REG-Anglesey Mining PLC: Final Results and project update
08/09/2022 07:15
7 September
2022
AIM: AYM
Anglesey Mining plc
(“Anglesey” or “the Company”)
Anglesey Mining Financial Results and Corporate Update
Anglesey Mining plc, the UK minerals development company, is pleased to
announce the release of its full year financial results for the year ending 31
March 2022, and provide an update for investors on current activities at the
Company’s Parys Mountain Cu-Zn-Pb-Ag-Au and Grängesberg iron ore projects.
Financial and Operating Results
* Comprehensive loss of £2.8m in the financial year ended 31 March 2022
compared to the prior year comprehensive profit of £3.7m, with the variance
primarily attributable to the mark-to-market valuation of the Company’s 12%
holding in Labrador Iron Mine Holdings Limited
* Successful fund raising of £0.86m subsequent to the end of the financial
period
* Completion of key operating milestones during the period, including the
completion of the first drilling programme at Parys Mountain for 12-years and
the commencement of the Pre-Feasibility Study on the Grängesberg Iron Ore
Project in Sweden
* During the current financial year, the Company will continue to advance the
technical aspects of the Parys Mountain studies and permitting activities. At
the Grängesberg Iron Ore Project, the Company will be completing the next
round of technical work on the resource and reserve estimates to enable the
Bankable Feasibility Study to start
Jo Battershill, the CEO & Managing Director of Anglesey Mining, commented:
“The activities of the last 12 months continue to demonstrate that Anglesey
Mining has two potentially long life, highly cash generative mine
developments. At Parys Mountain, the first drilling in over a decade was
successful in infill drilling areas of White Rock that were previously in the
Inferred category and will provide a bulk sample to be used in the upcoming
pre-concentration and flotation testwork. The initial design work for the
Tailings Management Facility has also commenced along with many aspects of the
environmental baseline studies, which we will continue to advance over the
coming months. The Board continues to believe permitting of the project will
help to close the valuation gap between our share price and the potential NPV
of Parys Mountain.
Recent work on evaluating the prospectivity of the large Northern Copper Zone
has confirmed the significant upside of that mineralised system. Based on the
current mine plan, the Northern Copper Zone doesn’t come into the production
schedule until year 5, subsequently we believe there is an opportunity to
extend both the deeper high-grade zones and the shallower zones of wide
mineralisation – some of these zones are over 60m thick and represent
genuine bulk mining opportunities.
I am very confident about the prospects of a mine development opportunity at
Parys Mountain. The project would generate significant employment on Anglesey
and the greater region for a generation. We believe that the suite of
commodities at Parys Mountain are critical to the supply chain for the global
push of decarbonisation and electrification of the economy and will remain in
strong demand over the coming decades.
The release of the Grängesberg PFS Update results subsequent to the end of
the period were confirmation of just how significant that project could be,
both for Anglesey shareholders and the broader EU steel manufacturers after
the Russian invasion of Ukraine. Prior to the Ukraine invasion, the EU
imported almost 60%, or 40Mt, of its annual iron ore supply from these two
countries. Subsequently, a secure source of up to 2.5Mtpa of 70% Fe
concentrate has a highly strategic value. We will look to consolidate and
advance the Grängesberg project over the course of the current year.
Our unwavering commitment to the sustainable development of our resource
projects continues. Where possible, we will always use the appropriate
environmentally friendly solutions. We also continue to believe that the
development of our projects will benefit the environment via shortening of
global supply chains with the commensurate reductions in carbon emissions –
particularly the high-grade iron ore concentrate that will be produced from
the Grängesberg iron ore project in Sweden.”
Annual Report 2022 and Notice of AGM
The Company is pleased to publish its annual financial report for the year
ended 31 March 2022, which has also been posted to shareholders. The annual
report is available to view at www.angleseymining.co.uk and extracts from the
report are presented below. The annual report also includes a Notice of AGM.
The AGM will be held at the offices of DLA Piper, 160 Aldersgate Street London
EC1A 4HT on 27 October 2022 at 11.00 am and the Notice of AGM contains details
of all resolutions to be proposed.
Extracts from the Annual Report 2022
Chairman’s Statement
To Anglesey Shareholders
The past year has been a period of global uncertainty, volatility and
subsequent conflict. While the problems associated with the COVID-19 pandemic
reduced significantly, they were replaced with new challenges created by the
Ukraine conflict and the subsequent impacts on global security, rampant
inflation from energy scarcity and fears of global food shortages.
Nevertheless, despite these conditions, we saw significant progress at both
our Parys Mountain copper/zinc/lead project and our iron ore projects in
Sweden and Canada, while on the corporate side a new Chief Executive, Jo
Battershill, was appointed and the board of directors was strengthened.
Additionally, during the past year over £1.5 million was successfully raised
in new financings in October 2021 and May 2022 attracting new institutional
investor support and shortly after the year end we moved our listing from the
Main Market of the London Stock Exchange to AIM.
Review of activities
A very active year at Parys Mountain saw the first drilling programme since
2012, the commencement of environmental studies, the appointment of Knight
Piésold to undertake both the design stage for the tailings management system
together with the geotechnical assessment of the underground development, and
engagement with local planning and regulatory authorities and local councils.
Meanwhile in Sweden, a Pre-Feasibility Study Update for the Grängesberg Iron
Ore Project was completed with very encouraging results, while in Canada
Labrador Iron Mines continued to advance its Houston direct shipping iron ore
project toward production. Further details on these activities may be found in
the Strategic Report.
At Parys Mountain, the drilling programme had the aim of improving confidence
in the White Rock and Engine Zone resources and providing samples for both
confirmatory metallurgical test work and geotechnical domain modelling. The
infill programme confirmed an extensive mineralised system in the near surface
White Rock zone and provided very valuable information that will now feed into
the next stages of our development studies. Our confidence in the White Rock
and Engine Zones continues to increase.
Additionally at Parys Mountain, where Anglesey Mining holds planning
permissions for the development of the mine, processing plant and tailings
storage facility, first steps were taken to secure the required operating
permits to commence mining and processing of ore. We are engaged in the review
process including discussions with the North Wales Minerals and Waste Planning
Service and local councils. Initial environmental monitoring and ecological
surveys have also begun.
At Grängesberg, a very positive update of the PFS indicates production of 2.3
- 2.5Mtpa of iron ore concentrate grading 70% Fe that generates strong
economic returns, including a NPV(8%) of US$688 million post-tax, and
confirming that the Grängesberg iron ore mine has the potential to be
restarted as one of Europe’s largest individual producers of high-grade iron
ore concentrates.
The Ukraine conflict has highlighted the strategic positioning of
Grängesberg. Prior to the conflict, Russia and Ukraine supplied over 20Mt of
iron ore into the European steel market. With the future uncertainty around
this supply, a long-term source of iron ore could be highly sought after by
European and Middle Eastern steel producers. Grängesberg, with the high-grade
nature of its concentrate, existing infrastructure and favourable location in
southern Sweden in proximity to European steel mills, represents highly
strategic positioning.
Board of directors strengthened
After an extensive search, two senior minerals industry executives, Andrew
King and Namrata Verma, were appointed to the board as independent directors
to help guide the management team in the development of the Parys Mountain and
Grangesberg Iron projects. They both join Anglesey with the highest of
reputations in their own particular sectors and their combined and extensive
experience in the financing sector of the worldwide minerals industry will be
critical in the successful funding of both projects. The company is already
benefiting from their input and advice.
Sudden passing of Bill Hooley,
Deputy Chairman
It was with deep sadness that we reported the sudden death of our esteemed
colleague, Bill Hooley, in early June 2022. Bill had served as CEO of Anglesey
Mining from 2006 to 2021 and directed the completion of various resource
upgrades for Parys Mountain, the 2017 Scoping Study and the QME optimisation
work, which lead to the successful production of the 2021 PEA. Bill was also a
Director and Deputy Chairman of Anglesey’s associate company, Labrador Iron
Mines, serving as President and COO from 2007 to 2011, during which time he
directed the initial development and successful construction, into commercial
production, of LIM’s James iron ore mine in Labrador, Canada. Bill was
appointed non-executive Deputy Chairman of Anglesey Mining in August 2021 and
was continuing to provide his advice and experience until his sudden death. We
will miss Bill’s wise counsel, humour and friendship.
Corporate activity
In October 2021, £768,230 was successfully raised via the issuance of
22,595,000 shares at a price of 3.4p per share. On 8 April 2022, following
approval from shareholders at a General Meeting, Anglesey Mining moved from
the Main Market of the LSE to the Alternative Investment Market (AIM). The AIM
listing will offer greater flexibility regarding corporate transactions,
enabling the more rapid and cost-effective agreement and execution of
transactions and financings. It will also provide improved visibility for
Anglesey and enhanced liquidity for investors.
In May 2022, following the appointment of WH Ireland Limited and Canaccord
Genuity Limited as joint brokers, a Placing and Subscription was successfully
completed, raising gross proceeds of £864,416, with certain institutional and
other investors, including the Chairman and the Chief Executive, at a price of
3.4 pence per share.
As a further step to strengthen our financial position we entered into a new
Investor Agreement with Juno Limited, the company’s largest shareholder. In
the new Investor Agreement, Juno agreed to participate in any future equity
financing, with the subscription price to be satisfied by the conversion of
debt, and the company agreed to pay Juno in cash ten percent of the net
proceeds of the financing in further reduction of debt. The net effect of the
new agreement with the May placing was that the debt due to Juno was reduced
by £305,499.
Metal prices
Metals are critical for climate transition and the clean energy technologies
needed to meet the world’s climate action goals will require much more
metal. As a board, we remain very confident that the outlook for minerals,
particularly for the copper and zinc minerals at Parys Mountain, and for iron
ore where we hold significant investments, is very encouraging.
Environmental and social focus
The purpose and objective of Anglesey Mining is to create value for
shareholders in an environmentally, socially, and ethically responsible manner
which is also to the benefit of all stakeholders. Our principal current
activity is to achieve this by developing, building and operating a producing
mine at Parys Mountain. We place a high priority on environmental, social and
governance (ESG) matters, and we are committed to being a responsible mining
company, which maintains mutually beneficial long-term relationships with key
stakeholders and the local community. Readers are invited to refer to the
report on Corporate Governance.
Outlook
The results from the 2021 PEA demonstrate that a significant copper-zinc-lead
mine can be developed at Parys Mountain with very positive financial returns.
The current year is seeing momentum increased with respect to the required
elements of a project development. Permitting activities are ramping up,
including environmental and ecological studies, tailings management design
work is being undertaken, along with confirmatory metallurgical test work and
underground geotechnical domain modelling. Further infill drilling –
specifically within the Northern Copper Zone is planned.
These activities will enable us to move the project to a full committed
decision to proceed to production. As has been said before, these steps do
take some time to reach fruition and are key requirements to securing the
necessary finance to move the project towards production.
At Grängesberg, the Pre-Feasibility Study has provided a series of
recommendations to progress the project through to the commencement of a
Feasibility Study and at a general corporate level we will continue to review
other opportunities within the global metals and mining sector.
In closing I wish to recognise the dedication and enthusiasm of our small
management team, led by Jo Battershill, for the significant progress made over
the past year, and thank our expanded and reinvigorated board of directors for
their leadership, as well as consultants and advisors, for their contribution,
and, of course, our shareholders for their continued support.
John F. Kearney
Chairman of the Board
7 September 2022
Strategic report
Despite the global challenges highlighted in the Chairman’s report, we are
very pleased to report that significant progress was made at both our Parys
Mountain project and our iron ore projects in Sweden and Canada during the
reporting period.
Parys Mountain moving steadily forward
The Parys Mountain Cu-Zn-Pb-Ag-Au Project on the Isle of Anglesey hosts a
significant polymetallic deposit with a resource estimate of 16.9Mt grading
1.7% Zn, 0.8% Pb, 1.0% Cu, 17g/t Ag and 0.2g/t Au. The site has a head frame,
a 300m deep production shaft, is connected to grid power, located only 20
miles from the port of Holyhead and is well advanced towards permitting for an
operation. We have freehold ownership of the minerals and much of the surface
land on the western portion of the property where all the current resources
are located. Access to infrastructure is good, political risk is low and the
project enjoys the support of local people and government.
An independent Preliminary Economic Assessment (PEA) was completed in January
2021, using the three-year trailing metal prices as of September 2020 –
US$2.81/lb Cu, US$1.20/lb Zn, US$0.95/lb Pb, US$16.67/oz Ag and US$1459/oz Au.
Three separate development cases or scenarios were evaluated as part of the
PEA, utilising planned mine tonnages ranging from 5.5Mt at 1,500tpd, to 11.4Mt
at 3,000tpd in an expanded case.
The expanded case produced the most attractive financial returns, indicating a
total cash operating surplus of more than £408 million over a 12-year mine
life, which translated to a pre-tax net present value discounted at 10% of
over £96 million with an IRR of 26%.
However, with commodity prices having been consistently, and meaningfully,
higher than the three-year trailing averages of September 2020, the economic
results from the development scenarios assessed would now be substantially
higher.
First drilling programme since 2012
After securing additional funding in October 2021, we are now moving forward
with our plans to progress development. The first drilling programme since
2012 was commenced in late November 2021 and a site manager and geologist were
recruited.
The original 9-hole programme comprising 2,750m was designed to target the
areas of Inferred Resources, generally around the periphery of the mineralised
zones, with the aim of improving the confidence in the White Rock and Engine
Zone resources. Prior to the drilling programme, 78% of the White Rock and
Engine Zones were in the indicated category and we expect to be able to lift
this once all the assays have been returned.
Initial assay results have now been returned for eight of the ten drill holes
completed with multiple high-grade sections identified within a broader
overall mineralised zone, as reported subsequent to the end of the period.
Best results received to date include:
* 3.7m at 8.5% Zn, 6.3% Pb, 1.0% Cu, 38g/t Ag & 0.3g/t Au (from 142m)
* 2.8m at 7.2% Zn, 4.2% Pb, 0.6% Cu, 23g/t Ag & 0.3g/t Au (from 150m)
* 6.0m at 7.1% Zn, 3.7% Pb, 0.4% Cu, 37g/t Ag & 2.0g/t Au (from 172m)
* 3.7m at 5.8% Zn, 4.6% Pb, 0.6% Cu, 46g/t Ag & 0.2g/t Au (from 149m), and
* 6.0m at 6.3% Zn, 4.0% Pb, 0.2% Cu, 25g/t Ag & 0.3g/t Au (from 133.5m)
Importantly, the high-grade intersections reported above were generally
contained within much broader zones of lower grade mineralisation that could
potentially be mined and processed through a pre-concentration technique to
upgrade the metal content while rejecting the unmineralized material. Selected
lower grade zones include:
* 12.4m at 4.8% Zn, 3.3% Pb, 0.5% Cu, 20g/t Ag & 0.3g/t Au (from 140m)
* 21.5m at 4.0% Zn, 2.0% Pb, 0.3% Cu, 26g/t Ag & 1.0g/t Au (from 170.5m)
* 12.7m at 3.7% Zn, 1.9% Pb, 0.2% Cu, 22g/t Ag & 0.6g/t Au (from 204.5m), and
* 12.8m at 3.0% Zn, 1.3% Pb, 0.2% Cu, 51g/t Ag & 0.5g/t Au (from 167.9m)
Geotechnical modelling and new metallurgical testing
The drill holes were also designed to provide samples for both geotechnical
domain modelling within the White Rock and Engine zones and confirmatory
metallurgical test work.
Subsequent to the end of the reporting period, Knight Piésold, one of the
world’s leading geotechnical consultants, commenced the geotechnical
modelling that will feed into the underground design and optimisation process.
The next round of metallurgical testwork will begin once the final assay
results have been returned. Testwork from 2007 had already demonstrated that
Dense Media Separation (DMS) would upgrade the feed into the comminution
circuit with a mass rejection of around 40% and 3-5% associated metal losses.
We also plan to complete a trade-off study between DMS and X-Ray based
ore-sorting technology which is now utilised across many mines around the
globe.
Environmental assessment and permitting
Additionally at Parys Mountain, first steps were taken to secure the required
operating permits for mining and processing of ore. Environmental consultants
were engaged in late 2021 to evaluate historical baseline studies that then
fed into a subsequent gap analysis to determine future permitting
requirements.
The permitting process has changed significantly since the commencement of
mining activities in 1988. While we have a number of planning permissions that
relate to the proposed development of the mine, processing plant and tailings
storage facility, these need to be reviewed and updated to make sure they are
fit for purpose to meet today’s more stringent requirements.
The review process with the North Wales Minerals and Waste Planning Service
and local Councils is now under way and demonstrating encouraging progress.
Knowing that the Environmental Impact Assessment (EIA) is likely to be the
longest lead item in this process, initial environmental monitoring and
ecological surveys were initiated during the period and will feed directly
into the EIA.
Baseline studies for reptiles, insects and birds are being carried out along
with testing of water bodies around the site. Given the natural run-off from
the outcropping sulphides that make up the historically mined Parys Mountain
deposits, almost all the surface water is acidic and carries very little, if
any, natural wildlife. Ongoing studies will be continued over the course of
the next 12-months and expanded to include soil geochemistry, ground water and
air quality monitoring, noise vibration studies, traffic modelling and initial
design work for the tailings management facility.
Exploring Northern Copper Zone
We also plan to commence work on the large Northern Copper Zone, which
currently hosts a resource estimate of 9.4Mt at 1.7% CuEq - all in the
Inferred Resource category. Initial work on the Northern Copper Zone will
include reviewing the historical resource model and identifying areas that
could be brought into the mine plan earlier than currently envisaged, with a
view to infill drilling and potentially converting to the Indicated category.
The long section of the Northern Copper Zone in Figure 3 demonstrates the
potential scale of the opportunity and also highlights the limited amount of
historical drilling along strike to the east. A selection of the historical
assays include:
- 4.2m at 16.7% CuEq (3.97% Cu, 7.53% Pb, 14.1% Zn, 532g/t Ag and
0.3g/t Au) from a depth of 563m
- 1.4m at 13.5% CuEq (13.26% Cu, Pb and Zn not assayed, 18g/t Ag and
0.1g/t Au) from a depth of 432m
- 0.9m at 12.1% CuEq (11.7% Cu, 0.19% Pb, 1.00% Zn, 6/t Ag, gold not
assayed) from a depth of 497m
- 3.8m at 8.6% CuEq (8.29% Cu, 0.02% Pb, 0.06% Zn, 32g/t Ag, gold not
assayed) from a depth of 352m
- 11.4m at 5.5% CuEq (2.04% Cu, 3.03% Pb, 6.38% Zn, 50g/t Ag and
0.4g/t Au) from a depth of 495m
- 4.8m at 5.4% CuEq (3.68% Cu, 0.95% Pb, 3.00% Zn, 28g/t Ag and 0.2g/t
Au) from a depth of 562m
- 7.6m at 4.0% CuEq (2.84% Cu, 0.19% Pb, 0.50% Zn, 7g/t Ag and 1.4g/t
Au) from a depth of 298m
- 6.0m at 3.8% CuEq (2.22% Cu, 0.08% Pb, 4.19% Zn, 15g/t Ag and 0.2g/t
Au) from a depth of 466m
- 50.9m at 1.2% CuEq (1.12% Cu, 0.02% Pb, 0.06% Zn, 2g/t Ag, gold not
assayed) from a depth of 399m
- 146.3m at 1.2% CuEq (0.98% Cu, 0.20% Pb, 0.30% Zn, 7g/t Ag, gold not
assayed) from a depth of 350m
- 25.9m at 1.14% Cu (no other elements assayed) from a depth of 557m
- 46.0m at 0.80% Cu (no other elements assayed) from a depth of 366m
The Northern Copper Zone covers an extensive area with the resource estimate
extending over 800m in length and 400m in depth. Subsequently, the review of
the potential will be divided into blocks, as shown in the figure above. Both
blocks B and D have potential to host high-grade extensions to the Garth
Daniel resource between depths of 400 – 600m. Blocks A and C have potential
to host thick lower grade intersections amenable to bulk mining methods
between 200 – 400m depth, and blocks E and F are both essentially
extensional targets.
Metal price environment remains supportive
Metals are critical for the climate transition and the clean energy
technologies needed to meet the world’s climate action goals will require
much more metal. For example, every electric car requires up to four times
more copper than an ICE car and every megawatt of solar power generation
capacity requires 5 tonnes of copper. According to the International Energy
Agency, achieving the Paris Agreement targets will require almost twice the
volume of metals by 2050. As a Board, we remain very confident that the
outlook for most minerals, particularly for the copper and zinc minerals at
Parys Mountain, is very encouraging. Base metal prices generally held onto the
impressive gains from the previous year, or in the case of zinc, rallied
strongly. During the year, we saw a strong demand for metals with the prices
for zinc, copper, and lead rising in 2021 by 28.1%, 26.8%, and 14.8%,
respectively. Copper reached a decade long high in May 2021 of over $4.80/lb
while the zinc price was the highest since 2007. Copper prices on the London
Metal Exchange (LME) averaged US$4.23 per pound in 2021, up from an average of
US$2.80 per pound in 2020.
Global demand for zinc grew strongly during the year. Zinc prices increased
significantly and especially in the fourth quarter, Zinc prices on the London
Metal Exchange (LME) averaged US$1.36 per pound during 2021, higher than
US$1.03 per pound in 2020, and the highest annual average since 2007.
First quarter 2022 LME copper prices reached record levels and averaged
US$4.53 per pound, 17% higher than the first quarter 2021 average of US$3.86
per pound. Zinc prices rose to US$1.70 per pound during the first quarter of
2022 compared with US$1.25 per pound in the same period in 2021.
In the second quarter of 2022 LME copper averaged US$4.31/lb (vs. US$4.53/lb
in Q1) and zinc prices rose to a high of $1.95/lb in April and averaged
US$1.77/lb (vs. US$1.70/lb in Q1), although subsequently metal prices have
since retreated due to uncertainties about the war in Europe, higher oil
prices, gas shortages, and inflation.
The base case economic model in the PEA utilized three-year trailing metal
prices of $2.81/lb copper, $1.20/lb zinc, $0.95/lb lead, $16.67/oz silver, and
$1,459/oz gold, with an exchange rate of £1.00/$1.25. We continue to believe
that the base case three-year trailing metal prices used in the PEA are a very
conservative starting point. Prices at 23 August 2022, the last practicable
date before the publication of this report, were $3.70/lb copper, $1.58/lb
zinc, $0.89/lb lead, $18.99/oz silver and $1739/oz gold, with the exchange
rate at £1.00/$1.18. Using these commodity prices the expanded case pre-tax
NPV(10%) increases from US$120 million to US$221 million, with pre-tax IRR of
42%, which clearly demonstrate the sensitivity and leverage of a mine at Parys
Mountain to higher metal prices.
