REG-Anglesey Mining PLC: Final Results for year ended 31 March 2018
31/07/2018 16:35
Anglesey Mining plc
A UK mining company listed on the London Stock Exchange
Projects:
100% of the Parys Mountain underground zinc-copper-lead-silver-gold deposit in
North Wales, UK where an updated Scoping Study was completed in 2017. The
results of this Study are positive and provide a route to develop the project
through to production.
12% of Labrador Iron Mines Holdings Limited which holds direct shipping iron
ore deposits in Labrador and Quebec.
A 6% interest in, and management rights to, the Grangesberg Iron project in
Sweden, together with a right of first refusal to increase its interest to
57%.
Chairman’s statement
To Anglesey Shareholders
The improvement in base metal prices, which began in 2016, continued in 2017
and into 2018. The zinc price increased from US$1.00 per pound in January 2017
to a 10-year high of US$1.63 per pound in February 2018. From January 2016,
the zinc price more than doubled making it one of the better performing metals
over the two-year period. Expectations of an increase in the supply of zinc
concentrates towards the end of 2018 have led to the recent decline in the
zinc price to the $1.15 per pound range.
The price of copper increased substantially in the second half of 2017 and
ended the year at US$3.25 per pound, a 30% increase from the end of 2016. Lead
also performed well in 2017, rising from US$0.92 per pound in January 2017 to
US$1.22 per pound in January 2018. Although all metal prices softened in mid
-summer 2018 in response to global geopolitical uncertainty, there is a strong
expectation of a continued positive outlook for base metals, particularly for
zinc and copper.
Parys Mountain - 2017 Scoping Study
In July 2017 a new Scoping Study on the Parys Mountain copper-lead-zinc
project in North Wales, was prepared by Micon International Limited (Micon)
and Fairport Engineering Ltd. The Scoping Study envisages a mining rate of
1,000 tonnes per day, to produce an average annual output of 14,000 tonnes of
zinc concentrate at 57% Zn, 7,200 tonnes of lead concentrate at 52% Pb and
4,000 tonnes of copper concentrate at 25% Cu, over an initial mine life of
eight years.
The Scoping Study demonstrates a viable mine development and a healthy
financial rate of return. For example, using assumptions of longer term metal
price projections of $1.35 per pound for zinc and $3.00 per pound for copper,
and using an 8% discount rate, to reflect the relatively low political risk in
the UK, the indicated NPV would be $52 million or £42 million, with an IRR of
30%.
Path towards Production
Following completion of the positive 2017 Scoping Study, Anglesey has been
working to progress the Parys Mountain project towards production. We have
previously described four key steps in the development of the project which
are: the conversion of the Scoping Study to a Definitive Feasibility Study,
the commencement of an Environmental Impact Assessment, the recruitment of key
corporate staff and securing project finance. Whilst a Definitive Feasibility
Study to develop the project to a suitable status for bank debt financing
might be the ideal course, the Parys Mountain project is not yet at the stage
to undertake a Definitive Feasibility Study.
A Definitive Feasibility Study can be defined as a comprehensive technical and
economic study to demonstrate that development of a mine is reasonably
justified. The results of the study may serve as the basis for a decision by a
financial institution to finance the development of the project. However, a
Preliminary Feasibility Study is an intermediate step in the engineering
process to evaluate the technical and economic viability of a mining project,
occurring between a Scoping Study and a DFS.
The 2017 Scoping Study recommended further work as interim steps towards
undertaking a PFS, including more detailed mine planning and design, more
engineering studies, additional metallurgical test work and a review of
tailings management and environmental and planning permissions, all of which
will require new and further financing. During the year the Scoping Study has
been subject to detailed examination and review with the aim of enhancing the
economics of the project to attract the capital financing necessary to achieve
our target of getting the Parys Mountain Mine into production at the earliest
date possible.
Optimisation Studies
The 2017 Scoping Study was based on mining only the 2.1 million tonnes of
indicated resources reported by Micon in 2012. Micon had reported a further
4.1 million tonnes of inferred resources which were not incorporated into the
Scoping Study. Of the inferred resources currently estimated, the Engine Zone,
which lies at depths up to 600m, is of higher grade in most areas.
