REG-Anglesey Mining PLC: Final Results and annual report <Origin Href="QuoteRef">AYM.L</Origin> - Part 1

Anglesey MiningAnnouncement

31/07/2015 15:50

Anglesey Mining plc

Annual report 2015

Strategic report - chairman's statement

The expected resurgence in the resources sector that we discussed this time
last year has generally not yet materialised and indeed there have been some
areas in which confidence has been badly eroded. These matters have made it
very difficult for all junior companies operating in the sector, including our
own. The general economic malaise in Europe has now spread somewhat to the US
and importantly to China. Whilst there are some areas in which blue sky is
appearing the lack of confidence of the investment sector in resources has made
raising funding quite difficult.

In order to reduce corporate costs all the directors have demonstrated their
commitment to the group by waiving salaries and fees since 1st July 2014 which
saved more than £80,000 in the financial year. This waiver is expected to
continue until the financial position of the group improves.

Grangesberg Iron

Our major effort during the year has been with the Grangesberg project where we
began managing operations in May 2014. A successful geotechnical investigation
programme followed the production of a compliant ore resource estimate. However
the ever more depressed iron ore market forced us to the conclusion that we
should not exercise the option over a 51% interest which has now been replaced
with a right of first refusal over that interest.

As part of the ongoing arrangements we continue to manage the project albeit
subject to certain restrictions. The Grangesberg board will need to keep the
future prospects for the iron ore market firmly in view as it looks to future
project funding and possible alternative investment strategies.

Labrador Iron

In Canada the operations of Labrador Iron Mines, in which the company continues
to hold a 15% interest, remained suspended during 2014 as iron ore prices
declined below a level at which an operating surplus could be made. LIM spent
the majority of the year seeking new financing particularly for the development
of its flagship Houston deposit.

However with iron ore prices continuing to fall these financing efforts proved
to be impossible and after the end of the financial year LIM initiated
proceedings for a financial restructuring under the Canadian Companies
Creditors Arrangement Act ("CCAA"). LIM has raised some funds through asset
sales and has sufficient cash available to continue to operate a limited
function until at least the end of the current financial year whilst it seeks
new funding and reviews its ongoing business strategy.

LIM owns extensive iron ore resources, processing plants and equipment and rail
infrastructure and facilities in its Schefferville Projects but is currently in
a challenging financial position. LIM believes that an orderly CCAA process
that enables the restructuring of the company's debts, the restructuring of
certain of its operating contracts and securing additional development
financing to proceed with the development of the Houston Project is in the best
interest of all of stakeholders.

Parys Mountain

Operations at Parys Mountain were maintained at a low level as a consequence of
limited available funding and no additional drilling took place while
management focused on studying the optimisation of mine development. We are
fortunate to hold freehold title to the majority of the known resource and thus
are not subject to onerous annual exploration costs as would be common in many
other jurisdictions. Site maintenance costs are also kept to a minimum.

The increase in the zinc price that was forecast this time last year and which
will be a key driver in the immediate future economics of Parys Mountain has
not yet materialised. However the fundamentals for zinc remain strong with
major mines such as Lisheen and Century planned to close during 2015. With
little new production coming on stream stocks of zinc metal have continued to
fall and it now seems only a matter of time before prices do eventually start
to move upwards. We will need to raise funds to update studies on Parys
Mountain particularly with regard to what may well now be lower than previous
capital costs, so that we will be properly placed when the zinc market begins
its long delayed move forward.

Outlook

The future for commodity prices continues at best to be uncertain. The group
has exposure to iron ore both at LIM and at Grangesberg and whilst neither
makes a cash draw on Anglesey any upward movement in the iron ore price would
significantly benefit both projects and hence the general tenor of the group.

Robust steel production and iron ore demand from China have underpinned the
iron ore price over the past ten years. Despite an economic slowdown, it would
seem that Chinese steel production continues to increase and China will need to
import more iron ore to replace the shutdown of domestic production, which
should help iron ore price stability.

The iron ore industry is re-consolidating as small, high cost miners are
closing. The larger lower cost miners such as Rio Tinto, BHP Billiton and Vale
should continue to take market share as a result.  The top four producers are
re-asserting their status as an oligopoly in the market and currently control
54% of the supply. This dominant position is forecast to increase to 75% within
the next two years and will likely result in more disciplined supply growth and
less volatility in iron ore prices.

The group's Parys Mountain property will benefit from any improvement in the
price of zinc. Zinc will form a major part of the projected revenue stream from
Parys Mountain, especially in the early years of production, and would be
followed by increasing proportions of lead and copper as mine development
advances.

Over the past few years there has been a strong argument supporting higher
prices for zinc and lead over the long term, as a forecast imbalance between
demand and supply is widely expected to have a significant impact. Wood
Mackenzie, a global leader in commercial intelligence for the metals and mining
industries, has stated that as a result of the industrialisation and
urbanisation of China, they expect growth in demand for zinc to average 6% per
year until 2020. For the rest of the world, they forecast demand to rise at a
rate of 2.2% annually so that on a global basis, zinc demand is expected to
increase 4% annually until 2020. This view is also held by most market
commentators including CRU which in its 2014 Zinc Market Outlook was
forecasting that "enormous deficits are likely in 2017 and 2018" and that "some
very high prices are in prospect".