At these August 2022 metal prices, copper production from a Parys Mountain
mine would represent 50% of the net smelter revenue under the expanded case
while zinc and lead would represent 28% and 12% respectively. The PEA
indicates production of 75,000 tonnes of copper, 166,000 tonnes of zinc,
80,000 tonnes of lead, over 5 million ounces of silver and 30,000 ounces of
gold over the project’s 12-year mine life, this equates to an average copper
equivalent production rate of 14,000 tonnes per year over the proposed life of
the operation.
Grängesberg iron ore - a unique strategic opportunity
Anglesey holds a 19.9% interest in the Grängesberg project, together with
management rights and a right of first refusal to increase its interest to
70.2%. The Grängesberg project, located about 200 kilometres north-west of
Stockholm, is a substantial iron ore asset located in a very favourable
jurisdiction. Prior to its closure in 1989, due to then prevailing market
conditions, the mine had produced around 180Mt of iron ore.
Anglesey, in conjunction with its Swedish partners in Grängesberg,
commissioned an updated PFS on the development of the Grängesberg project,
based on updated forecasts for long term iron prices and on a modified
development programme to take advantage of optimisations expected since the
previous 2012 Pre-Feasibility Study. The update by leading mining consultant
Micon International Limited commenced in late 2021 and was finalised in July
2022.
We are very pleased to report that the updated PFS demonstrates a very robust
project with production of 2.3 - 2.5Mtpa of iron ore concentrate grading 70%
Fe over an initial 16-year life, generating strong economic returns, including
a NPV(8%) of US$688 million post-tax. The study assumed an iron ore price of
US$120/t (62% Fe benchmark, CFR China) with sensitivities indicating a
long-term price of US$80/t required to achieve a positive return at a discount
rate of 8%.
Grängesberg PFS Study Highlights
The study confirmed the previous estimate of 82.4Mtpa of Probable Ore Reserves
which would support a 16-year mine life at a throughput of 5.3Mtpa. Production
of between 2.3 and 2.5Mtpa of iron ore was envisaged with concentrate grading
70% Fe that generates strong economic returns including:
* Post-tax NPV of US$688 million at an 8% discount rate
* IRR of 25.9% post-tax
* Operating costs of US$53.60/t FOB to the port of Oxelösund
* Net cashflow post-tax of US$2.08bn, for an average annual net cashflow of
US$130 million
* Pre-production capital of US$399 million
* 3.6 years payback
Micon concluded that the Grängesberg Project demonstrates an economically
viable project using the stated price assumptions, cost estimates and
technical parameters generated by the PFS, with the sensitivity analysis
indicating positive returns can be achieved even with using a 30% lower
underlying iron ore price.
Key financial metrics from the updated PFS
Key Metric Unit 2022 updated PFS
Ore to Mill Mt 82.3
Life of Mine Years 16.0
Contained Fe Mt 30.6
Recovery % 85
Recovered Fe Mt 26.0
Outgoing Concentrate Mt 37.2
Concentrate Grade % Fe 70
Average annual Concentrate Output Mt 2.3
Cash cost* US$/t Conc 53.60
All-in Sustaining Cost** US$/t Conc 57.80
Pre-production capital US$m 399
Post-tax NPV (8%) US$m 688
Post-tax Internal Rate of Return % 26
Project payback Years 3.6
Average annual Post-tax Operating Cashflow *** US$m 130
* Cash costs are inclusive of mining costs, processing costs, site G&A,
transportation charges to port and royalties
** All-in Sustaining Cost includes cash costs plus sustaining capital and
closure cost
*** Post-tax Operating Cashflow based on iron ore price forecast of US$120/t
China CFR 62% Fe benchmark
The results from the PFS study represent another promising stage in
development of the project and provide a very solid foundation. Grängesberg
has the potential to be restarted as one of Europe’s largest individual
producers of iron ore concentrates. When combined with the high-grade nature
of the concentrate and proximity to European steel mills, the asset clearly
demonstrates highly strategic positioning.
Strategic positioning in iron ore
The iron ore price demonstrated significant volatility over the course of the
calendar year 2021. In the first third of the year, the price rallied from
US$170/t (62% CFR China) to US$235/t. The second third of the year saw the
price collapse to US$87/t, mainly due to lower imports by China following its
move to control steel production to meet carbon emission norms and Covid-19
related shutdowns. The final third of the year saw the price regain value as
it closed the period at US$155/t.
The iron ore market experienced another period of extreme volatility in the
first half of 2022. While averaging US$140 per tonne for the full six
months, the price fluctuated between a high of US$159 in March to a low of
US$112 in June. Subsequently, the price declined to US$100 in July before
recovering to US$115 in early August.
Iron ore is a non-fungible commodity with many variables that determine
quality. There are number of key price-affecting chemical components of iron
ore including iron, silica, alumina and phosphorus. Iron ore also differs in
its physical form. Fines require sintering (agglomeration into crude pellets)
prior to use in the blast furnace, lump ore and pellets can bypass this
process and be charged directly into the furnace – with both commanding an
associated price premium. Most steel mills use a blend of different grades of
ore, and a mix of sinter, lumps and fines but the quality requirements depend
on the circumstances and availability.
A more recent element of the iron ore price formation process is the
‘green’ aspect. China’s 2016 update to its Environmental Protection law
enforced stricter caps on industrial pollution, and consequently increased the
appetite for higher purity ores, which has not diminished significantly
although the law’s deadline has been postponed by five years.
As a relatively simple ‘rule-of-thumb’, lower-grade ores with higher
fractions of impurities such as silica and alumina require increased
consumption of coke, which can raise emissions of controlled gases and
particulates. We are now very much in an environment where
‘grade-is-king’. The 70% Fe high-quality product expected to be produced
at Grängesberg would command premium prices and makes Grängesberg more
attractive than many of the undeveloped iron ore projects in Europe.
The Ukraine conflict has demonstrated the strategic positioning of the
Grängesberg Iron Ore Project. Prior to the Ukrainian conflict, Russia and
Ukraine supplied over 20Mt of iron ore into the European steel market. With
the future uncertainty around this supply, a long-term supply of high-grade
iron ore concentrate is anticipated to see strong demand from both European
and Middle Eastern steel producers. Historical production from Grängesberg
demonstrated the ability to produce a 70% Fe concentrate, which would generate
strong premiums in the current, and forecast, steel industry dynamics. With
steel producers and their downstream customers looking to reduce the overall
carbon footprint of manufactured products, supplies of high-grade concentrate
feed to produce direct reduced iron (DRI) are becoming highly sought after.
Importantly, the production of steel from DRI in an electric arc furnace has a
significantly lower CO2 footprint than the traditional blast furnace route.
Inspecting a tailings facility at Grangesberg
The opportunity for Anglesey Mining is now to advance the Grängesberg project
through to a Financial Investment Decision. This could be completed along with
securing a strategic investor, offtake partner, separate listing, or a
combination of these options. However, we recognise that there is still a lot
of work to do at Grängesberg, including consolidation of the asset, as well
as updating both the resource and reserve models and undertaking environmental
assessment studies as preliminary steps to preparing a Feasibility Study.
Labrador Iron Mines
Meanwhile, on the other side of the Atlantic, Labrador Iron Mines (LIM), in
which we hold a 12% interest, continues to progress plans to develop its
Houston Project in the Labrador trough. LIM published a PEA on its Houston
Project in February 2021 which supports its plan to resume iron ore production
and demonstrated an initial 12-year mine life with production of 2 million dmt
of per year, for total production of 23.4 million dmt of product at 62.2% Fe
over the life of the Houston mine.
The PEA estimates the Houston Project will generate an undiscounted net cash
flow of CAD$234 million and an after-tax net present value at an 8% discount
rate of CAD$109 million, and an after-tax internal rate of return of 39%,
under the base case $90/dmt benchmark pricing model. The PEA notes that using
a spot price of $160/dmt would increase the after-tax NPV(8%) to CAD$459
million and the after-tax IRR to 209%.
Anglesey holds 19.29 million LIM shares which on 31 March 2022 were valued in
total at $2.5 million, or approximately £2 million, on the OTC Market in the
United States.
Financial results and position
There are no revenues from the operation of the properties.
The loss before other comprehensive income for the year ended 31 March 2022
after tax was £693,242 compared to a loss of £328,518 in the 2021 fiscal
year. The administrative and other costs excluding investment income and
finance charges were £528,045 compared to £162,824 in the previous year.
This increase is due to the recommencement of the payment of executive
director salaries, the engagement of our new CEO, higher public relations and
related costs, London office rentals and generally higher levels of staffing
and activity.
The value of the group’s holding in LIM is reported in other comprehensive
income and effectively is based on its share price. Last year there was an
unusual gain of £4 million in this value, as it was held at a nominal value
of £1 in the previous year. This year there is a loss of £2 million as the
shares retreated. The outcome is a total comprehensive loss for the year of
£2,826,957, compared to a comprehensive gain for the prior year of
£3,714,921.
During the year there were no additions to fixed assets (2021 - nil) and
£394,410 (2021 - £101,570) was capitalised in respect of the Parys Mountain
property as mineral property exploration and evaluation, significantly up as a
result of a far more extensive programme of geological and environmental work
as well the drilling programme described in the Strategic report.
At 31 March 2022 there were mineral property exploration and evaluation assets
with a carrying value of £15.7 million. These carrying values are supported
by the results of the 2021 Preliminary Economic Assessment of the Parys
Mountain project.
At the reporting date, as detailed in Note 10, the directors considered the
carrying value of the Parys Mountain exploration and evaluation assets to
determine whether specific facts and circumstances suggest there is any
indication of impairment. They carefully considered the positive results of
the recent independent PEA and the plans for moving the project forward.
Consequently, the directors concluded that there were no facts and
circumstances which materially changed during the year which might trigger an
impairment review and that there are no indicators of impairment.
The effect of Covid-19 on the group’s activities has been minimal and is
expected to remain so.
Corporately, we raised £768,230 via the issuance of 22,595,000 shares at a
price of 3.4p in October 2021. The successful placement resulted in a cash
inflow of £725,105 after fees and expenses. The cash balance at 31 March 2022
was £922,177 , compared to £891,767 at 31 March 2021. In May 2022 a further
placement raised £865,000 at a price of 3.4 pence per share. These funds will
be used for ongoing work on the Parys Mountain project, as well as for general
corporate purposes.
In May 2022 a new Investor Agreement was concluded with Juno Limited to
replace the controlling shareholder and consolidated working capital
agreements. In the new Investor Agreement Juno agreed to participate in any
future equity financing, at the same price per share and on the same terms as
other arms-length participants, to maintain its percentage, with the
subscription price to be satisfied by the conversion and consequent reduction
of debt, and the company agreed to pay Juno in cash ten percent of the net
proceeds of such equity financing in further reduction of the debt. The
interest rate on the outstanding debt will be reduced from 10% to 5% p.a. from
1 April 2022. In addition, Juno was granted certain nomination and reporting
rights, including the right to nominate two directors to the board, so long as
Juno holds at least 20% of the company’s outstanding shares and one director
so long as Juno holds at least 10% of the company’s outstanding shares. This
renegotiation was approved by an independent board committee responsible for
reviewing and approving any transactions and potential transactions with Juno.
The family interests of Danesh Varma have a significant shareholding in Juno.
The net effect of the new agreement with the May 2022 financing was that the
debt due to Juno was reduced by £305,499, of which £78,345 was paid in cash
and the balance by conversion of debt.
At 31 March 2022 there were 248,070,732 ordinary shares in issue (2021 –
225,475,732), the increase being due to the financing events referred to
above. At 7 September 2022 there were 280,675,732 ordinary shares in issue.
The use of financial instruments is described in note 23.
Performance
The Group holds interests in exploration and evaluation properties and, until
a mine is placed into production, there are no standardised performance
indicators which can usefully be employed to gauge performance., The
publication of the independent PEA on the Parys Mountain project in January
2021, which built upon the optimisation studies successfully completed over
the previous two years, and included a new expanded mineral resource estimate,
with a financial model for an expanded case at 3,000 tpd which indicated a
pre-tax NPV(10%) of US$120 million and a 26% IRR, demonstrated a significant
improvement on previous studies and steady progress.
Initial assay results for eight of the ten drill holes at Parys Mountain in
the first drilling programme since 2012 which was completed in April 2022,
returned multiple high-grade sections within a broader overall mineralised
zone of lower grade mineralisation that could potentially be mined and
processed through a pre-concentration technique to upgrade the metal content.
This improved the confidence in the White Rock and Engine Zone resources.
The completion of the independent updated PFS on the Grängesberg project
subsequent to the year-end demonstrates a very robust project with production
of 2.3 - 2.5Mtpa of iron ore concentrate grading 70% Fe over an initial
16-year life, generating strong economic returns, including a NPV(8%) of
US$688 million post-tax using the stated price assumptions, cost estimates and
technical parameters.
The chief external factors affecting the ability of the Group to move its
projects forward are primarily the demand for metals and minerals, levels of
metal prices, and the market sentiment for investment in mining and mineral
exploration companies. These are discussed above, and risks and uncertainties
are dealt with below.
Other activities
The Directors continue to review new properties suitable for advanced
exploration or development that would be complementary to or provide synergies
with the existing projects and would be within the financing capability likely
to be available. A number of base metals projects have been identified as
potentially attractive and further early-stage opportunities continue to be
evaluated.
Environmental and Social Focus
The purpose and objective of Anglesey Mining is to create value for
shareholders in an environmentally, socially, and ethically responsible manner
which is also to the benefit of all stakeholders. Our principal current
activity is to achieve this by developing, building and operating a producing
mine at Parys Mountain and to progress the Grangesberg Iron Ore project in
Sweden through to a decision to mine. We place a high priority on
environmental, social and governance (ESG) matters, and we are committed to
being a responsible mining company, maintaining mutually beneficial long-term
relationships with key stakeholders and the local community. Readers are
invited to refer to the report on Corporate Governance.
There has been an increasing investor focus on ESG matters. These are areas on
which we have always placed high importance, although we have not attempted
quantitative measurements, particularly as having the social licence to
operate, and operating in an environmentally responsible manner, are critical
for the successful operation of any mining project. In Anglesey Mining we
place a high priority on sustainability, and we are committed to being a
responsible mining company, maintaining mutually beneficial long-term
relationships with key stakeholders and the local community.
Section 172 Statement
The Directors, both individually and collectively, believe, in good faith,
that throughout the year and at every meeting of the Board and management when
making every key decision, they have acted to promote the success of the Group
for the benefit of its members as a whole, as required by Section 172 of the
Companies Act 2006, having regard to the stakeholders and matters set out in
section 172(1) of the Companies Act 2006. The Directors Section 172 Statement
follows.
Section 172 of the Companies Act is contained in the part of the Act which
defines the duties of a director and concerns the “duty to promote the
success of the Company”. Section 172 adopts an ‘enlightened shareholder
value’ approach to the statutory duties of a company director, so that a
director, in fulfilling his duty to promote the success of the company must
act in the way he considers, in good faith, would be most likely to promote
the success of the Company for the benefit of its members as a whole, and in
doing so have regard to other specified factors insofar as they promote the
Company’s interests.
The Board of Anglesey Mining recognises its legal duty to act in good faith
and to promote the success of the Company for the benefit of its shareholders
and with regard to the interests of stakeholders as a whole and having regard
to other matters set out in Section 172. These include the likely consequences
in the long term of any decisions made; the interest of any employees; the
need to foster relationships with all stakeholders; the impact future
operations may have on the environment and local communities; the desire to
maintain a reputation for high standards of business conduct and the need to
act fairly between members of the Company.
The Board recognises the importance of open and transparent communication with
shareholders and with all stakeholders, including landowners, communities, and
regional and national authorities. We seek to maximise the operation’s
benefits to local communities, while minimising negative impacts to
effectively manage issues of concern to society.
Shareholders have the opportunity to discuss issues and provide feedback at
any time.
The application of the Section 172 requirements can be demonstrated in
relation to the Group’s operations and activities during the past year as
follows.
Having regard to the likely consequences of any decision in the long term
The Company’s purpose and vision are set out in the Chairman’s Letter and
in this Strategic Report. The Board oversees the Company’s strategy and is
committed to the long-term goal of the development of the Parys Mountain
Project. The activities towards that goal are described and discussed in the
Strategic Report. The Board remains mindful that its strategic decisions have
long-term implications for the Parys Mountain project, and these implications
are carefully assessed. During the year the Board recruited and appointed a
new Chief Executive, Jo Battershill, a mining geology graduate from Camborne
School of Mines with extensive experience both in operations and in finance in
Australia and in the UK. In connection with the move to AIM and the delisting
from trading on the Main Board, a general meeting of shareholders was called
to approve the proposal.
In evaluating alternatives or opportunities the Directors always consider the
likely consequences of any decision in the long-term that may affect the
Group, and the potential impact on long-term shareholder value, including key
competitive trends, supply and demand of metals, potential impact on the
environment and climate change considerations, all of which were considered in
the preparation of the PEA.
Having regard to the need to foster business relationships with others
The Company operates as a mineral exploration and development business,
without any regular income and is entirely dependent upon new investment from
the financial markets for its continued operation. The Board values the
benefits of maintaining strong relationships with key partners, contractors
and consultants. This is discussed in more detail elsewhere in the annual
report. As a mine development company, the Board understands that a range of
third parties- regulators, contractors, suppliers, and potential customers for
the concentrates that would be produced from a mine at Parys Mountain, are
relevant to the sustainability of the business.
Having regard to the interests of the employees
The Group currently has three full-time and one part-time employee and is
managed by its directors and a small number of associates and sub-contract
staff. The Board takes steps to ensure that the suggestions, views and
interests of employees are considered in decision-making.
Having regard to the desirability of maintaining a reputation for high
standards of business conduct
The Board is committed to high standards of corporate governance, integrity,
and social responsibility and to managing the Company in an honest and ethical
manner, as further discussed in the Corporate Governance Report. The Directors
strive to apply ethical business practices and conduct themselves in a
responsible and transparent manner with the goal of ensuring that Anglesey
Mining plc maintains a reputation for high standards of business conduct and
good governance.
Having regard to the impact of operations on the community and the environment
The Board takes a broad range of stakeholder considerations into account when
making decisions and gives careful consideration to any potential impacts on
the local community and the environment. The Board strives to maintain good
relations with the local community, especially with local businesses in North
Wales. For example, in connection with its plans for the advancement of Parys
Mountain, discussions and consultations have been held with the North Wales
Minerals and Waste Planning Service and with local Councils.
The Corporate Governance Report discusses how the Directors engage with and
have had regard to the community in which the Group operates. Further
discussion of these activities can be found in this Strategic Report.
As a mine development company, the Board understands that recognising and
having regard to the potential impact the Company’s operations may have on
the community and the environment is essential to underpinning the social
licence necessary to operate. In making decisions about the development of a
mine at Parys Mountain, the Board would seek to maximise the benefits to the
local community, while minimising negative impacts, and to effectively manage
issues of concern to society. By aligning future operations to environmental,
social and governance performance the Company will seek to deliver on its
purpose to create value through responsible and sustainable mining.
Having regard to the need to act fairly as between members of the Company
The Company has only one class of share in issue and all shareholders benefit
from the same rights, as set out in the Articles of Association and as
required by the Companies Act 2006. Since 1996 agreements have been in place
with Juno Limited, the largest shareholder, which provide that Anglesey will
maintain an independent board and that any transactions between Juno and
Anglesey will be at an arm’s length basis. Effective 31 March 2022, as a
further step to strengthen its financial position, Anglesey entered into a new
Investor Agreement with Juno Limited, to amend and replace the Controlling
Shareholder Agreement and the Consolidated Working Capital Agreement. This
renegotiation was approved by an independent board committee responsible for
reviewing and approving any transactions and potential transactions with Juno.
The Board recognises its legal and regulatory duties and does not take any
decisions or actions, such as selectively disclosing confidential or inside
information, that would provide any shareholder with any unfair advantage or
position compared to the shareholders as a whole.
Risks and uncertainties
The Directors have carried out an assessment of the principal risks facing the
Group, including those that would threaten its business model, future
performance, solvency or liquidity. In conducting its business, the Group
faces a number of risks and uncertainties, the more significant of which are
described below. The board believes the principal risks are adequately
disclosed in this annual report and that there are no other risks of
comparable magnitude which need to be disclosed.
Mineral exploration and mine development is a high-risk speculative business
and the ultimate success of Anglesey Mining will be dependent on the
successful development of a mine at Parys Mountain, which is subject to
numerous significant risks most of which are outside the control of the Board.
In reviewing the risks facing the Group, the members of the Board consider
they are sufficiently close to operations and aware of activities to be able
to adequately monitor risk without the establishment of any formal process.
There may be risks against which it cannot insure or against which it may
elect not to insure because of high premium costs or other reasons. 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, results of exploration,
mineral reserves, mineral resources, 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 expected
geological or geotechnical structures, 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 of properties,
mineral claims, leases and other mineral interests, should it seek to pursue
such opportunities, as well as for the recruitment and retention of qualified
employees and other personnel and in attracting investment and or potential
joint venture partners to its properties.
Exploration and development
Exploration for minerals and development of mining operations involve risks,
many of which are outside the Group’s control. Exploration by its nature is
subject to uncertainties and unforeseen or unwanted results are always
possible. Mineral exploration and development is a speculative business,
characterized by a number of significant risks including, among other things,
unprofitable efforts resulting not only from the failure to discover mineral
deposits but also from finding mineral deposits that, though present, are
insufficient in quantity and quality to return a profit from production.
Substantial expenditures are required to develop the mining and processing
facilities and infrastructure at any mine site. No assurance can be given that
a mineral deposit can be developed to justify commercial operations or that
funds required for development can be obtained on a timely basis and at an
acceptable cost. There can be no assurance that the Group’s current
development programmes will result in profitable mining operations. Current
operations are in politically stable environments and hence unlikely to be
subject to expropriation but exploration by its nature is subject to
uncertainties and unforeseen or unwanted results are always possible.
Financing and liquidity risk
The Group has relied on equity financing to fund its working capital
requirements and will need to generate additional financial resources to fund
all future planned exploration and development programmes. Developing the
Parys project will be dependent on raising further funds from various sources.
There is no assurance that the Group will continue to obtain additional
financial resources and/or achieve positive cash flows or profitability.
There can be no assurance that the Group will be successful in obtaining any
additional required funding necessary to conduct operations on its properties.
Failure to obtain additional financing on a timely basis could cause planned
activities and programs to be delayed.
