260055 Tertiary Minerals Cover.qxp 18/12/2020 11:45 Page 1
Tertiary Minerals plc
Silk Point
Queens Avenue
Macclesfield
Cheshire
SK10 2BB
United Kingdom
Tel: +44 (0)1625 838679
Fax: +44 (0)1625 838559
www.tertiaryminerals.com
Perivan 260055
Tertiary Minerals plc
Company No. 03821411
Annual Report and Accounts
for the year ended 30 September 2020
260055 Tertiary Minerals Cover.qxp 18/12/2020 11:45 Page 2
Contents
Chairman’s Statement 3
Strategic Report
Group Overview 4
Operating Review and Performance 4
Financial Review and Performance 7
Risks & Uncertainties 9
Section 172 (1) Statement 11
Our Governance
Corporate Governance Statement 12
Board of Directors 15
Directors’ Responsibilities 16
Directors’ Report 16
Financial Statements
Independent Auditor’s Report to the Members of Tertiary Minerals plc 18
Consolidated Income Statement 22
Consolidated Statement of Comprehensive Income 22
Consolidated and Company Statements of Financial Position 23
Consolidated Statement of Changes in Equity 24
Company Statement of Changes in Equity 25
Consolidated and Company Statements of Cash Flows 26
Notes to the Financial Statements 27
Annual General Meeting
Notice of Annual General Meeting 46
Annual General Meeting Explanatory Notes 47
Voting at the Meeting, Electronic Voting, Proxy Notes and Instructions 48
Company Information IBC
Company Information
Tertiary Minerals plc (AIM – EPIC: TYM)
Company No. 03821411
Stock Code: TYM
Head Office
Silk Point
Queens Avenue
Macclesfield
Cheshire
SK10 2BB
United Kingdom
Tel: +44 (0)1625 838679
Fax: +44 (0)1625 838559
Auditor
Crowe U.K. LLP
3rd Floor
The Lexicon
Mount Street
Manchester
M2 5NT
United Kingdom
Nominated Adviser & Broker
SP Angel Corporate Finance LLP
Prince Frederick House
35-39 Maddox Street
London
W1S 2PP
United Kingdom
Registrars
Link Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
United Kingdom
Registered Office
Sunrise House
Hulley Road
Macclesfield
Cheshire
SK10 2LP
United Kingdom
Company website:
www.tertiaryminerals.com
Bankers
National Westminster Bank plc
2 Spring Gardens
Buxton
Derbyshire
SK17 6DJ
United Kingdom
Joint Broker
Peterhouse Capital Limited
3rd Floor
80 Cheapside
London
EC2V 6EE
United Kingdom
Solicitors
Gowling WLG (UK) LLP
4 More London Riverside
London
SE1 2AU
United Kingdom
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Tertiary Minerals plc Annual Report and Accounts 2020
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Chairman’s Statement
Stock Code: TYM
I am pleased to present the
Company’s Annual Report and
Financial Statements for the year
ended 30 September 2020,
a year of transition as we
continue to build our project
portfolio. We now have five
attractive precious metal and
base metal projects in Nevada,
USA, one of the most prospective
exploration terrains on Earth.
These include precious metal
targets as well as a number of targets for copper
mineralisation, an under explored commodity in Nevada
which is, of course, more famous for its gold and silver
deposits.
We have been active in exploring and adding to our Nevada
projects throughout the year with results still awaited for our
autumn exploration programmes. This has included
combinations of soil sampling, geophysics and trenching on
our Paymaster, Pyramid, Mt Tobin and Peg Leg Projects and
it is anticipated that drilling will be the next step on a number
of these exciting prospects. These projects and the work
carried out in 2020 are discussed in my Operating Review set
out on pages 4 to 7.
We have seen some developments on our royalty interests
in 2020, most notably with the completion of a drilling
programme by Aurion Resources Ltd on the Kaaresselkä
Gold project in Finland where 12 holes were drilled to follow
up on our previous exploration. Results announced recently
were described as encouraging and extend the gold
mineralised zone to c.200m depth and to c.600m strike length
at the Vanha target.
At the end of the reporting period we made the difficult
decision to terminate our interest in the large MB Fluorspar
Project in Nevada after years of effort to find a viable
processing route. The combination of fine-grained mineral
intergrowths, poor recovery and low grade combined to make
production of a saleable concentrate unviable.
There is no news to report on our Storuman Fluorspar Project
as we have had no response yet to our appeal against the
decision by the Swedish Mining Inspectorate to reject
Tertiary’s Exploitation (Mine) Permit in its current form after
having previously granted this. Many projects in Sweden are
in the same unfortunate situation and there is no legislated
timeframe for the Government to respond.
Fluorspar, as a source of fluorine, is one of the least known of
the battery commodities. Fluoride ion batteries provide an
interesting alternative to lithium ion batteries, in particular
because of their larger theoretical energy densities and the
increasing use of fluoropolymers in lithium batteries is an
opportunity for the market in the coming years. We have
acquired significant expertise in fluorspar and remain
interested in identifying and acquiring new fluorspar projects.
In June this year we saw the resignation of our Managing
Director, Richard Clemmey, who was originally recruited to
take our Storuman Fluorspar Project into production. Since
Mr. Clemmey’s departure I have temporarily taken on a more
involved executive role until a new MD is found and have
overseen our recent high level of exploration activity.
For some time we have been looking for a new non-executive
director and an excellent candidate has now been identified
and we expect to make a new Board appointment in the very
near future.
Our Annual General Meeting for the year ended 30 September
2020 will be held in our offices in Macclesfield this year, on
Thursday 28 January 2021, the notice of which is set out on
page 46. Further detailed instructions on proxy voting are set
out on pages 48 and 49. In order to observe ongoing
government restrictions on social distancing and public
gatherings, only the Chairman and one other nominated
Shareholder will attend the meeting to ensure that the meeting
is quorate. Other Shareholders and third parties will not be
permitted to attend the Meeting and will be refused entry.
Shareholders are therefore encouraged to appoint the
Chairman as their proxy (online at www.signalshares.com or by
requesting and submitting a hard copy Form of Proxy) as soon
as possible. In line with corporate governance best practice
and in order that any proxy votes of those shareholders who
are not allowed to attend and to vote in person are fully
reflected in the voting on the resolutions, the Chairman of the
meeting will direct that voting on the resolutions set out in the
notice of meeting will take place by way of a poll. The final poll
vote on the resolutions will be published after the General
Meeting on the Company’s website.
As anticipated in my 2019 Statement, 2020 has been a better
year for stock markets and junior mining companies in
particular, and, despite the COVID-19 pandemic, this has
enabled us to raise funds to continue to explore our project
portfolio. A consequence of the higher availability of funding
across the mining markets is increased competition for drilling
and geological contractors. This may delay progress on our
projects but we are pleased that the COVID-19 pandemic has
not held up our project work so far and mining is currently
exempt from business restrictions in Nevada. However, the
rate of infection is continuing to rise over much of the USA
and we are starting to see this further affect the availability of
contract staff. On the positive side these shortages are likely
to be alleviated by the roll-out of new vaccines.
On that note I think there is reason for cautious optimism in
looking forward to 2021 and I look forward to delivering further
news of developments on our exciting project portfolio.
Patrick Cheetham
Executive Chairman
11 December 2020
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Strategic Report
Group Overview
Our Aim is to increase shareholder value through the
discovery and development of valuable mineral deposits.
Our Strategy is to build, explore and develop a multi-
commodity project portfolio.
Operating Review &
Performance
Precious Metal & Base Metal Projects,
Nevada, USA
Our Principal Activities involve the identification, acquisition,
exploration and development of mineral deposits including
precious metals, base metals and industrial minerals in
Nevada, USA and northern Europe.
The head office is based in Macclesfield in the United
Kingdom with operating locations in Nevada, USA, Sweden
and Norway.
Company’s Business Model
For exploration projects, the Group prefers to acquire 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 that rise over time as
confidence in the project value increases.
The Group currently operates with a low-cost base to
maximise the funds that can be spent on exploration and
development – value adding activities. The Company
currently has five full-time employees including the Executive
Chairman who work with and oversee carefully selected and
experienced consultants and contractors. Following the
departure of the Managing Director in June 2020 the Board of
Directors now comprises one independent Non-Executive
Director and the Chairman. The profiles of the current
directors are provided on page 15.
Administration costs are further reduced via an arrangement
governed by a Management Services Agreement with Sunrise
Resources plc (“Sunrise”), whereby Sunrise pays a share of
the cost of head office overheads (£20,369 in the reporting
period). As at the 30 September 2020, Tertiary holds 0.6% 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.
Pyramid Gold Project (100% owned by Tertiary
by lease agreement)
The Pyramid Project is located 25 miles northwest of Reno in
the Pyramid Mining District and is secured by a 20-year lease
on 9 patented claims with options to purchase (subject to
underlying royalties) and an additional 25 mining claims
staked to cover additional targets along strike.
Geology, Mineralisation and Past Exploration
The Pyramid Mining District lies at the northwest end of the
Walker Lane mineral belt, a major northwest trending
structural deformation zone and a highly productive gold,
silver and copper producing region which is host to numerous
past and currently producing multi-million ounce epithermal
gold deposits as well as porphyry copper and porphyry
molybdenum deposits.
In the main part of the Pyramid District, precious metals were
mined from 1866 on a small scale from three moderately to
steeply dipping, northwest-striking vein systems within the
Perry Canyon. The only documented field exploration within
the area of the Company’s claims was carried out by Battle
Mountain Gold Mining (“Battle Mountain”) who leased the
project from our current lessors in the period 1988-89.
Soil sampling by Battle Mountain identified a significant open-
ended gold-in-soil anomaly which they then tested with two
drill holes. Drill hole PYR 9 intersected high-grade gold
mineralisation and visible gold within a sample thickness of
1.52m grading 17.8g/t Au from 94.5m downhole. A broad zone
of low-grade mineralisation continued to the end of the hole at
115.8m where the last 1.52m sample graded 2.6g/t Au.
The second hole, PYR 10, targeted the same western line soil
anomaly some 150m to the southwest but was interpreted to
have been drilled in the wrong direction and made no
significant gold intersections. Battle Mountain did not carry out
any follow up exploration.
Company Exploration
In 2020 the Company completed drill hole TPYR1 to twin and
deepen percussion hole PYR9. TPYR1 was drilled to a depth
of 137m down hole at the same 45-degree angle and azimuth
and from the same general location as PYR9. Gold assay
results showed a best intersection of 0.55m grading 2.01g/t
Au from 82.6m down hole. Whilst lower than those from the
historic drill hole PYR9, the results have confirmed that the
target zone is gold mineralised.
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Stock Code: TYM
Most recently in autumn 2020 a programme of soil sampling
was completed to confirm and determine the extent of an
open-ended gold and multi-element soil anomaly originally
defined by Battle Mountain and to test the broader potential of
the vein systems on the Project area which is highlighted by
the results of 43 surface chip samples taken by Battle
Mountain which assayed up to 7.27g/t Au and averaged
1.3g/t Au.
A total of 370 soil samples have been collected by the
Company on a 30m by 120m grid. Results are not yet
available but drilling and/or trenching is provisionally planned
to test any strong soil anomalies.
Paymaster Polymetallic Project (100% owned by
Tertiary)
The Paymaster Project is located approximately 30km
southwest of Tonopah in Nevada, USA, and is held by mining
claims covering an area of more than 390 acres.
Geology, Mineralisation and Past Exploration
The primary target at the Paymaster Project is a skarn hosted
zinc-silver deposit in Cambrian age limestone in contact with
shale and is located one mile south of the limestone contact
with the Cretaceous age Lone Mountain granite pluton.
Zinc skarns are important, not only as a source of zinc, lead,
copper, silver and other associated metals, but also as
indicators of buried porphyry copper and molybdenum
deposits. As a class of mineral deposit, they include a number
of world class zinc-silver deposits such as Antamina in Peru.
The Company’s consultant geologist has also drawn
analogies to the Taylor Zinc-Silver Deposit owned by South 32
at Hermosa, in the neighbouring state of Arizona (reported
resource of 155mt grading 3.4% zinc, 3.7% lead and 69g/t
silver).
The skarn mineralisation at Paymaster is exposed in a
number of prospector scale workings but has seen no
systematic company exploration until now.
Company Exploration
In 2019 the Company sampled outcropping skarn
mineralisation over a total distance of 1.7km in a number of
wide spaced and very shallow prospector pits. Seven grab
samples of the skarn mineralisation exposed in or excavated
from the pits average 10.1% zinc (maximum 20.9%), 1.5%
lead (max. 6.5%) 134g/t silver (max 253g/t or 7.3 ounces/ton)
and 0.68% copper (maximum 3.4%). The skarn samples also
contain up to 0.11% cobalt (average of 419ppm or 0.045%)
and up to 58ppm tellurium (average 31ppm) and 782ppm
bismuth (average 315ppm).
An initial soil sampling programme was completed by the
Company in 2019 and defined significantly elevated levels of
Ag, Cu, Zn, Co and Pb over a strike length of over 2,000
metres and work has now focused on two areas of
mineralisation:
Valley Prospect
•
•
New thick skarn zone observed in the field:
Approximately 350m long and up to 8m thick.
Rock sample taken from historic shaft spoil dump
assayed 7.5% zinc, 4.3% lead and 180g/t silver.
East Slope Prospect
•
•
650m long zinc soil anomaly (100-250ppm Zinc)
surrounding previously sampled outcrop of zinc-silver-
cobalt bearing skarn mineralisation, including 175m long
250-500ppm zinc soil anomaly.
Previous rock sample assays up to 20.9% zinc, 0.11%
cobalt and 198ppm silver within the prospect.
In 2020 a detailed magnetic survey was carried out by drone
to cover these two main prospects. In addition, an infill soil
sampling programme was competed to cover the East Slope
Prospect where previous wide spaced soil sampling defined a
coherent zinc anomaly over 500m long (+100ppm zinc) and
where samples from prospecting pits have assayed up to
21% zinc.
134 infill soil samples were collected on a 10m by 20m grid
and results are awaited. A programme of drone
photogrammetry has been completed for topographic control.
Peg Leg Copper-Silver-Lead-Zinc Project
(100% owned by Tertiary)
The Peg Leg Project claims are located 11km north of
Tonopah in the San Antone Mineral Field. Historical workings
comprise shallow shafts, trenches and bulldozer scrapes
exploring contact metasomatic (skarn) deposits associated
with the Frazier’s Well granodiorite.
The project was originally prospected for tungsten which
occurs in grey marble. The Company’s reconnaissance
sampling has confirmed the tungsten content in one skarn
layer within the limestone where sampling across 11m width
in an old shallow trench returned 11m at 0.22% tungsten.
However, the principal target is a zone of base-precious metal
skarn mineralisation along the granite/limestone contact
where an outcrop of mineralisation exposed adjacent to the
granite contact assayed 59 grammes/tonne (g/t) silver, 1.4%
copper, 2.4% lead and 1.8% zinc. The waste pile from a
nearby shallow mine shaft contains material assaying up to
181g/t silver, 3.9% copper, 10.1% lead and 1.2% zinc.
