Tertiary Minerals

Tertiary Minerals (TYM) plans a formal resource estimate next month for its key Storuman fluorspar project in Sweden after encouraging drilling results. The Macclesfield-based company says latest drilling has shown further thick intervals of shallow mineralisation, suitable for open-pit mining, with grades including 22.2 metres with 11.6% fluorspar and 22m at 15.3% fluorspar.

AIM-quoted Tertiary indicates the drilling also reveals more higher-grade intervals, which might be suitable for mechanised underground extraction, including 7.5m grading 19.7% and 2.35m grading 21.9%. The company has been bullish on the outlook for fluorspar, which produces hydrofluoric acid with uses ranging from plastics and refrigeration to electroplating and stainless steel, and believes the era of periodic dumping by China is well past.

Steered by indefatigable executive chairman Patrick Cheetham, Tertiary raised £1.8m at 6p in December to develop Storuman, which was then reckoned to hold around 3.5m tonnes of fluorspar. A scoping study suggested the project could itself pay back capital investment of £29m in three years.

Shares in Tertiary, which lost nearly £322,000 in the year to September, were until recently market dogs, having fallen from more than 30p in 2002 to 2p within the past year, as the company dissipated cash and goodwill on as yet unrewarding tantalum, rare earths, niobium and iron ore projects, in Saudi Arabia and Finland. But they have perked up recently on possibilities for Storuman and the company's other fluorspar prospects, in Norway.

Recommended by Growth Company Investor at 6.88p last September, the shares now trade at 14.75p. Partial profit taking would be prudent, while retaining a chunk for the hoped-for fluorspar pay-off.