If additional financing is raised through the issuance of equity or
convertible debt securities, the interests of shareholders in the net assets
of the Group may be diluted.
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 are
usually expressed and traded in US dollars and any fluctuations may be either
exacerbated or mitigated by currency fluctuations which affect the revenue
which might be received by the Group in sterling.
Foreign exchange
LIM is a Canadian company; Angmag AB 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. Most of the cash balance at the year-end
was held in sterling – see notes 16 and 23.
Permitting, environment, climate change and social
The Group's operations are subject to environmental legislation and
regulations which are evolving in pursuit of national climate change
objectives and in a manner where standards are becoming more stringent.
Mineral extraction and processing can have significant environmental impacts.
Mining operations require approval of environmental impact assessments and
obtaining planning permissions. The Group holds planning permissions for the
development of the Parys Mountain property, but further environmental studies
and assessments and various approvals and consents will be required to carry
out proposed activities and these may be subject to various operational
conditions and reclamation requirements.
There can be no assurance that all permits, licences, permissions and
approvals that the Group may require for its activities will be obtainable on
reasonable terms or on a timely basis.
Employees and personnel
The Group is dependent on the services of a small number of key executives,
specifically 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. A
discussion on the composition and assessment of the Board of Directors is
included in the Report on Corporate Governance.
Covid-19
The Directors have carefully considered the impact of the Covid-19 pandemic on
the Parys Mountain property and have concluded that to date it has had no
impact on the project and further it is unlikely to have, assuming that the
pandemic does not escalate. The project is not currently in production, so
Covid-19 does not impact current operations.
Group Prospects
Recognition of potential opportunities
The recommencement of activities at Parys Mountain is the first stage of
bringing the asset back into the focus of mainstream investors, both retail
and institutional. The economics of the project under the current commodity
pricing environment make the progression of Parys Mountain through to a
financial investment decision an obvious milestone.
Development of a new mine at Parys Mountain, producing copper, zinc and lead
with gold and silver credits, can deliver economic growth in the UK, regional
jobs for the community and business opportunities for local service providers.
Importantly, these critical and strategic metals, essential for the
decarbonisation of the economy, are primarily imported into the UK currently.
This creates a unique and timely opportunity, both for Anglesey Mining and for
the UK, to develop a new, modern, mine at Parys Mountain in an environmentally
sustainable manner.
A similar view can be held for the Grängesberg Iron Ore Project, where with
the Pre-Feasibility Study update now complete, we have a clear view on the
requirements to enable us to advance through to the Feasibility stage. When
combined with the Labrador Mines assets, Anglesey Mining has a very valuable
and strategic set of iron ore assets that should be progressed with the
greatest speed possible, but within the constraints of the resources
available.
Outlook
As previously discussed, the results from the 2021 PEA demonstrate that a
significant copper-zinc-lead mine can be developed at Parys Mountain with very
positive financial returns. We expect to increase the level of activity at
Parys Mountain over the next twelve months with respect to a number of the
elements required for a project development. We plan to ramp up permitting
activities, including the completion of environmental and ecological studies
around site, initial design work of the tailings management facility, which
has already commenced, along with underground geotechnical domain modelling on
the White Rock and Engine Zones. Once the final assay results from the
completed drill programme are received, we will conduct additional
metallurgical testwork to identify the most optimal pre-concentration method.
We also plan to commence work on the large Northern Copper Zone, which
currently hosts a resource estimate of 9.4Mt at 1.7% copper equivalent - all
in the Inferred resource category. Initial work on the Northern Copper Zone
will include reviewing the historical resource model and identifying areas
that could be brought into the mine plan earlier than currently envisaged with
a view to infill drilling and potentially converting to the Indicated
category.
All of these activities are required to enable the Parys Mountain
copper/zinc/lead project to move from the PEA to a full committed decision to
proceed to production. As has been said before, these steps do take some time
to reach fruition and are key requirements to securing the necessary finance
to move the project towards production.
At Grängesberg, the Pre-feasibility Study Update has provided a series of
recommendations to progress the project through to the commencement of a
Feasibility Study. The initial work programmes include updating the resource
to include domaining of the apatite zones that could produce a valuable
by-product stream and updating the reserve estimate to incorporate the
proposed alternative mining method (sub-level open stoping with back fill
instead of sublevel caving), which would reduce the risk of any potential
movement on the Export Fault zone.
At a general corporate level, the company will continue to review other
opportunities within the global metals and mining sector. At the end of March
2022, the group had cash resources of £922,177.
This report was approved by the board of Directors on 7 September 2022 and
signed on its behalf by:
Jo Battershill
Chief Executive
Directors’ report
The Directors are pleased to submit their report and the audited accounts for
the year ended 31 March 2022.
The principal activities of the Group are set out in the Strategic Report
which also includes certain matters relating to financial performance, risk
exposure and management and future developments. The Corporate Governance
statement which follows forms part of this Directors’ report.
Directors
* John F. Kearney - Chairman
* Jo Battershill - CEO from 1 August 2021
* Bill Hooley - CEO until 31 July 2021 then Deputy Chairman until 7 June
2022
* Danesh Varma - Finance director
* Howard Miller - Senior non-executive director
* Andrew King - appointed non-executive director from 20 December 2021
* Namrata Verma - appointed non-executive director from 20 December 2021
Biographical details of the directors are shown at the end of this annual
report. It is with great regret that the Directors note the death of Bill
Hooley on 7 June 2022 after 16 years of service as a director. All other
directors remain in office. The responsibilities of the directors are
discussed in the Corporate Governance Report.
The appointment and replacement of directors, is governed by the Articles, 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 or
her appointment and therefore Andrew King and Namrata Verma who were appointed
as directors on 20 December 2021 will offer themselves for election at the
AGM. 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 has been the practice for some years to submit re-election
resolutions for all directors at each AGM.
Directors’ interests in shares
23 August 2022 31 March 2022 31 March 2021
Director Number of options Number of ordinary shares Number of options Number of ordinary shares Total Number of options Number of ordinary shares Total
John Kearney 2,000,000 1,297,142 - - - - 500,000 500,000
Bill Hooley n/a n/a - 200,000 200,000 - 1,200,000 1,200,000
Jo Battershill 2,800,000 3,584,830 - 1,787,688 1,787,688 - - -
Danesh Varma 1,500,000 - - - - - 1,000,000 1,000,000
Howard Miller 1,000,000 - - - - - 500,000 500,000
Namrata Verma 1,000,000 - - - -
Andrew King 1,000,000 - - - -
9,300,000 4,881,972 - 1,987,688 1,987,688 - 3,200,000 3,200,000
1. All of these interests are beneficial.
2. The family interests of Danesh Varma have a significant shareholding of
Juno Limited, a connected person, which has notified an interest in 64,605,248
ordinary shares.
3. Bill Hooley died on 7 June 2022.
Directors' share options
There were no outstanding share options during the year and at 31 March 2022
however options were granted on 4 August 2022 as set out in the Remuneration
section of this report.
Directors’ interests in material contracts
Juno Limited
Juno Limited (Juno), which is registered in Bermuda, holds 21% of the ordinary
share capital. Until May 2022 there was a controlling shareholder agreement
and working capital agreement with Juno and note 18 sets out movements under
this working capital agreement. Apart from interest charges there were no
transactions between the Group and Juno or its group during the year.
In May 2022, a new Investor Agreement was concluded with Juno Limited to
replace the controlling shareholder and consolidated working capital
agreements. In the new Investor Agreement Juno agreed to participate in any
future equity financing, at the same price per share and on the same terms as
other arms-length participants, to maintain its percentage, with the
subscription price to be satisfied by the conversion and consequent reduction
of debt, and the company agreed to pay Juno in cash ten percent of the net
proceeds of such equity financing in further reduction of the debt. The
interest rate on the outstanding debt will be reduced from 10% to 5% p.a. from
1 April 2022. In addition, Juno was granted certain nomination and reporting
rights, including the right to nominate two directors to the board, so long as
Juno holds at least 20% of the company’s outstanding shares and one director
so long as Juno holds at least 10% of the company’s outstanding shares. This
renegotiation was approved by an independent board committee responsible for
reviewing and approving any transactions and potential transactions with Juno.
The family interests of Danesh Varma have a significant shareholding in Juno.
Grangesberg Iron
John Kearney and Danesh Varma, as nominees of the company, are directors of
Grangesberg Iron AB. 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 in 2014. The Group has
a liability to Eurang Limited, amounting to £337,839 at the year-end (2021
– £343,613). See also notes 18 and 24.
There are no other contracts of significance in which any director has or had
during the year a material interest.
There is a directors’ and officers’ liability insurance policy in force on
normal commercial terms which includes third party indemnity provisions.
Substantial shareholders
At 23 August 2022 Juno Limited had notified an interest in 64,605,248 shares
representing 23.0% of the issued ordinary shares.
Shares
Allotment authorities and disapplication of pre-emption rights
The Directors would ideally 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 its ongoing exploration and development programs
and working capital, or the acquisition of new mineral ventures or other
activities, they believe that now the Group is on AIM it is appropriate to
take advantage of the associated freedoms and to have a larger amount
available for issue at their discretion without pre-emption than had been the
case when the group had a main board listing. At the annual general meeting
the Directors will therefore seek a renewal and enlargement of the share
allotment authorities.
The authority sought in resolution 12 of the meeting 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 £2,800,000
(280,000,000 ordinary shares) which is approximately 100% of the total issued
ordinary share capital at 23 August 2022. The Directors will consider issuing
shares if they believe it would be appropriate to do so in respect of
potential financings or business opportunities that may arise consistent with
the Group's strategic objectives. The Directors have no immediate intention of
exercising this general authority, other than in connection with the potential
issue of shares for interim financings to fund working capital or pursuant to
the 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 £2,800,000
(280,000,000 ordinary shares). This aggregate nominal amount represents
approximately 100% of the issued ordinary share capital at 23 August 2022.
This will provide additional flexibility which the Directors believe is in the
best interests of the Group in its present circumstances. This authority will
expire on 31 December 2023. The Directors intend to seek renewal of this
authority at future annual general meetings.
Rights and obligations attached to shares
The rights and obligations attached to the ordinary and deferred shares are
set out in the Articles of Association. The deferred shares are non-voting,
have no entitlement to dividends and have negligible rights to return of
capital on a winding up. Details of the issued share capital are shown in note
20. Details of employee share schemes are set out in the directors’
remuneration report and in note 21.
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
shares.
Voting rights
Each ordinary share carries the right to one vote at general meetings. Holders
of deferred shares, which are of negligible value, are not entitled to attend,
speak or vote at any general meeting, nor are they entitled to receive notice
of general meetings.
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 those 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 any meeting unless all monies, if any,
presently payable in respect of their shares have been paid, but no such
shares are in issue. Furthermore, no member shall be entitled to attend or
vote at any meeting if he has been served with a notice after failing to
provide the Company with information concerning interests in his shares.
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 share plan contains 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.
Employment, community and donations
The Group is an equal opportunity employer in all respects and aims for high
standards from and for its employees. The group aims to be a valued and
responsible member of the communities that it operates in or affects. The
policies on these matters are further discussed in the Report on Corporate
Governance. There are no social, community or human rights issues which
require the provision of further information in this report.
Environment and greenhouse gas emissions
There are established policies and procedures to ensure that future operations
will be conducted in compliance with all relevant laws and regulations and
that will enable the group to meet its high standards for corporate
sustainability and environmental stewardship. Currently the projects are not
in operation and consequently any effect on the environment is slight, being
limited to the periodic operation of an exploratory drilling rig at Parys
Mountain together with its support operation as well as usage of two small
offices, where recycling and energy usage minimisation are encouraged.
Activities or processes which may lead to the production of greenhouse gases
are minimal. The extent to which these activities together with the Group’s
administrative and management functions result in greenhouse gas emissions is
impracticable to estimate and, in any event, less than the amount reportable
under the Energy and Carbon Regulations 2018.
Report on payments to governments
The group is required to disclose payments made to governments in countries
where exploration or extraction activities are undertaken and hereby reports
that no such payments made in the year.
Dividend
The group has no revenues and the directors do not recommend a dividend (2021
– nil).
Going concern and viability
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 ‘Guidance on Risk
Management, Internal Control and Related Financial and Business Reporting’
issued in September 2014.
The financial statements are prepared on a going concern basis. The validity
of the going concern basis is dependent on finance being available for the
continuing working capital requirements for the foreseeable future, being a
period of at least twelve months from the date of approval of the accounts.
Based on the current cash reserves, there is sufficient finance available for
the continuing working capital requirements on a status quo basis for at least
twelve months from the date of the financial statements.
Looking to the period beyond the twelve months covered by current cash
resources the Group will need to generate additional financial resources to
progress the ongoing development of the Parys Mountain project and will
require interim funding to finance the further studies, optimisation and
feasibility programmes and, in the longer term, senior financing to fund the
capital and development costs to put the Parys Mountain Mine into production.
The Group has relied primarily on equity financings to fund its working
capital requirements and will be required to do so in the future to ensure
there will be adequate funds for planned activities and to continue as a going
concern. Anglesey Mining plc has operated for more than 30 years, in what at
times have been challenging economic and investment climates and has continued
to attract the necessary investment to continue as a going concern.
The Directors rely upon this long experience and particularly upon the
potential of the mineral assets at Parys Mountain on which Anglesey was
founded. These mineral resources are held largely as freehold and cannot be
diminished by any act of nature. Given this permanency, both legally and
geologically, the Directors believe that future funding will be found at least
for the medium term of two years from the balance sheet date to support the
ongoing maintenance and operation of the Parys Mountain property. In making
this assessment the directors have substantially relied on the key assumption
that the underlying costs of maintenance and operation will not change, that
there are no unrecognised liabilities that will become due and on their
experience of being able to raise additional investment as and when required
over the last 30 years. During the past year in October 2021 and May 2022 over
£1.5 million was successfully raised in new financings.
The Directors are actively pursuing various options regarding proposals for
financing and are in discussions with a range of investors. Whilst these
discussions continue there are reasonable expectations that these will be
successful and therefore the financial statements have been prepared on the
going concern basis. Nevertheless, there is a risk that adequate additional
funding may not be available on a timely basis or on acceptable terms to move
the Parys Mountain project through to its full potential and there is no
guarantee that such funding will be available, or that the Group will be
successful in raising the necessary investment to advance the development of
the project and put a mine at the Parys Mountain property into production.
Given the resources currently available, there is a risk that there will not
be sufficient financial resources to fund all the planned programme
requirements
Post balance sheet events
On 17 May 2022 a placing to institutional investors for cash of 22,829,705
shares raising £864,416 gross was completed. At the same time the terms of
the Juno loan were amended and the debt due to Juno was reduced by £305,499,
of which £78,345 was paid in cash and the balance by conversion of debt.
Statement of directors’ responsibilities
The Directors are responsible for preparing the annual report and the
financial statements in accordance with applicable law and international
accounting standards in conformity with the Companies Act 2006. The group
financial statements are also prepared in accordance with international
financial reporting standards (IFRSs) as applied in the European Union.
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; 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, are fair, balanced and understandable and provide 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 Directors are also responsible for
preparing a Strategic Report, Directors’ Report, Section 172 Statement,
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.
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 auditor is unaware. 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 auditor is aware of that
information. This confirmation is given and should be interpreted in
accordance with the provisions of section 418 of the Companies Act 2006.
Further information on the change of auditor is contained in the Audit
Committee report.
This report was approved by the board of directors on 7 September 2022 and
signed on its behalf by:
Danesh Varma
Company Secretary
Remuneration Committee report
Following the move on 8 April 2022 from the main board to AIM the format and
content of remuneration reporting has changed from that in use last year.
The remuneration committee comprised Howard Miller until 18 January 2022 when
John Kearney and Namrata Verma were appointed, making three members from that
point forwards. No remuneration consultants have been engaged or are
considered appropriate at this stage of the group’s development.
Directors’ remuneration policy
The policy of the Remuneration Committee with regard to executive and
non-executive directors’ remuneration, is to provide a compensation package
which will attract, retain and motivate directors of the calibre and with the
experience required, and be consistent with the company’s ability to pay.
We aim to provide a competitive salary and benefits package to employees and
executive directors with an appropriate balance between fixed and
performance-related elements. The committee is implementing an annual review
of remuneration arrangements however this was not carried out in the during
the period under review.
Although the board intended the grant of share options to form part of overall
director remuneration, the implementation of this policy and grant of share
options was delayed and did not occur until 4 August 2022 when the options
shown in the table below were granted.
The committee recognises that under the Code share options should not be
granted to non-executive directors, however no revenue or income is generated
at present so the use of equity incentives in the form of share option grants
is one of the few economically effective ways available to provide
remuneration to the directors; further it is aligned to the long-term
interests of shareholders. The remuneration committee takes into account any
views expressed by shareholders when considering remuneration policy and
practices.
Performance incentives
It is the Remuneration Committee’s expectation that further share options
will be issued in the current year at the Board’s discretion to the Chief
Executive under the terms of his employment and subject to achieving defined
goals.
The use of traditional performance standards in other industries, such as
profitability, is not considered to be appropriate in the evaluation of
executive performance in a mineral exploration and development company with no
sales or revenue on which to generate income. When approving executive
compensation levels, the Committee and the Board consider the financial
situation of the Group in a wider context regarding the outlook for the
industry and the ongoing development of the Parys Mountain project. It is
expected that in future years that the use of equity grants, stock
appreciation rights, and or the deferred equity schemes may also form part of
the incentive portion of the remuneration of executive directors.
There is currently no formal incentive bonus plan in place other than under
the contract of employment with the CEO which provides that he will be
eligible to be awarded options and performance shares upon the attainment of
various defined targets. Any award of a bonus to executive directors is at the
discretion of the board based upon recommendation by the Remuneration
Committee. In considering the payment of a bonus to any executive directors,
the Committee would take into account the individual performance and efforts
of the executive, the progress made by the Group in furthering its business
plans and the overall financial position.
Board changes in year
Our Chief Executive Jo Battershill was appointed on 1 August 2021 and two new
non-executive directors: Namrata Verma and Andrew King were appointed on 20
December 2021.
Terms and conditions of service
For executive directors it is our policy to keep contract durations, notice
periods and termination payments to a minimum consistent with industry norms.
All non-executive directors have letters of appointment with a written
contract for service and are subject to annual reappointment at the AGM.
Annual report on remuneration
John Kearney, the Chairman, does not currently receive fees from the Company;
he is employed and remunerated by Labrador Iron Mines and has previously been
granted options over shares under the 2014 Unapproved Share Option Scheme. New
options granted since the year end are shown below.
Bill Hooley, the Chief Executive during the year until 31 July 2021, and
subsequently Deputy Chairman until his untimely death in June 2022, had
written terms of employment specifying a salary of £24,000 per annum together
with two bonus payments, firstly £60,000 paid in August 2021 and secondly
£30,000 payable in April 2022, with no other entitlement to notice,
termination or bonuses.
Jo Battershill, who was appointed as Chief Executive and a director on 1
August 2021, has a written contract of employment which provides for a minimum
notice period of six months and under which he is eligible to be awarded
options and performance shares and an increased salary upon the attainment of
various defined targets. The contract provides for a base salary of £120,000
per annum, together with a contribution of 10% of that figure into a pension
scheme.
Danesh Varma, the Finance Director and Company Secretary, has written terms of
employment specifying a salary of £12,000 per annum together with two bonus
payments, firstly £24,000 paid in August 2021 and secondly £12,000 payable
in April 2022, with no other entitlement to notice, termination or bonuses.
During the year the group began making pension contributions in respect of the
chief executive at 10% of his salary and 7% in respect of other employee
salaries.
Directors’ remuneration summary - fiscal years ended March 31:
2022 2021
Name Salary and fees Additional fees and bonuses Pensions Total Salary and fees Additional fees and bonuses Pensions Total
£ £ £ £ £ £ £ £
Executive
John Kearney - - - - - - - -
Bill Hooley 84,000 - - 84,000 - - - -
Jo Battershill 40,000 - 1,867 41,867
Danesh Varma 36,000 - - 36,000 - - - -
Non-executive - - - - - - -
Howard Miller - - - - - - - -
Andrew King - - - -
Namrata Verma - - - -
Totals 160,000 - 1,867 161,867 - - - -
Between 1 July 2014 and 31 March 2021 all the directors waived their
entitlement to remuneration. Following a Board review of non-executive
remuneration, it was decided to begin payments of fees to each non-executive
director at the rate of £1,000 per quarter from 1 July 2022.
Share schemes
There is currently one active share scheme: the 2014 Unapproved Share Option
Scheme. The committee has begun the establishment of an Enterprise Management
Incentive Scheme for employees and executive directors and this is expected to
be operational by the date of the AGM.
In respect of the Unapproved Share Option Scheme established in 2014 all
directors and employees are eligible to receive options. All share options are
subject to a performance criterion, namely that the company’s share price
performance over the period from grant to exercise must exceed that of the
companies in the FTSE 100 index. This index was selected as being an easily
available benchmark of general corporate performance. As described above,
there were no options outstanding at the beginning of the financial year and
no option grants were made during the year.
However, a total of 10,900,000 options were granted under the Unapproved Share
Option Scheme on 4 August 2022 as follows: the options have an exercise price
of £0.04, representing a premium of 38% to the closing share price of £0.029
on 3 August 2022. The options are subject to time-based vesting conditions
with 25% of options vesting on 31 March 2023, 25% on 30 September 2023, 25% on
31 March 2024 and 25% on 30 September 2024. The options will lapse on 31 March
2030.
Director Number of Exercise Price
options granted per share option
John F Kearney 2,000,000 £0.04
Jo Battershill 2,800,000 £0.04
Danesh Varma 1,500,000 £0.04
Howard Miller 1,000,000 £0.04
Namrata Verma 1,000,000 £0.04
Andrew J King 1,000,000 £0.04
The award of the Options represents the first issuance of share options to
directors and employees since September 2016. The non-executive directors of
the Company had also previously waived the payment of cash fees since July
2014.
Other components of remuneration
There were no taxable benefits, incentive plans, bonuses, share scheme
interests, payments to past directors, payments for loss of office or other
remuneration or payments which are required to be disclosed made during the
year.
There is a table of directors’ interests in shares and options in the
directors’ report.
This report was approved by the board of directors on 7 September 2022 and
signed on its behalf by:
Danesh Varma
Company Secretary
Statement of Corporate Governance
Anglesey Mining believes that good corporate governance provides the framework
whereby the Board ensures that the Company’s strategy is aligned to the
interest of its shareholders and takes into account the interest of all
stakeholders.