The Company has completed four exploration trenches along
a granite/limestone contact zone targeting skarn-style
mineralisation over a strike length of approximately 230m.
The objective of the trenching was to test the thickness of the
outcropping mineralisation which is largely obscured by scree
and old mine waste.
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Strategic Report (continued)
The trenches explored zones of oxidised skarn mineralisation
adjacent to the granite contact but analytical results were
disappointing. However, a drone magnetic survey has also
been completed and this has identified additional and as-yet-
untested skarn targets beyond the area so far investigated.
Mt Tobin Silver Prospect (100% owned by
Tertiary)
Mt Tobin is located 73km south of Winnemucca in north-
central Nevada. The Company’s mining claims cover a zone
of stratiform mineralisation in chert and silicified sediments
45-60m thick over a strike length of 1,200m. This is coincident
with a significant silver-lead-zinc soil anomaly reported by
previous explorer Queenstake Resources.
In 2020 the Company carried out field reconnaissance work
and rock samples returned silver values of up to 101
grammes/tonne (g/t) silver (3.12 ounces/ton) over a 450m
strike length sampled to date. Mineralisation is open to north
and south, structurally controlled and spatially related to dyke
intrusion.
A drone magnetic survey and a soil sampling programme
have now been completed. This survey comprised 23.6-line
km of flying on traverses 50m apart. 304 soil samples were
collected on a 40m by 100m grid. Results are awaited.
Lucky Copper Prospect (100% owned by
Tertiary)
The Lucky Project comprises 13 claims on the east side of the
old Aurum mining centre, 96km northeast of the major
porphyry copper mining town of Ely in northeast Nevada.
The target is a disseminated sediment hosted, intrusion-
related copper deposit based on a 1951 shallow churn
(percussion) drill hole which intersected copper mineralised
limestone and porphyry beneath alluvium on the range front
pediment slope. A 20.4m cumulative thickness of this
sequence assayed 0.65% copper to the bottom of the hole at
77.7m depth. The hole ended in mineralisation.
A preliminary field evaluation and sampling programme has
been carried out in 2020 and drill testing is proposed as soon
as a drill rig contract can be secured.
The aim of the drill programme will be to confirm and extend
at depth the copper mineralised drill intersection made in
1951.
Fluorspar Projects
Storuman Fluorspar Project, Sweden
The Company’s 100% owned Storuman Project is located in
north-central Sweden and is linked by the E12 highway to the
port city of Mo-i-Rana in Norway and by road and rail to the
port of Umeå on the Gulf of Bothnia.
JORC Compliant Mineral Resource
Classification Million Tonnes (Mt) Fluorspar (CaF2 %)
Indicated 25.0 10.28
Inferred 2.7 9.57
Total 27.7 10.21
Exploitation (Mine) Permit
No work was carried out in 2020 and the Company continues
to wait for feedback from the Swedish Government in
response to its appeal against the decision by the Swedish
Mining Inspectorate to reject Tertiary’s Exploitation (Mine)
Permit in its current form.
The appeal was lodged on 3 May 2019 and still no timeline for
a response has been given by the Swedish Government.
MB Fluorspar Project, Nevada, USA
The Company’s interest in the MB Fluorspar Project was
terminated during the year.
This follows extensive project work over a number of years
and which continued during the year. Despite a large resource
of low-grade fluorspar having been defined, metallurgical
testwork has failed to achieve target concentrate grades or
recovery.
The fluorspar in the deposit is finely intergrown with other
minerals, in particular calcite, and the Company concluded,
after extensive testwork, that a viable processing route cannot
be achieved for the MB Project using currently available
technologies.
In addition to this, the leasing costs and expenditure
commitments under the Company’s lease agreement with the
underlying claim holder were set to increase substantially
from 30 September 2020 and holding costs could no longer
be justified.
Lassedalen Fluorspar Project, Norway
The Lassedalen Fluorspar Project is favourably located near
Kongsberg, 80km to the south-west of Oslo in Norway. It is
less than 1km from highway E134 and approximately 50km
from the nearest Norwegian port.
JORC Compliant Mineral Resource
Classification Million Tonnes (Mt) Fluorspar (CaF2 %)
Inferred 4.0 24.6
The resource defined at Lassedalen is currently too small to
justify development at present but it is open to expansion
along strike and at depth. Given the commitments on its other
projects and available funding, further exploration at the
Lassedalen Project has continued to be a lower priority in
2019/2020 and consideration is being given to the future of
the project.
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Stock Code: TYM
Royalty Interests
Kaaresselkä and Kiekerömaa Gold Projects,
Finland
The Company retains a royalty interest in the Kaaresselkä
and Kiekerömaa gold projects which were sold in 2016 to
TSX-V listed Aurion Resources Ltd (“Aurion”). These projects
are located in the Central Lapland Greenstone Belt of the
Fennoscandian Shield where there are a number of existing
gold mines and a number of potential new mine
developments.
Since acquiring the Kaaresselkä Project, Aurion’s work on the
project has included re-logging of all drill holes, oriented core
measurements, a detailed ground magnetic survey, whole
rock geochemistry, GIS compilation and integration of
historical data into 3D modelling software. This work has
allowed for a reinterpretation of the geology and a better
understanding of the property’s potential. The main host
lithology is strongly altered and sheared mafic volcanics,
which is a classic setting for major orogenic gold deposits.
In the reporting period Aurion completed its maiden drill
programme at Kaaresselkä. The programme comprised 12
holes for a total of 2,400m testing four targets (Vanha, Lampi
South, Lampi North, Tienvarsi) with the aim of confirming
historical drilling and testing the mineralised structure at depth
and along strike. The results were described by Aurion as
encouraging and include drill intercepts of 1.52g/t Au over
2.85m (KS20001 from 306.50m down hole) and 1.85g/t Au
over 5.40m (KS20002 from 199.00m down hole). The drilling
has extended the gold mineralised zone to ~200m depth and
to ~600m strike length at Vanha target.
Non-Core Projects
Rosendal Tantalum Project, Finland
The Exploration Licence for the project expired in October
2015 and the Company has applied for a renewal of the
Licence. If the Company is unsuccessful in finding a suitable
partner or buyer to progress the project, it is unlikely the
renewal will be granted.
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.
Financial Review &
Performance
The Group is currently in the earlier stages of the typical
mining development cycle and so has no income other than
cost recovery from the management contract with Sunrise
Resources plc 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 results for the Group are set out in detail on page 22.
The Group reports a loss of £2,498,167 for the year (2019:
£831,507) after administration costs of £597,994 (2019:
£502,788) and after crediting interest receivable of £437
(2019: £234). The loss includes impairment of the MB Project
of £2,027,000, expensed pre-licence and reconnaissance
exploration costs of £49,360 (2019: £75,778). Administration
costs include £30,290 (2019: £8,021) as non-cash costs for
the value of certain share warrants held by employees as
required by IFRS 2.
Revenue includes £175,750 (2019: £189,742) from the
provision of management, administration and office services
provided to Sunrise Resources plc, to the benefit of both
companies through efficient utilisation of services.
The financial statements show that, at 30 September 2020,
the Group had net current assets of £208,365 (2019:
£21,499). 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 on page 23 and are also components of the
Net Assets of the Group. Net assets also include various
“intangible” assets of the Company. As the name suggests,
these intangible assets are not cash assets but include this
year’s and previous years’ accrued expenditure on minerals
projects where that expenditure meets the criteria set out in
Note 1(d) (accounting policies) to the financial statements on
page 28. The intangible assets total £541,958 (2019:
£2,461,972) and the breakdown by project is shown in Note 2
to the Financial Statements on page 32.
Expenditure which does not meet the criteria set out in Notes
1(d) and 1(n), such as pre-licence and reconnaissance costs,
are expensed and add to the Company’s loss. The loss
reported in any year can also include expenditure that was
carried forward in previous reporting periods as an intangible
asset but which the Board determines is “impaired” in the
reporting period.
The extent to which expenditure is carried forward as
intangible assets is a measure of the extent to which the
value of the Company’s expenditure is preserved.
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Strategic Report (continued)
Impairment
A biannual review is carried out by the directors to assess
whether there are any indications of impairment of the
Group’s assets.
Investments in Group undertakings:
The directors have reviewed the carrying value of the
Company’s investments in shares of subsidiary undertakings
totalling £224,890, 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:
A review of the recoverability of loans to subsidiary
undertakings, totalling £2,275,735 has been carried out.
This indicated a potential credit loss arising in the year of
£1,899,212 relating to Tertiary Minerals US Inc. The
assessment and provision arises from the fact that there has
been an impairment of the underlying exploration assets held
by Tertiary Minerals US Inc., leading to doubt over
recoverability of the loan. The provision made against the
receivables has reduced it to the value of the underlying
development assets.
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.
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 do not provide a reliable guide to the
performance of the Company or its Board and its long-term
potential to create value.
Key Performance Indicators
The usual financial key performance indicators (“KPIs”) are
neither applicable nor appropriate to measurement of the
value creation of a company involved in mineral exploration
and which currently has no turnover other than cost recovery.
The directors consider that the detailed information in the
Operating Review is the best guide to the Group’s progress
and performance during the year.
The Company does seek to reduce overhead costs, where
practicable, and is reporting administration costs this financial
year of £597,994 (2019: £502,788).
Fundraising
During the 2020 financial year the Company raised a total of
£1,135,800, before expenses, as shown in Note 14 to the
financial statements.
These funds were raised through:
•
•
•
the issue on 19 November 2019 of zero coupon
convertible securities to Bergen Global Opportunity Fund,
LP (the “Investor”), a US based institutional investment
fund as detailed in Notes 14 and 20 of the financial
statements on pages 39 and 45; and
a placing of shares on 25 February 2020 to clients of the
Company’s joint broker, Peterhouse Capital Limited, as
detailed in Note 14 of the financial statements on
page 39; and
a share subscription deed on 2 April 2020 with Precious
Metals Capital Group LLC, a U.S. based institutional
specialist investor, as detailed in Notes 14 and 21 of the
financial statements on pages 39 and 45.
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
(£622,859), these projections include the proceeds of future
fundraising necessary within the next 12 months to meet the
Group’s overheads and planned discretionary project
expenditures and to maintain the Company and its
subsidiaries as going concerns.
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Stock Code: TYM
Risks & Uncertainties
The Board regularly reviews the risks to which the Group is exposed and ensures through its meetings and regular reporting
that these risks are minimised as far as possible.
The principal risks and uncertainties facing the Group at this stage in its development and in the foreseeable future are detailed
below together with risk mitigation strategies employed by the Board.
RISK MITIGATION STRATEGIES
Exploration Risk
The Group’s business is mineral exploration and evaluation
which are speculative activities. There is no certainty that
the Group will be 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.
Resource Risk
All mineral projects have risk associated with defined grade
and continuity. Mineral Reserves are always subject to
uncertainties in the underlying assumptions which include
geological projections and metal/mineral assumptions.
Development Risk
Delays in permitting, or changes in permit legislation and/or
regulation, financing and commissioning a project may
result in delays to the Group meeting production targets or
even the Company ultimately not receiving the required
permits and in extreme cases loss of title.
Commodity Risk
The directors bring many years of combined mining and
exploration experience and an established track record in
mineral discovery.
The Company mainly targets advanced and drill ready
exploration projects in order to avoid higher risk grass roots
exploration.
Resources and reserves are estimated by independent
specialists on behalf of the Group in accordance with
accepted industry standards and codes. The directors are
realistic in the use of mineral price forecasts and impose
rigorous practices in the QA/QC programmes that support
its independent estimates.
In order to reduce development risk in future, the directors
will ensure that its permit application processes and
financing applications are robust and thorough.
Changes in commodity prices can affect the economic
viability of mining projects and affect decisions on
continuing exploration activity.
The Company consistently reviews commodity prices and
trends for its key projects throughout the development
cycle.
Mining and Processing Technical Risk
Notwithstanding the completion of metallurgical testwork,
test mining and pilot studies indicating the technical viability
of a mining operation, variations in mineralogy, mineral
continuity, ground stability, groundwater conditions and
other geological conditions may still render a mining and
processing operation economically or technically non-viable.
From the earliest stages of exploration the directors look to
use consultants and contractors who are leaders in their
field and in future will seek to strengthen the executive
management and the Board with additional technical and
financial skills as the Company transitions from exploration
to production.
Environmental Risk
Exploration and development of a project can be adversely
affected by environmental legislation and the unforeseen
results of environmental studies carried out during
evaluation of a project. Once a project is in production
unforeseen events can give rise to environmental liabilities.
Mineral exploration carries a lower level of environmental
liability than mining. The Company has adopted an
Environmental Policy and the directors avoid the acquisition
of projects where liability for legacy environmental issues
might fall upon the Company.
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Strategic Report (continued)
RISK MITIGATION STRATEGIES
Political Risk
All countries carry political risk that can lead to interruption
of activity. Politically stable countries can have enhanced
environmental and social 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.
Partner Risk
Whilst there has been no past evidence of this, the Group
can be adversely affected if joint venture partners are
unable or unwilling to perform their obligations or fund their
share of future developments.
The Company’s strategy currently restricts its activities to
stable, democratic and mining friendly jurisdictions.
The Company has adopted a strong Anti-corruption Policy
and a Code of Conduct and these are strictly enforced.
The Company currently maintains control of certain key
projects so that it can control the pace of exploration and
reduce partner risk.
For projects where other parties are responsible for critical
payments and expenditures the Company’s agreements
legislate that such payments and expenditures are met.
Financing & Liquidity Risk
Liquidity risk is the risk that the Company will not be able to
raise working capital for its ongoing activities.
The Group’s goal is to finance its exploration and evaluation
activities from future cash flows, but until that point is
reached the Company is reliant on raising working capital
from equity markets or from industry sources. There is no
certainty such funds will be available when needed.
The Company maintains a good network of contacts in the
capital markets that 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.
Financial Instruments
Details of risks associated with the Group’s Financial
Instruments are given in Note 19 to the financial statements
on page 43.
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.
In carrying out their responsibilities, the directors have put in
place a framework of controls to ensure as far as possible
that ongoing financial performance is monitored in a timely
manner, that corrective action is taken and that risk is
identified as early as practically possible, and they have
reviewed the effectiveness of internal financial control.
The Board, subject to delegated authority, reviews capital
investment, property sales and purchases, additional
borrowing facilities, guarantees and insurance
arrangements.
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Stock Code: TYM
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 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 on page 4 and in the Chairman’s
Statement on page 3. 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) on
page 12 and the section on Risks and Uncertainties on
page 9.
The interests of the Company’s employees:
All of the Company’s employees have daily access to the
Executive Chairman and to the non-executive directors and
there is a continuous and transparent dialogue on all
employment matters. Further details on the Board’s
employment policies, health and safety policy and employee
engagement are given in the Corporate Governance
Statement (Principle 8) on page 13.
