Tertiary Minerals looks forward to further progress during 2012 - UPDATE

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Tertiary Minerals (LON:TYM) expects to make further substantial progress in 2012 towards becoming a significant and profitable producer of fluorspar.

The market for this strategic commodity is expected to remain tight for years to come, it said, unveiling its final results for the year to September 30, 2011.

The company controls two significant Scandinavian projects - Storuman in Sweden and Lassedalen in Norway.

The year saw the definition of a maiden resource at Storuman and the start of feasibility studies and permitting - marking the transition of the company from explorer to developer.

Fluorspar prices continued to climb in 2011 with recent Chinese export spot prices reaching $600 a tonne, up 69 per cent from the beginning of the year, said executive chairman Patrick Cheetham.

At Storuman, the indicated and inferred mineral resource of 28 million tonnes grading 10.2 per cent fluorspar exceeded expectations from the earlier scoping study, he said.

Preliminary feasibility studies at Storuman have begun, as have environmental baseline sampling programmes, mine and environmental permitting studies, the company said.

" We anticipate that we will submit an application for a mining lease at the end of 2012," it added.

Recent drilling in untested areas on the west and north-west side of the known resource has established an area of mineralisation which is potentially much larger than that defined so far, it added.

Tertiary also reported progress at Lassedalen with positive results from core sampling. Metallurgical testwork and JORC mineral resource estimation is in progress there while there have been encouraging results from first drill programme at Kiekerömaa gold prospect in Finland.

The company booked a loss of £289,673 for the year (2010: £321,563). It had cash and equivalents of £1.18 million as at September 30 this year compared to £370,334 at the same time in 2010.

Cheetham concluded: "The forecast growth for fluorspar consumption means that the equivalent of a new medium sized fluorspar mine needs to come on stream every year, but there are just a handful of companies having this ambition.

"Tertiary Minerals is one of very few public listed companies offering investors exposure to this strategic commodity and in 2012 we expect to be able to make further substantial progress towards our goal of becoming a significant and profitable producer."

Asa Bridle, analyst at broker Seymour Pierce, which rates the stock a 'buy' targeting a price of 30 pence, said the firm had spent just under £700,000 on project exploration and development and the company's net cash position at 30 September was £1.2 million.

"On such a modest outlay Tertiary has again achieved a significant amount of progress," said the analyst.

"All this progress comes against a very encouraging backdrop for the fluorspar industry. China continues to focus on producing high value fluorochemicals from its own fluorspar supply and this is driving up prices and leaving western markets seeking fresh, secure sources of supply.

"This has lead to a number of deals in the sector in recent times being carried out at premiums to valuations given by the market. As the news continues to flow from Tertiary's projects, we see the company coming into the sights of industry consolidators and industrial users."