“The MB project has been gaining real momentum since we took it on coming up for three years ago”, says Richard Clemmey, managing director of Tertiary Minerals (LON:TYM).
“When we took the project on we had lots of historic data and so we concentrated our first two phases of drilling on where we had the data.”
The result was an impressive maiden resource of upwards of 38mln tonnes of ore grading more than 10% fluorspar; that, says Clemmey, was “pretty large”.
But the company didn’t stop there. The third phase of drilling, completed at the back end of last year, has yielded a new resource totalling 86.4 million tonnes of ore grading 10.7% fluorspar, a result with which Clemmey says he is “delighted”.
There could be even more to come. “The MB deposit remains open at depth and laterally in all directions and therefore we are very excited about the sheer size potential”, he continues.
“Eventually, the deposit size will far exceed the current estimates.”
But it’s not just the amount of fluorspar that Tertiary’s proving up that makes it such a standout opportunity.
It’s the location. Plumb in the centre of Nevada, one of the most mining-friendly jurisdictions in the world, just 19 km from a major highway and rail hub, and with immediate access to a huge fluorspar market, it’s no wonder Clemmey sounds animated when he’s talking up Tertiary’s potential.
“Geographically we’re in a great location”, he said.
“Currently the US imports 100% of its requirement of fluorspar. Having something on their home turf we see as a key position, and we see a lot of interest.”
Fluorspar is a key ingredient in the manufacture of white goods, and is also used in the creation of hydrogen fluoride and hydrofluoride acid.
That’s why the likes of Dupont and Honeywell are nosing around MB and why fluorspar is a commodity that increasingly is attracting the attention of US policy makers.
At the moment, the Chinese dominate the market. That simple dynamic makes Americans nervous and keen to work up viable alternatives.
“We believe that fluorspar is in a high demand situation and that supplies are going to get reduced with high demand from China”, says Clemmey.
“The key markets in Europe and America are trying to secure supply outside of China.”
Of course, there’s plenty of work to be done on MB yet, but the share price boost that the news of the latest upgrade delivered shows just what the market thinks of recent progress – it’s all good.
Next, says Clemmey, will be a detailed consideration of where to drill in the upcoming programme.
“We don’t know the exact location of the source of the fluorspar at the moment”, he says, notwithstanding that he’s slowly zeroing in.
“The last phase of drilling indicated that we are pretty close.”
A full understanding of this deposit now seems near, and given that it’s by no means drilled out yet, that could mean further significant resource upgrades in due course.
All that work has to be funded, of course, but notwithstanding the tough mining markets, Tertiary has been able navigate the choppy waters through various small financings that have allowed it to keep going and working up its asset base.
To be sure, some projects have fallen by the wayside. Lassedalen, a promising fluorspar deposit in Norway, has effectively been on care and maintenance for some time now, as the company has sought to direct limited funds towards the most promising projects in its portfolio.
To date that’s been MB in Nevada, and the Storuman deposit in Sweden, currently undergoing the final stages of permitting.
So, although the money to pay for that work has come in dribs and drabs, it’s never stopped coming.
Over the last year or so there’s been a facility in place from Darwin Strategic, but that’s now about to lapse. It’s not been used recently in any case; the most recent fund-raisings coming directly from equity placements into the market.
“We do have a loyal following”, says Clemmey. “We’ve never received any negative comments about our Darwin deal, and in March we did a straight equity placing through a small syndicate of investors.
“In a good market with a strongly performing share price we would be looking to raise more, but at the moment it’s all about minimising the dilution. A lot of the feedback we get off our investors is about minimising the dilution.”
The most recent raise will take the company through to the end of the permitting process for Storuman and allow planning for follow-up work at MB; however, that spend is in any case discretionary, as Clemmey points out.
“All our projects are 100% owned with low running costs. We’ve got pretty tight control. Even when we raise a small amount of funds it goes a long way, but our intention is to keep the momentum going.”