: £27,500).
Nature and purpose of reserves
Capital redemption reserve
Non distributable reserve into which amounts are transferred following the
redemption or the purchase of a company's own shares. The provisions relating
to the capital redemption reserve are set out in section 733 of the Companies
Act 2006.
Foreign currency reserve
Exchange differences relating to the translation of the net assets of the
Group's foreign operations, which relate to subsidiaries only, from their
functional currency into the Parent Company's functional currency, being
Sterling, are recognised directly in the foreign currency reserve.
Share option reserve
The share option reserve is used to recognise the fair value of share-based
payments provided to third parties and employees, including key management
personnel, by means of share options and share warrants issued as part of
their remuneration. Refer to Note 15 for further details.
Fair value reserve
Fair value reserve represents the cumulative fair value changes of
available-for-sale equity investment assets.
15. Warrants granted
Warrants not exercised at 30 September 2024
Issue date Exercise Number Exercisable Expiry
price dates
06/11/2023 0.12p 6,250,000 Any time before expiry 06/11/2024
14/02/2024 0.08p 23,437,500 Any time before expiry 16/02/2025
27/02/2020 0.34p 8,100,000 Any time from 27/02/2021 27/02/2025
28/06/2021 0.34p 3,100,000 Any time from 28/06/2022 28/06/2026
28/06/2021 0.50p 3,000,000 Any time from 28/06/2022 28/06/2026
28/06/2021 1.00p 3,000,000 Any time from 28/06/2023 28/06/2026
28/06/2021 1.50p 3,000,000 Any time from 28/06/2024 28/06/2026
16/02/2023 0.123p 10,000,000 Any time from 16/02/2024 16/02/2028
14/02/2024 0.085p 10,000,000 Any time from 14/02/2025 14/02/2029
06/11/2023 0.12p 6,250,000 Any time before expiry 06/11/2024
14/02/2024 0.08p 23,437,500 Any time before expiry 14/02/2025
14/02/2024 0.085p 10,000,000 Any time from 14/02/2025 14/02/2029
27/08/2024 0.08p 55,000,000 Any time before expiry 27/08/2024
Total 124,887,500
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 6,250,000 warrants at an exercise price of 0.12p, as part of a
share placing, to Peterhouse Capital Limited (6 November 2023).
A grant of 23,437,500 warrants at an exercise price of 0.08p, as part of a
share placing, to Peterhouse Capital Limited (14 February 2024).
A grant of 10,000,000 warrants at an exercise price of 0.085p, to employees
and directors of the Company (14 February 2024).
A grant of 55,000,000 warrants at an exercise price of 0.08p, as part of a
share placing, to Peterhouse Capital Limited (28 August 2024).
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:
2024 2023
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 304,539,285 0.28 245,817,646 0.36
Granted during the year 94,687,500 0.08 253,839,285 0.244
Expired during the year 274,339,285 0.26 (195,117,646) 0.33
Outstanding at 30 September 124,887,500 0.18 304,539,285 0.28
Exercisable at 30 September 89,437,500 0.13 195,325,000 0.27
The warrants outstanding at 30 September 2024 had a weighted average exercise
price of 0.18p (2023: 0.26p), a weighted average fair value of 0.04p (2023:
0.02p) and a weighted average remaining contractual life of 1.29 years (2023:
0.66 years).
In the year ended 30 September 2024, warrants were granted on 1 November
2023, 12 February 2024, 14 February 2024 and 28 August 2024. The aggregate
of the estimated fair values of the warrants granted on these dates is
£18,284. 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.
The inputs into the Black-Scholes-Merton Pricing Model were for warrants
granted in the year and are as follows:
2024 2023
Weighted average share price 0.08p 0.14p
Weighted average exercise price 0.083p 0.223p
Expected volatility 76.0% 70.0%
Expected life 1.42 years 1.19 years
Risk-free rate 4.31% 0.34%
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 £28,350 and £17,784 related to
equity-settled share-based payment transactions in 2024 and 2023 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:
2024 2023
Land & buildings Land & buildings
£ £
Office accommodation:
Within one year 18,468 17,100
Lease payments recognised in loss for the period amounted to £23,256 (2023:
£21,900).
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 2024 At 30 September 2023
Shares Share Warrants Warrants Shares Share
number warrants exercise expiry number warrants
number price date number
P L Cheetham* 46,465,000 2,000,000 0.340p 27/02/2025 21,465,000 15,000,000
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
2,000,000 0.085p 14/02/2029
D A R McAlister 2,937,609 1,500,000 0.340p 27/02/2025 2,937,609 6,500,000
1,500,000 0.340p 28/06/2026
2,000,000 0.123p 16/02/2028
2,000,000 0.085p 14/02/2029
Dr M G Armitage 8,823,529 2,000,000 0.123p 16/02/2028 8,823,529 2,000,000
* 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 2024.
Details of the Parent Company's investment in subsidiary undertakings are
shown in Note 10.
Sunrise Resources plc
P L Cheetham is a director and Executive Chairman of Sunrise Resources plc and
Tertiary Minerals plc.