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) starting on page 12.
Having regard to the impact of the Company’s operations
on the community and the environment:
The Company requires a “social licence” to operate
sustainably in the mining industry and so the Board makes
careful consideration of any potential impacts of its activities
on the local community and the environment. The Board
strives to maintain good relations with the local communities
in which it operates and with local businesses. The Executive
Chairman meets with regulators and community
representatives when promulgating the Company’s plans for
exploration and development and takes their comments into
consideration wherever possible. Further discussion of these
activities can be found in the Operating Review starting on
page 4 and in the Corporate Governance Statement
(Principle 3) on page 12.
The desirability of the Company maintaining a reputation
for high standards of business contact:
The Board recognises that its reputation is key to its long-term
success and depends on maintaining high standards of
corporate governance. It has adopted the QCA Code of
Corporate Governance and sets out in detail how it has
complied with the 10 key principles of the QCA Code in the
Corporate Governance Statement starting on page 12. This
contains details of various Company policies designed to
maintain high standards of business conduct such as the
Share Dealing Policy, Health and Safety Policy and Anti-
Bribery Policy and Code of Conduct.
The need to act fairly between Members of the Company:
The Board ensures that it takes decisions in the interests of
the members (shareholders) as a whole and aims to keep
shareholders fully informed of significant developments,
ensuring that all shareholders receive Company news at the
same time. The Executive Chairman devotes time to
answering genuine shareholder queries, no individual or
group of shareholders is given preferential treatment. Further
information is provided in the Corporate Governance
Statement (Principles 2 and 10) on pages 12 and 14.
This Strategic Report was approved by the Board on
11 December 2020 and signed on its behalf.
Patrick Cheetham
Executive Chairman
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Our Governance
Corporate Governance
Statement
There is no prescribed corporate governance code for AIM
companies and London Stock Exchange prefers to give
companies the flexibility to choose from a range of codes
which suit their specific stage of development, sector and
size.
The Board considers the corporate governance code
published by the Quoted Companies Alliance for small and
mid-sized quoted companies to be the most suitable code for
the Company. Accordingly the Company has adopted the
principles set out in the QCA Corporate Governance Code
(the “QCA Code”) and applies these principles wherever
possible, and where appropriate to its size and available
resources.
The Chairman, Patrick Cheetham, has overall responsibility
for the Corporate Governance of the Company. This
Corporate Governance Statement was reviewed and
amended by the Board on 30 October 2020.
The QCA Code sets out ten principles which should be
applied. The principles are listed below with an explanation of
how the Company applies each principle and/or the reasons
for any aspect of non-compliance.
Principle One: Establish a strategy and business model
which promotes long-term value for shareholders.
The Company has a clearly defined strategy and business
model that has been adopted by the Board and is set out on
page 4. Details of the key challenges to the execution of the
Company’s strategy and business model and how these
challenges are addressed can be found in Risks and
Uncertainties in the Strategic Report set out on pages 9 to 10.
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.
Where feasible all shareholders are encouraged to attend the
Annual General Meeting where they can meet and directly
communicate with the Board. Shareholders are welcome to
contact the Company via email at info@tertiaryminerals.com
with any specific queries.
The Company also provides regulatory, financial and business
news updates through the Regulatory News Service (RNS)
and various media channels such as Twitter. Shareholders
also have access to information through the Company’s
website, www.tertiaryminerals.com, which is updated on a
regular basis.
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. At this stage in the Group’s development, the
Board has not adopted a specific written policy on Corporate
Social Responsibility as it has a limited pool of stakeholders
other than its shareholders. Rather, the Board seeks to
protect the interests of the Group’s stakeholders (both internal
and external to the Group) through individual policies and
through ethical and transparent actions. The Company
engages positively with suppliers, stakeholders and with local
communities through open meetings and meetings with
community representatives in its project locations and
encourages feedback through this engagement.
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 together with risk mitigation
strategies employed by the Board are detailed in Risks and
Uncertainties in the Strategic Report on pages 9 to 10.
Principle Five: Maintain the board as a well-functioning,
balanced team led by the chair.
The Board’s role is to agree the Group’s long-term direction
and strategy and monitor achievement of its business
objectives. The Board meets formally four times a year for
these purposes and holds additional meetings when
necessary to transact other business. The Board receives
regular and timely reports for consideration on all significant
strategic, operational and financial matters. Relevant
information for consideration by the Board is circulated in
advance of its meetings.
The Board is supported by the Audit, Remuneration and
Nomination Committees.
The Board currently consists of the Executive Chairman and
one independent non-executive director. The current Board’s
preference is that there is a minimum of two independent
non-executive directors. However, this is not currently the
case and the Company intends that an additional independent
non-executive director will be appointed shortly. When there
are two independent non-executive directors in post, the
Board considers that the Board structure will be acceptable
having regard to the fact that it is not yet revenue-earning.
Despite serving as a non-executive director for more than
nine years, Donald McAlister is considered independent of
management and free from any business or other relationship
which could materially interfere with the exercise of his
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Stock Code: TYM
independent judgement. In compliance with good practice, he
will continue to seek annual re-election rather than every third
year as per the Articles of Association.
Attendance at Board and Committee Meetings
The Board retains full control of the Group with day-to-day
operational control delegated to the Executive Directors. The
full Board meets formally four times a year and on any other
occasions it considers necessary. During the period under
review there were sixteen Board meetings, two Remuneration
Committee meetings, two Audit Committee meetings and one
Nomination Committee meeting. All meetings were attended
by their constituent directors.
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 the directors is
relevant to the Company’s business and is appropriate given
the current size and stage of development of the Company.
The Board is satisfied 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.
Details of the current directors’ biographies are set out on
page 15.
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.
The Board and its committees will also seek external
expertise and advice where required.
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 performance of the
Executive Directors is reviewed once a year by the rest of the
Board, and measured against a definitive list of short, medium
and long-term strategic targets set by the Board.
The Nomination Committee, currently consisting of the
Chairman and the Non-Executive Director, meets once a year
to lead the formal process of rigorous and transparent
procedures for Board appointments. During this meeting, 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.
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
corporate culture of the Company is promoted throughout its
workforce, suppliers and contractors and is underpinned by
the implementation and regular review, enforcement and
documentation of various policies: Health and Safety Policy;
Environmental Policy; Share Dealing Policy; Anti-Corruption
Policy and Code of Conduct; Privacy and Cookies Policy and
Social Media Policy.
Employees
The Group encourages its employees to understand all
aspects of the Group’s business and seeks to remunerate its
employees fairly, being flexible where practicable. The Group
gives 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
employees’ interests when making decisions, and
suggestions from employees aimed at improving the Group’s
performance are welcomed.
Suppliers and Contractors
The Group recognises that the goodwill of its contractors,
consultants and suppliers is important to its business success
and seeks to build and maintain this goodwill through fair
dealings. The Group has a prompt payment policy and seeks
to settle all agreed liabilities within the terms agreed with
suppliers. The amount shown in the Consolidated and
Company Statements of Financial Position in respect of trade
payables at the end of the financial year represents 13 days
of average daily purchases (2019: 11 days).
Anti-Corruption Policy and Code of Conduct
The Company has adopted and implements an Anti-
Corruption Policy and a Code of Conduct.
Health and Safety
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
stakeholders. The Company has developed and implemented
a Health and Safety Policy to clearly define roles and
responsibilities and in order to identify and manage risk.
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 ensuring the
non-executive directors are properly briefed on all operational
and financial matters. The Chairman has overall responsibility
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Our Governance (continued)
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.
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 various stakeholder groups. The
Company’s website is regularly updated and users can
register to be alerted via email when certain announcements
are made.
The Group’s financial reports can be found here:
www.tertiaryminerals.com/investor-media/financial-reports
Notices of General Meetings held for at least the past five
years can be found here:
www.tertiaryminerals.com/news-releases
The results of voting on all resolutions in general meetings will
be 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% of independent votes.
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.
Patrick Cheetham
Executive Chairman
11 December 2020
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.
Non-Executive Director, Donald McAlister, is responsible for
bringing independent and objective judgment to Board
decisions. The Board has established Audit, Remuneration
and Nomination Committees with formally delegated duties
and responsibilities. Donald McAlister currently chairs the
Audit and Remuneration Committees and Patrick Cheetham
chairs the Nomination Committee.
Audit Committee
The Audit Committee, currently composed entirely of the Non-
Executive Director, 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
Auditor taking account of any non-audit services provided by
them.
Remuneration Committee
The Remuneration Committee also comprises the Non-
Executive Director. The Remuneration Committee determines
the appropriate remuneration for the Company’s executive
directors, ensuring that this reflects their performance and
that of the Group, and to demonstrate to shareholders that
executive remuneration is set by Board members who have
no personal interest in the outcome of their decisions.
The Company has previously operated a long-term bonus and
incentive scheme for the position of Managing Director. The
objective of adopting the scheme was to provide reward for
successfully achieving performance targets set by the Board
in line with the Company’s Aims and Strategy. The Company
has in place an Inland Revenue approved share option
scheme and also issues warrants to subscribe for shares to
executive directors and employees. Directors’ emoluments
are disclosed in Note 4 to the financial statements and details
of directors’ warrants are disclosed in Note 17.
As noted above, the Company intends that an additional
independent non-executive director will be appointed shortly.
The audit and remuneration committees will then comprise
two independent non-executive directors.
Conflicts of Interest
The Companies Act 2006 permits directors of public
companies to authorise directors’ conflicts and potential
conflicts, where appropriate, and the Articles of Association
contain a provision to this effect.
At 30 September 2020, Tertiary Minerals plc held 0.6% of the
issued share capital of Sunrise Resources plc and the
Chairman of Tertiary Minerals plc is also Chairman of Sunrise
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Stock Code: TYM
Board of Directors
The directors and officers of the Company during the financial
year were:
Patrick Cheetham (60)
Chairman
Key Strengths and Experience
•
Geologist.
Donald McAlister (61)
Non-Executive Director*
Key Strengths and Experience
•
Accountant.
•
•
•
39 years’ experience in mineral exploration.
34 years’ experience in public company management.
Founder of the Company, Dragon Mining Ltd, Archaean
Gold NL and Sunrise Resources plc.
External Appointments
Chairman and founder of Sunrise Resources plc.
•
•
•
Previously Finance Director at Mwana Africa plc, Ridge
Mining plc, Reunion Mining and Moxico Resources plc.
25 years’ experience in all financial aspects of the
resource industry, including metal hedging, tax planning,
economic modelling/evaluation, project finance and IPOs.
Founding director of the Company.
External Appointments
Financial Director of ZincOx Resources plc.
* Currently Chair of the Audit Committee and the
Remuneration Committee.
Richard Clemmey (47) (Resigned 30 June 2020)
Previously Managing Director
Rod Venables – City Group PLC
Company Secretary
Key Strengths and Experience
•
Chartered Engineer.
Key Strengths and Experience
•
Qualified company/commercial solicitor
•
•
26 years’ experience in developing and managing
mining/quarrying projects worldwide for Derwent Mining,
Lafarge, Hargreaves (GB) Ltd, Marshalls plc and CFE.
Board Director since May 2012.
External Appointments
Gritstone Ltd.
•
•
Director and Head of Company Secretarial Services at
City Group PLC
Experienced in both Corporate Finance and Corporate
Broking
External Appointments
Company Secretary for Sunrise Resources plc and other
corporate clients of City Group PLC.
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Our Governance (continued)
Directors’ Responsibilities
Directors’ Report
The directors are responsible for preparing the Strategic
Report, the Directors’ Report and the financial statements in
accordance with applicable law and regulations.
The directors are pleased to submit their Annual Report and
audited financial statements for the year ended 30 September
2020.
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
International Financial Reporting Standards (IFRSs) as
adopted by the European Union and applicable law. Under
company law the directors must not approve the financial
statements unless they are satisfied that they give a true and
fair view of the state of affairs of the Group and Company and
of the profit or loss of the Group for that period. The directors
are also required to prepare financial statements in
accordance with the AIM Rules of the London Stock
Exchange for companies trading securities on the AIM
market.
In preparing these financial statements, the directors are
required to:
•
select suitable accounting policies and then apply them
consistently;
• make judgements and accounting estimates that are
reasonable and prudent;
•
•
state whether they have been prepared in accordance
with IFRSs as adopted by the European Union, subject to
any material departures disclosed and explained in the
financial statements; and
prepare the financial statements on the going concern
basis unless it is inappropriate to presume that the
Company and the Group will continue in business.
The directors are responsible for keeping adequate
accounting records that are sufficient to show and explain the
Company’s transactions and disclose with reasonable
accuracy at any time the financial position of the Company
and enable them to ensure that the financial statements
comply with the requirements of the Companies Act 2006.
They are also responsible for safeguarding the assets of the
Company and hence for taking reasonable steps for the
prevention and detection of fraud and other irregularities.
They are further responsible for ensuring that the Strategic
Report and the Directors’ Report and other information
included in the Annual Report and financial statements are
prepared in accordance with applicable law in the United
Kingdom.
Website Publication
The maintenance and integrity of the Tertiary Minerals plc
website is the responsibility of the directors. Legislation in the
United Kingdom governing the preparation and dissemination
of the accounts and the other information included in annual
reports may differ from legislation in other jurisdictions.
The Strategic Report starting on page 4 contains details of the
principal activities of the Company and includes the Operating
Review and Performance 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 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
(£622,859), these projections include the proceeds of future
fundraising necessary within the next 12 months to meet the
Company’s and Group’s overheads and planned discretionary
project expenditures and to maintain the Company and Group
as going concerns. Although the Company has been
successful in raising finance in the past, there is no assurance
that it will obtain adequate finance in the future. This
represents a material uncertainty related to events or
conditions which may cast significant doubt on the Group and
Company’s ability to continue as going concerns and,
therefore, that they may be unable to realise their assets and
discharge their liabilities in the normal course of business.
However, the directors have a reasonable expectation that
they will secure additional funding when required to continue
meeting corporate overheads and exploration costs for the
foreseeable future and therefore believe that the going
concern basis is appropriate for the preparation of the
financial statements.
Dividend
The directors are unable to 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 which
are set out on pages 9 to 10.
16
Tertiary Minerals plc Annual Report and Accounts 2020
Stock Code: TYM
Disclosure of Audit Information
Each of the directors has confirmed that so far as he is aware,
there is no relevant audit information of which the Company’s
Auditor is unaware, and that he has taken all the steps that he
ought to have taken as a director in order to make himself
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
Notice of the Company’s Annual General Meeting, convened
for Thursday, 28 January 2021 at 2.00 p.m., is set out on
page 46 of this report. Explanatory Notes giving further
information about the proposed resolutions are set out on
page 47.
Approved by the Board on 11 December 2020 and signed on
its behalf.
Patrick Cheetham
Executive Chairman
260055 Tertiary Minerals pp03 to 21.qxp 18/12/2020 11:48 Page 17
Directors
The directors holding office during the year were:
Mr P L Cheetham
Mr R H Clemmey (Resigned 30 June 2020)
Mr D A R McAlister
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.