The Board of Anglesey Mining is committed to high standards of corporate
governance, integrity and social responsibility and to managing the Company in
an honest and ethical manner. The Chairman is responsible for the leadership
of the Board and for ensuring that the Company has appropriate governance
standards in place and that these requirements are communicated and applied.
The Group seeks to conduct its operations with honesty and fairness and
expects its contractors and suppliers to meet similar ethical standards. The
Board recognizes the importance of communicating with shareholders and all
stakeholders in an open and transparent fashion.
Board of Directors
The Board of Anglesey Mining was small at the beginning of the year with just
four members, subsequently increased to seven in December 2021. The Board
currently consists of six directors, three of whom are considered independent.
Profiles of the directors, summarizing their experience and backgrounds can be
found at the end of this Annual Report. Each director is subject to annual
re-election at every AGM,
The Board has overall responsibility for all aspects of the business and
affairs of the Company and has an active engaged role in all decision making.
The Board approves the Group’s strategy and expenditure plans and regularly
reviews operational and financial performance, risk management, and health,
safety, environmental and community matters.
Members of the Board are directly involved in decisions and an extensive
committee or reporting structure is not particularly useful. Nevertheless, a
system of checks and balances is in place and all material decisions must be
approved by the Board. The definition of ‘materiality’ is low, almost all
decisions are material and require the approval of the Board.
The Board is assisted by an Audit Committee and has also established
Remuneration and Nomination committees. All Directors may attend meetings of a
committee at the committee’s invitation. There are written terms of
reference for the Audit, Remuneration and Nomination committees, each of which
deals with specific aspects of the Group’s affairs. These are made available
to shareholders at each general meeting and are available on the website. The
Board receives periodic reports from all committees where appropriate. All
committees have an independent non-executive director within their
composition. As well as chairing Board meetings, John Kearney chairs the
Nomination committee. Howard Miller is the lead independent director and
chairs the Audit and Remuneration Committees.
The number of meetings of the Board and of each committee held over the past
year is at the end of this report.
The Chairman
The Chairman, John Kearney, is responsible for the leadership of the Board and
for ensuring that appropriate governance standards are in place and that these
requirements are communicated and applied. The Chairman’s primary role is to
create the cultural environment to enable each director and the Board as whole
to perform effectively for the benefit of the Group, its shareholders and its
wider stakeholders.
He has many years of experience as chairman or director of numerous public
mining or exploration companies. He is not a full-time executive of Anglesey
Mining and does not receive compensation (other than an entitlement to share
options). He is employed and remunerated by Labrador Iron Mines and divides
his time between several mineral companies and other activities. The
Chairman’s primary functions include providing leadership and direction to
the Board and ensuring its effectiveness. The Chairman has overall
responsibility for corporate governance matters.
The Board has appointed Howard Miller as the lead independent non-executive
director to assist the Chairman and perform such other duties and
responsibilities as the Board may determine from time to time. Howard Miller
has served for more than twenty years as a non-executive director.
The roles of Chairman and Chief Executive are separate. Jonathan (Jo)
Battershill was appointed Chief Executive on 1 August 2021.
Audit committee
The Board has established an Audit Committee with formally delegated duties
and responsibilities. Until January 2022 the Audit Committee’s sole member
was Howard Miller, who is considered an independent non-executive director,
but is not independent as defined by the Corporate Governance Code. From that
date Namrata Verma and Andrew King both of whom are independent non-executive
directors were appointed to the audit committee.
The Audit Committee assists the Board in meeting its responsibilities for
internal control and external financial reporting. The audit committee meets
at least twice a year and is responsible for ensuring that the financial
information of the Group is properly reported on and monitored, including by
conducting reviews of the annual and interim accounts, the internal control
systems and procedures and accounting policies. More information on the work
of the Audit Committee is provided in the Report of the Audit Committee below.
Remuneration committee
From January 2022 the Remuneration Committee comprised Howard Miller
(Chairman) and John Kearney and Namrata Verma. The committee is responsible
for making recommendations on remuneration policy. It determines any contract
terms, remuneration and other benefits, including share options, for each of
the executive directors. The remuneration of non-executive directors is a
matter for the Board. No director may be involved in any decisions as to their
own remuneration. The Remuneration Committee has responsibility for
determining, within agreed terms of reference, the policy on remuneration,
including incentive awards.
The Remuneration Committee is also responsible for recommending grants of
options under the Share Option Scheme. The use of equity incentives aligned to
the long-term interests of shareholders is an effective and efficient way to
compensate directors and accordingly option grants under the Unapproved share
option scheme are made to all directors.
The Directors’ Report on Remuneration and the Report of the Remuneration
Committee is set out in other parts of the Annual Report.
Nomination committee
The Nomination Committee is comprised of John Kearney, Howard Miller and
Andrew King and assists the Board in discharging its responsibilities relating
to the composition and make-up of the Board and any committees of the Board.
It is also responsible for periodically reviewing the Board’s structure and
identifying potential candidates to be appointed as directors.
The Nomination Committee is responsible for evaluating the balance of skills,
knowledge and experience and the size, structure and composition of the Board
and committees of the Board, retirements and appointments of additional and
replacement directors and committee members and will make appropriate
recommendations on such matters.
Internal control
The Board is responsible for the Group’s systems of internal control,
financial and otherwise. The key feature of the financial control system is
that the Directors directly monitor all payments and transactions, as well as
budgets and annual accounts. Such system provides reasonable but not absolute
assurance of the safeguarding of assets, the maintenance of proper accounting
records and the reliability of financial information. The Board, advised by
the audit committee, has not considered it appropriate to establish an
internal audit function at present because of the Group’s limited
operations. The Board has reviewed the effectiveness of the system of internal
control as described during the period.
There are no significant issues disclosed in the Strategic Report and
Financial Statements for the year to 31 March 2022 and up to the date of
approval of the Annual Report that have required the Board to deal with any
related material internal control issues.
Remuneration – non-executive directors
The non-executive directors did not receive cash compensation during the year
ended 31 March 2022 however following a Board review of non-executive
remuneration it was decided to (a) grant options over shares to non-executive
directors as incentives and partial compensation for their services on 4
August 2022 and (b) to begin payments of fees to each non-executive director
at the rate of £1,000 per quarter from 1 July 2022.
The Board is satisfied that the grant of incentive options to Directors in
lieu of cash compensation is appropriate given the Company’s stage of
development and is aligned with shareholders’ interests and expectations
that a high proportion of available funds are allocated to exploration.
Risks and uncertainties
Mineral exploration and mine development are a high-risk speculative business,
and the ultimate success of Anglesey Mining will be dependent on the
successful development of a mine at Parys Mountain, which is itself subject to
numerous significant risks.
The significant risks facing the Group are summarised and discussed in the
Strategic Report and the “Going-concern” risk is discussed in detail in
the Directors Report. Management of those risks is the responsibility of the
Board of Directors which considers it is sufficiently close to the Group’s
operations and aware of its activities to be able to adequately monitor risks
within its control without the establishment of any further formal processes.
There is no assurance the Company can maintain the services of its directors
or recruit other qualified personnel to serve as directors. The loss of the
services of any of the current directors could have a material adverse effect
on the Group and its prospects.
Directors’ appointment and attendance at Board and committee meetings
During the year ended 31 March 2022 a majority of Board and committee meetings
were held by telephone or video conference due to Covid restrictions and
attendance at meetings was as follows:
Meetings
Director Date appointed Board Audit Remuneration Nomination
Total number of meetings: 9 4 2 2
John Kearney 10 November 1994 8 2 2
Bill Hooley 10 January 2006 9
Jo Battershill 1 August 2021 8 of 8
Danesh Varma 15 November 1994 9
Howard Miller 20 September 2001 9 4 2 2
Andrew King 20 December 2021 2 of 3
Namrata Verma 20 December 2021 3 of 3
All directors are invited to attend the meetings of the Audit Committee and
meet with the auditors
Bill Hooley was the Chief Executive until 31 July 2021. He was subsequently
appointed as Deputy Chairman and remained so until his death in June 2022.
Jonathan (Jo) Battershill was appointed as the Chief Executive and as a
director on 1 August 2021.
Danesh Varma is Finance Director and the Company Secretary.
Corporate Governance Compliance Review
Anglesey has been listed on the London Stock Exchange since 1988 and
throughout that time has been in compliance with all the listing rules and
policies of the LSE. As the company had a premium listing, for the past two
years it applied and reported on the 2018 UK Corporate Governance Code.
Anglesey believes that throughout the year, it generally complied with the
spirit of the principles of the 2018 UK Corporate Governance Code, to the
extent such principles are applicable in Anglesey’s particular situation and
having regard to the size and resources of the Group. However, some of the
principles and many of the provisions are not applicable to the individual
circumstance of Anglesey Mining.
Specifically, for example, the company is not in compliance with the
provisions of the Code that require “at least half” of the Board to be
independent non-executive directors, as until December 2021 when two new
independent non-executive directors were appointed, the directors in office
year had served for more than nine years and the Chairman has held that role
for 27 years. In addition, the company has awarded share options to
non-executive directors, which again is not in compliance with the provisions
of the Code, as one of the few effective and economical ways available to the
Company to provide some compensation to the Directors
The Directors recognise the importance of sound corporate governance and, upon
the move to AIM adopted the QCA Corporate Governance Code published by the
Quoted Companies Alliance (the “QCA Code”), to the extent applicable, as
they consider it more appropriate than the 2018 UK Corporate Governance Code,
having regard to the company’s size, resources and stage of development
The QCA Code sets out 10 principles listed below, and the following compliance
report explains broadly how Anglesey seeks to apply these principles:
Establish a strategy and business model which promote long-term value for
shareholders
Anglesey’s purpose is the development of a modern mine at Parys Mountain, in
an environmentally, socially, and ethically responsible manner, producing
copper, zinc, lead, gold and silver to create value for shareholders and for
the benefit of all stakeholders. Parys Mountain was the largest copper mine in
the UK, and one of the largest copper mines in the world in the 18th
century.
Today, amidst the growing recognition that metals and minerals are essential
for addressing climate change and adapting to a green economy, the Parys
Mountain property hosts the largest known deposits of copper, zinc and lead in
the UK. The Board believes that the Parys Mountain property provides an
opportunity to develop a sustainable long-term modern mining operation and
business, producing the very minerals that are essential for electrification,
energy storage and extending product lifespan, copper, lead and zinc.
In 2021 a new independent Preliminary Economic Assessment of the Parys
Mountain project was prepared by Micon International Limited which
demonstrates the potential for a viable mine development and a healthy
financial rate of return. Further details on the progress in the development
of the Parys Mountain Project during the year are provided in the Chairman’s
Statement and in the Strategic Report.
The Group also has two other smaller investments, in Canada and in Sweden,
both in iron ore, and interestingly both seeking to breathe renewed life into
former world class projects. Iron ore produced from the Schefferville mines in
Labrador fuelled the US steel industry for 30 years after World War Two and
Grangesberg was once the largest iron mine in Sweden. As discussed in the
Strategic Report, notable progress was reported on these investments during
the past year.
Seek to understand and meet shareholder needs and expectations
The Board of Directors is committed to maintaining good communications and
having constructive dialogue with its shareholders. Shareholders have the
opportunity to discuss issues and provide feedback at any time. Shareholders
have access to current information on the Company through its website and
through direct contact with the directors by telephone or email. All
shareholders will be encouraged to attend the Annual General Meeting (subject
to COVID guidelines and/or restrictions).
Take into account wider stakeholder and social responsibilities and their
implications for long-term success
Anglesey Mining is committed to high standards of corporate social
responsibility. Health, safety, and environmental protection are core values.
Anglesey seeks to ensure open and transparent communication with all
stakeholders including landowners, neighbours, communities, and regional and
national authorities.
In considering strategy and in making decisions, the Board takes into account
its wider stakeholder and social responsibilities and the implications for the
long term and seeks to proactively engage key stakeholders on sustainable
development challenges and opportunities in an open and transparent manner.
Further details of the actions of the Directors to promote the success of the
Group are included in the Directors Section 172 Statement which is included as
part of the Strategic Report.
Development of a new mine at Parys Mountain can deliver economic growth in the
UK, regional jobs and business opportunities for local service providers. The
spin-off effects of mine development would be significant. The minerals that
would be mined at Parys Mountain are those that are necessary for the modern
world, copper in electronics, zinc in construction and medicine, and lead is
required for large electric battery storage. None of these important and
essential metals are currently produced in the UK.
Embed effective risk management, considering both opportunities and threats,
throughout the organisation
The Board is responsible for the ongoing review and management of risks that
could affect the enterprise. Mineral exploration and mine development are a
high-risk speculative business, and the ultimate success of Anglesey Mining
will be dependent on the successful development of a mine at Parys Mountain,
which is itself subject to numerous significant risks. Management of those
risks is the responsibility of the Board and often requires the application of
judgement based on experience.
The significant risks facing the Company are summarised and discussed in the
Strategic Report and the “Going-concern” risk is discussed in detail in
the Directors Report. Management of those risks is the responsibility of the
Board. A system of checks and balances is in place and all material decisions
must be approved by the Board which considers it is sufficiently close to the
Group’s operations and aware of its activities to be able to adequately
monitor risks within the Company’s control without the establishment of any
further formal processes.
The major risks are outside the control of the Board. They include risks of
nature (the minerals, the orebody, the geological strata and operating
conditions), risks of the market (world-wide demand and supply of metals) and
risk of investor interest.
Maintain the board as a well-functioning, balanced team led by the chair
The Board believes that its current members reflect, among other attributes,
experience, knowledge, expertise, judgement, character diversity and
integrity. The directors have a broad diversity, including nationality,
ethnicity, race, national origin, gender and other elements of identity. One
of the current directors is a woman. The Board believes that having directors
with diverse backgrounds and experiences enable the Board to consider issues
from different perspectives and enhances effective strategic planning and
decision making.
The Directors believe that there are appropriate divisions of responsibilities
within the Board and its committees and between the Board and the executive
directors. There is no mandatory retirement age for directors as the Directors
believe their extensive experience outweighs their long service and other
issues.
The Board supports a corporate culture focused on inclusion and gender
diversity, and this is an important consideration is recruitment of new
directors, but there are no formal policies in effect regarding these
provisions. The Board has not adopted a specific target for women on the Board
as it does not believe that any director should be chosen largely or solely
because of gender, rather it believes that the interests of shareholders are
best served by ensuring that directors are identified from the widest possible
group of potentially interested candidates.
John Kearney is the Chairman, a role he has held since 1994. He was formerly
also Chief Executive, a role he relinquished in 2006. The Board has determined
that by continuing as Chairman, John Kearney has provided clear and consistent
leadership on critical strategic objectives and has provided consistent
oversight and direction. Mr Kearney’s track record over 40 years in the
minerals industry in a variety of leadership positions, strongly supports the
Board’s conclusion that the shareholders are well served with him leading
Anglesey Mining as its Chairman.
Howard Miller is the lead director and provides a sounding board to the
Chairman.
Ensure that between them the directors have the necessary up-to-date
experience, skills and capabilities
The Board currently consists of six directors, three of whom are considered
independent. The members come from a variety of professional backgrounds, and
collectively have a wide range of managerial, technical, financial, and legal
skills, based on both qualifications and experience, including mineral process
engineering, accounting, legal, financial and of capital markets. Collectively
they possess significant relevant management skills, as well as long
experience of having served as directors of numerous other public companies,
in several international jurisdictions.
The Board is responsible for establishing qualifications and skills
necessary for effective management, including factors such as professional
experience, particular areas of expertise, personal character, potential
conflicts of interest, diversity and other commitments.
The Chairman has many years of experience as chairman or director of numerous
public mining or exploration companies. The Directors are satisfied that there
is an appropriate balance of experience and qualifications to carry out the
Board’s responsibilities effectively, given the current status and stage of
development.
Evaluate board performance based on clear and relevant objectives, seeking
continuous improvement
There are no formal policies in effect in respect of measurable objectives of
performance and there has been no formal annual evaluation of the performance
of the Board, its committees or the individual directors. The Board of
Directors reviews on an ongoing informal basis the effectiveness and
performance of the Board as a whole and the effectiveness and contribution of
individual directors. Each year when providing notice of the Annual Meeting,
the Board considers its appropriate size and composition to properly
administer the affairs of the Group. The Directors have not to date taken
outside advice in reviewing performance.
The Board is satisfied that each of the Directors commits sufficient time to
the business of the Group and contributes materially to the governance and
operations of the Group. The Board is satisfied that it is highly effective
and is comprised of a small but strong team with a breadth of skills,
experiences and perspectives.
Promote a corporate culture that is based on ethical values and behaviour
The Board is committed to high standards of corporate governance, integrity,
and social responsibility and to managing operations in an honest and ethical
manner.
Certain of the Directors do serve as directors and/or officers of, or have
significant shareholdings in, other companies involved in natural resource
exploration and development and consequently there exists the possibility for
such Directors to be in a position of conflict. Directors are expected to
adhere to all legal requirements in respect of any transaction or agreement in
which they may have a material interest. Directors who have an interest in a
transaction or agreement with the Company must promptly disclose that interest
at any meeting of the Board at which the transaction or agreement will be
discussed and abstain from discussions and voting so that the remaining
directors may properly exercise independent judgment. The Board values the
participation of directors on the boards of other companies in the mineral
industry as this provides exposure to developments and other opportunities
which are useful to enhance the experience of the Directors and are
potentially beneficial to the Group.
Maintain governance structures and processes that are fit for purpose and
support good decision-making
The Board has overall responsibility for all aspects of the business and
affairs of the enterprise and has an active engaged role in all decision
making. The Board approves strategy and expenditure plans and regularly
reviews operational and financial performance, risk management, and health,
safety, environmental and community matters. The Chairman has overall
responsibility for corporate governance matters.
Communicate how the company is governed and is performing by maintaining a
dialogue with shareholders and other relevant stakeholders
The Board recognises the importance of open and transparent communication with
the shareholders and with all stakeholders, including landowners, communities,
and regional and national authorities.
Shareholders have access to current information on our activities primarily
though the annual and half year Reports which are sent to shareholders.
Further information is available on the website, www.angleseymining.co.uk,
which is updated whenever announcements or press releases are made.
In addition, all shareholders are encouraged to attend the Annual General
Meeting where this is permitted. Presentations on our activities are made at
the AGM and at various industry and investor events and discussions are held
with shareholders at or after each of these occasions.
The Chairman, Chief Executive and Finance Director make themselves available
to substantial shareholders regularly to understand their views on important
topics. Shareholders have the opportunity to discuss issues and provide
feedback at any time through direct contact with the Directors by telephone or
email. Every effort is made to reply promptly and effectively to appropriate
questions and concerns from shareholders on matters relating to business
operations or their shareholdings.
All significant concerns and complaints regarding business performance or
governance matters are evaluated and reported to the Board of Directors, as
appropriate. Communications considered to be advertisements or sales material,
or other types of ‘junk’ messages, unrelated to the responsibilities of
the Board, are discarded without further action. As a matter of policy, the
Directors do not participate in internet or on-line chat rooms.
Audit Committee report
Howard Miller was the only member of the audit committee until 18 January 2022
when Namrata Verma and Andrew King who had recently joined the board as
non-executive directors were appointed. All of the committee members have
extensive mineral industry experience and the necessary recent and relevant
experience required by the Code. The committee’s terms of reference have
been approved by the Board and follow published guidelines. The audit
committee’s primary responsibilities are to establish and monitor the
Group’s financial risk management systems with particular reference to
internal control systems and to ensure that financial statements and other
financial communications are properly prepared.
Financial statements and internal control
The Audit Committee reviews the half-yearly and annual accounts before they
are presented to the board, focusing in particular on accounting policies and
areas of management judgement and estimation. The committee ensures that the
judgements made in applying accounting policies and key sources of estimation
uncertainty are properly disclosed and discussed at the end of note 2 to the
accounts and has nothing further to report in respect of them.
The Audit Committee is responsible for monitoring the controls which are in
place to ensure the information reported to the shareholders, taken as a
whole, is fair, balanced and understandable and provides the information
necessary to give a true and fair view of the assets, liabilities and
financial position of the Group.
The Audit Committee also considers internal control and risk management issues
and contributes to the Board’s review of the effectiveness of the systems
and procedures for financial reporting, internal control and risk management
and to the disclosure and explanation of the risks faced by the Group. These
are set out in the Strategic Report.
The Committee notes that the consolidation schedules have been prepared under
the direction of the Finance Director and is satisfied that, given the stage
of development of the business, and the involvement of the Board in all
material decisions, no further internal controls over this process are
required.
Internal and external audits
The Audit Committee considered the need for an internal audit function, which
it believes is not required at present due to the limited operations being
undertaken. The Committee is available should any personnel wish to make
representations to the committee about the conduct of the affairs of the
Group.
The Audit Committee oversees the relationship with the external auditor and
meets with the external auditors to review the planning and scope of the audit
and identify key audit matters, and again before approving the financial
statements, to review the nature, scope and effectiveness of the audit, and
the results of the audit and discuss any issues which may arise from the
audit.
The Committee monitors the performance of the external auditor and advises the
Board on the appointment of external auditors and on their remuneration for
both audit and non-audit work. The Committee also reviews the effectiveness of
the external auditor by enquiries and discussions with the staff involved in
the audit and with the finance director.
The Audit Committee also undertakes a formal assessment of the auditor’s
independence each year which includes: a review of any non-audit services
provided; discussion with the auditor of all relationships with the Company
and any other parties that could affect independence or the perception of
independence; a review of the auditor’s own procedures for ensuring the
independence of the audit firm and partners and staff involved in the audit,
including the regular rotation of the audit partner and obtaining confirmation
from the audit partner that, in his/her professional judgement, he/she is
independent. An analysis of the fee payable to the external audit firm in
respect of both audit and non-audit services during the year is set out in
note 4 to the financial statements.
In the early part of 2022 as the planned move to AIM was being finalised the
audit committee agreed with Mazars, auditors between 2008 and 2021, that it
would be appropriate to undertake a formal auditor review and engagement
process. Four firms, including Mazars, were invited to submit proposals and
from these UHY Farrelly Dawe White in Dublin, Ireland were selected and
formally appointed on 13 May 2022.
Signed by Andrew King and Namrata Verma on behalf of Howard Miller who is
indisposed
Audit committee members
7 September 2022
Independent auditor’s report to the members of Anglesey Mining plc
Opinion
We have audited the financial statements of Anglesey Mining plc (the ‘parent
company’) and its subsidiaries (the ‘group’) for the year ended 31 March
2022 which comprise the Group Income Statement, the Group Statement of
Comprehensive Income, the Group and Company Statements of Financial Position,
the Group and Company Statements of Changes in Equity, the Group and Company
Statements of Cash Flows and notes to the financial statements, including a
summary of significant accounting policies.
