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Tertiary Minerals said Monday for the year ended Sep. 30, it made a loss before taxation of GBP791,965 compared with a pretax loss of GBP871,964 a year earlier.
The Executive Chairman, Patrick Cheetham, said:"Even allowing for the deepening recession, financial deleveraging has caused the prices of many metals to fall below the limits of sustainable economic production suggesting that medium term outlook should be positive.
"The Company's progress during the year has been eclipsed by the 2008 financial crisis, the resulting stock market crash and a burgeoning recession. In response, the Board took immediate action to further reduce costs on an already low cost base.
"In recent months many metal prices have collapsed as demand slows and financial institutions deleverage their commodity related financial instruments.
"However, the prices of some of the commodities in which we are involved, fluorspar, tantalum, niobium, and rare-earths have not yet been as badly affected as they are not speculatively traded and as a result demand and prices tend to track global GDP more closely than do the prices of those metals that trade on terminal markets such as the London Metal Exchange.
"Commentators seem divided on the future level of real commodity demand depending on their view of the dependence of China on western world demand for its exports.
"Undoubtedly the trading picture is currently obscured as the collapse of shipping costs translates to lower delivered prices for many bulk minerals such as fluorspar. However it seems certain that 'mine-gate' prices are softening on negative global economic demand and sentiment.
"Iron ore prices doubled in 2007 and early 2008, but more recently price pressures have been strongly downward with a number of iron ore companies announcing production cut-backs. Annual contract prices are expected to be sharply down when next fixed.
"Amongst the current market gloom and uncertain outlook it is worth remembering that it is in such financial environments, when mines are closed and production lost, that the seeds of the next mining boom are being sown.
"I remain optimistic that the quality of the Company's projects and the experience of the Board will carry the Company forward.
"The most significant development this year has been the acquisition in Jan. of the Storuman fluorspar deposit in Sweden.
"Fluorspar is the principal industrial source of fluorine for the manufacture of hydrofluoric acid and derivative fluorine chemicals and it is used as a flux in the manufacture of steel.
"Following years of oversupply from China, fluorspar is now in critically short supply as traditional Chinese sources become depleted and reserved for Chinese domestic use. The Company's evaluation of a new European source of fluorspar is therefore timely.
"Storuman was defined as a multi-million tonne deposit in the 1970s when resource estimation, mine planning and metallurgical testwork outlined a potentially commercial deposit that was not subsequently developed.
"In 2008, Tertiary fast-tracked further work on the deposit having completed a confirmatory drilling programme and initiated metallurgical testwork and a technical and economic scoping study. Whilst development of any mineral project faces challenges, particularly in the current financial environment, we have been encouraged by the high level of industry interest in our project.
"The Kolari iron deposit sits at the heart of the Kolari-Pajala iron province in the border areas of northern Finland and Sweden where a number of iron deposits are being considered for development.
"Our work during the year has validated the potential for a substantial tonnage of near surface bulk-mineable iron mineralisation on our Sivakkalehto claims in Finland that could be developed to produce high grade iron concentrates.
"Tertiary's target is to define a resource of 100 million tonnes grading 30% magnetite. An initial programme of metallurgical testwork has produced premium-grade magnetite concentrates averaging 70% iron.
"Iron ore prices doubled in 2007 and early 2008, but more recently price pressures have been strongly downward with a number of iron ore companies announcing production cut-backs. Annual contract prices are expected to fall sharply.
"At Ghurayyah, in Saudi Arabia, we have seen further progress towards the issue of the new exploration licence over the world class Ghurayyah tantalum-niobium rare-earth deposit, with the issue and agreement of draft licence terms and we hope that our patience will be rewarded before too long.
"The Company has maintained its shareholding in Sunrise Diamonds throughout the year and continues to provide management services and to share costs to the advantage of both companies. The Company currently holds 14% of the issued capital of Sunrise Diamonds.
"The Group reported a loss of GBP791,965 for the year (2007: GBP871,964). During the year we have secured a trading platform on PLU.S. markets and whilst our AIM trading facility is unaffected, it gives investors further choice and will lead, we hope, to increased trading liquidity once markets recover."
(END) Dow Jones Newswires
12-08-08 0911ET
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