The directors’ shareholdings are shown in Note 17 to the
financial statements.
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 share
As at 11 December 2020 of shares capital
Interactive Investor Services
Nominees Limited SMKTNOMS 86,851,224 10.44
Hargreaves Lansdown
(Nominees) Limited 15942 63,269,726 7.61
Interactive Investor Services
Nominees Limited SMKTISAS 59,999,436 7.21
Aurora Nominees Limited
2288700 50,786,187 6.11
Barclays Direct Investing
Nominees Limited CLIENT1 46,521,466 5.59
Euroclear Nominees Limited
EOC01 44,136,845 5.31
Hargreaves Lansdown
(Nominees) Limited HLNOM 39,688,700 4.77
Hargreaves Lansdown
(Nominees) Limited VRA 32,662,960 3.93
HSDL Nominees Limited 30,882,097 3.71
Cancellation of Deferred Shares
At a General Meeting held on 10 September 2020 the
shareholders approved a buy-back of deferred shares in
accordance with the Company’s Articles of Association for an
aggregate consideration of £1.00. After the buy-back the
deferred shares were cancelled.
The deferred shares effectively carried no value and were
created as a result of a capital restructuring in April 2017
whereby each existing ordinary share with a nominal value
of 1p was subdivided into 1 new ordinary share of 0.01p and
1 deferred share of 0.99p each. Further details are provided
in Note 14 on page 39.
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Independent Auditor’s Report
to the Members of Tertiary Minerals plc for the year ended 30 September 2020
Opinion
We have audited the financial statements of Tertiary Minerals
plc (the “Parent Company”) and its subsidiaries (the “Group”)
for the year ended 30 September 2020, which comprise:
•
•
•
•
•
the Group income statement and statement of
comprehensive income for the year ended 30 September
2020;
the Group and Parent Company statements of financial
position as at 30 September 2020;
the Group and Parent Company statements of cash flows
for the year then ended;
the Group and Parent Company statements of changes
in equity for the year then ended; and
the notes to the financial statements, including a
summary of significant accounting policies.
The financial reporting framework that has been applied in the
preparation of the Group and Parent Company financial
statements is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European
Union.
In our opinion:
•
•
•
•
the financial statements give a true and fair view of the
state of the Group’s and of the Parent Company’s affairs
as at 30 September 2020 and of the Group’s loss for the
period then ended;
the group financial statements have been properly
prepared in accordance with IFRSs as adopted by the
European Union;
the Parent Company financial statements have been
properly prepared in accordance with IFRSs as adopted
by the European Union as applied in accordance with the
provisions of the Companies Act 2006; and
the financial statements have been prepared in
accordance with the requirements of the Companies Act
2006.
This report is made solely to the company’s members, as a
body, in accordance with Chapter 3 of Part 16 of the
Companies Act 2006. Our audit work has been undertaken so
that we might state to the company’s members those matters
we are required to state to them in an auditor’s report and for
no other purpose. To the fullest extent permitted by law, we do
not accept or assume responsibility to anyone other than the
company and the company’s members as a body, for our
audit work, for this report, or for the opinions we have formed.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law.
Our responsibilities under those standards are further
described in the ‘Auditor’s responsibilities for the audit of the
financial statements’ section of our report. We are
independent of the Group in accordance with the ethical
requirements that are relevant to our audit of the financial
statements in the UK, including the FRC’s Ethical Standard,
and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the
audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion.
Material uncertainty relating to going
concern
We draw attention to Note 1(b) in the financial statements,
which indicates that the Group’s projections include the
proceeds of future fundraising necessary within the next 12
months in order to cover the Company’s and Group’s
overheads and carry out the Company’s and Group’s planned
discretionary project expenditure necessary to realise the
value inherent in these projects. As stated in Note 1(b), these
events or conditions, along with the other matters as set forth
in Note 1(b) (taking into account the projects set out in Note
1(n), indicate that a material uncertainty exists that may cast
significant doubt on the Company’s ability to continue as a
going concern. In considering the longer term financial
outlook of the group, the continued viability of the most
significant exploration and evaluation assets is critical to this
assessment and the risks and audit responses are detailed in
the Key Audit Matters below. Our opinion is not modified in
respect of this matter.
Overview of our audit approach
Materiality
In planning and performing our audit we applied the concept
of materiality. An item is considered material if it could
reasonably be expected to change the economic decisions of
a user of the financial statements. We used the concept of
materiality to both focus our testing and to evaluate the
impact of misstatements identified.
Based on our professional judgement, we determined overall
materiality for the Group financial statements as a whole to be
£25,000, based on 2% of the Group’s total assets.
We use a different level of materiality (‘performance
materiality’) to determine the extent of our testing for the audit
of the financial statements. Performance materiality is set
based on the audit materiality as adjusted for the judgements
made as to the entity risk and our evaluation of the specific
risk of each audit area having regard to the internal control
environment.
Where considered appropriate performance materiality may
be reduced to a lower level, such as, for related party
transactions and directors’ remuneration.
We agreed with the Audit and Risk Committee to report to it
all identified errors in excess of £1,000. Errors below that
threshold would also be reported to it if, in our opinion as
auditor, disclosure was required on qualitative grounds.
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Stock Code: TYM
Overview of the scope of our audit
The Group and its subsidiaries are accounted for from one
central operating location, the Group’s registered office. Our
audit was conducted from the main operating location and all
group companies were within the scope of our audit testing.
Key Audit Matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the
financial statements of the current period and include the
most significant assessed risks of material misstatement
(whether or not due to fraud) that we identified. These matters
included those which had the greatest effect on: the overall
audit strategy, the allocation of resources in the audit; and
directing the efforts of the engagement team. These matters
were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon,
and we do not provide a separate opinion on these matters.
We determined that going concern should be considered a
key audit matter and this is described above in the section
“Material uncertainty relating to going concern.”
The other key matters and responses are summarised below.
This is not a complete list of all risks identified by our audit.
KEY AUDIT MATTER HOW THE SCOPE OF OUR AUDIT ADDRESSED THE
KEY AUDIT MATTER
Potential impairment of capitalised exploration and
evaluation costs.
The group has intangible assets, comprising exploration
and evaluation project costs, the most significant of which
are the US projects within Tertiary Minerals US Inc. and
assets relating to projects in Finland within Tertiary Gold
Limited.
The directors are required to ensure that only costs which
meet the IFRS criteria of an asset are capitalised within
exploration properties.
The directors are required to assess whether there are any
indicators of impairment of these assets. Any assessment of
value in use requires that accumulated costs be assessed
against the likelihood that such costs will be recoverable
against future exploitation or sale. This requires
management to use their sector experience, apply their
specialist expertise and form a conclusive judgement as
whether or not, on the balance of evidence, further
exploration is justified to determine if an economically viable
mining operation can be established in future.
Potential impairment of investments in subsidiaries and
recoverability of loans to subsidiaries in the Company
financial statements.
The carrying values of investments in and recoverability of
loans to subsidiaries, Tertiary Gold Limited and Tertiary
Minerals US Inc., are dependent upon the future cash flows
associated with the recovery of the exploration and
evaluation assets held by the subsidiaries.
In the event of impairment in the underlying exploration and
evaluation assets, there is a potential impact upon the
realisation of investments and recoverability of loans in the
accounts of Tertiary Minerals Plc (the Company) and this
assessment would also be required by the directors.
In respect of all material intangible assets our audit work
included, but was not restricted to:
•
•
•
Reviewing progress on exploration and evaluation
activities at each of the licence areas to assess
whether there was evidence which would indicate a
potential impairment trigger;
Reviewing approved budget forecasts and minutes of
board meetings to confirm the intention to continue
exploration work on the licences; and
Review and challenge of the directors’ assessment of
whether there are any indicators of impairment and
discussion of any key judgemental areas.
In conjunction with our work associated with the potential
impairment of the exploration and evaluation assets held
within subsidiaries, critical review of the directors’
assessment of potential impairment of investments in
subsidiaries and recoverability of loans to subsidiaries in the
accounts of Tertiary Minerals Plc (the Company).
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Independent Auditor’s Report (continued)
Our audit procedures in relation to these matters were
designed in the context of our audit opinion as a whole. They
were not designed to enable us to express an opinion on
these matters individually and we express no such opinion.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the
annual report, other than the financial statements and our
auditor’s report thereon. Our opinion on the financial
statements does not cover the other information and, except
to the extent otherwise explicitly stated in our report, we do
not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially
inconsistent with the financial statements or our knowledge
obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or
apparent material misstatements, we are required to
determine whether there is a material misstatement in the
financial statements or a material misstatement of the other
information. If, based on the work we have performed, we
conclude that there is a material misstatement of this other
information, we are required to report that fact.
We have nothing to report in this regard.
Opinion on other matter prescribed by the
Companies Act 2006
In our opinion based on the work undertaken in the course of
our audit:
•
•
the information given in the strategic report and the
directors’ report for the financial year for which the
financial statements are prepared is consistent with the
financial statements; and
the directors’ report and strategic report have been
prepared in accordance with applicable legal
requirements.
Matters on which we are required to report by
exception
In light of the knowledge and understanding of the Group and
the Parent Company and their environment obtained in the
course of the audit, we have not identified material
misstatements in the strategic report or the directors’ report.
We have nothing to report in respect of the following matters
where the Companies Act 2006 requires us to report to you if,
in our opinion:
•
•
•
•
adequate accounting records have not been kept by the
Parent Company, or returns adequate for our audit have
not been received from branches not visited by us; or
the Parent Company financial statements are not in
agreement with the accounting records and returns; or
certain disclosures of directors’ remuneration specified by
law are not made; or
we have not received all the information and explanations
we require for our audit.
Responsibilities of the directors for the financial
statements
As explained more fully in the directors’ responsibilities
statement set out on page 16, the directors are responsible
for the preparation of the financial statements and for being
satisfied that they give a true and fair view, and for such
internal control as the directors determine is necessary to
enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the Group’s and Parent Company’s
ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the
going concern basis of accounting unless the directors either
intend to liquidate the Group or the Parent Company or to
cease operations, or have no realistic alternative but to do so.
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Tertiary Minerals plc Annual Report and Accounts 2020
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Stock Code: TYM
Auditor’s responsibilities for the audit of the
financial statements
Our objectives are to obtain reasonable assurance about
whether the financial statements as a whole are free from
material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance, but is not
a guarantee that an audit conducted in accordance with ISAs
(UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are
considered material if, individually or in the aggregate, they
could reasonably be expected to influence the economic
decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of the
financial statements is located on the Financial Reporting
Council’s website at: www.frc.org.uk/auditorsresponsibilities.
This description forms part of our auditor’s report.
Ian Weekes (Senior Statutory Auditor)
for and on behalf of Crowe U.K. LLP
Statutory Auditor
Manchester
11 December 2020
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Consolidated Income Statement
for the year ended 30 September 2020
2020 2019
Notes £ £
Revenue 2,17 175,750 189,742
Administration costs (597,994) (502,788)
Pre-licence exploration costs (49,360) (75,778)
Impairment of deferred exploration asset 8 (2,027,000) (442,917)
Operating loss (2,498,604) (831,741)
Interest receivable 437 234
Loss before income tax 3 (2,498,167) (831,507)
Income tax 7 — —
Loss for the year attributable to equity holders of the parent (2,498,167) (831,507)
Loss per share — basic and diluted (pence) 6 (0.38) (0.19)
All amounts relate to continuing activities.
Consolidated Statement of Comprehensive
Income
for the year ended 30 September 2020
2020 2019
£ £
Loss for the year (2,498,167) (831,507)
Items that could be reclassified subsequently to the income statement:
Foreign exchange translation differences on foreign currency net investments in subsidiaries (94,278) 115,415
(94,278) 115,415
Items that will not be reclassified to the income statement:
Changes in the fair value of other investments 23,263 (71,670)
23,263 (71,670)
Total comprehensive income/(loss) for the year attributable to
equity holders of the parent (2,569,182) (787,762)
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Tertiary Minerals plc Annual Report and Accounts 2020
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Stock Code: TYM
Consolidated and Company Statements of
Financial Position
at 30 September 2020
Company Number 03821411
Group Company Group Company
2020 2020 2019 2019
Notes £ £ £ £
Non-current assets
Intangible assets 8 541,958 — 2,461,972 —
Property, plant & equipment 9 3,369 3,369 4,182 4,182
Investment in subsidiaries 10 — 541,958 — 2,196,297
Other investments 10 55,985 55,985 89,775 89,775
601,312 601,312 2,555,929 2,290,254
Current assets
Receivables 11 71,695 52,634 41,568 19,347
Cash and cash equivalents 12 622,859 587,139 50,617 29,445
694,554 639,773 92,185 48,792
Current liabilities
Trade and other payables 13 (66,189) (37,038) (70,686) (29,717)
Share subscription loan 21 (420,000) (420,000) — —
(486,189) (457,038) (70,686) (29,717)
Net current assets 208,365 182,735 21,499 19,075
Net assets 809,677 784,047 2,577,428 2,309,329
Equity
Called up Ordinary Shares 14 83,164 83,164 44,307 44,307
Deferred Shares 14 — — 2,644,062 2,644,062
Share premium account 10,740,972 10,740,972 10,008,687 10,008,687
Capital redemption reserve 14 2,644,061 2,644,061 — —
Merger reserve 131,096 131,096 131,096 131,096
Share option reserve 14 71,897 71,897 67,468 67,468
Fair value reserve 14,819 14,819 (8,444) (8,444)
Foreign currency reserve 14 325,474 — 419,752 —
Accumulated losses (13,201,806) (12,901,962) (10,729,500) (10,577,847)
Equity attributable to the owners of the parent 809,677 784,047 2,577,428 2,309,329
The Company reported a loss for the year ended 30 September 2020 of £2,349,976 (2019: -£779,821).
These financial statements were approved and authorised for issue by the Board on 11 December 2020 and were signed on its
behalf.