Development of even half of these inferred resources, which were not included
in the Scoping Study, would significantly increase the projected life of the
Parys Mountain mine from the initial eight years to perhaps double the
projected mine-life to 15 or 18 years with potential positive outcomes on the
project economics.
Anglesey is working on a revised mine model with the objective of
incorporating some of the inferred resources, including part of the
higher-grade Engine Zone inferred resources, into the earlier years of the
mine plan and thereby increasing the project life of the mine to at least 10
years. In parallel, the cut-off grade used to determine the resources included
in the Scoping Study can be tested to determine if this cut-off grade can be
lowered to increase the mineable tonnage and thereby further extend the
projected mine life.
The Scoping Study also recommended further metallurgical investigation to
improve recoveries and minimise metal losses from the DMS plant, particularly
for gold and silver via the gravity concentration circuit. The proposed
metallurgical work would help to confirm the design and selection of key
process items such as the grinding circuit and the flotation cells and
finalise the process flow sheet and mass balance before carrying out any
detailed engineering works. A preliminary proposal for additional laboratory
test work, with an estimated cost of £100,000, has been obtained which
requires representative samples of the ore which currently may not be
available. The recommended metallurgical review will be carried out to the
extent possible using existing data and technical information.
Environmental Studies
Completion of a feasibility study requires an evaluation of the planning and
environmental aspects of the proposed development. An external review of the
planning permissions and associated licence requirements has confirmed that
the planning permissions previously granted remain valid and in force and that
development and operation of the Parys Mountain Mine will require various
environmental assessments and permits granted by Natural Resources Wales. It
is proposed that some further environmental baseline and investigative work be
carried out to bring the database up to date and to comply with the current
level of requirements.
Financing and Marketing
Based on the positive results of the Scoping Study, we have commenced
discussions with potential financiers for the development of the Parys
Mountain project. It is expected that this development will occur in stepped
progressions, to be followed by sequential financings to move towards mine
construction.
The Parys Mountain Mine will produce three separate marketable concentrates
for each of the base metals to be mined: zinc, lead and copper. In addition, a
small quantity of gravity concentrate containing silver and gold will be
produced. The concentrates are likely be sold to one or more of the smelting
and refining operations in Europe. Anglesey has also commenced preliminary
discussions with potential end-purchasers of the concentrates with a view to
entering long-term supply contracts provided these can be linked to
investment or other funding or commercial arrangements as part of the
financing for the development of the project.
Iron Ore
The group’s investments in Grangesberg Iron and in Labrador Iron are heavily
dependent on the future price of iron ore. In 2017 the price of 62% Fe iron
ore ranged from US$55 to US$97, while averaging US$71 per tonne, and during
the first six months of 2018 ranged from US$65 to US$80 per tonne. Over the
past two years there has been a substantial shift in the iron ore market
favouring higher grade quality (+65% Fe) product, with premiums paid for 65%
Fe exceeding 30% of the 62% Fe spot price. As a result, high grade iron ore
products are currently commanding high premiums to this spot price while
sub-commodity grades (<60% Fe) with high impurities are suffering increasing
penalties, resulting in a widening divergence in actual market sale prices.
These market conditions and the resultant strong premium for ~65% Fe products
are expected to continue in the medium term based on the current global
project pipeline, to the potential benefit of our projects.
Grangesberg Iron
Anglesey continues to manage the Grangesberg iron ore project in Sweden. The
high-quality product expected to be produced from Grangesberg, together with
the potential for sales within Sweden’s domestic markets, make Grangesberg
more attractive than many other undeveloped iron ore projects. Although
Grangesberg will benefit from extensive existing infrastructure the project
will still require high levels of capital expenditure. Together with the other
shareholders and stakeholders in Grangesberg we continue to evaluate all
options to develop a viable way forward for the project.