The demand for zinc and lead is expected to remain robust because of wide
spread industrial usage. On the supply side, there has been a lack of
investment in recent years in the exploration for, and development of, new zinc
and lead projects, which has led to limited new sources of supply. In addition,
a number of larger producers, notably the Brunswick mine in Canada, the Lisheen
mine in Ireland and the Century mine in Australia, either have closed or are
expected to shut down by the end of 2015, all of  which should lead to reduced
current mine supply of zinc and lead concentrates.

While the US economy continues to show signs of improvement, the global
economic outlook remains weak and uncertain. China's growth continues to
decelerate and Europe risks slipping into recession. Near-term growth prospects
in both China and Europe now look dependent on further government intervention.
There is also concern that as prices rise, some Chinese zinc production will
come back on line. While it is possible that Chinese production could increase
to fill the gap, much higher prices are needed to sustain these operations.
However, on the supply side, the pipeline of large-scale, development-ready,
zinc-lead projects remains very thin and the long term outlook for the prices
of both zinc and lead remains very favourable.

John F. Kearney

Chairman

31 July 2015

Strategic report - operations

Principal activities and business review

The group is engaged in the business of exploring and evaluating the
wholly-owned Parys Mountain project in North Wales, although activities there
have been very limited during the year.  

Under various agreements the group participates in the management of the
Grangesberg iron ore property in Sweden in which it has a 6% holding and a
right of first refusal to acquire a further 51% ownership interest.

Operations at the Labrador iron project in eastern Canada in which group has a
15% holding (2014 - 15%) are currently suspended. LIM is now operating under
the Canadian Companies' Creditors Arrangement Act to facilitate a restructuring
and refinancing of its business operations.

The group continues its search for other mineral exploration and development
opportunities.

The aim of the group is to create value in the Parys Mountain and Grangesberg
properties, including by co-operative arrangements where appropriate, and to
actively engage in other mineral ventures using the group's own resources
together with such external investment and finance as may be required.

Parys Mountain

The Parys Mountain property has a significant UK zinc, copper and lead deposit
with small amounts of silver and gold. A feasibility study in 1991 demonstrated
the technical and economic viability of bringing the property into production
at a rate of 350,000 tonnes per annum, producing zinc, copper and lead
concentrates. In 2012 the first JORC Code compliant resource estimate of the
property was published. It showed 2.1 million tonnes at 6.9% combined base
metals in the indicated category and 4.1 million tonnes at 5.0% combined in the
inferred category.

The site has a head frame, a 300m deep production shaft and planning permission
for operations; consequently the lead time to production is expected to be
relatively short. The group has freehold ownership of the minerals and surface
land and there is substantial exploration potential. Infrastructure is good,
political risk is low and the project has the support of local people and
government.

During the financial year activities have been limited to a minor amount of
follow-up geological work.

There are technical and other matters to be addressed to ensure that the
project moves towards production, however the directors are of the opinion that
this project is at an advanced state and the existence of the original
feasibility study, together with the valid planning permissions, will do much
to reduce both the volume of work required to move the project into production
and the risks associated with this work. After due consideration the directors
decided to undertake an impairment review this year, however this review did
not indicate any requirement for impairment against the value of the Parys
Mountain mineral asset on the balance sheet. Operation of the mine and the
receipt of cashflows from it are dependent on finance being available to fund
the development of the property.

Grangesberg Iron AB

In late May 2014 the group entered into agreements giving it the right to
acquire a majority interest in the Grangesberg iron ore mine situated in the
mineral-rich Bergslagen district of central Sweden about 200 kilometres
north-west of Stockholm. Until its closure in 1989 due to prevailing market
conditions Grangesberg had mined in excess of 150 million tonnes of iron ore.
GIAB holds a 25 year exploitation permit covering the previously mined
Grangesberg underground mining operations granted by the Swedish Mining
Inspectorate in May 2013.

In a series of agreements the group purchased for US$145,000 a direct 6%
interest in GIAB, a private Swedish company founded in 2007 which had recently
completed a financial and capital restructuring with assistance from the group.
At the same time the group obtained an option to acquire 51% of the enlarged
share capital of GIAB for the issue of new ordinary shares of Anglesey to the
value of US$1.75 million priced at a minimum of 3.375 pence per share. The
group also entered into shareholder and cooperation agreements such that during
the term of the option Anglesey holds operatorship of GIAB subject to certain
conditions and appointed three out of five directors to the board of GIAB.
Given the continuing difficulties with the iron ore price this option was not
exercised however a right of first refusal in the case of another offer has
been secured, until June 2018. This right has been granted in exchange for the
group continuing to co-manage GIAB on a cost recovery basis.

In September 2014 an NI 43-101Technical Report was prepared by Roscoe Postle
Associates Inc ("RPA") showing a compliant resource estimate for the
Grangesberg Mine of 115.2 million tonnes at 40.2% Fe in the indicated category
and 33.1 million tonnes at 45.2% Fe in the inferred category. RPA concluded
that the Grängesberg iron ore deposit hosts a significant iron resource that
has excellent potential for expansion at depth.

A programme to look closely at geo-mechanical and hydro-geological aspects of
the site which will be critical components of the permitting regime required
for the dewatering and reopening of the mine has been completed and a final
report is in the course of preparation.