During the year the Company charged costs of £147,718 (2023: £166,429) to
Sunrise Resources plc being shared overheads of £23,420 (2023: £35,142),
costs paid on behalf of Sunrise Resources plc of £325 (2023: £1,129), staff
salary costs of £66,318 (2023: £63,120) and directors' salary costs of
£62,355 (2023: £67,038), comprising P L Cheetham £62,355 (2023: £67,038).
At the reporting date, Note 11 includes amounts receivable of £25,958 (2023:
£50,753) owed by Sunrise Resources plc.
Shares and warrants held in Sunrise Resources plc by the Company's directors
are as follows:
At 30 September 2024 At 30 September 2023
Shares Share Warrants Warrants Shares Share
number warrants exercise expiry number warrants
number price date number
P L Cheetham* 381,832,572 15,000,000 0.195p 05/08/2025 255,785,016 55,000,000
15,000,000 0.195p 05/08/2025
50,000,000 0.075p 05/07/2025
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 £278,055, loan interest £23,545 and
capital contribution amounted to £438,325. D A R McAlister, a director of
Tertiary Minerals plc, is also the director of Tertiary Minerals (Zambia)
Limited.
Copernicus Minerals Limited
Copernicus Minerals Limited is a second-tier subsidiary of Tertiary Minerals
plc (Group Parent Company). 90% of the equity of Copernicus Minerals Limited
is owned by Tertiary Minerals (Zambia) Limited and the 10% non-controlling
interest is not material. The subsidiary is fully financed by the Group Parent
Company via capital contribution, which amounted to £62,062 and the deferred
exploration assets held by the second-tier subsidiary are £93,507. The net
assets amount to £61,848 and the loss for the year was £683. P L Cheetham, a
director of Tertiary Minerals plc, is also a director of Copernicus Minerals
Limited.
18. Capital management
The Group's capital requirements are dictated by its project and overhead
funding requirements. 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 2024, 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 2024, as defined in IFRS 9, are as follows:
Group Company Group Company
2024 2024 2023 2023
£ £ £ £
Financial assets at amortised cost 833,940 797,831 213,474 152,243
Financial assets at fair value through other comprehensive income 10,428 10,428 16,466 16,466
Financial liabilities at amortised cost 124,355 62,730 68,796 42,080
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
2024 2023 2024 2023
£ £ £ £
United Kingdom Sterling 714,251 97,495 712,538 80,968
United States Dollar 60,313 22,957 52,706 18,722
Other 1,183 1,361 503 525
775,747 121,813 765,747 100,215
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 2024 would increase or decrease
by £3,016 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 2024 2023
£ £
Reclamation provision 11,496 15,158
At start of year
Additions - -
Reduction/reversal (1,494) (2,492)
Exchange adjustments (859) (1,170)
At 30 September 9,143 11,496
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
Executive Chairman's Bonus for calendar year ended 31 December 2023
Post year-end, on 29 October 2024, the Remuneration Committee recommended to
the Board the adoption of a discretionary salary bonus scheme (the
"Recommended Scheme") to be considered annually for the Company's Chief
Executive Officer ("CEO") to apply for calendar years commencing 1 January
2023. No such scheme has been in existence up to this point.
Under the Recommended Scheme, a bonus award, if any, will, ordinarily, be for
a total amount of up to an equivalent of 30% of annual salary and will,
ordinarily, be payable in shares (at the then market price, net of employee
income tax & NI). The Remuneration Committee will have the discretion to
recommend that 25% of any bonus is paid in cash. Any shares issued pursuant to
a bonus award will be subject to a hold period of two years, except in the
event that there is a takeover offer for the entire share issued capital of
the Company.
Fifty percent of any discretionary bonus amount will be based on the
Remuneration Committee's assessment of the CEO's performance during the
relevant calendar year in the administration and management of the Company and
its subsidiaries and 50% of any bonus will be assessed against the achievement
in respect of specific short-term target outcomes during the calendar year
where the CEO is able to influence those outcomes. While the bonus assessment
will be focused on short-term targets, medium-term, long-term and
non-timeframe specific targets have and will be set by the Remuneration
Committee reflecting the Company's overarching aims and with the intent that
medium-term and long-term targets will likely become short-term targets over
time.
In extraordinary circumstances, and for transformational outcomes, it is
proposed that the bonus could be increased in any calendar year up to 100% of
salary at the Remuneration Committee's discretion.
At a meeting held on 29 October 2024, the Remuneration Committee recommended
that the current CEO, Mr Patrick Cheetham, be awarded a bonus equal to 21% of
his 2023 salary in respect of the 2023 calendar year (the "2023 Bonus"). Mr
Cheetham requested that the 2023 Bonus be paid gross in shares on the basis
that he pay over to the Company the associated employee PAYE and employee NI.
The Board agreed to this request as it resulted in a lower cash cost to the
Company for the 2023 Bonus.
At a Board Meeting held on 18 November 2024, the Recommended Scheme was
approved and it was agreed to award a bonus of £27,677 in new ordinary shares
at a price of 0.0725 pence per share, to Mr Cheetham being the closing
mid-market price on Friday 15 November 2024. This resulted in the issue of
38,174,524 new ordinary shares.
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