The financial reporting framework that has been applied in their preparation
is applicable law and UK adopted International Financial Reporting Standards
in conformity with the Companies Act 2006 and, as regards the parent company
financial statements, as applied in accordance with the provisions of the
Companies Act 2006 and, as regards the group financial statements, UK adopted
International Financial Reporting Standards.
In our opinion, the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006 and:
* give a true and fair view of the state of the group’s and of the parent
company’s affairs as at 31 March 2022 and of the group’s loss for the year
then ended;
* the group financial statements have been properly prepared in accordance
with UK adopted International Financial Reporting Standards in conformity with
the requirements of the Companies Act 2006; and
* the parent company financial statements have been properly prepared in
accordance with UK adopted International Financial Reporting Standards in
conformity with the requirements of the Companies Act 2006, as applied in
accordance with the provisions of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those
standards are further described in the “Auditor’s responsibilities for the
audit of the financial statements” section of our report. We are independent
of the group and the parent company in accordance with the ethical
requirements that are relevant to our audit of the financial statements in the
UK, including the FRC’s Ethical Standard as applied to listed entities, and
we have fulfilled our other ethical responsibilities in accordance with these
requirements. We believe that the audit evidence we have obtained is
sufficient and appropriate to provide a basis for our opinion
Material uncertainty related to going concern
In auditing the financial statements, we have concluded that the directors’
use of the going concern basis of accounting in the preparation of the
financial statements is appropriate.
We draw attention to Note 2 of the financial statements, concerning the
applicability of the going concern basis of preparation. As detailed in the
financial statements and the Strategic Report, the group and the parent
company are not generating revenue and are in the process of advancing the
Parys Mountain mining project towards development. The business model requires
generation of additional financial resources to progress the ongoing
development of the Parys Mountain project.
At 31 March 2022 the group and parent company had net current assets of £613k
and £699k respectively and cash and cash equivalents of £922k and £921k
respectively. During the year, the parent company issued shares with net
proceeds of £738,230 and a further £864,416 gross cash was raised in May
2022 through a share placement. The directors consider that these cash
reserves are sufficient to support the group’s and the parent company’s
on-going non-project related expenditure on a status quo basis for the next 12
months.
In Note 2, the directors explain that:
* to date, the group and parent company have relied primarily on equity
financings to fund its working capital requirements and may be required to do
so in the future to ensure the group will have adequate funds for its current
activities and to continue as a going concern;
* the group will need to generate additional financial resources to progress
the ongoing development of the Parys Mountain project and will require interim
funding to finance the further studies, optimisation and feasibility
programmes and, in the longer term, senior financing to fund the capital and
development costs to put the Parys Mountain Mine into production.
* the directors are actively pursuing various financing options and are in
discussions with a range of investors regarding proposals for financing.
Whilst these discussions continue, 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.
Nevertheless, there is a risk that adequate additional funding may not be
available on a timely basis or on acceptable terms to move the Parys Mountain
project through to its full potential and there is no guarantee that such
funding will be available, or that the Group will be successful in raising the
necessary investment to advance the development of the project and put a mine
at the Parys Mountain property into production.
As stated in Note 2, these events or conditions indicate that a material
uncertainty exists that may cast significant doubt on the group’s and the
parent company’s ability to continue as a going concern. Our opinion is not
modified in respect of this matter.
Our audit procedures to evaluate the directors’ assessment of the group’s
and the parent company's ability to continue to adopt the going concern basis
of accounting included but were not limited to:
* Undertaking an initial assessment at the planning stage of the audit to
identify events or conditions that may cast significant doubt on the group’s
and the parent company’s ability to continue as a going concern;
* Making enquiries of the directors to understand the period of assessment
considered by them, their plans for group and company going forward and
ensuring that these have been incorporated into their financial projections,
the assumptions they considered and the implication of those assumptions when
assessing the group’s and the parent company’s future financial
performance;
* Assessing the likelihood of management’s ability to raise additional
finance by obtaining a letter of support from Juno Limited and by considering
the funding raised historically;
* Assessing the transparency, completeness, and accuracy of the matters
covered in the going concern disclosure by evaluation of management’s cash
flow projections for the forecast period and the underlying assumptions;
* Considering the results of our audit of the valuation of the intangible
asset to determine whether limited headroom or impairment would have the
potential to deter future investment; and
* Evaluating the appropriateness of the directors’ disclosures in the
financial statements relating to going concern.
In relation to the group’s and the parent company’s reporting on how it
has applied the UK Corporate Governance Code, we have nothing material to add
or draw attention to in relation to the directors’:
* statement in the financial statements about whether the directors considered
it appropriate to adopt the going concern basis of accounting; and
* identification in the financial statements of any material uncertainties
related to the group’s and the parent company’s ability to continue as a
going concern over a period of at least twelve months from the date of
approval of the financial statements.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material
misstatement (whether or not due to fraud) we identified, including those
which had the greatest effect on: the overall audit strategy; the allocation
of resources in the audit; and directing the efforts of the engagement team.
These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not
provide a separate opinion on these matters.
We summarise below the key audit matters in forming our audit opinion above,
together with an overview of the principal audit procedures performed to
address each matter and key observations arising from those procedures. The
matters set out below are in addition to the “Material uncertainty related
to going concern” above which, by its nature, is also a key audit matter.
These matters, together with our findings, were communicated to those charged
with governance through our Audit Completion Report.
Key audit matter How our audit addressed key audit matters
Carrying value of Parys Mountain exploration and evaluation asset (E&E) - (group) The group’s accounting policy in respect of its exploration and evaluation asset is set out under “mineral property exploration and evaluation costs” and its accounting Our audit procedures included, but were not limited to: · Evaluating whether, under IFRS 6 Exploration for and Evaluation of Mineral Assets , the asset is appropriately determined as an E&E asset; · Reviewing and challenging management’s assessment with respect to indicators of impairment under IFRS 6; · Reviewing the PEA report prepared by Micon International Limited to assess whether it supports management’s assertions in their analysis; · Assessing Micon International Limited’s independence, objectivity and competency to act as management’s expert; and · Evaluating whether the relevant disclosures in the financial statements are reasonable. Key observations Based on the work performed, nothing has come to our attention which suggests that there were unidentified indicators for impairment not considered by the management.
policy in respect of impairment is set out under “impairment of tangible and intangible assets” in Note 2 to the financial statements. The Group holds rights to explore and mine the Parys Mountain site. At 31 March 2022 the balance sheet includes an E&E
asset of £15.7m. In January 2021, the group received a Preliminary Economic Assessment report (PEA) prepared by Micon International Limited that built on earlier scoping and optimisation studies. The Group has yet to move to the development stage of the
Parys Mountain project and will need to raise additional funding to move towards production. Management have assessed the E&E asset for impairment indicators under IFRS6 and concluded that no triggers existed at the year-end. Determining whether impairment
indicators exist involves significant judgement by management, including considering specific impairment indicators prescribed in IFRS 6. There is a risk that if unidentified impairment indicators exist, the carrying value of the E&E asset may not be fully
recoverable.
Valuation of investment in the subsidiary Parys Mountain Mines Limited (PMM) - (parent company only) The group’s accounting policies in respect of investments and impairment of investments are set out under “investments” and “impairment of investments” in Our audit procedures included, but were not limited to: · Considering the results of the assessment for impairment indicators on the E&E asset detailed above; and · Evaluating whether the relevant disclosures in the financial statements are reasonable. Key observations Based on the work performed, nothing has come to our attention which suggests that there were unidentified indicators for impairment not considered by the management
Note 2 to the financial statements. The primary asset within PMM is the E&E asset discussed above. There is a risk that if there are any unidentified impairment indicators that would impact the carrying value of the E&E asset these may also impact the
carrying value in the parent company of its investment in PMM.
Valuation of investment in Labrador Iron Mines Holdings Limited (LIM) - (group) The group’s accounting policies in respect of investments and impairment of investments are set out under “investments” and “impairment of investments” in Note 2 to the Our audit procedures included, but were not limited to: · Reviewing and challenging management’s assessment of fair value, including: o Independent check of LIM’s share price at 31 March 2022; o Review of the latest financial statements of LIM; and o Check for any other internal or external indicators of impairment to the investment that contradicts the fair value at year-end. · Evaluation of the trading of LIM’s shares on the OTC market to assess whether it constitutes an active market sufficient to determine fair value under IFRS 9. Key observations Based on the work performed, nothing has come to our attention that suggests that the fair value of LIM is not appropriately stated.
financial statements. Under the accounting policy, financial assets classified and measured at fair value through other comprehensive income (FVOCI) comprise equity securities which are not held for trading and which the group has irrevocably elected at
initial recognition to recognise in this category. The group has a 12% investment in LIM, a Canadian company with shares traded on the OTC market in the United States, which holds the Labrador iron ore properties. The group’s investment in LIM is carried
FVOCI. In recent years, based on the director’s assessment, the investment in LIM had been carried at a value of £1, reflecting the directors’ view that the value of LIM was uncertain. At 31 March 2021 the directors assessed the fair value of the
investment in LIM at £4m (being measured by the closing share price on 31 March 2021) resulting in a gain reported through other comprehensive income, which had been based on improved iron ore prices and an optimistic PEA report which had resulted in
stronger market interest in LIM with a significant increase in its share price at that time. The directors have assessed the fair value of LIM as being measured by the closing share price at 31 March 2022, which has resulted in a loss in value through
other comprehensive income of £2.1m. There is a risk that the fair value of investment in LIM is not stated in line with IFRS 9 requirements.
Our application of materiality and an overview of the scope of our audit
The scope and focus of our audit was influenced by our application of
materiality. We apply the concept of materiality both in planning and
performing our audit, and in evaluating the effect of misstatements on our
audit and on the financial statements. We define financial statement
materiality to be the magnitude by which misstatements, including omissions,
could reasonably be expected to influence the economic decisions taken on the
basis of the financial statements by reasonable users.
In order to reduce to an appropriately low level the probability that any
misstatements exceed materiality, we use a lower materiality level,
performance materiality, to determine the extent of testing needed.
Importantly, misstatements below these levels will not necessarily be
evaluated as immaterial as we also take account of the nature of identified
misstatements, and the particular circumstances of their occurrence, when
evaluating their effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the
financial statements as a whole as follows:
Group
Overall materiality £286,407
How we determined it 2% of group’s net assets
Rationale for benchmark applied The group’s net assets represent shareholders’ funds and we have determined this measure to be the principal benchmark within the financial statements relevant to shareholders, as the group does not generate revenue and is in pre-production phase.
Performance materiality & specific materiality Performance materiality is set as 60% of overall materiality, being £171,844. Specific materiality of £57,281 is used for the audit of the Group Income Statement.
Reporting threshold 5% of financial statement materiality, being £14,320.
Parent company
Overall materiality £232,826
How we determined it 2% of the parent company’s net assets
Rationale for benchmark applied We considered net assets to be the most appropriate benchmark, as the parent company is non-trading and holds mainly subsidiary investments.
Performance materiality Performance materiality is set at 60% of overall materiality, being £139,695.
Reporting threshold 5% of financial statement materiality, being £11,641.
We agreed with the Audit Committee that we would report to them all individual
misstatements in excess of £14,000 identified during the audit, as well as
differences below that threshold that in our view, warrant reporting on
qualitative grounds. We also report to the Audit Committee on disclosure
matters that we identified when assessing the overall presentation of the
financial statements.
As part of designing our audit, we assessed the risk of material misstatement
in the financial statements, whether due to fraud or error, and then designed
and performed audit procedures in response to those risks. In particular, we
looked at where the directors made subjective judgements such as making
assumptions on significant accounting estimates.
We tailored the scope of our audit to ensure that we performed sufficient work
to be able to give an opinion on the financial statements as a whole. We used
the outputs of a risk assessment, our understanding of the group and the
parent company, their environment, controls and critical business processes,
to consider qualitative factors in order to ensure that we obtained sufficient
coverage across all financial statement line items.
Our group audit scope included an audit of the group and parent company
financial statements of Anglesey Mining plc. Based on our risk assessment, all
entities within the group were subject to full scope audit and was performed
by the group audit team.
At the parent level we also tested the consolidation process and carried out
analytical procedures to confirm our conclusion that there were no significant
risks of material misstatement of the aggregated financial information.
Other information
The directors are responsible for the other information. The other information
comprises the information included in the annual report other than the
financial statements and our auditor’s report thereon. Our opinion on the
financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form
of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility
is to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the
other information. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to
report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the directors’ remuneration report to be audited
has been properly prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
* 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 those reports have been prepared
in accordance with applicable legal requirements;
* the information about internal control and risk management systems in
relation to financial reporting processes and about share capital structures,
given in compliance with rules 7.2.5 and 7.2.6 in the Disclosure Guidance and
Transparency Rules sourcebook made by the Financial Conduct Authority (the FCA
Rules), is consistent with the financial statements and has been prepared in
accordance with applicable legal requirements; and
* information about the parent company’s corporate governance code and
practices and about its administrative, management and supervisory bodies and
their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA Rules.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the group and the parent
company and their environment obtained in the course of the audit, we have not
identified material misstatements in:
* the Strategic Report or the Directors’ Report; or
* the information about internal control and risk management systems in
relation to financial reporting processes and about share capital structures,
given in compliance with rules 7.2.5 and 7.2.6 of the FCA Rules.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
* adequate accounting records have not been kept by the parent company, 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 parent
company.
Corporate governance statement
The Listing Rules require us to review the directors' statement in relation to
going concern, longer-term viability and that part of the Corporate Governance
Statement relating to Anglesey Mining plc's compliance with the provisions of
the UK Corporate Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each
of the following elements of the Corporate Governance Statement is materially
consistent with the financial statements or our knowledge obtained during the
audit:
* Directors' statement with regards the appropriateness of adopting the going
concern basis of accounting and any material uncertainties identified set out
on pages 21;
* Directors’ explanation as to its assessment of the entity’s prospects,
the period this assessment covers and why the period is appropriate set out on
page 16;
* Directors' statement on fair, balanced and understandable set out on page
22;
* Board’s confirmation that it has carried out a robust assessment of the
emerging and principal risks set out on pages 15 and 16;
* The section of the annual report that describes the review of effectiveness
of risk management and internal control systems set out on page 27 and 29 to
31 and;
* The section describing the work of the audit committee set out on pages 26
and 32.
Responsibilities of Directors
As explained more fully in the directors’ responsibilities statement set out
on page 19, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and
for such internal control as the directors determine is necessary to enable
the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the group’s and the parent company’s ability to continue as a
going concern, disclosing, as applicable, matters related to going concern and
using the going concern basis of accounting unless the directors either intend
to liquidate the group or the parent company or to cease operations, or have
no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to
fraud or error, and to issue an auditor’s report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities,
including fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
Based on our understanding of the group and the parent company and their
industry, we identified that the principal risks of non-compliance with laws
and regulations related to employment law, general data protection regulation,
health and safety regulation, local legislation in places of operations,
extractive industries transparency initiative and anti-bribery, and we
considered the extent to which non-compliance might have a material effect on
the financial statements.
In identifying and assessing risks of material misstatement in respect to
irregularities including non-compliance with laws and regulations, our
procedures included but were not limited to:
* At the planning stage of our audit, gaining an understanding of the legal
and regulatory framework applicable to the group and parent company, the
structure of the group, the industry in which they operate and considered the
risk of acts by the group and the parent company which were contrary to the
applicable laws and regulations;
* Discussing with the directors and management the policies and procedures in
place regarding compliance with laws and regulations;
* Discussing amongst the engagement team the identified laws and regulations,
and remaining alert to any indications of non-compliance; and
* During the audit, focusing on areas of laws and regulations that could
reasonably be expected to have a material effect on the financial statements
from our general commercial and sector experience and through discussions with
the directors (as required by auditing standards), from inspection of the
parent company’s and group’s regulatory and legal correspondence and
review of minutes of directors’ meetings in the year. We also considered
those other laws and regulations that have a direct impact on the preparation
of financial statements, such as the Companies Act 2006 and FCA rules.
Our procedures in relation to fraud included but were not limited to:
* Making enquiries of the directors and management on whether they had
knowledge of any actual, suspected or alleged fraud;
* Gaining an understanding of the internal controls established to mitigate
risks related to fraud;
* Discussing amongst the engagement team the risks of fraud such as
opportunities for fraudulent manipulation of financial statements, and
determined that the principal risks were related to posting manual journal
entries to manipulate financial performance, and management bias through
judgements and assumptions in significant accounting estimates, in particular
in relation to the identification of indicators of impairment to the
exploration and evaluation asset, assessment of the fair value of investment
in the subsidiary Parys Mountain Mines Limited and assessment of the fair
value of investment in entities that are not subsidiaries; and
* Addressing the risks of fraud through management override of controls by
performing journal entry testing.
The primary responsibility for the prevention and detection of irregularities
including fraud rests with both those charged with governance and management.
As with any audit, there remained a risk of non-detection of irregularities,
as these may involve collusion, forgery, intentional omissions,
misrepresentations or the override of internal controls.
The risks of material misstatement that had the greatest effect on our audit,
whether due to fraud or error, are discussed under “Key audit matters”
within this report.
A further description of our responsibilities is available on the Financial
Reporting Council’s website at www.frc.org.uk/auditorsresponsibilities.
Other matters which we are required to address
Following the recommendation of the audit committee, we were appointed by the
Board of Directors on 13 May 2022 to audit the financial statements for the
year ended 31 March 2022.
The non-audit services prohibited by the FRC’s Ethical Standard were not
provided to the group or the parent company and we remain independent of the
group and the parent company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit
committee.
Use of the audit report
This report is made solely to the parent 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 parent 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 parent company and the
parent company’s members as a body for our audit work, for this report, or
for the opinions we have formed.
Signed by
Michael Bellew (Senior Statutory Auditor)
for and on behalf of UHY Farrelly Dawe White Limited
Registered Auditors & Accountants
FDW House, Blackthorn Business Park,
Coe’s Road, Dundalk,
Co. Louth,
Ireland.
A91 RW26
7 September 2022
Group income statement
All attributable to equity holders of the company
. Notes Year ended 31 March 2022 Year ended 31 March 2021
All operations are continuing £ £
Revenue - -
Expenses (528,045) (162,824)
Investment income 6 24 39
Finance costs 7 (165,248) (165,702)
Foreign exchange movement 27 (31)
Loss before tax 4 (693,242) (328,518)
Taxation 8 - -
Loss for the period (693,242) (328,518)
Loss per share
Basic - pence per share 9 (0.3)p (0.2)p
Diluted - pence per share 9 (0.3)p (0.2)p
Group statement of comprehensive income
Loss for the period (693,242) (328,518)
Other comprehensive income
Items that may subsequently be reclassified to profit or loss:
Change in fair value of investment 14 (2,139,322) 4,053,506
Foreign currency translation reserve 5,607 (10,067)
Total comprehensive (loss)/profit for the period (2,826,957) 3,714,921
Group statement of financial position
Notes 31 March 2022 31 March 2021
£ £
Assets
Non-current assets
Mineral property exploration and evaluation 10 15,711,703 15,317,293
Property, plant and equipment 11 204,687 204,687
Investments 14 2,024,342 4,163,664
Deposit 15 123,811 123,787
18,064,543 19,809,431
Current assets
Other receivables 57,123 31,381
Cash and cash equivalents 16 922,177 891,767
979,300 923,148
Total assets 19,043,843 20,732,579
Liabilities
Current liabilities
Trade and other payables 17 (366,418) (126,228)
(366,418) (126,228)
Net current assets 612,882 796,920
Non-current liabilities
Loans 18 (4,307,095) (4,147,294)
Long term provision 19 (50,000) (50,000)
(4,357,095) (4,197,294)
Total liabilities (4,723,513) (4,323,522)
Net assets 14,320,330 16,409,057
Equity
Share capital 20 7,991,541 7,765,591
Share premium 11,453,789 10,941,509
Currency translation reserve (84,926) (90,533)
Retained losses (5,040,074) (2,207,510)
Total shareholders' funds 14,320,330 16,409,057
The financial statements of Anglesey Mining plc which include the notes to the
accounts were approved
by the board of directors, authorised for issue on 7 September 2022 and signed
on its behalf by:
John F. Kearney, Chairman
Danesh Varma, Finance Director
Company statement of financial position
31 March 2022 31 March 2021
Notes £ £
Assets
Non-current assets
Investments 13 14,911,173 14,576,869
14,911,173 14,576,869
Current assets
Other receivables 10,920 7,448
Cash and cash equivalents 16 921,043 883,463
931,963 890,911
Total assets 15,843,136 15,467,780
Liabilities
Current liabilities
Trade and other payables 17 (232,596) (66,767)
(232,596) (66,767)
Net current assets 699,367 824,144
Non-current liabilities
Loan 18 (3,969,256) (3,815,022)
(3,969,256) (3,815,022)
Total liabilities (4,201,852) (3,881,789)
Net assets 11,641,284 11,585,991
Equity
Share capital 20 7,991,541 7,765,591
Share premium 11,453,789 10,941,509
Retained losses (7,804,046) (7,121,109)
Shareholders' equity 11,641,284 11,585,991
The company reported a loss for the year ended 31 March 2022 of £682,937
(2021 - £313,717). The financial statements
of Anglesey Mining plc registered number 1849957 which include the notes to
the accounts were approved by the
board of directors, authorised for issue on 7 September 2022 and signed on its
behalf by:
John F. Kearney, Chairman
Danesh Varma, Finance Director
Statements of changes in equity
All attributable to equity holders of the company.