During the coming year, under Anglesey's direction, and subject to suitable
economic conditions prevailing, GIAB will review and update its previous
pre-feasibility study on the project incorporating inputs from the compliant
resource estimate and from the geo-technical investigations.

Labrador Iron

Labrador Iron Mines Holdings Limited (LIM) was formerly an associate company in
the group however following a dilution of the group's holding in November 2012
it became an investment in which Anglesey holds a 15% interest. 

Labrador Iron Mines is engaged in the exploration, development and mining of
direct shipping iron ore projects near Schefferville in the central part of the
Labrador Trough region, one of the major iron ore producing regions in the
world. There is a direct railway to the Port of Sept-Îles on the Atlantic Ocean
and established infrastructure.

LIM did not undertake any mining operations during the 2014 operating season
due to a combination of the prevailing low price of iron ore in 2014, an
assessment of the current economics of its deposits and a strategic shift in
corporate focus towards establishing a lower cost operating framework.

In April 2015 LIM initiated a court-supervised process under the Canadian
Companies' Creditors Arrangement Act in order to facilitate a restructuring and
refinancing of its business operations. These proceedings should provide LIM
with the time and stability to restructure its business, negotiate a
restructuring plan with stakeholders, compromise creditor claims, restructure
key operating contracts, secure new financing, and otherwise consider
restructuring and refinancing options. In view of this situation the value of
the group's investment in LIM has been written down to £1 in the accounts to 31
March 2015.

Other activities

Management continues to search for new properties suitable for development
within a relatively short time frame and within the financing capability likely
to be available to the group.

Performance

The directors expect to be judged by results of project development and/or
exploration and by their success in creating long term value for shareholders.
The group holds shares in mineral companies and has interests in exploration
and evaluation properties and, until economically recoverable reserves can be
identified, there are no standardised performance indicators which can usefully
be employed to gauge the performance of the group, other than the market price
of the company's shares.

The chief external factors affecting the ability of the group to move forward
are primarily the demand for metals and minerals, levels of metal prices and
exchange rates; these and other factors are dealt with in the risks and
uncertainties section below.

Financial results and position

The group has no revenues from the operation of its properties. The loss for
the year after tax was £1,736,610 compared to a loss of £7,173,703 in 2014.
Each of these losses are due chiefly to falls in the value of the group's
investment in Labrador Iron. Although there were significant expense reductions
during the year (including the waiver by directors of salaries and fees) the
administrative and other costs excluding investment income and finance charges
were £355,071 compared to £353,455 in the previous year. Included in this
year's figure was £167,256 in respect of expenses in connection with the
acquisition of the Grangesberg investment (2014 - nil).

During the year there were no additions to fixed assets (2014 - nil) and £
75,145 (2014 - £48,482) was capitalised in respect of the Parys Mountain
property as mineral property exploration and evaluation.

The group's cash balance at 31 March 2015 was £96,873 (2014 - £289,097). The
foreign exchange loss of £4,574 (2014 -loss £3,741) shown in the income
statement arises on cash balances held in Canadian dollars and Swedish Krona.

At 31 March 2015 the company had 160,608,051 ordinary shares in issue,
unchanged from last year.

Employment, community, donations and environment

The group is an equal opportunity employer in all respects and aims for high
standards from and for its employees. It also aims to be a valued and
responsible member of the communities which it operates in or affects.

The group has no operations; consequently its effect on the environment is very
slight, being limited to the operation of two small offices, where recycling
and energy usage minimisation are taken seriously and encouraged. It is not
practical or useful to quantify the effects of these measures. There are no
social, community or human rights issues which require the provision of further
information in this report.

Risks and uncertainties

In conducting its business the group faces a number of risks and uncertainties
some of which have been described above in regard to particular projects.
However, there are also risks and uncertainties of a nature common to all
mineral projects and these are summarised below.

General mining risks

Actual results relating to, amongst other things, mineral reserves, mineral
resources, results of exploration, capital costs, mining production costs and
reclamation and post closure costs, could differ materially from those
currently anticipated by reason of factors such as changes in general economic
conditions and conditions in the financial markets, changes in demand and
prices for minerals that the group expects to produce, legislative,
environmental and other judicial, regulatory, political and competitive
developments in areas in which the group operates, technological and
operational difficulties encountered in connection with the group's activities,
labour relations, costs and changing foreign exchange rates and other matters.

The mining industry is competitive in all of its phases. There is competition
within the mining industry for the discovery and acquisition of properties
considered to have commercial potential. The group faces competition from other
mining companies in connection with the acquisition and retention of
properties, mineral claims, leases and other mineral interests as well as for
the recruitment and retention of qualified employees and other personnel.

Development and liquidity risk

On previous occasions and during the year the group has relied upon its largest
shareholder, Juno Limited, for financial support and may be required to do so
in the future to ensure the group will have adequate funds for its current
activities. In the absence of support from Juno Limited the group would be
dependent on the proceeds of share issues or other sources of funding.
Developing the Parys project will be dependent on raising further funds from
various sources.

Exploration and development

Exploration for minerals and development of mining operations involve risks,
many of which are outside the group's control. The group currently operates in
politically stable environments and hence is unlikely to be subject to
expropriation of its properties but exploration by its nature is subject to
uncertainties and unforeseen or unwanted results are always possible.