Labrador Iron
The group holds a 12% interest in Labrador Iron Mines Holdings Limited (LIM)
which owns extensive iron ore resources and facilities in its Schefferville
Projects in Labrador and Quebec, Canada. LIM has not undertaken mining
operations since 2013, primarily due to the low iron ore price environment,
but maintains its iron ore assets on a stand-by care and maintenance basis
and, subject to securing financing, is positioned to resume mining operations
as soon as economic conditions warrant.
Outlook
The 2017 Scoping Study demonstrated a viable mine development at Parys
Mountain with a healthy financial rate of return. The outlook for metal
prices, particularly zinc, copper and lead, which form the basis of the Parys
Mountain revenue, remains very positive.
Our objective is to phase the development and financing of Parys Mountain in
logical, sequential and parallel steps by undertaking the various
optimisations studies and programmes, completing a prefeasibility or
feasibility study and progressing Parys Mountain towards production as quickly
as the necessary financing and technical timelines allow.
As well as maintaining a watching brief on the iron ore projects in Canada and
Sweden, Anglesey also plans to pursue new opportunities for mineral
exploration and development projects, in the context of the current resource
cycle, with a focus on advanced copper exploration or development projects. We
plan to enhance our board and small management team by recruiting experienced
executives to help execute our plans and deliver our objectives.
We believe that given the world’s continuing demand for metals and the
shortage of attractive advanced projects, the strong technical base and
political stability associated with all of Anglesey’s projects, particularly
Parys Mountain, finance for project development will become available.
Once again, I would like to thank all our shareholders for their patience and
continuing support.
John F. Kearney
Chairman
31 July 2018
Strategic report - operations
Principal activities and business review
Anglesey Mining is engaged primarily in the evaluating and developing its
wholly owned Parys Mountain zinc, lead, copper project in North Wales. In 2017
a new Scoping Study demonstrated a viable mine development and a healthy
financial rate of return. Site activities during the year have continued to be
limited to care and maintenance, though the Scoping Study has been subject to
detailed examination and review with the aim of further optimising the
development of the Parys Mountain project.
In addition, under various agreements the group participates in the management
of the Grangesberg iron ore property in Sweden in which it has a 6% holding
and a right of first refusal to acquire a further 51% ownership interest. The
group also has a 12% holding in the Labrador Iron Mines in eastern Canada,
currently in care and maintenance.
The group’s objective is to phase the development and financing of the Parys
Mountain project by undertaking various optimisation programmes, completing a
prefeasibility or feasibility study and progressing the Parys Mountain Mine
towards production.
Parys Mountain
The Parys Mountain property hosts a significant polymetallic zinc, copper,
lead, silver and gold deposit. The site has a head frame, a 300m deep
production shaft and planning permission for operations. The group has
freehold ownership of the minerals and surface land. Infrastructure is good,
political risk is low and the project enjoys the support of local people and
government.
An independent JORC resource estimate completed in 2012 by Micon International
Limited reported a resource of 2.1 million tonnes at 6.9% combined base metals
in the indicated category and 4.1 million tonnes at 5.0% combined base metals
in the inferred category, with substantial exploration potential.
In July 2017 a new Scoping Study using the 2012 resource estimate was prepared
by Micon and Fairport Engineering Ltd. The Scoping Study demonstrates a viable
development mining 1,000 tpd to produce lead, zinc and copper concentrates and
yielding a healthy financial rate of return.
Development Plan
During the period 2006-2010 Anglesey Mining carried out a detailed drilling
programme on the White Rock Zone which lies adjacent to the existing 300m deep
Morris Shaft and largely overlies the deeper Engine Zone deposits, but which
extends to surface. As a result of this drilling the 2012 resource estimate by
Micon included both the White Rock Zone and the Engine Zone.
A new mining plan based on a surface decline to access the White Rock zone was
prepared. It proposed that a decline would be developed by mining contractors
and would be used as the initial means of access to the resource for
development and mining. During the initial production phase from the White
Rock zone the decline would continue to be driven to reach the current bottom
of the Morris Shaft and beyond. The shaft would then be dewatered and deepened
by approximately 150 metres and recommissioned as a hoisting shaft for the
remnant White Rock ore and for the deeper and more valuable Engine Zone ore.