Group Share Share Currency translation reserve Retained losses Total
capital premium
£ £ £ £ £
Equity at 1 April 2020 7,380,591 10,258,309 (80,466) (5,932,498) 11,625,936
Total comprehensive loss for the year:
Loss for the year - - - (328,518) (328,518)
- 4,053,506 4,053,506
Exchange difference on translation of foreign holding - - (10,067) - (10,067)
Total comprehensive loss for the year - - (10,067) 3,724,988 3,714,921
Transactions with owners:
Shares issued 385,000 770,000 - - 1,155,000
Share isssue expenses - (86,800) - - (86,800)
Equity at 31 March 2021 7,765,591 10,941,509 (90,533) (2,207,510) 16,409,057
Total comprehensive loss for the year:
Loss for the year - - - (693,242) (693,242)
Change in fair value of investment - - - (2,139,322) (2,139,322)
Exchange difference on translation of foreign holding - - 5,607 - 5,607
Total comprehensive loss for the year - - 5,607 (2,832,564) (2,826,957)
Transactions with owners:
Shares issued 225,950 542,280 - - 768,230
Share issue expenses - (30,000) - - (30,000)
Equity at 31 March 2022 7,991,541 11,453,789 (84,926) (5,040,074) 14,320,330
Company Share Share Retained Total
capital premium losses
£ £ £ £
Equity at 1 April 2020 7,380,591 10,258,309 (6,807,392) 10,831,508
Total comprehensive loss for the year:
Loss for the year - - (313,717) (313,717)
Total comprehensive loss for the year - - (313,717) (313,717)
Transactions with owners:
Shares issued 385,000 770,000 - 1,155,000
Share isssue expenses - (86,800) - (86,800)
Equity at 31 March 2021 7,765,591 10,941,509 (7,121,109) 11,585,991
Total comprehensive loss for the year:
Loss for the year - - (682,937) (682,937)
Total comprehensive loss for the year - - (682,937) (682,937)
Transactions with owners:
Shares issued 225,950 542,280 - 768,230
Share issue expenses - (30,000) - (30,000)
Equity at 31 March 2022 7,991,541 11,453,789 (7,804,046) 11,641,284
Group statement of cash flows
Notes Year ended 31 March 2022 Year ended 31 March 2021
£ £
Operating activities
Loss for the period (693,242) (328,518)
Adjustments for:
Investment income 6 (24) (39)
Finance costs 7 165,248 165,702
Foreign exchange movement (27) 31
(528,045) (162,824)
Movements in working capital
(Increase) in receivables (25,742) (14,758)
Increase in payables 165,620 3,539
Net cash used in operating activities (388,167) (174,043)
Investing activities
Mineral property exploration and evaluation (319,680) (77,618)
Investment - (20,052)
Net cash used in investing activities (319,680) (97,670)
Financing activities
Issue of share capital 738,230 1,068,200
Net cash generated from financing activities 738,230 1,068,200
Net increase in cash and cash equivalents 30,383 796,487
Cash and cash equivalents at start of period 891,767 95,311
Foreign exchange movement 27 (31)
Cash and cash equivalents at end of period 16 922,177 891,767
Company statement of cash flows
Notes Year ended 31 March 2022 Year ended 31 March 2021
£ £
Operating activities
Loss for the period 22 (682,937) (313,717)
Adjustments for:
Finance costs 154,234 154,234
(528,703) (159,483)
Movements in working capital
(Increase) in receivables (3,472) (1,488)
Increase/(decrease) in payables 165,829 (424)
Net cash used in operating activities (366,346) (161,395)
Investing activities
Investments and long term loans (334,304) (116,227)
Net cash used in investing activities (334,304) (116,227)
Financing activities
Share issues net of expenses 738,230 1,068,200
Net cash generated from financing activities 738,230 1,068,200
Net increase in cash and cash equivalents 37,580 790,578
Cash and cash equivalents at start of period 883,463 92,885
Cash and cash equivalents at end of period 16 921,043 883,463
Notes to the Financial Statements
1 General information
Anglesey Mining plc is domiciled and incorporated in England and Wales under
the Companies Act with registration number 1849957. The nature of the
group’s operations and its principal activities are set out in note 3 and in
the strategic report. The registered office address is shown at the end of
this report.
These financial statements are presented in pounds sterling because that is
the currency of the primary economic environment in which the group has been
operating. Foreign operations are included in accordance with the policies set
out in note 2.
2 Significant accounting policies
Basis of Accounting
The group and company financial statements have been prepared in accordance
with applicable law and international accounting standards in conformity with
the Companies Act 2006 and, as regards the parent company financial
statements, as applied in accordance with the provisions of the Companies Act
2006, and as regards the group financial statements, international financial
reporting standards adopted pursuant to Regulation (EC) No 1606/2002 as it
applies in the European Union.
The financial statements have been prepared on the historical cost basis
except for the fair valuation of certain financial assets. The principal
accounting policies adopted are set out below.
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 ‘Guidance on Risk
Management, Internal Control and Related Financial and Business Reporting’
issued in September 2014.
The financial statements are prepared on a going concern basis. The validity
of the going concern basis is dependent on finance being available for the
continuing working capital requirements for the foreseeable future, being a
period of at least twelve months from the date of approval of the accounts.
Based on the current cash reserves, there is sufficient finance available for
the continuing working capital requirements on a status quo basis for at least
twelve months from the date of the financial statements.
Looking to the period beyond the twelve months covered by current cash
resources the Group will need to generate additional financial resources to
progress the ongoing development of the Parys Mountain project and will
require interim funding to finance the further studies, optimisation and
feasibility programmes and, in the longer term, senior financing to fund the
capital and development costs to put the Parys Mountain Mine into production.
The Group has relied primarily on equity financings to fund its working
capital requirements and will be required to do so in the future to ensure
there will be adequate funds for planned activities and to continue as a going
concern. Anglesey Mining plc has operated for more than 30 years, in what at
times have been challenging economic and investment climates and has continued
to attract the necessary investment to continue as a going concern.
The Directors are actively pursuing various options regarding proposals for
financing and are in discussions with a range of investors. Whilst these
discussions continue there are reasonable expectations that these will be
successful and therefore the financial statements have been prepared on the
going concern basis. Nevertheless, there is a risk that adequate additional
funding may not be available on a timely basis or on acceptable terms to move
the Parys Mountain project through to its full potential and there is no
guarantee that such funding will be available, or that the Group will be
successful in raising the necessary investment to advance the development of
the project and put a mine at the Parys Mountain property into production.
Given the resources currently available, there is a risk that there will not
be sufficient financial resources to fund all the planned programme
requirements.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the company and entities controlled by the company (its subsidiaries) made up
to 31 March each year. Control is achieved where the company has the power to
govern the financial and operating policies of an investee entity so as to
obtain benefits from its activities.
On acquisition, the assets and liabilities and contingent liabilities of a
subsidiary are measured at their fair values at the date of acquisition. Any
excess of the cost of acquisition over the fair values of the identifiable net
assets acquired is recognised as goodwill. Any deficiency of the cost of
acquisition below the fair values of the identifiable net assets acquired
(i.e., discount on acquisition) is credited to the income statement in the
period of acquisition. The results of subsidiaries acquired or disposed of
during the year are included in the group income statement from the effective
date of acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring the accounting policies used into line with those used
by the group. All intra-group transactions, balances, income and expenses are
eliminated on consolidation.
Revenue recognition
Interest income is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts through the expected
life of the financial asset to that asset’s net carrying amount.
Foreign currencies
Transactions in currencies other than pounds sterling are recorded at the
rates of exchange prevailing on the dates of the transactions. At the end of
each reporting period, monetary assets and liabilities that are denominated in
foreign currencies are retranslated at the rates prevailing on the period end
date. Non-monetary assets and liabilities carried at fair value that are
denominated in foreign currencies are translated at the rates prevailing at
the date when the fair value was determined. Gains and losses arising on
retranslation are included in net profit or loss for the period.
On consolidation, the assets and liabilities of the group’s overseas
operations are translated at exchange rates prevailing on the period end date.
Exchange differences arising, if any, are classified as items of other
comprehensive income and transferred to the group’s translation reserve
within equity. Such translation differences are reclassified to profit or
loss, and recognised as income or as expense, in the period in which there is
a disposal of the operation.
Segmental analysis
Operating segments are identified on the basis of internal reports about
components of the group that are regularly reviewed by the chief operating
decision-maker.
Retirement benefit costs
Payments to defined contribution retirement benefit schemes are charged as an
expense as they fall due. There are no defined benefit retirement schemes.
Equity-settled employee benefits
Equity-settled benefits may be provided to certain directors and employees.
Equity-settled employee benefits are measured at fair value at the date of
grant. The fair value determined at the grant date is expensed on a
straight-line basis over the vesting period, based on the group’s estimate
of shares that will eventually vest and adjusted for the effect of non-market
based vesting conditions. Fair value is measured by use of a Black-Scholes
model.
Taxation
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the period end liability method. Deferred
tax liabilities are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are not recognised if
the temporary difference arises from goodwill or from the initial recognition
(other than in a business combination) of other assets and liabilities in a
transaction that affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future. The carrying amount of any deferred tax
assets is reviewed at each period end date and reduced to the extent that it
is no longer probable that sufficient taxable profits will be available to
allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset is realised and is charged
or credited in the income statement, except when it relates to items charged
or credited directly to equity, in which case the deferred tax is also dealt
with in equity.
The charge for current tax is based on the results for the year as adjusted
for items which are non-taxable or disallowed. It is calculated using rates
that have been enacted or substantively enacted by the balance sheet date.
Property, plant and equipment
The group’s freehold land is stated in the statement of financial position
at cost. The directors consider that the residual value of buildings, based on
prices prevailing at the date of acquisition and at each subsequent reporting
date as if the asset were already of the age and in the condition expected at
the end of its useful life, is such that any depreciation would not be
material.
Plant and office equipment are stated in the statement of financial position
at cost, less depreciation. Depreciation is charged on a straight-line basis
at the annual rate of 25%. Residual values and the useful lives of these
assets are also reviewed annually.
Mineral property exploration and evaluation
Exploration and evaluation assets under IFRS 6 include acquired mineral use
rights for mineral properties held by the company. The amount of consideration
paid (in cash or share value) for mineral use rights is capitalised. Mineral
exploration and evaluation expenditures are capitalised on a
project-by-project basis pending determination of the technical feasibility
and the commercial viability of the project. Capitalised costs include costs
directly related to exploration and evaluation activities in the area of
interest. General and administrative costs are only allocated to the asset to
the extent that those costs can be directly related to operational activities.
Exploration and evaluation assets will be amortised to profit or loss once
commercial production has been achieved or written off if the exploration and
evaluation assets are abandoned or sold. Depletion of costs capitalised on
projects when put into commercial production will be recorded using the
unit-of-production method based upon estimated proven and probable reserves.
The ultimate recoverability of the amounts capitalised for the exploration and
evaluation assets and expenditures is dependent upon the delineation of
economically recoverable ore reserves, obtaining the necessary financing to
complete their development, obtaining and retaining the necessary permits to
operate a mine, and realising profitable production or proceeds from the
disposition thereof.
The commercial viability of extracting a mineral resource is considered to be
determinable when resources are determined to exist, the property rights are
current and it is considered probable that the costs will be recouped through
successful development and exploitation of the project, or alternatively by
sale of the property. Upon determination of resources, exploration and
evaluation assets attributable to those resources are first tested for
impairment and then reclassified from exploration and evaluation assets to
mineral property interests. Expenditures deemed unsuccessful are recognised in
operations in the Income Statement.
Expenditures incurred in connection with the development of mineral resources
after such time as mineral reserves are proven or probable; permits to operate
the mineral resource property are received; financing to complete development
has been obtained; and approval of the board of directors to commence mining
development and operations, are capitalized as deferred development
expenditures.
Impairment of tangible and intangible assets
The carrying values of capitalised exploration and evaluation assets are
assessed for impairment if fact and circumstances indicate that the carrying
amount exceeds the recoverable amount and sufficient data exists to evaluate
technical feasibility and commercial viability. If any indication of
impairment exists, an estimate of the asset’s recoverable amount is
estimated. The recoverable amount is determined as the higher of the fair
value less costs of disposition and the asset’s value in use. If the
carrying amount of the asset exceeds its estimated recoverable amount, the
asset is impaired, and an impairment loss is charged to the Income Statement
so as to reduce the carrying amount to its estimated recoverable amount.
Investments
Investments in subsidiaries are shown at historical cost less provisions for
impairment in value. Income from investments in subsidiaries together with any
related withholding tax is recognised in the income statement in the period to
which it relates.
Investments which are not subsidiaries are shown at fair value.
Associates are accounted for using the equity method.
Impairment of financial assets measured at amortised cost
At each reporting date the group recognises a loss allowance for expected
credit losses on financial assets measured at amortised cost. In establishing
the appropriate amount of loss allowance to be recognised, the group applies
either the general approach or the simplified approach, depending on the
nature of the underlying group of financial assets.
The general approach is applied to the impairment assessment of refundable
deposits, restricted cash and cash and cash equivalents. Under the general
approach a loss allowance for a financial asset is recognised at an amount
equal to the 12-month expected credit losses, unless the credit risk on the
financial asset has increased significantly since initial recognition, in
which case a loss allowance is recognised at an amount equal to the lifetime
expected credit losses. Under the simplified approach a loss allowance for a
financial asset is always recognised at an amount equal to the lifetime
expected credit losses.
Impairment of non-financial assets
Non-financial assets are tested for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable.
Non-financial assets are impaired when their carrying amount of the asset
exceeds its recoverable amount. The recoverable amount is measured as the
higher of fair value less cost of disposal and value in use.
Provisions
Provisions are recognised when the group has a present obligation as a result
of a past event and it is probable that the group will be required to settle
that obligation. Provisions are measured at the directors’ best estimate of
the expenditure required to settle that obligation at the end of the reporting
period and are discounted to present value where the effect is material.
Financial instruments
Initial recognition
All financial assets and liabilities are initially recognised on the trade
date; this being the date that group becomes a party to the contractual
provisions of the instrument.
All financial instruments are initially recognised at fair value plus, in the
case of financial assets and financial liabilities not held at fair value
through profit or loss, directly attributable transaction costs.
Classification and measurement
Financial assets
The classification of financial instruments depends on the purpose and
management’s intention for which the financial instruments were acquired and
their characteristics. Financial assets are classified in one of the following
categories:
• Amortised cost
• Fair value through other comprehensive income (FVOCI)
Financial assets classified and measured at amortised cost
Amortised cost financial instruments are non-derivative financial assets held
within a business model, whose objective is to collect contractual cash flows,
on specified dates that are solely payments of principal and interest on the
principal amount outstanding.
Such financial instruments are those that are subsequently measured at
amortised cost using the effective interest rate method, less any allowance
for impairment based on Expected Credit Loss (ECL). Amortised cost is
calculated by taking into account any discount or premium on acquisition and
fees and costs that are an integral part of the financial asset.
Financial assets classified at amortised cost are other receivables, deposits
and cash and cash equivalents.
Financial assets classified and measured at fair value through other
comprehensive income “FVOCI”
FVOCI financial assets are those non-derivative financial assets held within a
business model, whose objectives are both to sell the financial assets and to
collect contractual cash flows, on specified dates, that are solely payments
of principal and interest on the principal amount outstanding.
Financial assets that are classified as FVOCI are measured at fair value. The
changes in fair value are recognised in other comprehensive income with three
exceptions, which are recognised in profit and loss:
• Interest, calculated using the effective interest method;
• Impairment losses; and
• Foreign exchange gains and losses on monetary financial assets.
When the investment is disposed of, the cumulative gain or loss previously
recognised in equity is recognised in the statement of comprehensive income.
Financial assets at fair value through other comprehensive income (FVOCI)
comprise equity securities which are not held for trading and which the group
has irrevocably elected at initial recognition to recognise in this category.
These are strategic investments and the group considers this classification to
be more relevant.
Financial liabilities
All financial liabilities are classified as other financial liabilities
measured at amortised cost. Financial liabilities are initially recognised at
fair value, net of directly attributable transaction costs, and are
subsequently measured at amortised cost using the effective interest method.
Equity instruments
Equity instruments issued by the company are recorded at the proceeds
received, net of direct issue costs.
Leases
Mining lease payments relating to mineral property exploration and evaluation
are capitalised; there are no other leases, see note 25 for details. There are
no IFRS 16 disclosures required in respect of the mining leases.
New standards and interpretations not yet adopted
Certain pronouncements were issued by the IASB or the IFRIC that are mandatory
for accounting periods commencing on or after 1 January 2021. Many are not
applicable or do not have a significant impact to the Group and have been
excluded. The following have not yet been adopted and are being evaluated to
determine their impact on the Group.
IAS 1 – Presentation of Financial Statements (“IAS 1”) was amended in
January 2020 to provide a more general approach to the classification of
liabilities under IAS 1 based on the contractual arrangements in place at the
reporting date. The amendments clarify that the classification of liabilities
as current or noncurrent is based solely on a group’s right to defer
settlement at the reporting date. The right needs to be unconditional and must
have substance. The amendments also clarify that the transfer of a group’s
own equity instruments is regarded as settlement of a liability, unless it
results from the exercise of a conversion option meeting the definition of an
equity instrument. The amendments are effective for annual periods beginning
on 1 January 2023. The adoption of the above standard and interpretations is
not expected to lead to any changes to the accounting policies or have any
other material impact on the financial position or performance of the group.
IAS 37 – Provisions, Contingent Liabilities, and Contingent Assets (“IAS
37”) was amended. The amendments clarify that when assessing if a contract
is onerous, the cost of fulfilling the contract includes all costs that relate
directly to the contract – i.e. a full-cost approach. Such costs include
both the incremental costs of the contract (i.e. costs a group would avoid if
it did not have the contract) and an allocation of other direct costs incurred
on activities required to fulfil the contract – e.g. contract management and
supervision, or depreciation of equipment used in fulfilling the contract. The
amendments are effective for annual periods beginning on 1 January 2022.
IFRS 3 – Business Combinations (“IFRS 3”) was amended. The amendments
introduce new exceptions to the recognition and measurement principles in IFRS
3 to ensure that the update in references to the revised conceptual framework
does not change which assets and liabilities qualify for recognition in a
business combination. An acquirer should apply the definition of a liability
in IAS 37 – rather than the definition in the Conceptual Framework – to
determine whether a present obligation exists at the acquisition date as a
result of past events. For a levy in the scope of IFRIC 21, the acquirer
should apply the criteria in IFRIC 21 to determine whether the obligating
event that gives rise to a liability to pay the levy has occurred by the
acquisition date. In addition, the amendments clarify that the acquirer should
not recognize a contingent asset at the acquisition date. The amendments are
effective for annual periods beginning on 1 January 2022.
IAS 16 – Property, Plant and Equipment (“IAS 16”) was amended. The
amendments introduce new guidance, such that the proceeds from selling items
before the related property, plant and equipment is available for its intended
use can no longer be deducted from the cost. Instead, such proceeds are to be
recognized in profit or loss, together with the costs of producing those
items. The amendments are effective for annual periods beginning on 1 January
2022.
IAS 8 – Accounting Estimates (“IAS 8”) was amended. In February 2021,
the IASB issued amendments to IAS 8, in which it introduces a definition of
‘accounting estimates. The amendments clarify the distinction between
changes in accounting estimates and changes in accounting policies and the
correction of errors. It also explains how organizations use measurement
methods and inputs to develop accounting estimates. The amendments are
effective for annual reporting periods beginning on or after 1 January 2023
and apply to changes in accounting policies and changes in accounting
estimates that occur on or after the start of that period. Early application
is permitted and must be disclosed. The adoption of the above standard and
interpretations is not expected to lead to any changes to the accounting
policies or have any other material impact on the financial position or
performance of the group.
The adoption of the above standards and interpretations is not expected to
lead to any changes to the accounting policies or have any other material
impact on the financial position or performance of the group.
There have been no other new or revised International Financial Reporting
Standards, International Accounting Standards or Interpretations that are in
effect since that last annual report that have a material impact on the
financial statements.
Judgements made in applying accounting policies and key sources of estimation
uncertainty
The following critical judgements have been made in the process of applying
the accounting policies:
(a) In determining the treatment of exploration and evaluation expenditures
the directors are required to make estimates and assumptions as to future
events and circumstances. Significant judgment must be exercised in
determining when a project moves from the exploration and evaluation category
phase and into the development category of mineral property interests. The
existence and extent of economic mineral resources, proven or probable mineral
reserves; regulatory permits and licences; the availability of development
financing; current and future metal prices; and market sentiment are all
factors to be considered.
(b) In connection with possible impairment of exploration and evaluation
assets and the investment of the company in Parys Mountain Mines Limited the
directors assess each potentially cash generating unit annually to determine
whether any indication of impairment exists. The judgements made when making
these assessments are similar to those set out above and are subject to the
same uncertainties.
(c) The directors applied assumptions and judgement in determining the fair
value of investments classified and measured as financial assets at FVOCI.
Some of the financial assets set out in note 14 are unquoted investments in
companies holding mining rights. The inputs in determining fair value are
taken from observable markets where possible, but where this is not feasible,
a degree of judgement has been applied in establishing fair values. Judgements
include considerations of inputs such as exploration potential, available
market information relating to current demand, prices, economic viability and
future financing. See note 14 for further details.
Nature and purpose of equity reserves
The share premium reserve represents the consideration that has been received
in excess of the nominal value of shares in issue of new ordinary share
capital, less any direct costs of issue.
The currency translation reserve represents the variations on revaluation of
overseas foreign subsidiaries and associates.
The retained earnings reserve represents profits and losses retained in
previous and the current period.
3 Segmental information
The group is engaged in the business of exploring and evaluating the wholly
owned Parys Mountain project in North Wales, managing its interest in the
Grangesberg properties and has an investment in the Labrador iron project in
eastern Canada. These activities comprise one class of business which is mine
exploration, evaluation and development which are classified in geographical
segments; these are the basis on which information is reported to the board.
As yet there have been no site expenses directly incurred in respect of the
interest in Grangesberg and management expenses for this segment are included
in the UK total.
Income statement analysis
2022 2021
UK Sweden Canada Total UK Sweden Canada Total
£ £ £ £ £ £ £ £
Expenses (528,045) - - (528,045) (162,824) - - (162,824)
Investment income 24 - - 24 39 - - 39
Finance costs (154,234) (11,014) - (165,248) (154,234) (11,468) - (165,702)
Exchange rate loss - 27 - 27 - (31) - (31)
Loss for the year (682,255) (10,987) - (693,242) (317,019) (11,499) - (328,518)
Assets and liabilities
31 March 2022 31 March 2021
UK Sweden Canada Total UK Sweden Canada Total
£ £ £ £ £ £ £ £
Non-current assets 16,040,201 110,157 1,914,185 18,064,543 15,645,767 110,157 4,053,507 19,809,431
Current assets 978,199 1,101 - 979,300 922,056 1,092 - 923,148
Liabilities (4,385,674) (337,839) - (4,723,513) (3,991,250) (332,272) - (4,323,522)
Net assets/liabilities 12,632,726 (226,581) 1,914,185 14,320,330 12,576,573 (221,023) 4,053,507 16,409,057
4 Loss before taxation
The loss before taxation for the year has been arrived at after charging/(crediting):
2022 2021
£ £
Fees payable to the group's auditor:
for the audit of the annual accounts 30,000 37,000
for the audit of subsidiaries' accounts 5,000 5,000
for other services - -
Directors' remuneration 160,000 -
Foreign exchange movement (27) 31
5 Staff costs
The average monthly number of persons employed (including executive directors) was:
2022 2021
Administrative 4 3
Other 1 -
5 3
Their aggregate remuneration was: £ £
Wages and salaries 216,351 23,660
Social security costs 24,264 6,803
240,615 30,463
The directors did not receive any remuneration during the year ended 31 March
2021. Further details are provided in the
directors’ remuneration report together with information on share options.