Metal prices

The prices of metals fluctuate widely and are affected by many factors outside
the group's control. The relative prices of metals and future expectations for
such prices have a significant impact on the market sentiment for investment in
mining and mineral exploration companies. Metal price fluctuations may be
either exacerbated or mitigated by currency fluctuations which affect the
amount which might be received by the group in sterling.

Foreign exchange

LIM is a Canadian company; Angmag Limited and GIAB are Swedish companies.
Accordingly the value of the group's holdings in these companies is affected by
exchange rate risks. Operations at Parys Mountain are in the UK and exchange
rate risks are minor. The majority of the cash balance at the year-end was held
in sterling - see notes 17 and 24.

Permitting, environment and social

The group holds planning permission for the development of the Parys Mountain
property but further consents will be required to carry out proposed activities
and these may be subject to various reclamation and operational conditions.

Employees and personnel

The group is dependent on the services of a small number of key executives
including the chairman, chief executive and finance director. The loss of these
persons or the group's inability to attract and retain additional highly
skilled and experienced employees for any areas in which the group might engage
may adversely affect its business or future operations. At 31 March 2015 the
company had six male directors; there were no female directors or employees. 

Financial instruments

The group's use of financial instruments is described in note 24.

Approved by the board of directors and signed on its behalf

Bill Hooley

Chief executive officer       

31 July 2015

Directors' report

The directors are pleased to submit their report and the audited accounts for
the year ended 31 March 2015.

The corporate governance statement which follows forms part of this report. In
accordance with statutory requirements, the principal activities of the group
and other information is set out in the strategic report section preceding this
report.

Directors

The names of the directors are shown in the directors' remuneration report and
biographical details are shown at the end of this report. It is the company's
procedure to submit re-election resolutions for all directors at the annual
general meeting. The company maintains a directors' and officers' liability
policy on normal commercial terms which includes third party indemnity
provisions. The powers of the directors are described in the Corporate
Governance Report.

With regard to the appointment and replacement of directors, the company is
governed by its Articles, the Corporate Governance Code, the Companies Act and
related legislation. The Articles themselves may be amended by special
resolution of the shareholders. Under the Articles, any director appointed by
the board during the year must retire at the AGM following his appointment. In
addition, the Articles require that one-third of the remaining directors retire
by rotation at each general meeting and seek re-appointment. However it is now
the company's practice to submit re-election resolutions for all directors at
each AGM.
Directors' interests in material contracts

Juno Limited (Juno), which is registered in Bermuda, holds 36.1% of the
company's ordinary share capital. The company has a controlling shareholder
agreement and working capital agreement with Juno. Advances made under the
working capital agreement are shown in note 19. Apart from interest charges
there were no transactions between the group and Juno or its group during the
year. An independent committee reviews and approves any transactions and
potential transactions with Juno. Danesh Varma is a director and, through his
family interests, a significant shareholder of Juno.

John Kearney is chairman and chief executive of LIM, Bill Hooley is a director
and vice-chairman of LIM and Danesh Varma is a director of LIM. All three are
shareholders of LIM, are entitled when applicable to remuneration from LIM.
There are no transactions between LIM, the group and the company which are
required to be disclosed.

In May 2014 Bill Hooley and Danesh Varma were appointed as directors of
Grangesberg Iron AB and of the special purpose vehicle Eurmag AB; further
information concerning these appointments is included in the strategic report.
Danesh Varma has been associated with the Grangesberg project since 2007 when
he became a director of Mikula Mining Limited, a company  subsequently renamed
Eurang Limited, previously  involved in the Grangesberg project.  He did not
take part in the decision to enter into the Grangesberg project when this was
approved by the board. The group has a liability to Eurmag AB a subsidiary of
Eurang  amounting to £226,857 at the year end (2014 - nil). See also note 25.

There are no other contracts of significance in which any director has or had
during the year a material interest.

Substantial shareholders

At 16 July 2015 the following shareholder had advised the company of an
interest in the issued ordinary share
capital: Juno Limited notified an interest in 57,924,248 shares representing
36.1% of the issued ordinary shares.

Shares

Allotment authorities and disapplication of pre-emption rights

The directors would usually wish to allot any new share capital on a
pre-emptive basis, however in the light of the group's potential requirement to
raise further funds for the acquisition of new mineral ventures, other
activities and working capital, they believe that it is appropriate to have a
larger amount available for issue at their discretion without pre-emption than
is normal or recommended for larger listed companies.  At this year's annual
general meeting, the directors will seek a renewal and replacement of the
company's existing share allotment authorities. 

The authority sought in resolution 12 of the notice of the AGM is to enable the
directors to allot new shares and grant rights to subscribe for, or convert
other securities into shares, up to a nominal value of £540,000 (54,000,000
ordinary shares) which is approximately one third of the total issued ordinary
share capital of the company as at 16 July 2015. The directors will consider
issuing shares if they believe it would be appropriate to do so in respect of
business opportunities that arise consistent with the company's strategic
objectives. The directors have no present intention of exercising this general
authority, other than in connection with the potential issue of shares pursuant
to the company's employee share and incentive plans.