Mining would be carried out initially from the main decline using rubber-tyred
equipment including drill jumbos, load-haul-dump machines and trucks to remove
development waste to surface and production ore to the planned adjacent
processing plant. The existing hoist and headframe would be refurbished and
used to bring ore to the surface for delivery to the processing plant through
the deepened shaft.
The 2017 Scoping Study concluded that the preferred development option for
Parys Mountain is a 1,000 tpd mine and plant with a Dense Media Separation
(DMS) section and that after an initial ramp-up period, the higher production
level can be maintained. This would result in a mine life of approximately
eight years based only on the indicated resources.
Metal Production
The proposed processing plant will consist of crushing and grinding followed
by conventional three stage flotation to produce copper, zinc and lead
concentrates to be shipped to smelters in Europe. Metallurgical performance
and recovery is based on the large volume of information available from test
work on Parys Mountain ores over the years. Total base metal recovery to each
of the three copper, zinc and lead concentrates is forecast to be 89.8% and
taking into account the DMS losses overall recovery will be approximately
85.7%. Significant amounts of silver and gold will report to each of the
concentrates. Some free gold will be recovered by gravity methods and will be
sold as Welsh gold.
Smelter payment terms and penalties have been based on indicative treatment
charges currently prevailing from European smelters.
On average 14,000 tonnes of zinc concentrate at 57% Zn, 7,200 tonnes of lead
concentrate at 52% Pb and 4,000 tonnes of copper concentrate at 25% Cu, will
be produced annually. These figures will vary somewhat during the life of the
mine as mine feed varies depending upon the particular ore bodies being mined
at any time. Life of mine average annual metal production into concentrates is
forecast at 17.6 million pounds of zinc, 8.3 million pounds of lead and 2.2
million pounds of copper.
Using estimated shipping costs, smelter terms and penalties, the overall NSR
for the three concentrates, including the precious metals, is expected to
total in excess of $270 million at the metal prices used for the base case.
This would represent net smelter revenue of approximately 72% of the metal
value in concentrates delivered to the smelters.
Project Financial Results
The pre-production capital cost of the base case including mining, DMS,
concentrator and infrastructure is estimated at $56 million, including a $4
million contingency. The initial capital cost for mine development is
estimated to be $16 million, the concentrator $29.5 million including $3
million for the DMS plant, and infrastructure $10 million. Operating costs
were developed by Micon and Fairport based on current knowledge and experience
which at the higher levels of production are forecast at around $47 per tonne
of ore treated.
The base case yields a pre-tax net present value of $33 million, or £26
million, at a conservative 10 per cent discount rate, using metal prices of
$1.25 per pound for zinc, $1.00 per pound for lead, $2.50 per pound for
copper, $17.50 per ounce for silver and $1,275 per ounce for gold and at an
exchange rate of £1.00 = $US1.25. With an estimated pre-production capital
cost of $56 million, or £45 million, this results in an indicated internal
rate of return (IRR) of 26%.
At an 8% discount rate, used to reflect the relatively low risks of the
project given its advanced level of development and low political risk in the
UK, the NPV8 would be enhanced to $40 million, or £32 million, for the base
case metal price scenario. The project is sensitive to metal prices and
exchange rates. Using metal price projections of $1.35 per pound for zinc and
$3.00 per pound for copper the NPV10 would be $43 million, or £35 million and
the NPV8 $52 million, or £42 million, with an IRR of 30%.
The pre-tax net present values, at 10% and 8% discount rates, and internal
rates of return, are illustrated in the table below, all at a sterling:US
dollar exchange rate of £1.00 = $US1.25.
Metal Prices Pre-Tax Cash Flows
Zinc US$/lb Lead US$/lb Copper US$/lb Silver US$/oz Gold US$/oz Undiscounted $M NPV10% $M NPV8% $M IRR %
1.25 1.00 2.50 17.50 1,275 91.2 33.2 40.2 26
1.35 1.00 3.00 17.50 1,275 110.8 43.5 52.3 30
Mineral Resources and Exploration Potential
The 2017 Scoping Study utilises the Micon 2012 JORC Code compliant resource
estimate of 2.1 million tonnes at 6.9% combined base metals in the indicated
category. Micon had also reported a further 4.1 million tonnes at 5.0%
combined base metals in the inferred category. These inferred mineral
resources are not included in the Scoping Study but if utilised would
significantly extend the projected operating life of the mine with a
consequential increase in the resultant estimated valuation.