P L Cheetham D A R McAlister
Executive Chairman Director
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Consolidated Statement of Changes in Equity
Capital
Ordinary Share redemp- Share Fair Foreign Accumu-
share Deferred premium tion Merger option value currency lated
capital shares account reserve reserve reserve reserve reserve losses Total
Group £ £ £ £ £ £ £ £ £ £
At 30 September 2018 35,932 2,644,062 9,785,702 — 131,096 168,923 63,226 304,337 (10,007,469) 3,125,809
Loss for the period — — — — — — — — (831,507) (831,507)
Change in fair value — — — — — — (71,670) — — (71,670)
Exchange differences — — — — — — — 115,415 — 115,415
Total comprehensive loss
for the year — — — — — — (71,670) 115,415 (831,507) (787,762)
Share issue 8,375 — 222,985 — — — — — — 231,360
Share based payments
expense — — — — — 8,021 — — — 8,021
Transfer of expired warrants — — — — — (109,476) — — 109,476 —
At 30 September 2019 44,307 2,644,062 10,008,687 — 131,096 67,468 (8,444) 419,752 (10,729,500) 2,577,428
Loss for the period — — — — — — — — (2,498,167) (2,498,167)
Change in fair value — — — — — — 23,263 — — 23,263
Exchange differences — — — — — — — (94,278) — (94,278)
Total comprehensive loss
for the year — — — — — — 23,263 (94,278) (2,498,167) (2,569,182)
Share issue 38,857 — 732,284 — — — — — — 771,141
Cancellation of deferred
shares — (2,644,062) 1 2,644,061 — — — — — —
Share based payments
expense — — — — — 30,290 — — — 30,290
Transfer of expired warrants — — — — — (25,861) — — 25,861 —
At 30 September 2020 83,164 — 10,740,972 2,644,061 131,096 71,897 14,819 325,474 (13,201,806) 809,677
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Company Statement of Changes in Equity
Stock Code: TYM
Ordinary Share Capital Share Fair Accumu-
share Deferred premium redemption Merger option value lated
capital shares account reserve reserve reserve reserve losses Total
Company £ £ £ £ £ £ £ £ £
At 30 September 2018 35,932 2,644,062 9,785,702 — 131,096 168,923 63,226 (9,907,502) 2,921,439
Loss for the period — — — — — — — (779,821) (779,821)
Change in fair value — — — — — — (71,670) — (71,670)
Total comprehensive loss
for the year — — — — — — (71,670) (779,821) (851,491)
Share issue 8,375 — 222,985 — — — — — 231,360
Share based payments
expense — — — — — 8,021 — — 8,021
Transfer of expired warrants — — — — — (109,476) — 109,476 —
At 30 September 2019 44,307 2,644,062 10,008,687 — 131,096 67,468 (8,444) (10,577,847) 2,309,329
Loss for the period — — — — — — — (2,349,976) (2,349,976)
Change in fair value — — — — — — 23,263 — 23,263
Total comprehensive loss
for the year — — — — — — 23,263 (2,349,976) (2,326,713)
Share issue 38,857 — 732,284 — — — — — 771,141
Cancellation of deferred
shares — (2,644,062) 1 2,644,061 — — — — —
Share based payments
expense — — — — — 30,290 — — 30,290
Transfer of expired warrants — — — — — (25,861) — 25,861 —
At 30 September 2020 83,164 — 10,740,972 2,644,061 131,096 71,897 14,819 (12,901,962) 784,047
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Consolidated and Company Statements of
Cash Flows
for the year ended 30 September 2020
Notes Group Company Group Company
2020 2020 2019 2019
£ £ £ £
Operating activity
Total (loss)/profit after tax excluding
interest received (2,498,604) (2,381,116) (831,741) (810,097)
Depreciation charge 9 1,850 1,850 1,635 1,635
Shares issued in lieu of net wages 4,090 4,090 1,360 1,360
Share based payment charge 30,290 30,290 8,021 8,021
Impairment charge – deferred
exploration asset 8 2,027,000 — 442,917 —
Increase/(decrease) in provision for
impairment of loans to subsidiaries 10 — 1,958,667 — 487,610
(Increase)/decrease in receivables 11 (30,127) (33,287) 55,084 53,401
Increase/(decrease) in payables 13 (4,497) 7,321 5,523 (8,885)
Net cash outflow from operating activity (469,998) (412,185) (317,201) (266,955)
Investing activity
Interest received 437 41,140 234 30,279
Exploration and development expenditures 8 (200,071) — (121,967) —
Disposal of other investments 10 57,053 57,053 40,883 40,883
Purchase of property, plant & equipment 9 (1,037) (1,037) (2,509) (2,509)
Additional loans to subsidiaries 10 — (304,328) — (204,985)
Net cash outflow from investing activity (143,618) (207,172) (83,359) (136,332)
Financing activity
Issue of share capital (net of expenses) 767,051 767,051 230,000 230,000
Share subscription loan 21 420,000 420,000
Net cash inflow from financing activity 1,187,051 1,187,051 230,000 230,000
Net increase/(decrease) in cash
and cash equivalents 573,435 567,694 (170,560) (173,287)
Cash and cash equivalents at start of year 50,617 29,445 218,297 202,732
Exchange differences (1,193) — 2,880 —
Cash and cash equivalents at 30 September 12 622,859 597,139 50,617 29,445
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Notes to the Financial Statements
for the year ended 30 September 2020
Stock Code: TYM
Background
Tertiary Minerals plc is a public company incorporated and domiciled in England. It is traded on the AIM market of the London
Stock Exchange – EPIC: TYM.
The Company is a holding company for a number of companies (together, “the Group”). The Group’s financial statements are
presented in Pounds Sterling (£) which is also the functional currency of the Company.
The following accounting policies have been applied consistently in dealing with items which are considered material in relation
to the Group’s financial statements.
1. Accounting policies
(a) Basis of preparation
The financial statements have been prepared on the basis of the recognition and measurement requirements of International
Financial Reporting Standards (IFRS), as adopted by the European Union. They have also been prepared in accordance with
those parts of the Companies Act 2006 applicable to companies reporting under IFRS.
(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 (£622,859), these projections include the proceeds of future fundraising necessary
within the next 12 months to meet the Company’s and Group’s overheads and planned discretionary project expenditures and to
maintain the Company and Group as going concerns. Although the Company has been successful in raising finance in the past,
there is no assurance that it will obtain adequate finance in the future. This represents a material uncertainty related to events or
conditions which may cast significant doubt on the Group and Company’s ability to continue as going concerns and, therefore,
that they may be unable to realise their assets and discharge their liabilities in the normal course of business. However, the
directors have a reasonable expectation that they will secure additional funding when required to continue meeting corporate
overheads and exploration costs for the foreseeable future and therefore believe that the going concern basis is appropriate for
the preparation of the financial statements.
(c) Basis of consolidation
Investments, including long-term loans, in subsidiaries are valued at the lower of cost or recoverable amount, with an ongoing
review for impairment.
The Group’s financial statements consolidate the financial statements of Tertiary Minerals plc and its subsidiary undertakings
using the acquisition method and eliminate intercompany balances and transactions.
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 £2,349,976 (2019: £779,821). The loss for 2020 includes provision for impairment of its investment in
subsidiary undertakings in the amount of £1,958,667 (Note 10).
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Notes to the Financial Statements (continued)
for the year ended 30 September 2020
(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. The biannual impairment reviews were conducted in April 2020 and October 2020.
Where an indication of impairment is identified, the relevant value is written off to the income statement in the period for which
the impairment was identified. An impairment of exploration and development costs may be subsequently reversed in later
periods should conditions allow.
Accumulated costs, where the Group does not yet have an exclusive exploration licence and in respect of areas of interest
which have been abandoned, are written off to the income statement in the year in which the pre-licence expense was incurred
or in which the area was abandoned.
Development
Exploration, evaluation and development costs are carried at the lower of cost and expected net recoverable amount. On
reaching a mining development decision, exploration and evaluation costs are reclassified as development costs and all
development costs on a specific area of interest will be amortised over the useful economic life of the projects, once they
become income generating and the costs can be recouped.
(e) Property, plant & equipment
All property, plant and equipment assets are stated at cost less accumulated depreciation. Depreciation is provided by the
Group on all property, plant and equipment, at rates calculated to write off the cost, less estimated residual value, of each asset
evenly over its expected useful life, as follows:
Fixtures and fittings 20% to 33% per annum Straight-line basis
Computer equipment 33% per annum Straight-line basis
Useful life and residual value are reassessed annually.
(f) Financial assets designated at fair value through OCI
Upon initial recognition, the Group can elect to classify irrevocably its equity investments as equity instruments designated at
fair value through OCI when they meet the definition of equity under IAS 32 Financial Instruments: Presentation and are not
held for trading. The classification is determined on an instrument-by-instrument basis.
Gains and losses on these financial assets are never recycled to profit or loss. Dividends are recognised as other income in the
statement of profit or loss when the right of payment has been established, except when the Group benefits from such proceeds
as a recovery of part of the cost of the financial asset, in which case, such gains are recorded in OCI. Equity instruments
designated at fair value through OCI are not subject to impairment assessment.
The Group elected to classify irrevocably its listed equity investments under this category.
(g) Trade and other receivables and payables
Trade and other receivables and payables are measured at initial recognition at fair value and subsequently measured at
amortised cost.
(h) Cash and cash equivalents
Cash and cash equivalents consist of cash at bank and in hand and short-term bank deposits with a maturity of three months or
less.
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Stock Code: TYM
(i) Deferred taxation
Deferred taxation, if applicable, is provided in full in respect of taxation deferred by temporary differences between the treatment
of certain items for taxation and accounting purposes.
Deferred tax assets are recognised to the extent that they are regarded as recoverable.
(j) Revenue
Revenue is recognised as the fair value of management services provided to Sunrise Resources plc and relates to expenditure
incurred and recharged. The company recognises revenue as contractual performance obligations are satisfied. Revenue is net
of discounts, VAT and other sales-related taxes.
Other income
Other income includes amounts received from Sunrise Resources plc under the management services agreement. Other
income is recognised in the period the management services are provided based on the expenditure incurred.
(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 balance sheet date.
For consolidation purposes, the net investment in foreign operations and the assets and liabilities of overseas subsidiaries,
associated undertakings and joint arrangements, that have a functional currency different from the Group’s presentation
currency, are translated at the closing exchange rates. Income statements of overseas subsidiaries, that have a functional
currency different from the Group’s presentation currency, are translated at exchange rates at the date of transaction. Exchange
differences arising on opening reserves are taken to the foreign currency reserve in equity.
(l) Leases
The Group adopted IFRS 16 from 1 January 2019 and this requires the recognition of operating lease commitments on the
Group’s statement of financial position as assets and the recognition of a corresponding liability. Lease costs are recognised in
the income statement in the form of depreciation of the right of use asset over the lease term and interest charges representing
the unwind of the discount on the lease liability. The adoption of IFRS 16 did not have material impact on the financial
statements of the Group as it has negligible leasing exposure and exploration project leases are exempt as exploration assets
under IFRS 16.3(b).
Short term leases, which meet the requirements to not be accounted for by recognising a right of use asset and a lease liability,
having a duration of 12 months or less and without reasonable certainty about their renewal, are charged to the income
statement on 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,
IAS 32 and IAS 39, 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.
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Notes to the Financial Statements (continued)
for the year ended 30 September 2020
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 whether or not, on the balance of
evidence that further exploration is justified to determine if an economically viable mining operation can be established in future.
Such estimates, judgements and assumptions are likely to change as new information and evidence becomes available. If it
becomes apparent, in the judgement of the directors, that recovery of capitalised expenditure is unlikely the carrying value
should be considered as impaired as detailed below.
Royalty assets
Royalty assets representing the Company’s rights to future royalties based upon the extraction of mineral resources by a third
party are amortised based upon units of production. The directors consider bi-annually whether there are any indications of
impairment of royalty assets. If such indications exist a full impairment review is undertaken and any impairment arising is
charged to the income statement.
Impairment
Impairment reviews for deferred exploration and evaluation costs are carried out on a project by project basis, with each project
representing a potential single cash generating unit. The directors are required to continually monitor and review the carrying
values by reference to new developments, stages in the exploration process and new circumstances. Assessment of the
potential impairment of assets requires an updated judgement of the probability of adequate future cash flows from the relevant
project. It includes consideration of:
(a) The period for which the entity has the right to explore in the specific area and whether this right will expire in the near
future, and whether the right is expected to be renewed.
(b) Whether substantive expenditure on further exploration for and evaluation of mineral resources for the specific project is
either budgeted or planned.
(c) Whether exploration for and evaluation of mineral resources on the specific project has led to the discovery of commercially
viable quantities of mineral resources and whether the entity has decided to discontinue such activities on the project.
(d) Whether sufficient data exist to indicate that, although a development on the specific project is likely to proceed, the
carrying amount of the exploration and evaluation asset is likely to be recovered in full from successful development of a
mine or by the sale of the project.
The judgments in respect of key projects are;
The MB Fluorspar project costs were fully impaired in the amount of £2,027,000 after metallurgical test work was unsuccessful
and the Group’s lease agreement on the project was terminated.
Two gold projects Kaaresselkä and Kiekerömaa with a total carrying value of £359,584 were sold to a third party Aurion
Resources Limited (“Aurion”) in 2016. Tertiary has the right to future royalties, but only if these projects proceed to the definition
of mineral resources and reserves and successful exploration and production. Aurion has recently completed a drilling
programme at Kaaresselkä. Based upon this and their confidence regarding the likely outcome of exploration, the directors have
concluded that the carrying value is not impaired.
Going concern
The preparation of financial statements requires an assessment of the validity of the going concern assumption. This in turn is
dependent on finance being available for the continuing working capital requirements of the Group. Based on the assumption
that such finance will become available, the directors believe that the going concern basis is appropriate for these accounts.
Share warrants, share options and share based payments
The estimates of costs recognised in connection with the fair value of share options and share warrants require that
management selects an appropriate valuation model and make decisions on various inputs into the model, including the
volatility of its own share price, the probable life of the warrants and options before exercise, and behavioural considerations of
warrant holders.
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Stock Code: TYM
(o) Standards, amendments and interpretations not yet effective
A number of new standards and amendments to standards and interpretations have been issued but are not yet effective and in
some cases have not yet been adopted by the EU.
(a) New standards, interpretations and amendments effective from 1 January 2019
The following new standards were effective and did not impact the Group:
•
•
IFRS 16 Leases (IFRS 16)
IFRIC 23 Uncertainty over Income Tax Treatments (IFRIC 23)
(b) New standards, interpretations and amendments not yet effective
There are a number of standards, amendments to standards, and interpretations which have been issued by the IASB that are
effective in future accounting periods. The following amendments are effective for the periods beginning on or after
1 January 2020:
•
•
IAS 1 Presentation of Financial Statements and IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors
(Amendment – Definition of Material)
IFRS 3 Business Combinations (Amendment – Definition of Business)
Revised Conceptual Framework for Financial Reporting
In January 2020, the IASB issued amendments to IAS 1, which clarify the criteria used to determine whether liabilities are
classified as current or non-current based upon whether an entity has a right at the end of the reporting period to defer
settlement of the liability. The amendments are effective for annual reporting periods beginning on or after 1 January 2022.
Amendments as part of the 2015-2018 Annual Improvements Cycle were as follows;
•
•
•
•
•
IFRS 3/IFRS 11: Measuring interests in Joint operations.
IAS 12: Accounting for income tax consequences of dividend payments.
IAS 23: Treatment of borrowings originally made to develop a specific asset.
IAS 1:125 Disclose significant key assumptions concerning the future, and other key sources of estimation uncertainty.
IAS 1:122 Disclose significant judgements management has made in applying the entity's accounting policies.
Tertiary Minerals Plc is currently assessing the impact of these new accounting standards and amendments. The Group does
not believe that the amendments to IAS 1 will have a significant impact on the classification of its liabilities.
