Nov 11, 2002

TERTIARY COMPLETES SUCCESSFUL TESTING OF EXTRACTION PROCESS FOR WORLD’S LARGEST TANTALUM DEPOSIT

• Ten-Fold Increase In Concentrate Grade Over Previous Testwork
• Financial Assistance Being Provided By British Government’s Offset Initiative
• Technical And Economic Scoping Study Now Being Planned

Tertiary Minerals Plc says it has successfully developed and tested an extraction and concentration process for the treatment of its Ghurayyah tantalum-rare metal deposit in Saudi Arabia, reportedly the world’s largest known tantalum deposit. The AIM-listed company also reveals that the project is now receiving financial support from British Offset, a joint initiative of the UK Ministry of Defence and BAE SYSTEMS to support new projects in Saudi Arabia through project financing assistance and the provision of soft loans.

One of the most significant aspects of the successful Ghurayyah testwork is that standard industry techniques of flotation and magnetic separation have been used to produce a concentrate grading 35.3p.c. combined tantalum, niobium and yttrium/rare earth oxides. This represents recoveries of 71p.c. and 65p.c. for tantalum and niobium respectively and undetermined but significant recoveries of yttrium and rare-earths and indicates that all of these metals may be commercially recoverable. Previously Ghurayyah was considered to be a valuable resource for tantalum only. Tertiary also notes that the extraction process is not fully optimised and concentrate grade and recovery might be improved with further testwork.

“These results represent a significant breakthrough for the project”, said Tertiary executive chairman Mr Patrick Cheetham.

The testwork has achieved a ten-fold improvement in concentrate grade compared to that obtained in earlier metallurgical testing on which all previous technical and financial evaluation of Ghurayyah has been based. High values of niobium and yttrium could potentially add significantly to the value of Ghurayyah concentrate, says Tertiary. The high grade of valuable yttrium and rare-earths in the concentrate was particularly unexpected, it adds. The company cautions, however, that the amount of yttrium that could be produced from Ghurayyah is large in proportion to the world market.

REMARKABLE GRADE CONTINUITY

Metallurgical process development testwork has been carried out by SGS Lakefield Research in Canada, one of the world’s leading independent metallurgical laboratories. It included mineralogical studies on ore and concentrates and numerous grinding, gravity, flotation, leaching and magnetic separation tests. During this testwork a check assaying programme was also undertaken on drill core from the 1999 drilling completed by the US Geological Survey. This generally confirmed the remarkable grade continuity within the Ghurayyah deposit which contains and inferred mineral resource of 385m tonnes averaging 245g/t tantalum pentoxide and 2,840g/t niobium pentoxide.

The concentrate produced in testwork may be directly saleable to established tantalum and niobium processors, but further market research is needed in order to determine the market value of these concentrates, says Tertiary. However, the estimated resources at Ghurayyah are sufficiently large to meet current world demand for these metals for over 40 years and justify the establishment of on-site concentrate processing facilities to add value to the tantalum, niobium and yttrium/rare-earth oxides.

On-site value-adding processing is standard practice in the niobium industry but less common in the case of tantalum, an industry dominated by separate and independent miners and concentrate processors. A number of commercially proven processing technologies could be applicable in this context, the company adds.

Tertiary estimates that, even at current low tantalum prices and prevailing niobium prices, the recoverable value of these two metals in an intermediate value form is US$38/t of ore mined and processed. Mining costs at Ghurayyah are expected to be low, Tertiary adds.

Recent work published by Metal Bulletin Research suggests that the market for tantalum should start to recover by mid-2003 and forecasts a sustainable long-term price of US$60/lb tantalum pentoxide (in concentrate), considerably above the current US$25-US$30/lb spot price used in the above estimate for Ghurayyah ore. At US$60/lb, and based on current niobium prices, the estimated recoverable value of the two metals in intermediate processed form increases to US$61/t of ore mined and processed.

Commenting on the positive outlook for Ghurayyah indicated by the latest metallurgical testwork and the above price forecasts, Mr Cheetham said: “Large mining companies have traditionally been built on the back of single giant metal deposits where large-scale production can be sustained over several tens of years. Ghurayyah has that potential and could be a company maker for Tertiary”.

Tertiary is now planning a preliminary technical and economic scoping study to determine the capital and operating costs for various mining rates and processing options and to provide an indication of the financial viability of the Ghurayyah project.

Further Information: Patrick Cheetham, Tertiary Minerals:
Tel: 01625-626203; mob: 07767-458751.

Ron Marshman/John Greenhalgh, City of London PR Ltd.
Tel : 020-7628-5518