While the inclusion of inferred resources does not meet the strict criteria
for feasibility studies used by banks for loan evaluation, given the detailed
geological knowledge of Parys Mountain now available it would be acceptable to
utilise some of this inferred resource for comparative financial modelling. To
evaluate potential optimisation of the project some additional mine planning
and scheduling will be carried out on the inferred resource and the results
input to the financial model.
As reported in 2012, the resource estimate was made using a gross metal
product value cut-off of $80 per tonne. The 2017 Scoping Study estimated the
cash operating cost, prior to royalties and taxes, at $47 per tonne. Use of a
lower cut-off grade would increase the tonnes in the indicated category, but
with some reduction in grade, and increase the projected mine life. Further
optimisation studies are required to determine the optimum cut-off grade that
would provide the maximum increased return. These studies are being carried
out initially on the base financial model, i.e. using the indicated resources
only, and this will be followed by the extended resources using some of the
inferred resources as detailed previously. These optimisation studies are of
necessity an on-going process. As more detailed mine costings are developed,
and as the increased tonnage potentially changes not just mine life but also
the grade of ore processed, a series of iterations will be required to reach
that optimum forecast result.
In addition to the indicated and inferred resources reported by Micon, the
Parys Mountain area, over which the group holds the mineral rights, contains
numerous indications of mineralisation across several kilometres many of which
have been disclosed in earlier releases and reports. As most of these
indications have been encountered in drilling at some depth, further
exploration would be more effective from underground locations once mining
operations commence.
Further work on Parys Mountain
The Scoping Study recommended further work to optimise and enhance the project
as the next step ahead of mine development, including more detailed mine and
stope design, underground geotechnical studies, additional infill drilling,
more detailed engineering studies, additional metallurgical test work
including work to improve recovery of specific metals to their own
concentrate, and review of tailings management and paste fill processes.
Several opportunities for cost reduction or productivity improvement have been
identified.
Metallurgical Studies
Fairport has recommended that additional metallurgical testwork be carried out
to increase confidence in a number of key areas including the performance of
the DMS plant, regrind work in the lead circuit to improve concentrate
quality, in the paste backfill section to confirm geotechnical
characteristics, and in improving the overall water balance to reduce
operating costs and discharge requirements. There is insufficient ore of a
representative nature currently available to carry out all of this programme.
Environmental Studies
A conditional planning permission was issued by Gwynedd County Council in 1988
for ‘the development of a mining and milling complex for the extraction and
processing of metalliferous ores and disposal of waste rock and slurry at
Parys Mountain, Amlwch, Gwynedd. In 1991 a second planning permission was
granted to develop a ‘Mine portal and spiral decline to access upper levels
of the ore body to provide a second means of egress’. Both these planning
permissions remain in force.
In the United Kingdom, industrial and other development proposals, including
mineral development projects, are subject to two different processes: a) a
planning process through which a planning authority grants permission for a
specific development and, b) the environmental permitting process through
which permission is granted (in this case by Natural Resources Wales) for the
operation of an installation or activity that could have an environmental
impact.
For planning purposes Parys Mountain is currently considered a dormant site
which cannot commence permitted activity until the mineral planning authority
has agreed conditions. An application may need to be accompanied by an
environmental statement under the Environmental Impact Assessment (EIA)
Regulations. The regulations specify what type of developments should be
subject to EIA. Underground mineral workings require an EIA only if the
development is likely to have significant effects on the environment. The
planning authority may require an EIA as part of the review process and has
the responsibility for deciding if an EIA is required.
