December 9 , 2004

SUCCESS OF TERTIARY’S FINNISH DIAMOND INITIATIVE HIGHLIGHTED BY CHAIRMAN

• Acquisition Of Additional Ground Gives Company 50 Further Diamond Targets
• Drilling Of Bedrock Targets To Start Soon At Pitkäjärvi Gold Project
• Company Hopeful Of Positive Outcome To Funding Efforts For Ghurayyah

In a year which has generally held mixed fortunes for mineral exploration companies, Mr Patrick Cheetham, executive chairman of Tertiary Minerals plc, says the highlight for the AIM-listed company has been the success of its diamond exploration initiative near Kuusamo in the Karelian craton of northern Finland.

In his chairman’s statement, Mr Cheetham says that, although analysis of samples from the three kimberlites identified to date yielded no diamonds, independent geological investigations have confirmed that geological conditions at Kuusamo “are ideal for the occurrence of diamondiferous kimberlites.” The company is also encouraged by the possibility that there may be a geological link between Tertiary’s discoveries and the Arkhangelsk kimberlites in the Russian half of the Karelian craton. These include the Lomonosov diamond project run by Alrosa and the highly diamondiferous Grib pipe.

In order to capitalise on this progress, Tertiary has undertaken further targeting work and acquired additional ground. The company now has over 50 targets for further investigation, and existing data strongly suggests that more, potentially diamondiferous, kimberlites will be discovered on this ground, the chairman adds.

Tertiary boosted its gold portfolio with the recent acquisition of the Pitkäjärvi project in west-central Finland where high-grade mineralisation is present in surface boulders containing visible gold. Following a programme of geophysics to trace the source of the boulders, Tertiary says it expects to drill bedrock targets shortly.

Meanwhile, follow-up drilling is underway at the Kaaresselkä gold project in northern Finland, where three zones of gold mineralisation have previously been identified within a 1km2 area. The current programme is focused on the high-grade mineralisation in the Vanha zone.

Earlier in the year, positive drilling results were returned from a large iron oxide-related copper-cobalt-gold mineralised system at Ahmavuoma in northern Sweden, including an extension of the Discovery zone. However, an early Spring thaw meant the programme had to be curtailed and Tertiary was unable to drill other targets on the property. These will be investigated when drilling is able to resume this winter once the swampy ground has frozen and access can be re-established.

Commenting on the significant recovery in the tantalum market over the past year, Mr Cheetham says inventories have been depleted, the spot price has recovered and the market is growing again, led by a resurgence in consumer electronics spending. Current annual demand growth is estimated at 7p.c.-8p.c. and may be further enhanced by the delivery of 3G mobile phone technology. The October 2004 move into Voluntary Administration by Australia’s Sons of Gwalia brought the tantalum industry into sharp focus. The possibility of a change of control of the world’s largest tantalum producer has turned the spotlight on to alternative sources of supply, including Tertiary’s world-class Ghurayyah project.

Work planned for Ghurayyah was delayed by the last-minute breakdown of negotiations with a potential joint venture partner that otherwise would have provided funding for preliminary and bankable feasibility studies. Renewed efforts are currently being made to secure alternative funding. “We are hopeful of a positive outcome”, says Mr Cheetham.

Like most exploration companies Tertiary remains loss-making, reporting a deficit of £861,081 for the year ended September 30, 2004 (£397,037 loss in 2002-03). This comprises interest receipts of £20,663, administration expenses of £245,030 and £636,714 of written-off expenditure on projects where the Board has decided that further exploration is not a priority. At the end of the year, the company had cash resources of almost £560,000.

Concluding his review, Mr Cheetham says that Tertiary has an excellent portfolio of exploration assets which is diversified by commodity and country but, in his opinion, the company’s exploration successes have yet to be reflected in the company’s share price. “I hope to improve this important measure of performance during 2005 by building on this inherent value.”

Further info: Patrick Cheetham, Executive Chairman, Tertiary Minerals plc.
Tel: 01625-626203

John Greenhalgh/Ron Marshman, City of London PR Ltd.
Tel: 0207-628 5518