Final Results

Tertiary Minerals PLC 11 December 2006 Tertiary Minerals plc Final Results Chairman's Statement I am pleased to report that the preliminary agreement we signed with a Saudi business consortium in 2005 for funding the US$7 million cost of feasibility studies for our Ghurayyah rare-metal project in Saudi Arabia was converted into a full joint venture agreement in March this year, and funds have been committed by the joint venture partners. Ghurayyah Preliminary Feasibility Study The Preliminary Feasibility Study is now well underway. Metallurgical testwork, using a three tonne sample obtained from previously collected drill samples, has now advanced to the stage where the initial mineral concentration scheme is largely defined. This has resulted in improvements in metal recoveries and reductions in reagent usage which should combine to reduce operating costs from our 2002 estimates. A further drilling programme has generated a 55 tonne sample which will form the basis for pilot scale testing of the proposed bulk concentration method. Further metallurgical testwork, designed to separate the contained tantalum, niobium, zircon and yttrium, is also in progress and should be completed early in 2007. A significant breakthrough in the current mineral processing testwork has been made with the development of a process that will allow the use of seawater as the mineral processing medium. This provides a sustainable alternative to the use of groundwater resources which are scarce in Saudi Arabia. Environmental studies have also started which will ultimately lead to the preparation of a comprehensive Environmental Management Plan. The marketing plan is progressing on track with strong interest in the project's future production being shown by leading industry participants. It is likely that the project will be designed to produce separate tantalum and niobium products in order to maximize project revenues. The outlook for both the tantalum and niobium markets remains strong. In addition, excellent local markets have been identified for the zircon contained in the Ghurayyah deposit provided that current metallurgical testwork shows that it can be produced to the desired specification. The recovery of an yttrium product will also be evaluated. The Saudi Government has asked that we do not develop a separate uranium product for sale. The preliminary feasibility study is scheduled for completion by the end of 2007. Sunrise Diamonds plc Our associated company Sunrise Diamonds plc ('Sunrise Diamonds') (23.45% held) has continued to make excellent progress in exploring its diamond projects in Finland during the year. It has announced a number of new diamondiferous kimberlite discoveries and a significant joint venture with Canada's Nordic Diamonds Ltd that will give it access to previous kimberlite discoveries made in the 1990's by Ashton Mining. Although it is disappointing to see that this progress is not reflected in a stronger share price for Sunrise Diamonds, its shares have traded consistently at more than twice the price at which Tertiary shareholders were offered shares in the lead up to the admission of Sunrise Diamonds to AIM last year. The Board's belief is that Sunrise Diamonds holds an exceptionally interesting exploration portfolio and database in Finland and that it is substantially undervalued at the current market price. Other Exploration Projects The Company's focus this year on advancing the Ghurayyah project has meant that our Scandinavian gold and base-metal portfolio was allocated only limited expenditure. The Company is considering strategic options for these projects, including several joint venture approaches and the resumption of exploration once funding levels permit. Annual Results The Group reported a loss of £250,934 for the year (2005: £415,803). In Conclusion I would like to take this opportunity to thank all of my staff and fellow Directors who have worked hard to advance the Company's interests this year. It has been a year of solid progress which we expect will result in further reward for our shareholders. Patrick L Cheetham Executive Chairman 8 December 2006 Further Information: Patrick Cheetham, Tertiary Minerals Plc. Tel: +44 (0)1625-626203. Ron Marshman/John Greenhalgh, City of London PR Ltd. Tel: +44 (0)20-7628-5518 Web-site: www.tertiaryminerals.com Tertiary Minerals plc Consolidated Profit and Loss Account for the year ended 30 September 2006 2006 2005 £ £ Exploration costs written off 52,077 294,088 Administrative expenses 227,250 310,269 ---------- ---------- Operating loss (279,327) (604,357) Share of loss of associate (48,294) (44,892) Profit on disposal of intangible asset - 75,100 Profit on disposal of tangible asset 504 - Profit arising from the increase in value of the Group's share of the net assets of Sunrise Diamonds resulting from share issues 44,357 134,371 Interest receivable 28,268 22,579 Share of interest receivable of associate 3,558 1,396 ---------- ---------- Loss on ordinary activities before taxation (250,934) (415,803) Tax on loss on ordinary activities - - Loss for the year (250,934) (415,803) ---------- ---------- Loss per share - basic (pence) (0.49) (0.93) ---------- ---------- All amounts relate to continuing activities. Tertiary Minerals plc Consolidated Statement of Total Recognised Gains and Losses for the year ended 30 September 2006 2006 2005 £ £ Loss for the year (250,934) (415,803) Foreign exchange translation differences on foreign currency net investments in subsidiaries (21,507) (19,488) ---------- ---------- Total