Tertiary Minerals

Tertiary Minerals is raising £1.8m at 6p to develop its Storuman fluorspar project in Sweden and other prospects. The AIM veteran, which has been through several incarnations since floating as a tantalum play in1998, is obtaining the money, nearly 34% of its enlarged capital, through broker Seymour Pierce chiefly to take forward Storuman, which is currently reckoned to hold around 3.5m tonnes of fluorspar at grades between 11.2% and 12.3%.

Patrick Cheetham, executive chairman of Macclesfield-based Tertiary, is bullish about prospects for fluorspar, which produces hydrofluoric acid with uses ranging from plastics and refrigeration to electroplating and stainless steel. He argues it is heading for a supply squeeze, with China no longer periodically dumping large quantities on world markets.

Tertiary says it controls an estimated four million tonnes of fluorspar at Storuman in Sweden and Lassedalen in Norway and argues a recent scoping study suggested Storuman alone could pay back capital investment of $46 million (£29 million) in three years, with a 24 per cent internal rate of return. The company, whose losses rose 19% to £321,600 in the year to September, also has interests in exploration and development of gold, iron ore, tantalum, niobium and rare earths in Finland and Saudi Arabia.

Tertiary previously lost much market credibility with licencing problems, hold-ups and delays at its earlier tantalum project in Saudi Arabia and iron ore prospects elsewhere and the shares fell from 30p in 2003 to 2p not so long ago. However, Cheetham has said the clear focus is now on fluorspar.

Highlighted as a speculative buy by Growth Company Investor at 6.88p in September, the price has slipped again to 6.25p. But for the strong nerved it is worth hanging in there for a while yet in the hope that the fluorspar market holds up as expected and Storuman lives up to expectations.