The purpose of resolution 13 is to authorise the directors to allot new shares
pursuant to the general authority given by resolution 12 in connection with a
pre-emptive offer or offers to holders of other equity securities if required
by the rights of  those securities or as the board otherwise considers
necessary, or otherwise up to an aggregate nominal amount of £401,500
(40,150,000 ordinary shares). This aggregate nominal amount represents
approximately 25% of the issued ordinary share capital of the company at 30
July 2015. Whilst such authority is in excess of the 5% of existing issued
ordinary share capital which is commonly accepted and recommended  for larger
listed companies, it will provide additional flexibility which the directors
believe is in the best interests of the group in its present circumstances. The
authority sought under resolution 13 will expire on 31 December 2015. The
directors intend to seek renewal of this authority at future annual general
meetings.

Rights and obligations attaching to shares

The rights and obligations attaching to the ordinary and deferred shares are
set out in the Articles of Association. Details of the issued share capital are
shown in note 21. Details of employee share schemes are set out in the
Directors Remuneration Report and in note 22.

Each ordinary share carries the right to one vote at general meetings of the
company. Holders of deferred shares, which are of negligible value, are not
entitled to attend, speak or vote at any general meeting of the company, nor
are they entitled to receive notice of general meetings.

Subject to the provisions of the Companies Act 2006, the rights attached to any
class may be varied with the consent of the holders of three-quarters in
nominal value of the issued shares of the class or with the sanction of an
extraordinary resolution passed at a separate general meeting of the holders of
the shares of the class.

There are no restrictions on the transfer of the company's shares.

Voting rights

Votes may be exercised at general meetings in relation to the business being
transacted either in person, by proxy or, in relation to corporate members, by
corporate representative. The Articles provide that forms of proxy shall be
submitted not less than 48 hours (excluding any part of a day that is not a
working day) before the time appointed for holding the meeting or adjourned
meeting.

No member shall be entitled to vote at a general meeting or at a separate
meeting of the holders of any class of shares in the capital of the company,
either in person or by proxy, in respect of any share held by him unless all
monies presently payable by him in respect of that share have been paid.
Furthermore, no shareholder shall be entitled to attend or vote either
personally or by proxy at a general meeting or at a separate meeting of the
holders of that class of shares or on a poll if he has been served with a
notice after failing to provide the company with information concerning
interests in his shares required to be provided under the Companies Act 2006.

Significant agreements and change of control

There are no agreements between the company and its directors or employees that
provide for compensation for loss of office or employment that may occur
because of a takeover bid. The company's share plans contain provisions
relating to a change of control. Outstanding awards and options would normally
vest and become exercisable on a change of control, subject to the satisfaction
of any performance conditions.

Dividend

The group has no revenues and the directors are unable to recommend a dividend
(2014 - nil).

Going concern

The directors have considered the business activities of the group as well as
its principal risks and uncertainties as set out in this report. When doing so
they have carefully applied the guidance given in the Financial Reporting
Council's document "Going concern and liquidity risk: Guidance for directors of
UK companies 2009".

The ongoing operations of the group are dependent on its ability to raise
adequate financing. The group relies on equity financing and support from its
shareholders to fund its working capital requirements. The group will need to
generate additional financial resources in order to meet its planned business
objectives and continue as a going concern. Additional financing will be
required in the short term to continue the development of the group's
properties and in the longer term to put the Parys Mountain Mine into
production.

The directors recognise the continuing operations of the group are dependent
upon its ability to raise adequate financing and that this represents a
material uncertainty which may cast significant doubt about the group's ability
to continue as a going concern. The directors have a reasonable expectation
that the required financing will be raised and are actively pursuing various
financing options with certain shareholders and financial institutions
regarding proposals for financing. The directors have reasonable expectations
that these financing discussions will be successful and therefore the financial
statements have been prepared on the going concern basis.  

Greenhouse Gas emissions

The group does not itself undertake any activities or processes which lead to
the production of greenhouse gases. The extent to which its administrative and
management functions result in greenhouse gas emissions is slight and the
directors do not believe that any useful purpose would be served by attempting
to quantify the amounts of these emissions.

Post balance sheet events

See note 30.

Statement of directors' responsibilities

The directors are responsible for preparing the annual report and the financial
statements. The directors are required to prepare the financial statements for
the group in accordance with International Financial Reporting Standards as
adopted by the European Union ("IFRS") and have also elected to prepare
financial statements for the company in accordance with IFRS. Company law
requires the directors to prepare group and parent company financial statements
for each financial year. Under that law they are required to the prepare the
financial statements in accordance with IFRS, the Companies Act 2006 and, in
relation to the group financial statements, Article 4 of the IAS Regulation.

Under company law the directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the group and parent company financial statements and of their
profit and loss for that period.

In preparing the financial statements the directors are required to:

  * select suitable accounting policies and then apply them consistently;
  * make judgements and estimates that are reasonable and prudent;
  * state that the financial statements comply with IFRSs as adopted by the
    European Union; and
  * prepare the financial statements on the going concern basis unless it is
    inappropriate to presume that the group and the parent company will
    continue in business.

The directors confirm that they consider the annual report and accounts, taken
as a whole, is fair, balanced and understandable and provides the information
necessary for shareholders to assess the company and group's performance,
business model and strategy.

The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the parent company's transactions and disclose
with reasonable accuracy at any time the financial position of the parent
company and the group and enable them to ensure that the financial statements
comply with the Companies Act 2006. They are also responsible for safeguarding
the assets of the parent company and the group and hence for taking reasonable
steps for the prevention and detection of fraud and other irregularities.