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Notes to the Financial Statements (continued)
for the year ended 30 September 2020
2. Segmental analysis
The Chief Operating Decision Maker is the Board. The Board considers the business has one reportable segment, the
management of exploration projects, which is supported by a Head Office function. For the purpose of measuring segmental
profits and losses the exploration segment bears only those direct costs incurred by or on behalf of those projects. No Head
Office cost allocations are made to this segment. The Head Office function recognises all other costs.
Exploration Head
projects office Total
2020 £ £ £
Consolidated Income Statement
Revenue — 175,750 175,750
Pre-licence exploration costs (49,360) — (49,360)
Impairment of deferred exploration asset (2,027,000) — (2,027,000)
Share-based payments — (30,290) (30,290)
Administration costs and other expenses — (567,704) (567,704)
Operating Loss (2,076,360) (422,244) (2,498,604)
Bank interest received — 437 437
Loss before income tax (2,076,360) (421,807) (2,498,167)
Income tax — — —
Loss for the year attributable to equity holders (2,076,360) (421,807) (2,498,167)
Non-current assets
Intangible assets:
Royalty assets:
Kaaresselkä Gold Project, Finland 261,329 — 261,329
Kiekerömaa Gold Project, Finland 98,255 — 98,255
359,584 — 359,584
Deferred exploration costs:
Paymaster, USA 39,055 — 39,055
Pyramid, USA 108,227 — 108,227
Pegleg, USA 11,964 — 11,964
Mt Tobin, USA 12,565 — 12,565
Lucky, USA 10,563 — 10,563
182,374 — 182,374
Property, plant & equipment — 3,369 3,369
Other investments — 55,985 55,985
541,958 59,354 601,312
Current assets
Receivables 16,640 55,055 71,695
Cash and cash equivalents — 622,859 622,859
16,640 677,914 694,554
Current liabilities
Trade and other payables (22,275) (43,914) (66,189)
Share subscription loan — (420,000) (420,000)
(22,275) (463,914) (486,189)
Net current assets (5,635) 214,000 208,365
Net assets 536,323 273,354 809,677
Other data
Deferred exploration additions 200,071 — 200,071
Exchange rate adjustments to deferred exploration costs (93,903) — (93,903)
Exchange rate adjustments to royalty assets 818 — 818
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Stock Code: TYM
Exploration Head
projects office Total
2019 £ £ £
Consolidated Income Statement
Revenue — 189,742 189,742
Pre-licence exploration costs (75,778) — (75,778)
Impairment of deferred exploration asset (442,917) — (442,917)
Share-based payments — (8,021) (8,021)
Administration costs and other expenses — (494,767) (494,767)
Operating Loss (518,695) (313,046) (831,741)
Disposal of other investments — — —
Bank interest received — 234 234
Loss before income tax (518,695) (312,812) (831,507)
Income tax — — —
Loss for the year attributable to equity holders (518,695) (312,812) (831,507)
Non-current assets
Intangible assets:
Deferred exploration costs:
Kaaresselkä Gold Project, Finland 260,938 — 260,938
Kiekerömaa Gold Project, Finland 97,828 — 97,828
MB Fluorspar Project, USA 2,056,419 — 2,056,419
Paymaster, USA 17,395 — 17,395
Pyramid, USA 29,392 — 29,392
2,461,972 — 2,461,972
Property, plant & equipment — 4,182 4,182
Other investments — 89,775 89,775
2,461,972 93,957 2,555,929
Current assets
Receivables 22,154 19,414 41,568
Cash and cash equivalents — 50,617 50,617
22,154 70,031 92,185
Current liabilities
Trade and other payables (9,183) (61,503) (70,686)
Net current assets 12,971 8,528 21,499
Net assets 2,474,943 102,485 2,577,428
Other data
Deferred exploration additions 121,967 — 121,967
Exchange rate adjustments to deferred exploration costs 112,536 — 112,536
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Notes to the Financial Statements (continued)
for the year ended 30 September 2020
3. Loss before income tax
2020 2019
£ £
The operating loss is stated after charging
Operating lease rentals – land and buildings 18,560 21,081
Depreciation – owned assets 1,850 1,635
Fees payable to the Group’s Auditor for:
The audit of the Group’s annual accounts 6,363 6,125
The audit of the Group’s subsidiaries, pursuant to legislation 4,671 3,105
Fees payable to the Group’s Auditor and its associates for other services:
Interim review of accounts 1,020 1,000
Corporation tax fees 1,460 1,300
Corporation tax review fees — 3,300
4. Directors’ emoluments
Remuneration in respect of directors was as follows:
Income from
recharge
to Sunrise
Net cost to Group Resources plc Total Total
2020 2020 2020 2019
£ £ £ £
P L Cheetham (salary) 37,237 71,305 108,542 86,888
R H Clemmey (salary) 66,340 — 66,340 86,889
D A R McAlister (salary) 18,365 — 18,365 16,833
121,942 71,305 193,247 190,610
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 £7,831 (2019: £4,677) or Employer’s National Insurance
contributions of £23,067 (2019: £23,072).
There was no bonus in the year 2020. Bonus remuneration is applicable to performance in the previous financial year.
Pension contributions made during the year on behalf of Directors amounted to £987 (2019: £1,061).
The directors are also the key management personnel. If all benefits are taken into account, the total key management
personnel compensation would be £201,078 (2019: £195,287).
After recharge to Sunrise Resources plc, if all benefits are taken into account, the key management personnel net compensation
cost to the Group would be £129,773 (2019: £126,514).
5. Staff costs
Total staff costs for the Group and Company, including directors, were as follows:
Income from
recharge
to Sunrise
Net cost to Group Resources plc Total Total
2020 2020 2020 2019
£ £ £ £
Wages and salaries 175,775 137,366 313,141 318,804
Social security costs 17,845 16,840 34,685 36,093
Share-based payments 9,921 — 9,921 8,021
203,541 154,206 357,747 362,918
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Stock Code: TYM
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:
2020 2019
Number Number
Technical employees 3 3
Administration employees (including non-executive directors) 4 5
7 8
Managing Director, Richard Clemmey, ceased to be an employee and director in June 2020. The Company Secretary, Colin
Fitch, retired in June 2019 and since July 2019 the company secretarial services have been provided by Rod Venables through
City Group PLC.
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.
2020 2019
Loss (£) (2,498,167) (831,507)
Weighted average ordinary shares in issue (No.) 661,815,154 416,198,199
Basic and diluted loss per ordinary share (pence) (0.38) (0.19)
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. Deferred shares are excluded from the loss per share calculation as they have no attributable earnings.
7.
Income tax
No liability to corporation tax arises for the year due to the Group recording a taxable loss (2019: £Nil).
2020 2019
£ £
Tax reconciliation
Loss before income tax (2,498,167) (831,507)
Tax at 19% (2019: 19%) (474,652) (157,986)
Differences between capital allowances and depreciation 31 (1,828)
Expenditure disallowed for tax purposes 127,909 29,902
Pre-trading expenditure no longer deductible for tax purposes 27,346 43,625
Tax effect at 19% (2019: 19%) 29,504 13,623
Unrelieved tax losses carried forward (445,148) (144,363)
Tax recognised on loss — —
Total losses carried forward for tax purposes 11,028,887 8,689,670
Factors that may affect future tax charges
The Group has total losses carried forward of £11,028,887 (2019: £8,689,670). This amount would be charged to tax, thereby
reducing tax liability, if sufficient profits were made in the future capped to £5m per annum allowance. 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.
The difference of £3,664 between 2019 and 2020 total losses carried forward balance is additional expenditure non-deductible
for tax purposes relating to 2019.
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Notes to the Financial Statements (continued)
for the year ended 30 September 2020
Intangible assets
8.
Deferred Deferred
exploration Royalty exploration
expenditure assets expenditure
2020 2020 2019
Group £ £ £
Cost
At start of year 5,885,219 358,766 6,009,482
Additions 200,071 — 121,967
Exchange adjustments (93,903) 818 112,536
At 30 September 5,991,387 359,584 6,243,985
Disposals
At start of year (3,782,013) — (3,339,096)
Impairment losses during year (2,027,000) — (442,917)
Disposals during year — — —
At 30 September (5,809,013) — (3,782,013)
Carrying amounts
At 30 September 182,374 359,584 2,461,972
At start of year 2,103,206 358,766 2,670,386
Two gold projects, Kaaresselkä and Kiekerömaa, with a total carrying value of £359,584 have been re-classified in the financial
statements as Royalty Assets. The exploration rights were sold to a third party, Aurion Resources Limited (“Aurion”) in 2016 and
Tertiary has the right to future royalties, but only if these projects proceed to the definition of mineral resources and reserves and
successful exploration and production. The re-classification in the financial statements therefore reflects the distinct nature of
these projects within intangible fixed assets.
The directors carried out an impairment review which, with reference to IFRS6.20(b), resulted in an impairment charge, relating
to the Tertiary Minerals US Inc. MB Fluorspar Project, being recognised in the Consolidated Income Statement as part of
operating expenses. Refer to accounting policy 1(d) and 1(n) for a description of the considerations used in the impairment
review.
9. Property, plant & equipment
Group Company Group Company
fixtures fixtures fixtures fixtures
and fittings and fittings and fittings and fittings
2020 2020 2019 2019
£ £ £ £
Cost
At start of year 48,152 33,394 49,543 34,785
Additions 1,037 1,037 2,509 2,509
Disposals 0 0 (3,900) (3,900)
At 30 September 49,189 34,431 48,152 33,394
Depreciation
At start of year (43,970) (29,212) (46,235) (31,477)
Charge for the year (1,850) (1,850) (1,635) (1,635)
Disposals 0 0 3,900 3,900
At 30 September (45,820) (31,062) (43,970) (29,212)
Net Book Value
At 30 September 3,369 3,369 4,182 4,182
At start of year 4,182 4,182 3,308 3,308
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Stock Code: TYM
10. Investments
Subsidiary undertakings
Country of Type and percentage
incorporation/ of shares held at
Company registration 30 September 2020 Principal activity
Tertiary Gold Limited England & Wales 100% of ordinary shares Mineral exploration
Tertiary (Middle East) Limited England & Wales 100% of ordinary shares Mineral exploration
Tertiary Minerals US Inc. Nevada, USA 100% of ordinary shares Mineral exploration
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.
Company Company
2020 2019
Investment in subsidiary undertakings £ £
Ordinary shares – Tertiary (Middle East) Limited 1 1
Ordinary shares – Tertiary Gold Limited 224,888 224,888
Ordinary shares – Tertiary Minerals US Inc. 1 1
Loan – Tertiary (Middle East) Limited 685,890 683,947
Less – Provision for impairment (685,890) (683,947)
Loan – Tertiary Gold Limited 5,360,637 5,302,305
Less – Provision for impairment (5,225,942) (5,168,430)
Loan – Tertiary Minerals US Inc. 2,081,585 1,837,532
Less – Provision for impairment (1,899,212) —
At 30 September 541,958 2,196,297
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
£224,890, 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 subsidiaries on
intercompany loans with Parent Company.
A review of the recoverability of loans to subsidiary undertakings has been carried out. This indicated potential credit losses
arising in the year which have been provided for as follows: Tertiary Gold Limited £57,512 (2019: £486,907), Tertiary (Middle
East) Limited £1,943 (2019: £704) and Tertiary Minerals US Inc. £1,899,212, following an impairment of the MB Project. The
provisions made reflect the differences between the loan carrying amounts and the value of the underlying project assets.
Other investments – listed investments
Country of Type and percentage
incorporation/ of shares held at
Company registration 30 September 2020 Principal activity
Sunrise Resources plc England & Wales 0.6% of ordinary shares Mineral exploration
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Notes to the Financial Statements (continued)
for the year ended 30 September 2020
Group Company Group Company
2020 2020 2019 2019
Investment designated at fair value through OCI £ £ £ £
Value at start of year 89,775 89,775 202,328 202,328
Additions — — — —
Disposal (57,053) (57,053) (40,883) (40,883)
Movement in valuation 23,263 23,263 (71,670) (71,670)
At 30 September 55,985 55,985 89,775 89,775
Disposals in the last financial year comprise a disposal of 52,500,000 Sunrise Resources plc shares (2019: 52,000,000).
The fair value of each investment is equal to the market value of its shares at 30 September 2020, 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
2020 2020 2019 2019
£ £ £ £
Trade receivables 43,717 43,717 10,496 10,496
Other receivables 18,412 1,772 20,020 1,725
Prepayments 9,566 7,145 11,052 7,126
At 30 September 71,695 52,634 41,568 19,347
The Group aged analysis of trade receivables is as follows:
Total
Not 30 days Over carrying
impaired or less 30 days amount
£ £ £ £
2020 Trade receivables 43,717 43,717 — 43,717
2019 Trade receivables 10,496 10,496 — 10,496
12. Cash and cash equivalents
Group Company Group Company
2020 2020 2019 2019
£ £ £ £
Cash at bank and in hand 52,827 27,107 47,787 26,615
Short-term bank deposits 570,032 570,032 2,830 2,830
At 30 September 622,859 597,139 50,617 29,445
13. Trade and other payables
Group Company Group Company
2020 2020 2019 2019
£ £ £ £
Trade payables 14,735 13,036 11,592 5,737
Other taxes and social security costs 7,106 7,106 6,481 6,481
Accruals 41,716 14,264 48,055 12,941
Other payables 2,632 2,632 4,558 4,558
At 30 September 66,189 37,038 70,686 29,717
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Stock Code: TYM
14. Issued capital and reserves
2020 2020 2019 2019
No. £ No. £
Allotted, called up and fully paid Ordinary Shares
Balance at start of year 443,075,665 44,307 359,323,754 35,932
Shares issued in the year 388,571,372 38,857 83,751,911 8,375
Balance at 30 September 831,647,037 83,164 443,075,665 44,307
2020 2020 2019 2019
No. £ No. £
Deferred Shares
Balance at start of year 267,076,933 2,644,062 267,076,933 2,644,062
Cancellation of shares (267,076,933) (2,644,062) — —
Balance at 30 September — — 267,076,933 2,644,062
Capital restructure
At a General Meeting on 10 September 2020 the shareholders approved a buy-back of the Company’s deferred shares in
accordance with the Company’s Articles of Association for an aggregate consideration of £1.00. The buy-back of the deferred
shares was funded from the part-proceeds of a placing of 1,000 new ordinary shares 0.01p each at a price of 0.25p per share to
the Company’s Chairman, Patrick Cheetham. The deferred shares were then cancelled and a Capital Redemption Reserve
formed to the value of £2,644,061.
The deferred shares resulted from a subdivision of the Company’s ordinary share capital in 2017 whereby each existing
Ordinary Share with a nominal value of 1p was subdivided into 1 new Ordinary Share of 0.01p and 1 deferred share of 0.99p
each. The deferred shares had no significant rights attached to them and carried no right to vote or to participate in distribution
of surplus assets and were not admitted to trading on the AIM market of the London Stock Exchange plc or any other stock
exchange. The deferred shares effectively carried no value.