recognised losses since last accounts (272,441) (435,291) ---------- ---------- Tertiary Minerals plc Balance sheets at 30 September 2006 Group Group Company Company 2006 2005 2006 2005 £ £ £ £ Fixed assets Intangible assets 1,158,926 943,219 - - Tangible assets 9,898 5,676 6,500 - Investment in subsidiary - - 224,889 224,889 Investment in associate - - 215,250 150,000 Share of net assets of associate 222,221 157,350 - - -------- -------- -------- -------- 1,391,045 1,106,245 446,639 374,889 -------- -------- -------- -------- Current assets Debtors 57,197 65,705 3,122,500 2,334,206 Cash at bank and in hand 884,110 435,969 385,305 424,940 -------- -------- -------- -------- 941,307 501,674 3,507,805 2,759,146 Creditors: amounts falling due within one year (71,052) (37,916) (37,274) (25,074) -------- -------- -------- -------- Net current assets 870,255 463,758 3,470,531 2,734,072 -------- -------- -------- -------- Net assets 2,261,300 1,570,003 3,917,170 3,108,961 -------- -------- -------- -------- Capital and reserves Called up share capital 545,127 464,210 545,127 464,210 Share premium account 4,259,683 3,376,862 4,259,683 3,376,862 Merger reserve 131,096 131,096 131,096 131,096 Profit and loss account (2,674,606) (2,402,165) (1,018,736) (863,207) -------- -------- -------- -------- Shareholders' funds 2,261,300 1,570,003 3,917,170 3,108,961 -------- -------- -------- -------- Tertiary Minerals plc Consolidated Cash Flow Statement for the year ended 30 September 2006 2006 2005 £ £ Net cash outflow from operating activities (217,465) (303,749) Returns on investment and servicing of finance Interest received 28,268 19,898 ----------- ----------- Net cash outflow from operating activities (189,197) (283,851) after returns on investments and servicing of finance ----------- ----------- Capital expenditure and financial investment Purchase of intangible fixed assets (230,324) (304,658) Purchase of tangible fixed assets (9,520) (3,675) Receipts from sale of intangible fixed assets - 150,000 Receipts from sale of tangible fixed assets 4,166 - ----------- ----------- Net cash outflow from capital expenditure and financial investment (235,678) (158,333) ----------- ----------- Acquisitions and disposals Payments to acquire investment in associate (65,250) (150,000) ----------- ----------- Net cash outflow from acquisitions and disposals (65,250) (150,000) ----------- ----------- Financing Issue of share capital (net of expenses) 963,738 475,197 Exchange differences (25,472) (4,710) ----------- ----------- Net cash inflow from financing 938,266 470,487 ----------- ----------- Increase/(decrease) in cash 448,141 (121,697) ----------- ----------- Notes: 1 Publication of Non-Statutory Accounts The financial information set out in this announcement does not constitute the Company's Statutory Accounts for the period ended 30 September 2006 or 2005. The financial information for 2005 is derived from the Statutory Accounts for 2005, which have been delivered to the Registrar of Companies. The auditors have reported on the 2005 and 2006 accounts; their reports were unqualified and did not contain statements under section 237 of the Companies Act 1985. The Statutory Accounts for 2006 will be delivered to the Registrar of Companies following the Company's Annual General Meeting. 2 Reconciliation of movements in shareholders' funds Group Group Company Company 2006 2005 2006 2005 £ £ £ £ Loss for the year (250,934) (415,803) (155,529) (169,979) Exchange differences (21,507) (19,488) - - Shares issued during the year 963,738 475,197 963,738 475,197 --------- --------- --------- --------- Increase in shareholders' funds 691,297 39,906 808,209 305,218 --------- --------- --------- --------- Opening shareholders' funds 1,570,003 1,530,097 3,108,961 2,803,743 --------- --------- --------- --------- Closing shareholders' funds 2,261,300 1,570,003 3,917,170 3,108,961 --------- --------- --------- --------- 3 Reconciliation of operating loss to net cash outflow from operating activities 2006 2005 £ £ Operating loss (279,327) (604,357) Depreciation charge 3,301 3,035 Depreciation released on disposal (2,169) - Profit on disposal of tangible fixed assets 504 - Intangible fixed assets written off 18,582 305,921 Disposal of intangible fixed assets - (74,900) Decrease in debtors 8,508 4,878 Increase/(Decrease) in creditors 33,136 (24,532) Share of operating loss of subsidiary prior to it becoming an associate - 86,206 -------- -------- Net cash outflow from operating activities (217,465) (303,749) -------- -------- 4 Reconciliation of cash flow to movement in net funds Cash at bank and in hand £ At 30 September 2006 884,110 At 1 October 2005 435,969 ---------- Increase in cash in the year 448,141 Cash outflow from decrease in funds and lease - financing Cash inflow from decrease in liquid resources - ---------- Change in net funds resulting from cash flows 448,141 New finance leases - ---------- Movement in net funds in the year 448,141 Net funds at 1 October 2005 435,969 ---------- Net funds at 30 September 2006 884,110 ---------- 5 Dividend No dividend is proposed. 6 Annual Report The Company's 2006 Annual Report will be published and sent to shareholders in due course and copies will be available to the public, free of charge, from the Registered Office of the Company at Sunrise House, Hulley Road, Macclesfield, Cheshire, SK10 2LP for at least 30 days from the date of publication. This information is provided by RNS The company news service from the London Stock Exchange

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