Tertiary Minerals plc ("Tertiary" or "the Company", LYSE: TYM.L) has signed a Preliminary Agreement with a consortium of Saudi Arabian investors ("the Consortium") that will provide a funding package of up to US$7m for the completion of Preliminary and Bankable feasibility studies for the development of the Al Ghurayyah tantalum-niobium project in Saudi Arabia.

Business Development Asia advised Tertiary Minerals in attracting the participation of the Saudi Consortium and in negotiating the terms of the Preliminary Agreement.

Assuming successful completion of these studies, a special purpose vehicle, funded and owned equally by Tertiary and the Consortium, will be established to develop the Al Ghurayyah deposit.

The Consortium comprises two of Saudi Arabia's prominent local group companies – A H Algosaibi & Bros. Co. and AlNahla Trading & Contracting Co. Both are diversified industrial companies with a range of domestic and international business interests. This joint venture is believed to be the first minerals based joint venture to be established between Saudi and foreign companies under the terms of the current Saudi Investment Code and the newly introduced Mining Code.

Under the Preliminary Agreement the Consortium will immediately subscribe £500,000 for 5,000,000 new ordinary shares in Tertiary Minerals plc at a price of 10 pence per share, representing a 100% premium over the current market price. The parties will then seek to implement a binding joint venture agreement based on the terms of the Preliminary Agreement whereby the cost of the Preliminary Feasibility study, estimated at US$2 million will be funded US$300,000 by Tertiary, US$850,000 from the issue to the Consortium of zero-coupon convertible loan notes and a further US$850,000 direct contribution to the joint venture expenses from the Consortium. The costs of a subsequent Bankable Feasibility Study, estimated at US$5 million, will be met 90% by the Consortium and 10% by Tertiary by direct contribution to joint venture expenses.

On construction, the project partners will seek to maximise the benefit of favourable debt funding available in Saudi Arabia, including that from the Saudi Industrial Development Fund and the Al Yamamah Economic Offset programme, which could reduce Tertiary's project equity requirement to as little as 6.5% of the US$75-100 million total capital costs of the project estimated in the 2003 Scoping Study.

Commenting on the transaction, Mr. Patrick Cheetham, Executive Chairman of Tertiary said: "This agreement is a major step forward in unlocking the huge potential of the Ghurayyah deposit. The agreement comes at a time when the tantalum market has substantially recovered from the volatility of the year 2000 'electronics bubble' and demand is now growing at 5-8% per year. I believe that Ghurayyah has the potential to become a significant supplier to this exciting market and I look forward to working with our new partners to bring Ghurayyah to production."

Tantalum

Tantalum has the ability to store and release electronic charge and its main use is in the manufacture of capacitors, components that regulate the flow of electricity in electronic circuit boards. Capacitors are widely used in most electronic devices, especially mobile phones, digital cameras, DVDs, gaming platforms and laptops.

About BDA

BDA (www.bdallc.com) is a corporate finance advisory firm. BDA assists multinational clients, both Western and Asian, to identify, assess and execute cross-border transactions involving Asia, including acquisitions, divestments, JVs, restructuring, and capital raising. BDA has particular focus on the automotive, chemicals, healthcare and pharmaceuticals, and technology sectors. We have offices and professional staff in New York, London, Bahrain, Mumbai, Shanghai, Hong Kong, Tokyo, and Seoul.

BDA Deal Contact
Timothy Holder

For more information regarding this transaction, please contact Euan Rellie or Charles Maynard in New York on +1 212 265 5300, Andrew Huntley in London on +44 (0) 20 7655 3500, or Timothy Holder in Bahrain on +973 17 567 914.