Fluorspar is an essential raw material in the chemical, steel and aluminium industries with no large-scale commercial alternative, or recycling available.
A European Commission report has named fluorspar as one of its 27 'critical mineral raw materials' for which a predicted supply shortage would represent a substantial economic threat. The USA considers fluorspar as a strategic mineral and is currently importing 100% of its fluorspar.
Western Europe and North America are the largest acid-spar consuming regions outside China.
China's fluorspar exports have continued to decline since 2000, a decline was driven by increasing internal demand and production and export restrictions. Under this dynamic, China is likely to evolve from a large net exporter to a potential net importer.
In 2017 China listed fluorspar as a strategic mineral
Storuman the lead asset
The lead asset is the Storuman project in Sweden, which shows the potential to produce an average annual production of 103,000 tonnes of acid-grade fluorspar per year over a mine life of 18 years.
On those parameters the mine would generate US$616mln in gross cash, netting out to a total of U$137mln.
The initial capital costs were put at US$46mln in the scoping study that generated these numbers.
However, Sweden’s permitting regime is notoriously hard to navigate, and there still remains work to be done in this score.
Other fluorspar assets coming along behind
Tertiary is also working up the Lassedalen project in Norway and the MB Fluorspar project in Nevada. Of the two, MB is more advanced and is currently the subject of a scoping study being conducted by SGS Lakefield.
Acquisitions in the pipeline
Tertiary stated in the middle of 2018 that after a process that evaluated several acquisition opportunities in the fluorspar space, the focus had now narrowed to just one such opportunity.
The company said it was in the early stages of due diligence, but cautioned that there was no guarantee a transaction would be completed.
Tightly run operation
In the six months to 31 March 2018 Tertiary lost just £170,000, a small sum for an exploration and development company. The figure was so low partly because the company was able to book a profit on the sale of some shares in Aurion Resources, whilst retaining a royalty. However, the figure for the comparable period in 2017 was even lower, so there is a pattern here. The main reason is that administration costs are kept down by basing the company outside of London and allowing it to share offices and staff with sister company Sunrise Resources (LON:SRES).