6 Investment income
2022 2021
Loans and receivables £ £
Interest on site re-instatement deposit 24 39
24 39
7 Finance costs
2022 2021
Loans and payables £ £
Loan interest to Juno Limited 154,234 154,234
Loan interest to Eurmag AB 11,014 11,468
165,248 165,702
For both loans the interest shown is accrued and it is intended that it will
be repaid together with the loan principal. The loans are repayable from any
future financings undertaken by the group.
8 Taxation
Activity during the year has generated trading losses for taxation purposes
which may be offset against investment income and other revenues. Accordingly,
no provision has been made for Corporation Tax. There is an unrecognised
deferred tax asset at 31 March 2022 of £1.4 million (2021 - £1.3 million)
which, in view of the trading results, is not considered by the directors to
be recoverable in the short term. There are also capital allowances, including
mineral extraction allowances, of £13.2 million unclaimed and available at 31
March 2022 (2021 - £12.8 million). No deferred tax asset is recognised in
respect of these allowances.
2022 2021
£ £
Current tax - -
Deferred tax - -
Total tax - -
Domestic income tax is calculated at 19% (2021 - 19%) of the estimated assessed profit for
the year. Taxation for other jurisdictions is calculated at the rates prevailing in the
relevant jurisdictions.
The total charge for the year can be reconciled to the accounting profit or loss as follows:
Loss for the year (693,242) (328,518)
Tax at the domestic income tax rate of 19% (131,716) (62,418)
Tax effect of:
Unrecognised deferred tax on losses 131,716 62,418
Total tax - -
9 Earnings per ordinary share
2022 2021
£ £
Earnings
Loss for the year (693,242) (328,518)
Number of shares
Weighted average number of ordinary shares for the purposes of basic earnings per share 236,185,143 201,073,814
Shares deemed to be issued for no consideration in respect of employee options
Weighted average number of ordinary shares for the purposes of diluted earnings per share 236,185,143 201,073,814
Basic earnings per share (0.3)p (0.2)p
Diluted earnings per share (0.3)p (0.2)p
As there is a loss for the year ended 31 March 2022 the effect of the
outstanding share options is
anti-dilutive and diluted earnings are reported to be the same as basic
earnings.
10 Mineral property exploration and evaluation costs - group
Parys Mountain
Cost £
At 31 March 2020 15,215,723
Additions - site 73,983
Additions - rentals & charges 27,587
At 31 March 2021 15,317,293
Additions - site 367,474
Additions - rentals & charges 26,936
At 31 March 2022 15,711,703
Carrying amount
Net book value 2022 15,711,703
Net book value 2021 15,317,293
Included in the additions are mining lease expenses of £18,727 (2021 -
£19,170).
Potential impairment of mineral property
Accumulated exploration and evaluation expenditure in respect of the Parys
Mountain property is carried in the financial statements at cost less any
impairment provision.
At each reporting date an assessment of exploration and evaluation assets is
made to determine whether specific facts and circumstances indicate there is
an indication of impairment and whether an impairment test is required. If
such an indication exists, the recoverable amount of the asset is estimated
and if the carrying amount of the asset exceeds its estimated recoverable
amount, the asset is impaired, and the impairment loss is measured. If
impairment testing is required, the impairment testing of exploration and
evaluation assets is carried out in accordance with IAS 36 Impairment of
Assets as modified by IFRS 6. Any impairment loss is charged to the Income
Statement to reduce the carrying amount to its estimated recoverable amount.
In determining whether there is an impairment indicator, both internal factors
(e.g. adverse changes in performance) and external factors (e.g., adverse
changes in the business or regulatory environment) are considered. Significant
judgment is required when determining whether facts and circumstances suggest
that the carrying amount of exploration and evaluation assets may exceed its
recoverable amount. The existence and extent of proven or probable mineral
reserves; retention of regulatory permits and licences; the availability of
development financing; current and future metal prices; and market sentiment
are all factors to be considered. There are several external factors that can
have a significant impact on the recoverable amount of a mineral property,
including the uncertainty of market conditions, the volatility of commodity
prices and foreign exchange rates.
Following review, the directors concluded that there are no material adverse
changes in facts and circumstances, or in market conditions or regulations
affecting, the Parys Mountain property during the year ended 31 March 2022.
The directors continued to rely on the publication in January 2021 of the
independent PEA, with an expanded resource base, which demonstrated that a
major mining operation can be established at Parys Mountain, with robust
economics at reasonable capital and operating costs.
The property has the potential for the discovery of new or additional
resources and has ongoing exploration potential and further work is
recommended and planned. Metal prices have improved and the outlook for most
minerals, and particularly for the copper, zinc and lead minerals at Parys
Mountain, is very encouraging. Accordingly, the directors concluded, as
described in the Strategic Report, that any specific facts and circumstances
which might suggest there is an indication of impairment have not materially
changed during the year and there are no facts or circumstances that suggest
there is an indication of impairment and therefore no impairment test was
required or completed.
11 Property, plant and equipment
Group Freehold land & property Plant & equipment Office equipment Total
Cost £ £ £ £
At 31 March 2020, 2021 and 2022 204,687 17,434 5,487 227,608
Depreciation
At 31 March 2020, 2021 and 2022 - 17,434 5,487 22,921
Carrying amount
At 31 March 2020, 2021 and 2022 204,687 - - 204,687
Company Freehold land & property Plant & equipment Office equipment Total
Cost £ £ £ £
At 31 March 2020, 2021 and 2022 - 17,434 5,487 22,921
Depreciation
At 31 March 2020, 2021 and 2022 - 17,434 5,487 22,921
Carrying amount
At 31 March 2020, 2021 and 2022 - - - -
12 Subsidiaries - company
The subsidiaries of the company at 31 March 2022 and 2021 were as follows:
Name of company Country of incorporation Percentage owned Principal activity
Parys Mountain Mines Limited (1) England & Wales 100% Development of the Parys Mountain mining property
Parys Mountain Land Limited (1) England & Wales 100% Holder of part of the Parys Mountain property
Parys Mountain Heritage Limited (1) England & Wales 100% Holder of part of the Parys Mountain property
Labrador Iron plc (2) Isle of Man 100% Holder of the company’s investment in Labrador Iron Mines Holdings Limited
Angmag AB (3) Sweden 100% Holder of the company’s investment in GIAB
Anglo Canadian Exploration (Ace) Limited (1) England & Wales 100% Dormant
Registered office addresses:
1. - Parys Mountain, Amlwch, Anglesey, LL68 9RE
2. - Fort Anne, Douglas, Isle of Man, IM1 5PD
3. - Box 1703, 111 87 Stockholm, Sweden
13 Investments - company
Shares at cost Capital contributions Total
£ £ £
At 1 April 2020 104,025 14,356,617 14,460,642
Advanced - 116,227 116,227
At 31 March 2021 104,025 14,472,844 14,576,869
Advanced - 334,304 334,304
At 31 March 2022 104,025 14,807,148 14,911,173
The realisation of investments is dependent on finance being available for
development and on a number
of other factors. Interest is not charged on capital contributions.
14 Investments - group
Labrador Grangesberg Total
£ £ £
At 1 April 2020 1 100,098 100,099
Net change during the period 4,053,506 10,059 4,063,565
At 31 March 2021 4,053,507 110,157 4,163,664
Net change during the period (2,139,322) - (2,139,322)
At 31 March 2022 1,914,185 110,157 2,024,342
LIM – Labrador, Canada
The group has an investment in Labrador Iron Mines Holdings Limited, a
Canadian company which holds the Labrador iron ore properties described in the
Strategic Report.
The investment in LIM is carried at fair value through other comprehensive
income. The group’s holding of 19,289,100 shares in LIM (12% of LIM’s
total issued shares) is valued at the closing price traded on the OTC Markets
in the United States and in the directors’ assessment this market is
sufficiently active to give the best measure of fair value, which on 31 March
2022 was 13 US cents per share (2021 - 29 US cents). At 23 August 2022 the
shares traded at 11 US cents per share.
Grangesberg - Sweden
The group has, through its Swedish subsidiary Angmag AB, a 19.9% ownership
interest in GIAB (unchanged from 2021), a Swedish company which holds rights
over the Grangesberg iron ore deposits.
The directors assessed the fair value of the investment in Grangesberg under
IFRS 9 and consider the cost at the date of transition and the investment’s
value at the year-end to approximate the fair value at these dates. Following
negotiation the group has, until June 2023, a right of first refusal over a
further 50.1% of the equity of GIAB together with management direction of the
activities of GIAB, subject to certain restrictions. Although the group has
significant influence over certain relevant activities of GIAB, equity
accounting has not been applied in respect of this influence as the directors
consider this would not have any material affect. The value of the group’s
share in the net assets of GIAB at 31 March 2022 was approximately £216,000
(2021 - £316,000).
15 Deposit
Group
2022 2021
£ £
Site re-instatement deposit 123,811 123,787
This deposit was required and made under the terms of a Section 106 Agreement
with the Isle of Anglesey County Council which has granted planning
permissions for mining at Parys Mountain. The deposit is refundable upon
restoration of the permitted area to the satisfaction of the Planning
Authority. The carrying value of the deposit approximates to its fair value.
16 Cash and cash equivalents
Group Company
2022 2021 2022 2021
£ £ £ £
Held in sterling 921,075 890,674 921,043 883,463
Held in Canadian dollars 1 1 - -
Held in US dollars 444 424 - -
Held in Swedish krona 657 668 - -
922,177 891,767 921,043 883,463
The carrying value of the cash approximates to its fair value.
17 Trade and other payables
Group Company
2022 2021 2022 2021
£ £ £ £
Trade payables (106,236) (4,366) (74,619) (2,887)
Other accruals (260,182) (121,862) (157,977) (63,880)
(366,418) (126,228) (232,596) (66,767)
The carrying value of the trade and other payables approximates to their fair
value.
18 Loans
Group Company
2022 2021 2022 2021
£ £ £ £
Loan from Juno Limited (3,969,256) (3,815,022) (3,969,256) (3,815,022)
Loan from Eurang Limited (337,839) (332,272) - -
(4,307,095) (4,147,294) (3,969,256) (3,815,022)
Juno: The loan is provided under a working capital agreement, denominated in
sterling, unsecured and carried interest during the year at 10% per annum on
the principal only. It is repayable from any future financing undertaken by
the company, or on demand following a notice period of 367 days.
In May 2022 a new Investor Agreement was concluded with Juno Limited to
replace the controlling shareholder and consolidated working capital
agreements. In the new Investor Agreement Juno agreed to participate in any
future equity financing, at the same price per share and on the same terms as
other arms-length participants, to maintain its percentage, with the
subscription price to be satisfied by the conversion and consequent reduction
of debt, and the company agreed to pay Juno in cash ten percent of the net
proceeds of such equity financing in further reduction of the debt. The
interest rate on the outstanding debt will be reduced from 10% to 5% p.a. from
1 April 2022. In addition, Juno was granted certain nomination and reporting
rights, including the right to nominate two directors to the board, so long as
Juno holds at least 20% of the company’s outstanding shares and one director
so long as Juno holds at least 10% of the company’s outstanding shares. This
renegotiation was approved by an independent board committee responsible for
reviewing and approving any transactions and potential transactions with Juno.
The family interests of Danesh Varma have a significant shareholding in Juno.
The net effect of the new agreement with the May 2022 financing was that the
debt due to Juno was reduced by £305,499, of which £78,345 was paid in cash
and the balance by conversion of debt.
The carrying value of the loan approximates to its fair value.
Eurang Limited: The loan arose in connection with the acquisition of the
investment in Grangesberg. It is the subject of a letter agreement,
denominated in Swedish Krona, is unsecured and carries interest at 6.5% per
annum on the principal only. It is repayable from any future financing
undertaken by the company, or on demand following a notice period of 367 days.
The terms of the facility were approved by an independent committee of the
board. The carrying value of the loan approximates to its fair value.
Changes in liabilities arising from financing activities
Due to Juno Due to Eurang Totals
£ £ £
1 April 2020 (3,660,788) (321,105) (3,981,893)
Cash flows - - -
Non cash movements (154,234) (11,167) (165,401)
1 April 2021 (3,815,022) (332,272) (4,147,294)
Cash flows - - -
Non cash movements (154,234) (5,567) (159,801)
At 31 March 2022 (3,969,256) (337,839) (4,307,095)
The Juno loan relates to the group and company. The non-cash movement
represents accrued interest.
The Eurang loan relates to the group only and its non-cash movement comprises
accrued interest and foreign exchange changes. In 2021 there was also the
value of GIAB shares transferred to Eurang which reduced the loan amount.
19 Long term provision - group
2022 2021
£ £
Provision for site reinstatement (50,000) (50,000)
The provision for site reinstatement covers the estimated costs of
reinstatement at the Parys Mountain site of the work done and changes made by
the group up to the date of the accounts. These costs would be payable on
completion of mining activities (which is estimated to be more than 20 years
after mining commences) or on earlier abandonment of the site. The provision
has not been discounted because the impact of doing so is not material to the
financial statements. There are significant uncertainties inherent in the
assumptions made in estimating the amount of this provision, which include
judgements of changes to the legal and regulatory framework, magnitude of
possible contamination and the timing, extent and costs of required
restoration and rehabilitation activity.
20 Share capital
Ordinary shares of 1p Deferred shares of 4p Total
Issued and Nominal Number Nominal Number Nominal
fully paid value £ value £ value £
At 1 April 2020 1,869,758 186,975,732 5,510,833 137,770,835 7,380,591
Issued in the period 385,000 38,500,000 - - -
At 1 April 2021 2,254,758 225,475,732 5,510,833 137,770,835 7,765,591
Issued in the period 225,950 22,595,000 - - 225,950
At 31 March 2022 2,480,708 248,070,732 5,510,833 137,770,835 7,991,541
The deferred shares are non-voting, have no entitlement to dividends and have
negligible rights to return of capital on a winding up.
On 9 October 2021 a placing for cash was made of 22.595 million ordinary
shares at 3.4 pence per share, raising £768,230 gross. Further share issues
were made on 20 May 2022 and 4 August 2022 – see note 29.
21 Equity-settled employee benefits
The 2014 Unapproved share option plan provides for a grant price equal to or
above the average quoted market price of the ordinary shares for the three
trading days prior to the date of grant. All options granted carried a
performance criterion, namely that the company's share price performance from
the date of grant must exceed that of the companies in the FTSE 100 index. The
vesting period is one year. Options are forfeited if the employee leaves
employment with the group before the options vest. All options outstanding
were exercised in full last year. No options were granted, lapsed or forfeited
during the year. No options were outstanding at 31 March 2022.
2022 2021
Options Weighted average exercise price in pence Remaining contractual life in years Options Weighted average exercise price in pence Remaining contractual life in years
Outstanding at beginning of period - - - 3,500,000 2.00 1.5
Granted during the period - - - - -
Forfeited during the period - - - - -
Exercised during the period - - - 3,500,000 2.00
Expired during the period - - - - -
Outstanding at the end of the period - - - - - -
Exercisable at the end of the period - - - - - -
There were no expenses in respect of equity-settled employee remuneration for
the year ended 31 March 2022 (2021 – nil).
Grants of options were made following the year end on 4 August 2022.
22 Results attributable to Anglesey Mining plc
The loss after taxation in the parent company amounted to £682,937 (2021
loss £313,717). The directors have taken advantage of the exemptions
available under section 408 of the Companies Act 2006 and not presented an
income statement for the company alone.
23 Financial instruments
The main risks arising from the group's financial instruments are currency
risk and share price risk. The board reviews and agrees policies for managing
each of these risks and these are summarised below.
Capital risk management
There have been no changes during the year in the group’s capital risk
management policy.
The group manages its capital to ensure that entities in the group will be
able to continue as going concerns while optimising the debt and equity
balance. The capital structure consists of debt, which includes the borrowings
disclosed in note 18, the cash and cash equivalents and equity comprising
issued capital, reserves and retained earnings.
The group does not enter into derivative or hedging transactions and it is the
policy that no trading in financial instruments be undertaken.
Share price risk
The shares of Labrador Iron Mines Holdings Limited in Canada are traded on the
OTC Market in the United States and the value of the group’s investment in
LIM is subject to the market variations applicable to any publicly traded
investment. In respect of the value of this investment, if the LIM share price
were to fall by 10% there would be a loss to the group of £191,419 and if it
were to rise by a similar percentage there would be a gain of £191,419
Interest rate risk
The amounts advanced under the Juno loans are at a fixed rate of interest of
10% per annum (until 31 March 2022 after which the rate changed to 5%) and
those from Eurang Limited are at a fixed rate of 6.5% per annum. As a result,
the group is not exposed to interest rate fluctuations. Interest received on
cash balances is not material to the group’s operations or results.
The company (Anglesey Mining plc) is exposed to minimal interest rate risks.
Liquidity risk
The group has ensured continuity of funding through a mixture of issues of
shares and the working capital agreement with Juno Limited. During the year
the group raised new financing of over £750,000 through the placement of
shares and since the year end has raised further funds.
Trade creditors are payable on normal credit terms which are usually 30 days.
The loans due to Juno and Eurang carry a notice period of 367 days. Juno, in
keeping with its long-established practice has indicated that it has no
current intention of demanding repayment. No such notice had been received by
7 September 2022 in respect of either of the loans and they are classified as
having a maturity date between one and two years from the period end.
Currency risk
The presentational currency of the group and company is pounds sterling. The
loan from Juno Limited is denominated in pounds sterling and the group has no
currency exposure in respect of this loan. The currency risk in respect of the
group’s only other loan (denominated in Swedish krona) is as follows: if the
rate of exchange between the krona and sterling were to weaken against
sterling by 10% there would be a gain to the group of £ 30,713 (2021 -
£30,207) and if it were to move in favour of sterling by a similar amount
there would be a loss of £ 37,538 (2021 - £36,919). These gains or losses
would be recorded in other comprehensive income.
In respect of the investment in Grangesberg in Sweden, if the rate of exchange
between the Krona and sterling were to weaken against sterling by 10% there
would be a loss to the group of £ 10,338 (2021 - £10,508) and if it were to
move in favour of sterling by a similar amount there would be a gain of £
12,635 (2021 - £12,843).
In respect of the investment in Labrador Iron Mines in Canada, if the rate of
exchange between the US dollar (the currency of the market on which the shares
are quoted) and sterling were to weaken against sterling by 10% there would be
a loss to the group of £174,017 (2021 - £368,501) and if it were to move in
favour of sterling by a similar amount there would be a gain of £212,687
(2021 - £450,390). Potential exchange variations in respect of other foreign
currencies are not material.
Credit risk
The directors consider that the entity has limited exposure to credit risk as
the entity has immaterial receivable balances at the year-end on which a third
party may default on its contractual obligations. The carrying amount of the
group’s financial assets represents its maximum exposure to credit risk.
Cash is deposited with BBB or better rated banks.
Group Financial assets classified at fair value through other comprehensive income Financial assets measured at amortised cost
31 March 2022 31 March 2021 31 March 2022 31 March 2021
£ £ £ £
Investments 2,024,342 4,163,664 - -
Deposit - - 123,811 123,787
Other receivables - - 57,123 31,381
Cash and cash equivalents - - 922,177 891,767
- -
2,024,342 4,163,664 1,103,111 1,046,935
Financial liabilities measured at amortised cost
31 March 2022 31 March 2021
£ £
Trade payables (106,236) (4,366)
Other payables (260,182) (121,862)
Loans (4,307,095) (4,147,294)
(4,673,513) (4,273,522)
Company
. Financial assets measured at amortised cost Financial liabilities measured at amortised cost
31 March 2022 31 March 2021 31 March 2022 31 March 2021
£ £ £ £
Other receivables 10,920 7,448 - -
Cash and cash equivalents 921,043 883,463 - -
Trade payables - - (74,619) (2,887)
Other payables - - (157,977) (63,880)
Loan - - (3,969,256) (3,815,022)
931,963 890,911 (4,201,852) (3,881,789)
24 Related party transactions
Transactions between Anglesey Mining plc and its subsidiaries are summarised
in note 13.
Juno Limited
Juno Limited (Juno) which is registered in Bermuda held 23% of the company’s
issued ordinary share capital at 31 March 2022. The group had the following
agreements with Juno: (a) a controlling shareholder agreement dated September
1996 and (b) a consolidated working capital agreement of 12 June 2002. In May
2022 a new Investor Agreement was concluded with Juno Limited to replace the
controlling shareholder and consolidated working capital agreements. In the
new Investor Agreement Juno agreed to participate in any future equity
financing, at the same price per share and on the same terms as other
arms-length participants, to maintain its percentage, with the subscription
price to be satisfied by the conversion and consequent reduction of debt, and
the company agreed to pay Juno in cash ten percent of the net proceeds of such
equity financing in further reduction of the debt. The interest rate on the
outstanding debt will be reduced from 10% to 5% p.a. from 1 April 2022. In
addition, Juno was granted certain nomination and reporting rights, including
the right to nominate two directors to the board, so long as Juno holds at
least 20% of the company’s outstanding shares and one director so long as
Juno holds at least 10% of the company’s outstanding shares. This
renegotiation was approved by an independent board committee responsible for
reviewing and approving any transactions and potential transactions with Juno.
The family interests of Danesh Varma have a significant shareholding in Juno.
The net effect of the new agreement with the May 2022 financing was that the
debt due to Juno was reduced by £305,499, of which £78,345 was paid in cash
and the balance by conversion of debt.
Interest payable to Juno is shown in note 7 and the balance due to Juno is
shown in note 18. There were no further transactions between the group and
Juno or its group during the year. The family interests of Danesh Varma have a
significant shareholding in Juno, a connected person.
Grangesberg
John Kearney and Danesh Varma, as nominees of the company, are directors of
Grangesberg Iron AB. 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 in 2014. The Group has
a liability to Eurang Limited, amounting to £337,839 at the year-end (2021
– £343,613). See also note 18.
Key management personnel
All key management personnel are directors and appropriate disclosure with
respect to them is made in the directors’ remuneration report.
There are no other contracts of significance in which any director has or had
during the year a material interest.
25 Mineral holdings
Parys Mountain
(a) Most of the mineral resources delineated to date are under the western
portion of Parys Mountain, the freehold and minerals of which are owned by the
group. A royalty of 6% of net profits after deduction of capital allowances,
as defined for tax purposes, from production of freehold minerals is payable.