Share issues
During the year to 30 September 2020 the following share issues took place:
An issue of 18,000,000 0.01p Ordinary Shares, to Bergen Global Opportunity Fund, LP (“Bergen”) as collateral shares relating
to the convertible securities issuance deed (19 November 2019).
An issue of 17,000,000 0.01p Ordinary Shares, to Bergen for settlement of commencement fee (26 November 2019).
An issue of 651,900 0.01p Ordinary Shares at 0.21p per share, to a director, in satisfaction of directors’ fees, for a total
consideration of £1,369 (2 December 2019).
An issue of 154,705,883 0.01p Ordinary Shares at 0.17p per share, by exercise of conversion rights (Bergen convertible loan
note), for a total consideration of £263,000 before expenses (18 February 2020).
An issue of 100,000,000 0.01p Ordinary Shares at 0.275p per share, by way of placing, for a total consideration of £275,000
before expenses (25 February 2020).
An issue of 402,644 0.01p Ordinary Shares at 0.34p per share, to a director, in satisfaction of directors’ fees, for a total
consideration of £1,369 (27 February 2020).
An issue of 33,333,334 0.01p Ordinary Shares at 0.18p per share to Precious Metal Capital Group LLC (“PMCG”), by way of
subscription deed, for a total consideration of £60,000 before expenses (29 April 2020).
An issue of 25,000,000 0.01p Ordinary Shares at 0.2p per share to PMCG, by way of subscription deed, for a total consideration
of £50,000 before expenses (14 May 2020).
An issue of 38,888,889 0.01p Ordinary Shares at 0.18p per share to PMCG, by way of subscription deed, for a total
consideration of £70,000 before expenses (3 July 2020).
An issue of 587,722 0.01p Ordinary Shares at 0.23p per share, to a director, in satisfaction of directors’ fees, for a total
consideration of £1,352 (31 July 2020).
An issue of 1,000 0.01p Ordinary Shares, to P. Cheetham at 0.25p per share to buy back and cancel deferred shares for an
aggregate consideration of £1 (24 August 2020).
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Notes to the Financial Statements (continued)
for the year ended 30 September 2020
During the year to 30 September 2019 a total of 83,751,911 0.01p ordinary shares were issued, at an average price of 0.3p, for
a total consideration of £231,360 net of expenses.
The total amount of transaction fees debited to the Share Premium account in the year was £13,750 (2019: £20,000).
Nature and purpose of reserves
Capital redemption reserve
Non distributable reserve into which amounts are transferred following the redemption or the purchase of a company’s own
shares. The provisions relating to the capital redemption reserve are set out in section 733 of the Companies Act 2006.
Foreign currency reserve
Exchange differences relating to the translation of the net assets of the Group’s foreign operations, which relate to subsidiaries
only, from their functional currency into the Parent Company’s functional currency, being Sterling, are recognised directly in the
foreign currency reserve.
Share option reserve
The share option reserve is used to recognise the fair value of share-based payments provided to 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.
15. Warrants granted
Warrants not exercised at 30 September 2020
Exercise Expiry
Issue date price Number Exercisable dates
11/03/2016 1.40p 1,000,000 Any time before expiry 11/03/2021
31/01/2017 1.025p 1,000,000 Any time before expiry 31/01/2022
31/01/2018 1.875p 1,000,000 Any time before expiry 31/01/2023
21/02/2019 0.50p 3,500,000 Any time before expiry 21/02/2024
21/02/2019 0.35p 5,000,000 Any time before expiry 21/02/2024
26/11/2019 0.335p 22,000,000 Any time before expiry 26/11/2023
02/03/2020 0.275p 5,000,000 Any time before expiry 02/03/2021
27/02/2020 0.34p 8,100,000 Any time from 27/02/2021 27/02/2025
Total 46,600,000
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 22,000,000 warrants at an exercise price of 0.336p, to Bergen relating to the convertible securities issuance deed
(26 November 2019).
A grant of 8,100,000 warrants at an exercise price of 0.34p, to employees and directors of the Company (27 February 2020).
A grant of 5,000,000 warrants at an exercise price of 0.275p, as part of fundraising, to Peterhouse Capital Limited
(2 March 2020).
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Stock Code: TYM
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:
2020 2019
Weighted Weighted
average Number of average
Number of exercise share warrants exercise
share price and share price
warrants Pence options Pence
Outstanding at start of year 13,200,000 1.106 9,050,000 7.877
Granted during the year 35,100,000 0.328 8,500,000 0.412
Exercised during the year — — — —
Forfeited during the year — — — —
Expired during the year (1,700,000) 4 (4,350,000) 13.84
Outstanding at 30 September 46,600,000 0.415 13,200,000 1.106
Exercisable at 30 September 38,500,000 0.43 4,700,000 2.362
The warrants outstanding at 30 September 2020 had a weighted average exercise price of 0.415p (2019: 1.1p), a weighted
average fair value of 0.13p (2019: 0.43p) and a weighted average remaining contractual life of 3.01 years (2019: 3.42 years).
In the year ended 30 September 2020, warrants were granted on 26 November 2019, 2 March 2020 and 27 February 2020. The
aggregate of the estimated fair values of the warrants granted on these dates is £33,125. In the year ended 30 September 2019,
warrants were granted on 21 February 2019. The aggregate of the estimated fair values of the warrants granted on this date is
£11,173.
There were no warrants exercised in the year ending 30 September 2020.
The inputs into the Black–Scholes–Merton Pricing Model were as follows:
2020 2019
Weighted average share price 0.279p 0.350p
Weighted average exercise price 0.328p 0.388p
Expected volatility 75.0% 75.0%
Expected life 3.57 years 4 years
Risk-free rate 0.408% 0.827%
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 £30,290 and £8,021 related to equity-settled share-based payment transactions in
2020 and 2019 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.
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Notes to the Financial Statements (continued)
for the year ended 30 September 2020
16. Leases
The Company rents office premises under a short-term operating lease agreement.
Future minimum lease payments under non-cancellable operating leases are:
2020 2019
Land & Land &
buildings buildings
£ £
Office accommodation:
Within one year 15,863 3,525
The Company does not sub-let any of its leased premises.
Lease payments recognised in loss for the period amounted to £18,560 (2019: £21,081).
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 2020 At 30 September 2019
Share Warrants Warrants Share
Shares warrants exercise expiry Shares warrants
number number price date number number
P L Cheetham* 12,641,471 2,000,000 0.500p 21/02/2024 12,612,113 3,000,000
2,000,000 0.340p 27/02/2025
D A R McAlister 2,937,609 1,500,000 0.500p 21/02/2024 1,295,343 1,500,000
1,500,000 0.340p 27/02/2025
R H Clemmey – resigned** 977,405 3,000,000 0.350p 21/02/2024 977,405 3,000,000
3,000,000 0.340p 27/02/2025
* Includes 2,843,625 shares held by K E Cheetham, wife of P L Cheetham.
* The shareholding reported for the years ended 30 September 2017, 2018 and 2019 were under-reported by 28,358 ordinary
shares due to an administrative error.
** R H Clemmey ceased to be an employee and director of the Company on 30 June 2020.
The directors have no beneficial interests in the shares of the Company’s subsidiary undertakings as at 30 September 2020.
The directors of the Company are the directors of all Group companies.
Details of the Parent Company’s investment in subsidiary undertakings are shown in Note 10.
Sunrise Resources plc
During the year the Company charged costs of £175,750 (2019: £189,742) to Sunrise Resources plc being shared overheads of
£20,369 (2019: £27,025), costs paid on behalf of Sunrise Resources plc of £1,175 (2019: £6,554), staff salary costs of £74,085
(2019: £78,590) and directors’ salary costs of £80,121 (2019: £77,574), comprising P L Cheetham £80,121 (2019: £76,773) and
R H Clemmey £Nil (2019: £801). All salary costs include employer’s National Insurance and Pension contributions.
The salary costs in Notes 4 and 5 include these charges.
At the balance sheet date an amount of £43,717 (2019: £10,496) was due from Sunrise Resources plc.
P L Cheetham, a director of the Company, is also a director of Sunrise Resources plc.
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Stock Code: TYM
Shares and warrants held in Sunrise Resources plc by the Company’s directors are as follows:
At 30 September 2020 At 30 September 2019
Warrants Warrants
Shares Warrants exercise expiry Shares Warrants
number number price date number number
P L Cheetham* 231,047,657 30,000,000 0.195p 05/08/2025 125,593,683 3,000,000
D A R McAlister 550,000 — — — 550,000 —
R H Clemmey – resigned** — 500,000 0.160p 18/02/2021 — 3,000,000
500,000 0.135p 01/02/2022
500,000 0.160p 31/01/2023
750,000 0.110p 21/02/2024
* Includes 5,500,000 shares held by K E Cheetham, wife of P L Cheetham.
** R H Clemmey ceased to be an employee and director of the Company on 30 June 2020.
18. Capital management
The Group’s capital requirements are dictated by its project and overhead funding requirements from time to time. Capital
requirements are reviewed by the Board on a regular basis.
The Group manages its capital to ensure that entities within the Group will be able to continue as going concerns, to increase
the value of the assets of the business and to provide an adequate return to shareholders in the future when exploration assets
are taken into production.
The Group manages the capital structure and makes adjustments to it in the light of changes in economic conditions and the
risk characteristics of its assets. In order to maintain or adjust the capital structure the possibilities open to the Group in future
include issuing new shares, consolidating shares, returning capital to shareholders, taking on debt, selling assets and adjusting
the amount of dividends paid to the shareholders.
19. Financial instruments
At 30 September 2020, the Group’s and Company’s financial assets consisted of listed investments, trade receivables and cash
and cash equivalents. At the same date, the Group and Company had financial liabilities of trade and other payables due within
one year and had share subscription outstanding amount with PMCG convertible to shares within 24 months from the issue date
of 2 April 2020 as at this date. There is no material difference between the carrying and fair values of the Group and Company’s
financial assets and liabilities.
The carrying amounts for each category of financial instruments held at 30 September 2020, as defined in IFRS 9, are as
follows:
Group Company Group Company
2020 2020 2019 2019
£ £ £ £
Financial assets at amortised cost 684,527 632,336 81,133 41,670
Financial assets at fair value through other
comprehensive income 55,985 55,985 89,775 89,775
Financial liabilities at amortised cost 58,402 29,251 62,156 21,187
Share subscription loan 420,000 420,000 62,156 21,187
Risk management
The principal risks faced by the Group and Company resulting from financial instruments are liquidity risk, foreign currency risk
and, to a lesser extent, interest rate risk and credit risk. The Directors review and agree policies for managing each of these
risks as summarised below. The policies have remained unchanged from previous periods as these risks remain unchanged.
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Notes to the Financial Statements (continued)
for the year ended 30 September 2020
Liquidity risk
The Group holds cash balances in Sterling, US Dollars, Swedish Krona, Canadian Dollars, Euros and Saudi Riyals 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
2020 2019 2020 2019
£ £ £ £
United Kingdom Sterling 599,433 23,526 596,509 22,433
United States Dollar 19,804 11,628 290 6,691
Swedish Krona 3,238 5,734 — —
Norwegian Krona 4 4 4 4
European Euro 321 9,664 321 303
Canadian Dollar 15 14 15 14
Saudi Riyal 44 47 — —
622,859 50,617 597,139 29,445
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 2020 would
increase or decrease by £990 for each 5% increase or decrease in the value of Sterling against the Dollar.
Neither the Company nor the Group is exposed to material transactional currency risk.
Interest rate risk
The Group and Company finance their operations through equity fundraising and therefore do not carry borrowings.
Fluctuating interest rates have the potential to affect the loss and equity of the Group and the Company insofar as they affect
the interest paid on financial instruments held for the benefit of the Group. The directors do not consider the effects to be
material to the reported loss or equity of the Group or the Company presented in the financial statements.
Credit risk
The Company has exposure to credit risk through receivables such as VAT refunds, invoices issued to related parties and its
joint arrangements for management charges. The amounts outstanding from time to time are not material other than for VAT
refunds which are considered by the directors to be low risk.
The Company has exposure to credit risk in respect of its cash deposits with NatWest bank and this exposure is considered by
the directors to be low.
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Stock Code: TYM
20. Convertible Loan note
On 19 November 2019, the Company entered into a convertible securities issuance deed (the “Agreement”) with Bergen Global
Opportunity Fund, LP (the “Investor”), a US based institutional investment fund, in connection with an issuance by the Company
of zero coupon convertible securities having a nominal amount of up to £653,000 (the “Convertible Securities”). Pursuant to the
Agreement, on 26 November 2019 the Company issued a convertible security with the nominal value of £263,000 (at the
purchase price of £232,000).
In connection with the Agreement:
(a)
the Company issued to the Investor 17,000,000 Shares by way of a commencement fee in relation to the overall funding
(“Commencement Fee Shares”).
(b)
the Company issued to the Investor 18,000,000 Shares at par to collateralise the investment (“Collateral Shares”).
(c)
the Company issued 22,000,000 warrants with an exercise period of 48 months from the date of issue (the “Warrants”) to
the Investor entitling the Investor (or any subsequent holder of the Warrants) to subscribe for one Share per Warrant at the
exercise price equal to 0.33588 pence.
(d) On 18 February 2020, the Company received a Conversion Notice from the Investor in respect of the Conversion of
£263,000 of the Convertible Security as a result of which the Company will issued 154,705,883 new ordinary shares at a
Conversion Price of 0.17 pence per share.
(e) The Company announced that the convertible securities issuance deed (the “Agreement”) between the Company and
Bergen Global Opportunity Fund, LP (“Bergen”), dated 19 November 2019, the details of which were notified on 20
November 2019, has been terminated by the parties by mutual consent, effective as of 1 April 2020. Following the
termination, no further funding will be provided to the Company under the Agreement.
21. Share subscription loan
Tertiary Minerals plc entered into a share subscription deed on 2 April 2020 with Precious Metals Capital Group LLC (PMCG), a
U.S. based institutional specialist investor. PMCG made an investment of £600,000 by way of a subscription for
Company shares.
The placing was made by PMCG by way of prepayment for Company shares to be issued, at the Subscriber’s request, within
24 months of the date of the placing. A further investment may be made by the Subscriber within 12 months after the date of this
placement, but only with the consent of the Company, in the amount not exceeding an additional £600,000, by way of
prepayment for shares to be issued, at the Subscriber’s request, within 24 months following the date of such
subsequent placement.
The number of shares to be issued as a result of the placing is determined by dividing the subscription amount (or that part of
the subscription amount in relation to which the shares are being issued) by 95% of the prevailing price, the latter being the
average of the five daily volume weighted average prices during a specified period immediately prior to the date of issuance of
the shares. Alternatively, the Subscriber may choose for the subscription price to be equal to £0.0042, being an approximately
133% premium to the Company’s share price on 1 April 2020.
As at 30 September 2020 the outstanding amount of prepayment is £420,000 following three issues of shares within the period
since 2 April 2020 (Note 14).