Under applicable law and regulations the, the directors are also responsible
for preparing a Strategic Report, Directors' Report, Remuneration Report and
Corporate Governance Statement that comply with that law and those regulations.

The directors are responsible for the maintenance and integrity of the group
website. Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other
jurisdictions.

Each of the directors, whose names and functions are listed on the inside rear
cover, confirm that, to the best of their knowledge:

  * the group financial statements, which have been prepared in accordance with
    IFRSs as adopted by the EU, give a true and fair view of the assets,
    liabilities, financial position and loss of the group; and
  * the Strategic and Directors' Reports include a fair review of the
    development and performance of the business and the position of the group,
    together with a description of the principal risks and uncertainties that
    it faces.

Auditor

Each of the directors in office at the date of approval of the annual report
confirms that so far as they are aware there is no relevant audit information
of which the company's auditor is unaware and that each director has taken all
of the steps which they ought to have taken as a director in order to make
themselves aware of that information and to establish that the company's
auditor is aware of that information.  This confirmation is given and should be
interpreted in accordance with the provisions of s418 of the Companies Act
2006.

A resolution to reappoint Mazars LLP as auditor and to authorise the directors
to fix their remuneration will be proposed at the annual general meeting.

Approved by the board of directors and signed on its behalf

Danesh Varma

Company Secretary     

31 July 2015

Independent auditor's report to the members of Anglesey Mining plc

We have audited the financial statements of Anglesey Mining plc for the year
ended 31 March 2015 which comprise the Group Income Statement, the Group
Consolidated Statement of Comprehensive Income, the Group and Company Statement
of Financial Position, the Group and Company Statement of Changes in Equity,
the Group and Company Statement of Cash Flows and the related notes. The
financial reporting framework that has been applied in their preparation is
applicable law and International Financial Reporting Standards (IFRSs) as
adopted by the European Union.

Respective responsibilities of directors and auditor

As explained more fully in the Directors' Responsibilities Statement on page 9,
the directors are responsible for the preparation of the financial statements
and for being satisfied that they give a true and fair view.

Our responsibility is to audit and express an opinion on the financial
statements in accordance with applicable law and International Standards on
Auditing (ISAs) (UK and Ireland). Those standards require us to comply with the
Auditing Practices Board's Ethical Standards for Auditors.

This report is made solely to the company's members as a body in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company's members those matters we are
required to state to them in an auditor's report and for no other purpose. To
the fullest extent permitted by law, we do not accept or assume responsibility
to anyone other than the company and the company's members as a body for our
audit work, for this report, or for the opinions we have formed.

Scope of the audit of the financial statements

An audit involves obtaining evidence about the amounts and disclosures in the
financial statements sufficient to give reasonable assurance that the financial
statements are free from material misstatement, whether caused by fraud or
error. This includes an assessment of: whether accounting policies are
appropriate to the group's and the parent company's circumstances and have been
consistently applied and adequately disclosed, the reasonableness of
significant accounting estimates made by the directors and the overall
presentation of the financial statements. In addition, we read all the
financial and non-financial information in the annual report in order to
identify material inconsistencies with the audited financial statements and to
identify any information that is apparently materially incorrect based on, or
materially inconsistent with, the knowledge acquired by us in the course of
performing the audit. If we become aware of any apparent material misstatements
or inconsistencies we consider the implications for our report.

There are 7 legal entities accounting for 100% of the group's operating loss,
100% of net assets and 100% of total assets all of which were subject to full
scope audits for the year ended 31 March 2015. The audit of all the entities
within the group was undertaken by the group audit team.

Our assessment and application of materiality

We apply the concept of materiality both in planning and performing our audit,
and in evaluating the effect of misstatements on the financial statements and
our audit. Materiality is used so we can plan and perform our audit to obtain
reasonable, rather than absolute, assurance about whether the financial
statements are free from material misstatement. The level of materiality we set
is based on our assessment of the magnitude of misstatements that, individually
or in aggregate, could reasonably be expected to have influence on the economic
decisions of the users of the financial statements.

Based on our professional judgement the level of overall materiality we set for
the group financial statements is outlined below:

Overall Group          £380,000                                              
materiality:                                                                 
                                                                             
Benchmark applied:     This has been calculated with reference to the group's
                       net assets, of which it represents approximately 3%.  
                                                                             
Basis for chosen       Net assets represents shareholders' funds and we have 
benchmark:             determined it to be the principal benchmark within the
                       financial statements relevant to shareholders, as the 
                       group has no revenues and is still exploring and      
                       evaluating mineral sites in which it retains an       
                       interest.                                             

We agreed with the Audit Committee that we would report to it all audit
differences in excess of £11,000, as well as differences below that threshold
that, in our view, warranted reporting on qualitative grounds. We also report
to the Audit Committee on disclosure matters that we identified during the
course of assessing the overall presentation of the financial statements.

Our assessment of the risks of material misstatement

The assessed risks of material misstatement described below are those that had
the greatest effect on our audit strategy, the allocation of resources in the
audit and directing the efforts of the engagement team.