The mining rights over and under this area, and the leasehold area described
in (b) below, are held in the Parys Mountain Mines Limited subsidiary.
(b) Under a mining lease from Lord Anglesey dated December 2006, the
subsidiary Parys Mountain Land Limited holds the eastern part of Parys
Mountain, formerly known as the Mona Mine. An annual certain rent of £18,727
is payable for the year beginning 23 March 2021; the base part of this rent
increases to £20,000 when extraction of minerals at Parys Mountain commences;
this rental is index-linked. A royalty of 1.8% of net smelter returns from
mineral sales is also payable. The lease may be terminated at 12 months’
notice and otherwise expires in 2070.
(c) Under a renewable 30-year mining lease from the Crown dated December 1991
there was an annual lease payment of £5,000 and a royalty of 4% of gross
sales of gold and silver from the lease area was payable. This Crown lease
expired in April 2020 and negotiations in respect of the renewal of this lease
or the granting of a new lease are continuing. It is expected that a new or
renewed lease, if taken up and accepted, would be subject to annual lease
payments and a royalty on gold and silver sales.
Lease payments
The mining leases may be terminated by the group with 12 months’ notice. If
they are not so terminated, the minimum payments due in respect of the leases
and royalty agreement are analysed as follows: within the year commencing 1
April 2022 - £20,114 and for the five years between 1 April 2023 and 31 March
2026 - £106,713 Thereafter the payments will continue at proportionate
annual rates, in some cases with increases for inflation, for so long as the
leases are retained or extended.
26 Material noncash transactions
There were no material non-cash transactions in the year.
Under the Development and Co-operation Agreement with QME Limited in respect
of Parys Mountain optimisation studies which began in 2018, it was agreed to
grant QME various rights and options relating to the future development of
Parys Mountain comprising contracts for the construction of the decline and
the underground mine, including rehabilitation of the shaft. This will be done
on terms to be agreed following a decision to proceed with the development of
Parys Mountain. In the absence of agreement such contracts may be offered to
third parties, subject to a right of first refusal in favour of QME, and
subject to a payment to QME, upon the award of such contracts to a
third-party, of a break-fee of £500,000. Under such circumstances, the award
of such contracts to a third party could potentially create a contingent
liability for the payment of the break fee however such liability is not at
this time crystallised.
In addition, QME would be granted the right and option, upon completion of a
Prefeasibility Study, to undertake at its cost and investment, the mine
construction component of the Parys Mountain project, including the decline
and related underground and shaft works, with a scope to be agreed, to the
point of commencement of production, in consideration of which QME would earn
a 30% undivided joint venture interest in the Parys Mountain project.
27 Commitments
Other than commitments under leases (note 25) there is no capital expenditure
authorised or contracted which is not provided for in these accounts (2021 -
nil).
28 Contingent liabilities
There are no contingent liabilities (2021 - nil).
29 Events after the period end
On 17 May 2022 a placing to institutional investors for cash of 22,829,705
shares raising £864,416 gross was completed. In connection with the
financing, 1,250,000 broker warrants were issued to WH Ireland and Canaccord,
with each warrant exercisable at a price of 3.4 pence per share for a period
of three years.
At the same time, the terms of the Juno loan were amended, 6,681,000 shares
were issued to Juno and a cash repayment of £78,345 was made, together
reducing the amount of the outstanding loan by £305,499. See Notes 18 and 24.
On 4 August 2022, 500,000 shares were issued to the chief executive, Jo
Battershill, .as share based compensation upon the achievement of certain
performance targets.
Notice of the Annual General Meeting
Notice is given that the 2022 Annual General Meeting of Anglesey Mining plc
will be held at the offices of DLA Piper, 160 Aldersgate Street London EC1A
4HT on 27 October 2022 at 11.00 am to consider and, if thought fit, to pass
the resolutions set out below.
As ordinary business
1. To receive the annual accounts and directors' and auditor’s reports for
the year ended 31 March 2022
2. To approve the directors' remuneration report for the year ended 31 March
2022
3. To approve the directors' remuneration policy in the directors’
remuneration report for
the year ended 31 March 2022
4. To reappoint John F. Kearney as a director
5. To reappoint Jonathan (Jo) Battershill as a director
6. To reappoint Howard Miller as a director
7. To reappoint Danesh Varma as a director
8. To confirm the appointment of Namrata Verma as a director
9. To confirm the appointment of Andrew King as a director
10. To appoint UHY Farrelly Dawe White as auditor
11. To authorise the directors to determine the remuneration of the auditor.
As special business
12. That, pursuant to section 551 of the Companies Act 2006 ("Act"), the
directors be and are generally and unconditionally authorised to exercise all
powers of the company to allot shares in the company or to grant rights to
subscribe for or to convert any security into shares in the company up to an
aggregate nominal amount of £2,800,000, provided that (unless previously
revoked, varied or renewed) this authority shall expire on 31 December 2023,
save that the company may make an offer or agreement before this authority
expires which would or might require shares to be allotted or rights to
subscribe for or to convert any security into shares to be granted after this
authority expires and the directors may allot shares or grant such rights
pursuant to any such offer or agreement as if this authority had not expired.
This authority is in substitution for all existing authorities under section
551 of the Act (which, to the extent unused at the date of this resolution,
are revoked with immediate effect).
13. That pursuant to section 570 of the Act, the directors be and are
generally empowered to allot equity securities (within the meaning of section
560 of the Act) for cash pursuant to the authority granted under section 551
of the Act pursuant to the preceding resolution as if section 561(1) of the
Act did not apply to any such allotment, provided that this power shall be
limited to the allotment of equity securities:
(a) in connection with an offer of equity securities (whether by way of a
rights issue, open offer or otherwise) (i) to holders of ordinary shares in
the capital of the company in proportion (as nearly as practicable) to the
respective numbers of ordinary shares held by them; and (ii) to holders of
other equity securities in the capital of the company, as required by the
rights of those securities or, subject to such rights, as the directors
otherwise consider necessary but subject to such exclusions or other
arrangements as the directors may deem necessary or expedient in relation to
treasury shares, fractional entitlements, record dates or any legal or
practical problems under the laws of any territory or the requirements of any
regulatory body or stock exchange; and
(b) otherwise than pursuant to paragraph 12(a) above, up to an aggregate
nominal amount of £2,800,000
and (unless previously revoked, varied or renewed) this power shall expire on
31 December 2023, save that the company may make an offer or agreement before
this power expires which would or might require equity securities to be
allotted for cash after this power expires and the directors may allot equity
securities for cash pursuant to any such offer or agreement as if this power
had not expired. This power is in substitution for all existing powers under
section 570 of the Act which, to the extent effective at the date of this
resolution, are revoked with immediate effect.
By order of the board
Danesh Varma
Company secretary
7 September 2022
Notes to the notice of the AGM
Entitlement to attend and vote
If you wish to attend the Annual General Meeting (Meeting) in person, you must
send an email to mail@angleseymining.co.uk by 11.00 a.m. on 25 October 2022 to
make an advance booking for your attendance. You must also attach a Letter of
Corporate Representation from the custodian of your shares if the shares are
not registered in your name. Please note that your name must be pre-registered
with the venue in advance of the day.
To be entitled to attend and vote at the Meeting (and for the purpose of the
determination by the Company of the votes they may cast), shareholders must be
registered in the Register of Members at close of business on 25 October 2022
(or, in the event of any adjournment, at the close of business on the date
which is two business days before the date of the adjourned meeting). Changes
to the Register of Members after the relevant deadline shall be disregarded in
determining the rights of any person to attend and vote at the Meeting.
Appointment of proxies
Members who are entitled to attend and vote at the Meeting are entitled to
appoint a proxy to exercise all or any of their rights in relation to the
meeting on their behalf at the meeting. A shareholder may appoint more than
one proxy in relation to the Meeting provided that each proxy is appointed to
exercise the rights attached to a different share or shares held by that
shareholder. A proxy need not be a shareholder of the Company. The appointment
of a proxy shall be subject to any special arrangements that the board of
directors determines is necessary in light of the coronavirus pandemic.
You can appoint a proxy by:
* logging onto www.signalshares.com and submitting your proxy appointment and
votes online by following the instructions. If you have not previously done
so, you will first need to register to use this service. To do this you will
need your investor code detailed on your share certificate; or
* if you are a CREST member, submitting a proxy appointment electronically by
using the CREST voting service (in accordance with the notes below).
If you would prefer a paper proxy form, you may request one from the
registrar, Link Group, by calling 0371 664 0300 (Calls are charged at the
standard geographic rate and will vary by provider). If you are calling from
overseas, the number is +44 (0)371 664 0300 and calls will be charged at the
applicable international rate.
Proxy appointments must be received by no later than 11.00 a.m. on 25 October
2022 for them to be valid (or in the event of an adjournment, no later than 48
hours (excluding any part of a day that is not a working day) before the time
of the adjourned meeting). Beneficial owners of Ordinary Shares should consult
with their custodian or nominee in case they have any queries on how to
complete and submit a proxy appointment on their behalf.
The return of a completed proxy form or the submission of an electronic proxy
appointment will not prevent a shareholder attending the Meeting and voting in
person if he/she wishes to do so, subject to any legislation in force
temporarily limiting such rights.
In the case of joint holders, where more than one of the joint holders
purports to appoint a proxy, only the appointment submitted by the most senior
holder will be accepted. Seniority is determined by the order in which the
names of the joint holders appear in the Register of Members in respect of the
joint holding (the first-named being the most senior).
To change proxy instructions, please submit a new proxy appointment using the
methods set out above. If you submit more than one valid proxy appointment,
the appointment received last before the latest time for the receipt of
proxies will take precedence.
Appointment of proxies through CREST
CREST members who wish to appoint a proxy or proxies through the CREST
electronic proxy appointment service may do so by using the procedures
described in the CREST Manual. CREST Personal Members or other CREST sponsored
members, and those CREST members who have appointed (a) service provider(s),
should refer to their CREST sponsor or voting service provider(s), who will be
able to take the appropriate action.
In order for a proxy appointment or instruction made using the CREST service
to be valid, the appropriate CREST message (a CREST Proxy Instruction) must be
properly authenticated in accordance with Euroclear UK & Ireland Limited’s
specifications, and must contain the information required for such
instruction, as described in the CREST Manual (available via
www.euroclear.com). In order to be valid, the message, regardless of whether
it constitutes the appointment of a proxy or is an amendment to the
instruction given to a previously appointed proxy, must be transmitted so as
to be received by the issuer’s agent (ID RA10) by no later than 11.00 a.m.
on 25 October 2022. For this purpose, the time of receipt will be taken to be
the time (as determined by the time stamp applied to the message by the CREST
Application Host) from which the issuer’s agent is able to retrieve the
message by enquiry to CREST in the manner prescribed by CREST. After this time
any change of instructions to proxies appointed through CREST should be
communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors, or voting service
providers should note that Euroclear UK & Ireland Limited does not make
available special procedures in CREST for any particular message. Normal
system timings and limitations will, therefore, apply in relation to the input
of CREST Proxy Instructions.
It is the responsibility of the CREST member concerned to take (or, if the
CREST member is a CREST personal member, or sponsored member, or has appointed
a voting service provider, to procure that his CREST sponsor or voting service
provider(s) take(s)) such action as shall be necessary to ensure that a
message is transmitted by means of the CREST system by any particular time. In
this connection, CREST members and, where applicable, their CREST sponsors or
voting system providers are referred, in particular, to those sections of the
CREST Manual concerning practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy Instruction in the
circumstances set out in Regulation 35(5)(a) of the Uncertificated Securities
Regulations 2001.
Nominated persons
Any person to whom this Notice is sent who is a person nominated under section
146 of the Act to enjoy information rights (a Nominated Person) may, under an
agreement between him/her and the shareholder by whom he/she was nominated,
have a right to be appointed (or to have someone else appointed) as a proxy
for the Meeting. If a Nominated Person has no such proxy appointment right or
does not wish to exercise it, he/she may, under any such agreement, have a
right to give instructions to the shareholder as to the exercise of voting
rights.
The statement in these notes concerning the rights of shareholders in relation
to the appointment of proxies in the note on page 16 of this document does not
apply to Nominated Persons. Such rights described in that note can only be
exercised by shareholders of the Company.
Corporate representatives
Any corporation which is a member can appoint one or more corporate
representatives who may exercise on its behalf all of its powers as a member
provided that they do not do so in relation to the same shares. The attendance
in person of the meeting of any corporate representative shall be subject to
any special arrangements that the board of directors determines necessary in
light of the coronavirus pandemic.
Publication of audit concerns on website
Under section 527 of the Act, shareholders have the right to request
publication of any concerns that they propose to raise at the Meeting relating
to the audit of the Company’s accounts, subject to meeting the threshold
requirements set out in that section. Where a statement is published the
Company will forward the statement to the auditor not later than the time when
it makes the statement available on the website. The business which may be
dealt with at the Meeting includes any statement that the Company has been
required, under section 527 of the Act, to publish on its website. The Company
cannot require the members concerned to pay its expenses in complying with
either section 527 or 528 of the Act.
Entitlement to ask questions
Any shareholder attending the meeting has the right to ask questions relating
to the business of the meeting and for these to be answered, unless the
answer: would interfere unduly with the preparation for the meeting or involve
the disclosure of confidential information; has already been published on the
website; or it is not in the interests of the Company or the good order of the
meeting that the question be answered.
Details of communications
The electronic address given in this Notice for the appointment of proxies for
the meeting is given for that purpose only and may not be used for any other
purposes including general communication with the Company in relation to the
meeting or otherwise. Except as provided above, members who have general
queries about the Meeting should use the following means of communication (no
other method of communication will be accepted):
* calling the shareholder helpline, 0371 664 0300 or from overseas +44 371 664
0300;
* by email to shareholderenquiries@linkgroup.co.uk; or
* by writing to the registrar, Link Group, 10th Floor, Central Square, 29
Wellington Road, Leeds, LS1 4DL.
Documents on Display
Copies of this document and of the Articles of Association will be available
for inspection at the registered office of the Company during usual business
hours on any weekday (Saturdays, Sundays and public holidays excluded) from
the date of this document and at the place of the Meeting from at least 15
minutes prior to, and until the conclusion of, the Meeting. A copy of this
document, and other information required by section 311A of the Act, can be
found on the investors section of the website at www.angleseymining.co.uk.
Issued shares and total voting rights
As at 7 September 2022 (being the latest practicable date prior to the
publication of this Notice) the issued share capital consisted of 280,675,721
ordinary shares with a nominal value of £0.01 each, carrying one vote each
and 21,529,451 Deferred A Shares and 116,241,384 Deferred B Shares which do
not carry any rights to vote. Therefore, the total voting rights as at 7
September 2022 are 280,675,721.
John F. Kearney Irish, aged 71, is Chairman of Anglesey Mining plc, and several other public companies, including Labrador Iron Mines Holdings Limited, Buchans Resources Limited and Minco Exploration plc, and until 2019 was Chairman of Canadian Zinc Corporation. He is a
director of Grangesberg Iron AB. Over the course of his career, he has served as a senior officer (usually chairman and/or chief executive) of more than thirty public companies incorporated in Canada; Ireland; United Kingdom; United States; Australia and
elsewhere, the shares of which were listed on various stock exchanges (including London Stock Exchange; AIM Market; Toronto Stock Exchange; New York Stock Exchange; American Stock Exchange; NASDAQ; Australian Stock Exchange). Mr. Kearney also served as a
director and member of the Executive Committee of the Mining Association of Canada and as a director and two term President of the Northwest Territories and Nunavut Chamber of Mines. Mr. Kearney is a member of the Prospectors and Developers Association of
Canada, the Canadian Institute of Mining and Metallurgy and the Law Society of Ireland. He holds degrees in law and economics from University College Dublin, an M.B.A. degree from Trinity College Dublin, and a Certificate in Mining Law from Osgoode Hall
Law School, York University, Toronto. He qualified as a solicitor in Ireland and as a chartered secretary with the Institute of Chartered Secretaries and Administrators in London. He is a member of the nomination and remuneration committees.
Jonathan (Jo) Battershill from 21 August 2022 aged 52, Chief Executive, is a mining geology graduate from Camborne School of Mines and has over 25 years of experience both in mining operations and in the finance sector, particularly in Australia and in the United Kingdom. After almost a decade working
in mining operations and business development with Western Mining Corporation in Australia, in 2004 he joined a boutique broking house in Perth, Western Australia. He subsequently worked in the mining finance sector for 17 years until July 2021, primarily
as an Executive Director for UBS in Sydney/London and as Managing Director for Canaccord in London. He has extensive knowledge and connections within the mining finance industry, having been part of globally top ranked mining ECM/Sales between 2008 and
2021. Early in his mining career he worked as an underground miner at the South Crofty Tin Mine in Cornwall, while attending the School of Mines. Mr Battershill is also non-executive director of AIM listed Alien Metals Limited and ASX listed companies
Silver Mines Limited and Errawarra Resources Limited.
Bill Hooley until 7 June 2022 Bill Hooley was a director until his untimely death on 7 June 2022. aged 75, Deputy Chairman and previously Chief Executive until 31 July 2021, was a mining engineering graduate from the Royal School of Mines, London and had extensive experience in the
minerals industry including mine and processing operations, planning, project management and corporate management in many countries including Australia, Saudi Arabia, Canada and the UK. He also practised as a minerals industry consultant at a senior level
and has managed other businesses developing and selling products and services to the minerals and related industries. He was Vice-Chairman and a director of Labrador Iron Mines Holdings Limited as well as chairman and a director of Grangesberg Iron AB and
Angmag AB. He had been a director of a number of other companies involved in the minerals industry and was a Fellow of the Australasian Institute of Mining and Metallurgy.
Danesh Varma aged 72, Finance Director and Company Secretary is a chartered accountant in England and Wales, and Canada, with many years of experience in financial management. He is currently a director of Brookfield Investment Corp., Canadian Manganese Corp., Labrador
Iron Mines Holdings Limited, Grangesberg Iron AB, Angmag AB and Minco Exploration plc. He also serves as the Chief Financial Officer of Buchans Resources Limited. Previously he was President of American Resource Corporation and Westfield Minerals Limited
and a director of Northgate Exploration Limited., Minco plc and Connemara Mining plc
Howard Miller aged 78, non-executive director, a lawyer with over 45 years’ experience in the legal and mining finance sector in Africa, Canada and the UK. He has extensive experience in the financing of resource companies. He was chairman and chief executive of Avnel
Gold Mining Limited, which operated the Kalana gold mine in Mali and was acquired by Endeavour Mining in 2018. He is a member of the remuneration, audit and nomination committees and the lead independent director.
Andrew King From 20 December 2022 aged 57, non-executive director appointed 20 December 2021. Andrew is a proven business leader with more than 30 years’ experience in the mining, metals and banking sectors where his management experience has encompassed strategic, financial and
operational oversight. He is currently Managing Director of Scanmetals A/S, a specialist metal recycling business with operations in Denmark, the UK and Germany. Prior thereto he was Group Business Development Director at Amalgamated Metal Corporation Plc.
and for thirteen years Andrew held various positions with Standard Bank including Head of Resource Banking, Global Co-Head Investment Banking, and Chief Executive Standard Bank Asia. Earlier in his career he worked with BMO Nesbitt Burns and Warrior
International. Other directorships have included Avnel Gold Mining Limited and Rame Energy plc. Andrew has a BSc in Metallurgical Engineering from the University of the Witwatersrand, South Africa and an MBA from the London Business School. He is a member
of the audit and nomination committees.
Namrata Verma From 20 December 2022 aged 42, non-executive director appointed 20 December 2021. Namrata Verma is an experienced corporate finance executive with strong credentials in advising metals and mining companies with assets at the pre-feasibility and feasibility stages on project
bankability, growth strategies, funding options, and financing execution. She is the founder of Terrafranca Advisory, which was set up in 2015 to provide independent debt financing advice to early-stage and small and mid-cap mining companies and investors.
She has advised on bankability considerations, debt structuring and arranging on numerous mining projects in Europe and Africa. Namrata previously had more than a decade of experience at Standard Chartered Bank, in Asia and the UK, where she was a director
in the mining finance team focused on advising and arranging project and structured debt financing, acquisition financing and working capital funding for mining and metals clients. Namrata holds a Bachelor of Engineering from Nanyang Technological
University, Singapore and an MBA from the London Business School. She is a member of the audit and remuneration committees.
About Anglesey Mining plc
Anglesey Mining is traded on the AIM market of the London Stock Exchange and
currently has 280,675,721 ordinary shares on issue.
Anglesey is developing its 100% owned Parys Mountain Cu-Zn-Pb-Ag-Au deposit in
North Wales, UK with a 2020 reported resource of 5.2 million tonnes at 4.3%
combined base metals in the Indicated category and 11.7 million tonnes at 2.8%
combined base metals in the Inferred category.
Anglesey holds an almost 20% interest in the Grangesberg Iron project in
Sweden, together with management rights and a right of first refusal to
increase its interest to 70%. Anglesey also holds 11% of Labrador Iron Mines
Holdings Limited, which through its 52% owned subsidiaries, is engaged in the
exploration and development of direct shipping iron ore deposits in Labrador
and Quebec.
For further information, please contact:
Anglesey Mining plc
Jo Battershill, Chief Executive – Tel: +44 (0)7540 366000
John Kearney, Chairman – Tel: +1 647 728 4106
Davy
Nominated Adviser & Joint Company Broker
Brian Garrahy / Lauren O’Sullivan – Tel: +353 1 679 6363
WH Ireland
Joint Corporate Broker
Katy Mitchell / Harry Ansell – Tel: +44 (0) 207 220 1666
Canaccord Genuity Limited
Joint Company Broker
James Asensio / Harry Rees – Tel: +44 (0) 20 7523 8000
Scout Advisory Limited
Investor Relations Consultant
Sean Wade – Tel: +44 (0) 7464 609025
LEI: 213800X8BO8EK2B4HQ71
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See all newsREG-Anglesey Mining Plc: Anglesey Mining Announces Publication of a Conceptual Study of a High-Density Fluid Hydro-Power Energy Storage Project
AnnouncementREG-Anglesey Mining Plc: Anglesey Mining plc and RheEnergise Partner to Explore Underground Energy Storage at Parys Mountain Mine, through the Rehabilitation of the Existing 300m Deep Morris Shaft.
AnnouncementREG-Anglesey Mining Plc: Parys Mountain Mine Environmental Impact Assessment (EIA) Scoping Report Approved
AnnouncementREG-Anglesey Mining Plc: Half-year Report
AnnouncementREG-Anglesey Mining Plc: Board Changes
Announcement