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Notice of Annual General Meeting
TERTIARY MINERALS PLC
Company No.03821411
Notice is hereby given that the Annual General Meeting of Tertiary Minerals plc will be held at Silk Point, Queens Avenue,
Macclesfield, Cheshire SK10 2BB on Thursday, 28 January 2021, at 2.00 p.m. for the following purposes:
Ordinary Business
1. To receive the Accounts and the Reports of the Directors and of the Auditor for the year ended 30 September 2020.
2. To re-elect Mr D A R McAlister who is retiring as a director of the Company.
3. To reappoint Crowe U.K. LLP as Auditor of the Company and to authorise the directors to fix their remuneration.
Special Business
Ordinary Resolution
4. That, in accordance with section 551 of the Companies Act 2006 (the “2006 Act”), the Directors be generally and
unconditionally authorised to allot shares in the Company or grant rights to subscribe for or to convert any security into
shares in the Company (“Rights”) up to an aggregate nominal amount of £70,000 (consisting of 700,000,000 ordinary
shares of 0.01p each) provided that this authority shall, unless renewed, varied or revoked by the Company, expire at the
end of the next Annual General Meeting of the Company to be held after the date on which this resolution is passed, save
that the Company may, before such expiry, make an offer or agreement which would or might require shares to be allotted
or Rights to be granted and the directors may allot shares or grant Rights in pursuance of such offer or agreement
notwithstanding that the authority conferred by this resolution has expired.
This authority is in substitution for all previous authorities conferred on the Directors in accordance with section 551 of the
2006 Act.
Special Resolution
5. That subject to the passing of resolution 4, the directors be given the general power to allot equity securities (as defined by
section 560 of the 2006 Act) for cash, either pursuant to the authority conferred by resolution 4 or by way of a sale of
treasury shares, as if section 561(1) of the 2006 Act did not apply to any such allotment, provided that this power shall be
limited to:
a)
the allotment of equity securities in connection with an offer by way of a rights issue to the holders of ordinary shares in
proportion (as nearly as may be practicable) to their respective holdings but subject to such exclusions or other
arrangements as the Board may deem necessary or expedient in relation to treasury shares, fractional entitlements,
record dates, legal or practical problems in or under the laws of any territory or the requirements of any regulatory
body or stock exchange; and
b)
the allotment (otherwise than pursuant to paragraph (a) above) of equity securities up to an aggregate nominal amount
of £70,000 (consisting of 700,000,000 ordinary shares of 0.01 pence each).
The power granted by this resolution will expire on the conclusion of the Company’s next Annual General Meeting (unless
renewed, varied or revoked by the Company prior to or on such date) save that the Company may, before such expiry,
make offers or agreements which would or might require equity securities to be allotted after such expiry and the directors
may allot equity securities in pursuance of any such offer or agreement notwithstanding that the power conferred by this
resolution has expired.
This resolution revokes and replaces all unexercised powers previously granted to the directors to allot equity securities as
if section 561(1) of the 2006 Act did not apply but without prejudice to any allotment of equity securities already made or
agreed to be made pursuant to such authorities.
As a member of the Company you are entitled to appoint a proxy to exercise all or any of your rights to attend, speak and vote at a
general meeting of the Company. Please refer to the Proxy Notes and Instructions on page 48 regarding attendance restrictions.
By order of the Board.
Rod Venables
Company Secretary
11 December 2020
Registered Office:
Sunrise House, Hulley Road, Macclesfield, Cheshire SK10 2LP United Kingdom
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Annual General Meeting Explanatory Notes
Stock Code: TYM
The Annual General Meeting of Tertiary Minerals plc will be held on at 2.00 p.m. on Thursday, 28 January 2021 at Silk Point,
Queens Avenue, Macclesfield, Cheshire SK10 2BB. The business of the meeting is as follows:
ORDINARY BUSINESS
Resolution 1
The Board is required to present to the meeting for approval the Accounts and the Reports of directors and the Auditor for the
year ended 30 September 2020 which can be found on pages 4 to 26.
Resolution 2
Non-Executive Director, Donald McAlister, is considered independent of management and free from any business or other
relationship which could materially interfere with the exercise of his independent judgement. In compliance with good practice,
he will continue to seek annual re-election rather than every third year as per the Articles of Association. He continues to provide
valuable advice based on his long experience of the mining industry.
Biographical details of the directors can be found on page 15.
Resolution 3
The Company’s Auditor, Crowe U.K. LLP is offering itself for reappointment and if elected will hold office until the conclusion of
the next Annual General Meeting at which accounts are laid before shareholders. This resolution will also authorise the directors
to fix the remuneration of the Auditor.
SPECIAL BUSINESS
Resolution 4
This resolution is to give the directors authority to issue shares. The last such authority was put in place at the Annual General
Meeting of shareholders held on 19 March 2020 but it will expire at the coming Annual General Meeting.
Section 551 of the Companies Act 2006 requires that directors be authorised by shareholders before any share capital can
be issued.
At this stage in its development the Company relies on raising funds from the equity markets, through the issue of shares, from
time to time and unless this resolution is put in place the Company will not be in a position to continue to raise funds to continue
its activities.
If given, this authority will expire at the conclusion of the Annual General Meeting in 2021.
Resolution 5
This resolution will be proposed as a Special Resolution in the event that Resolution 4 is passed by shareholders. Resolution 5
is proposed to give the directors authority to issue shares other than by way of rights issues which are, for regulatory reasons,
complex, expensive, time consuming and impractical for a company the size of Tertiary Minerals plc.
A similar authority granted at last year’s Annual General Meeting is due to expire at the coming Annual General Meeting.
The resolution will, if passed, authorise directors to allot shares or grant rights over shares of the Company where they propose
to do so for cash and otherwise than to existing shareholders pro rata to their holdings, for example through share placings.
If given, this authority will expire at the conclusion of the Annual General Meeting in 2021.
As the Annual General Meeting is a closed Meeting, Shareholders who wish to raise any queries regarding the Resolutions to
be put to the Meeting may do so by email to agmtertiary@tertiaryminerals.com at any time before 2.00 p.m. on Friday
15 January 2021 and any relevant questions along with the answers will be published on the Company's website by 2.00 p.m.
on Tuesday 19 January 2021.
In line with corporate governance best practice and in order that any proxy votes of those shareholders who are not allowed to
attend and to vote in person are fully reflected in the voting on the resolutions, the Chairman of the meeting will direct that voting
on the resolutions set out in the notice of meeting will take place by way of a poll. The final poll vote on the resolutions will be
published after the General Meeting on the Company’s website.
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Voting at the Meeting, Electronic Voting,
Proxy Notes and Instructions
The following notes explain your general rights as a shareholder and your right to attend and vote at this Meeting or to appoint
someone else to vote on your behalf.
1. Due to the restrictions imposed by the Government in connection with the COVID-19 pandemic, the Meeting will be held as
a closed meeting, with only the minimum number of shareholders and directors in attendance as will be required to ensure
that the Meeting is quorate. This being the case, shareholders are advised not to travel to attend the Meeting as they will
not be admitted. Shareholders are therefore urged to register a proxy vote appointing the Chairman to vote in accordance
with their instructions.
2. To be entitled to attend and vote at the Meeting (and for the purpose of the determination by the Company of the number of
votes they may cast), shareholders must be registered in the Register of Members of the Company at close of trading on
Tuesday 26 January 2021. Changes to the Register of Members after the relevant deadline shall be disregarded in
determining the rights of any person to attend and vote at the Meeting. Please note that on this occasion the Meeting
will be held as a closed meeting and therefore Shareholders will not be able to attend in person.
3. Shareholders are entitled to appoint another person as a proxy to exercise all or part of their rights to attend and to speak
and vote on their behalf at the Meeting. A shareholder may appoint more than one proxy in relation to the Meeting provided
that each proxy is appointed to exercise the rights attached to a different ordinary share or ordinary shares held by that
shareholder. A proxy need not be a shareholder of the Company. Shareholders are advised that as the Meeting will be
a closed meeting they should appoint the Chairman of the Meeting as their proxy, in order to guarantee their proxy
is in attendance. Appointment of a proxy who is unable to attend the Meeting will mean that your vote will not
be counted.
4.
In the case of joint holders, where more than one of the joint holders purports to appoint a proxy, only the appointment
submitted by the most senior holder will be accepted. Seniority is determined by the order in which the names of the
joint holders appear in the Company’s Register of Members in respect of the joint holding (the first named being the
most senior).
5. A vote withheld is not a vote in law, which means that the vote will not be counted in the calculation of votes for or against
the resolution. If no voting indication is given, your proxy will vote or abstain from voting at his or her discretion. Your proxy
will vote (or abstain from voting) as he or she thinks fit in relation to any other matter which is put before the Meeting.
6. You can vote:
• by logging on to www.signalshares.com and following the instructions to appoint one or more and direct your votes.
• by hard copy Form of Proxy. You may request a hard copy form of proxy directly from the registrars, Link Asset
Services, on Tel: 0371 664 0300. Calls are charged at the standard geographic rate and will vary by provider. Calls
outside the United Kingdom will be charged at the applicable international rate. Lines are open between 09:00 – 17:30,
Monday to Friday excluding public holidays in England and Wales.
• in the case of CREST members, by utilising the CREST electronic proxy appointment service in accordance with the
procedures set out below.
In order for a proxy appointment to be valid a form of proxy must be completed. In each case the form of proxy must be
received by the Registrars, Link Asset Services, at 34 Beckenham Road, Beckenham, Kent, BR3 4TU by 2.00 p.m. on
Tuesday 26 January 2021.
7.
If you return more than one proxy appointment, either by paper or electronic communication, the appointment received last
by the Registrars before the latest time for the receipt of proxies will take precedence. You are advised to read the terms
and conditions of use carefully. Electronic communication facilities are open to all shareholders and those who use them
will not be disadvantaged.
8. CREST members who wish to appoint a proxy or proxies through the CREST electronic proxy appointment service may do
so for the Meeting (and any adjournment of the Meeting) by using the procedures described in the CREST Manual
(available from www.euroclear.com/site/public/EUI). CREST Personal Members or other CREST sponsored members, and
those CREST members who have appointed a service provider(s), should refer to their CREST sponsor or voting service
provider(s), who will be able to take the appropriate action on their behalf.
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Stock Code: TYM
9.
In order for a proxy appointment or instruction made by means of CREST to be valid, the appropriate CREST message (a
‘CREST Proxy Instruction’) must be properly authenticated in accordance with Euroclear UK & Ireland Limited’s
specifications and must contain the information required for such instructions, as described in the CREST Manual. The
message must be transmitted so as to be received by the issuer’s agent (ID RA10) by 2.00p.m. on Tuesday
26 January 2021. For this purpose, the time of receipt will be taken to mean the time (as determined by the timestamp
applied to the message by the CREST application host) from which the issuer’s agent is able to retrieve the message by
enquiry to CREST in the manner prescribed by CREST. After this time, any change of instructions to proxies appointed
through CREST should be communicated to the appointee through other means.
10. CREST members and, where applicable, their CREST sponsors or voting service providers should note that Euroclear UK
& Ireland Limited does not make available special procedures in CREST for any particular message. Normal system timings
and limitations will, therefore, apply in relation to the input of CREST Proxy Instructions. It is the responsibility of the CREST
member concerned to take (or, if the CREST member is a CREST personal member, or sponsored member, or has
appointed a voting service provider(s), to procure that his CREST sponsor or voting service provider(s) take(s)) such action
as shall be necessary to ensure that a message is transmitted by means of the CREST system by any particular time. In
this connection, CREST members and, where applicable, their CREST sponsors or voting system providers are referred, in
particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings. The
Company may treat as invalid a CREST Proxy Instruction in the circumstances set out in Regulation 35(5)(a) of the
Uncertificated Securities Regulations 2001.
11. Any corporation which is a shareholder can appoint one or more corporate representatives who may exercise on its behalf
all of its powers as a shareholder provided that no more than one corporate representative exercises powers in relation to
the same shares.
12. You may not use any electronic address (within the meaning of Section 333(4) of the Companies Act 2006) provided in
either this Notice or any related documents (including the form of proxy) to communicate with the Company for any
purposes other than those expressly stated.
www.tertiaryminerals.com
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Shareholder Notes
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Contents
Chairman’s Statement 3
Strategic Report
Group Overview 4
Operating Review and Performance 4
Financial Review and Performance 7
Risks & Uncertainties 9
Section 172 (1) Statement 11
Our Governance
Corporate Governance Statement 12
Board of Directors 15
Directors’ Responsibilities 16
Directors’ Report 16
Financial Statements
Independent Auditor’s Report to the Members of Tertiary Minerals plc 18
Consolidated Income Statement 22
Consolidated Statement of Comprehensive Income 22
Consolidated and Company Statements of Financial Position 23
Consolidated Statement of Changes in Equity 24
Company Statement of Changes in Equity 25
Consolidated and Company Statements of Cash Flows 26
Notes to the Financial Statements 27
Annual General Meeting
Notice of Annual General Meeting 46
Annual General Meeting Explanatory Notes 47
Voting at the Meeting, Electronic Voting, Proxy Notes and Instructions 48
Company Information IBC
Company Information
Tertiary Minerals plc (AIM – EPIC: TYM)
Company No. 03821411
Stock Code: TYM
Head Office
Silk Point
Queens Avenue
Macclesfield
Cheshire
SK10 2BB
United Kingdom
Tel: +44 (0)1625 838679
Fax: +44 (0)1625 838559
Auditor
Crowe U.K. LLP
3rd Floor
The Lexicon
Mount Street
Manchester
M2 5NT
United Kingdom
Nominated Adviser & Broker
SP Angel Corporate Finance LLP
Prince Frederick House
35-39 Maddox Street
London
W1S 2PP
United Kingdom
Registrars
Link Asset Services
The Registry
34 Beckenham Road
Beckenham
Kent BR3 4TU
United Kingdom
Registered Office
Sunrise House
Hulley Road
Macclesfield
Cheshire
SK10 2LP
United Kingdom
Company website:
www.tertiaryminerals.com
Bankers
National Westminster Bank plc
2 Spring Gardens
Buxton
Derbyshire
SK17 6DJ
United Kingdom
Joint Broker
Peterhouse Capital Limited
3rd Floor
80 Cheapside
London
EC2V 6EE
United Kingdom
Solicitors
Gowling WLG (UK) LLP
4 More London Riverside
London
SE1 2AU
United Kingdom
2
Tertiary Minerals plc Annual Report and Accounts 2020
www.tertiaryminerals.com
260055 Tertiary Minerals Cover.qxp 18/12/2020 11:45 Page 1
Tertiary Minerals plc
Silk Point
Queens Avenue
Macclesfield
Cheshire
SK10 2BB
United Kingdom
Tel: +44 (0)1625 838679
Fax: +44 (0)1625 838559
www.tertiaryminerals.com
Perivan 260055
Tertiary Minerals plc
Company No. 03821411
Annual Report and Accounts
for the year ended 30 September 2020