The risk                               Our response                          
                                                                             
Going concern                                                                
                                                                             
The financial statements are prepared  We evaluated the directors' assessment
on a going concern basis in accordance of the group's ability to continue as 
with IAS1 'Presentation of Financial   a going concern.  In particular, we   
Statements'. Given the cash position   reviewed and challenged the cash flow 
of the group at the year end, the net  forecasts including key assumptions to
current assets of £6,293, the net cash assess the risk of the inability to   
outflows since the year end, and the   meet liabilities as they fall due. We 
projected net cash outflows for the    have considered the group's reliance  
net 12 months there is a potential     on ongoing support from its largest   
material uncertainty that the group    shareholder, Juno Limited, including  
does not have sufficient cash or other its ability to provide adequate funds 
financial resources to continue in     for its current and future activities 
operation for at least 12 months from  and the availability of other sources 
the date of authorising these          of finance to the group to support the
financial statements.                  going concern assumption.             
                                       In the absence of support from Juno   
                                       Limited, the Directors consider that  
                                       the going concern status of the group 
                                       would be dependent on the raising of  
                                       funds from share issues or from       
                                       accessing alternative sources of      
                                       funding.  These conditions indicate   
                                       the existence of a material           
                                       uncertainty which may cast significant
                                       doubt about the group and company's   
                                       ability to continue as a going        
                                       concern. Accordingly, as outlined     
                                       below, without modifying our opinion  
                                       on the financial statements in respect
                                       of this matter, we have included an   
                                       emphasis of matter.                   
                                                                             
Potential impairment of capitalised                                          
costs associated with the exploration                                        
and evaluation of the Parys Mountain                                         
mine site                                                                    
                                       Our audit work included, but was not  
The group has held rights to explore   restricted to, a review of the        
and mine the site for a number of      directors' assessment of the criteria 
years but has not completed            for the capitalisation of exploration 
exploration and evaluation activities  and evaluation expenditure and whether
and feasibility assessments to an      there are any indicators of impairment
extent where the site has been         to capitalised costs. The directors   
confirmed as being commercially viable concluded that there were indicators  
and mining activities commenced. There of potential impairment, however their
is a risk that accounting criteria     assessment did not indicate that an   
associated with the capitalisation of  impairment of the asset was required. 
exploration and evaluation expenditure Our work included a review of the     
may no longer be appropriate and that  integrity of the discounted cash flow 
capitalised costs exceed the value in  model used by the directors to make an
use. Any assessment of the value in    assessment as to whether impairment   
use is highly judgemental and is based had occurred, as well as using our    
on the directors' assessment of a      professional scepticism to challenge  
number of factors, including: long     and test the key assumptions for      
term metal commodity prices, the       sensitivity to the model. These key   
estimated mineral deposits from        assumptions included: the expected    
independent experts' studies, costs    future revenue and costs associated   
associated with mineral extraction and with the extraction and sale of the   
sale, discount rates and exchange rate mineral deposits, future metal prices,
factors.                               currency exchange rates, demand for   
                                       the minerals and the discount rate    
                                       utilised in the financial model. Our  
                                       work did not indicate that impairment 
                                       to exploration and evaluation assets  
                                       was required.                         
                                                                             
                                                                             
Potential impairment of the investment                                       
in the subsidiary, Parys Mountain                                            
Mines Limited, in the company                                                
financial statements                                                         
                                       In conjunction with our work          
The cost of the investment in and loan associated with the potential         
due from the subsidiary, Parys         impairment of the exploration and     
Mountain Mines Limited, held in the    evaluation assets held within Parys   
balance sheet of the company, is       Mountain Mine Limited, we considered  
supported by the future cash flows     whether there was an indication that  
associated with the recovery of the    the cost of the investment in and loan
exploration and evaluation assets      due from the subsidiary required      
following the development of the Parys writing down in the company.  As there
Mountain site held by Parys Mountain   was no impairment of the asset held by
Mines Limited. If there were           Parys Mountain Mine Limited, there is 
impairment in the exploration and      no indication that the carrying value 
evaluation assets, this would have a   of the investment in and loan due from
direct impact on the carrying value of the company was not recoverable.      
the investment in and loan due from                                          
the subsidiary, which may need to be                                         
written down in the company's                                                
accounts.                                                                    
                                                                             
Accounting treatment of Grangesberg                                          
Iron AB ("GIAB"), Eurang Limited and                                         
Eurmag AB                                                                    
                                       We have reviewed management's         
During the year, Anglesey Mining Plc   assessment of the contractual         
acquired a 6% interest in Grangesberg  agreements entered into, including the
Iron AB through a special purpose      rights and restrictions within these  
subsidiary vehicle Angmag AB.  An      agreements, and their conclusion,     
Option and Control Agreement also gave under the requirements of IFRS10, that
the Company the right to acquire the   Anglesey Mining Plc had the ability to
entire share capital of Eurang Limited exercise control, during the year,    
which through its 100% subsidiary      over Angmag AB.  Management has       
Eurmag AB, holds a 51% shareholding in concluded that Angmag AB should be    
GIAB. There is a risk that the terms   designated as a subsidiary and        
of this Option and Control Agreement,  included in the Consolidated Financial
together with a Restructuring          Statements of Anglesey Mining Plc.    
Agreement and Shareholder's Agreement, Management's assessment of the        
relating to the 6% interest acquired,  contractual agreements entered into,  
are considered to result in the        including the rights and restrictions 
Company having the ability to          within these agreements, concluded    
exercise, directly or indirectly,      that under the requirements of IFRS10 
control of GIAB under the requirements they did not have control over GIAB,  
of IFRS10.                             Eurang Limited or Eurmag AB.          
                                       However, management considered that   
                                       the ability to exert significant      
                                       influence over GIAB existed during the
                                       Option and Control Agreement period,  
                                       thereby identifying GIAB as an        
                                       associate of the company. No          
                                       transactions of GIAB have been        
                                       accounted for as an associate in the  
                                       financial statements as management has
                                       concluded that the impact is          
                                       immaterial.  Whilst we consider that  
                                       under the requirements of IFRS during 
                                       the period of significant influence   
                                       the interest should have been         
                                       recognised as an associate, the       
                                       amounts and associated disclosures are
                                       not material to the Group financial   
                                       statements.                           

The Audit Committee's consideration of these risks is set out on pages 15 and
16.

The audit procedures relating to the above mentioned matters were designed in
the context of our audit of the financial statements as a whole. Our opinion on
the financial statements is not modified with respect to any of these risks,
and we do not express an opinion on these individual risks.

Opinion on the financial statements

In our opinion:

  * the financial statements give a true and fair view of the state of the
    group's and of the parent company's affairs as at 31 March 2015 and of the
    group's loss for the year then ended;
  * the group financial statements have been properly prepared in accordance
    with IFRSs as adopted by the European Union;
  * the parent company financial statements have been properly prepared in
    accordance with IFRSs as adopted by the European Union and as applied in
    accordance with the provisions of the Companies Act 2006; and
  * the financial statements have been prepared in accordance with the
    requirements of the Companies Act 2006 and, as regards the group financial
    statements, Article 4 of the IAS Regulation.

Emphasis of matter - Going concern

In forming our opinion on the financial statements, which is not modified in
this regard, we have considered the adequacy of the disclosure made in note 2
to the financial statements concerning the Group's ability to continue as a
going concern. The Group incurred a net cash outflow of £192,224 during the
year ended 31 March 2015 and, at that date it had net current assets of £6,293.
These conditions, along with the other matters explained in note 2 to the
financial statements, indicate the existence of a material uncertainty which
may cast significant doubt about the company's ability to continue as a going
concern. The financial statements do not include the adjustments that would
result if the company was unable to continue as a going concern.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion except for the effects of the matter described in the Basis for
Qualified Opinion paragraph:

  * the part of the Directors' Remuneration Report to be audited has been
    properly prepared in accordance with the Companies Act 2006;
  * the information given in the Strategic Report and the Directors' Report for
    the financial year for which the financial statements are prepared is
    consistent with the financial statements; and
  * the information given in the Corporate Governance Statement with respect to
    internal control and risk management systems in relation to financial
    reporting processes and about share capital is consistent with the
    financial statements and rules 7.2.5 and 7.2.6 of the Disclosure and
    Transparency Rules.

Matters on which we are required to report by exception

We have nothing to report in respect of the following:

Under the International Standards on Auditing (ISAs) (UK and Ireland), we are
required to report to you if, in our opinion, information in the annual report
is:

  * materially inconsistent with the information in the audited financial
    statements; or
  * apparently materially incorrect based on, or materially inconsistent with,
    our knowledge of the company acquired in the course of performing our
    audit; or
  * otherwise misleading.

In particular we are required to consider whether we have identified any
inconsistencies between our knowledge acquired during the audit and the
directors' statement that they consider the annual report is fair, balanced and
understandable and whether the annual report discloses those matters that we
communicated to the audit committee which we consider should have been
disclosed.

Under the Companies Act 2006, we are required to report to you, if in our
opinion:

  * adequate accounting records have not been kept, or returns adequate for our
    audit have not been received from branches not visited by us; or
  * the parent company financial statements and the part of the Directors'
    Remuneration Report to be audited are not in agreement with the accounting
    records and returns; or
  * certain disclosures of directors' remuneration specified by law are not
    made; or
  * we have not received all the information and explanations we require for
    our audit; or
  * a Corporate Governance Statement has not been prepared by the company.

Under the Listing Rules we are required to review:

  * the directors' statement, set out on page 8, in relation to going concern;
    and
  * the part of the Corporate Governance Statement relating to the company's
    compliance with the provisions of the UK Corporate Governance Code
    specified for our review.

Richard Metcalfe (Senior Statutory Auditor)

for and on behalf of Mazars LLP

Chartered Accountants and Statutory Auditor

Tower Bridge House, St. Katharine's Way, London, E1W 1DD  

Date: 31 July 2015

Group income statement

All attributable to equity holders of the company

                                     Notes  Year ended 31  Year ended 31
                                               March 2015     March 2014
                                                                        
All operations are continuing                                           
                                                 £              £       
                                                                        
   Revenue                                             -              - 
                                                                        
   Expenses                                     (355,071)      (353,455)
                                                                        
   Impairment of investment           14      (1,231,218)    (5,451,267)
                                                                        
   Exchange difference on             14         (26,766)    (1,255,280)
      investment impairment                                             
                                                                        
   Investment income                  6               882          2,630
                                                                        
   Finance costs                      7         (119,863)      (112,590)
                                                                        
   Foreign exchange loss                          (4,574)        (3,741)
                                                                        
 Loss before tax                      4       (1,736,610)    (7,173,703)
                                                                        
   Tax                                8                -              - 
                                                   

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