Several environmental studies have been undertaken within the Parys Mountain
area, dating back prior to 1988, when the first planning permission for a new
mine was obtained by Anglesey. Baseline monitoring of environmental conditions
was carried out at various times in the 1980s and 1990s. There has also been
an extensive monitoring programme for water quality carried out by the
Environment Agency to assess the impacts of historic mining activities in the
area.
It is now proposed that some further environmental baseline and investigative
work be carried out to bring the database up to date and to comply with the
now current level of regulations. During the year a report was prepared on the
details of the work that will be needed to meet these requirements and
planning for commencement of this work is advanced. It is stressed that the
original planning permissions that have been in place for a number of years
remain intact.
Grangesberg Iron AB
The Grangesberg iron ore mine is situated in the mineral-rich Bergslagen
district of central Sweden about 200 kilometres north-west of Stockholm. Until
its closure in 1989 due to prevailing market conditions, Grangesberg had mined
in excess of 150 million tonnes of iron ore.
The group holds a direct 6% interest in Grangesberg Iron AB (GIAB) and, until
June 2021, a right of first refusal over 51% of the share capital of GIAB.
This right has been granted in exchange for the group continuing to co-manage
GIAB on a cost recovery basis. The group also has shareholder and cooperation
agreements such that it holds operatorship of GIAB subject to certain
conditions and appoints three out of five directors to the board of GIAB.
GIAB is a private Swedish company founded in 2007 which in 2014 completed
(with assistance from the group) a financial and capital restructuring of the
mine. GIAB holds a 25-year exploitation permit covering the previously mined
Grangesberg underground mining operations granted by the Swedish Mining
Inspectorate in May 2013.
In September 2014 an NI 43-101 Technical Report was prepared by Roscoe Postle
Associates Inc showing a compliant resource estimate for the Grangesberg Mine
of 115.2 million tonnes at 40.2% Fe in the indicated category and 33.1 million
tonnes at 45.2% Fe in the inferred category. RPA concluded that the
Grängesberg iron ore deposit hosts a significant iron resource that has
excellent potential for expansion at depth.
Over the past two years there has been a substantial shift in the iron ore
market favouring higher grade quality (+65% Fe) product, with premiums paid
for 65% Fe exceeding 30% of the reported 62% reported spot price. The
high-quality product expected to be produced from Grangesberg would attract
such premium pricing and, together with the potential for sales within
Sweden’s domestic markets, make Grangesberg more attractive than many other
undeveloped iron ore projects. Although Grangesberg benefits from extensive
existing infrastructure, development of the project will still require high
levels of capital expenditure.
Labrador Iron
The group has an investment holding of 12% (2017 - 12%) in Labrador Iron Mines
Holdings Limited. LIM owns extensive iron ore resources and facilities in its
exploration properties in Labrador and in Quebec, Canada, one of the major
iron ore producing regions in the world.
In the three-year period of 2011 to 2013 LIM produced a total of 3.6 million
dry metric tonnes of iron ore, all of which was sold in 23 cape-size shipments
into the China spot market. LIM has not undertaken mining operations since
2013, primarily due to the low iron ore price environment, but maintains its
properties on a stand-by care and maintenance basis and, subject to securing
financing, is positioned to resume mining operations as soon as economic
conditions warrant.
Other activities
The directors continue to seek out new properties suitable for development
within a relatively short time frame and within the financing capability
likely to be available to the group. The directors have identified copper
projects as the most potentially attractive and the group is currently
evaluating a number of early stage opportunities.
Performance
The directors expect to be judged by results of project development and/or
exploration and by their success in creating long term value for shareholders.
The group holds shares in mineral companies and has interests in exploration
and evaluation properties and, until economically recoverable reserves can be
identified, there are no standardised performance indicators which can
usefully be employed to gauge the performance of the group, other than the
market price of the company’s shares.
The chief external factors affecting the ability of the group to move forward
are primarily the demand for metals and minerals, levels of metal prices and
exchange rates; these and other factors are dealt with in the risks and
uncertainties section below.
Financial results and position
The group has no revenues from the operation of its properties. The loss for
the year ended 31 March 2018 after tax was £278,189 compared to a loss of
£307,968 in the 2017 fiscal year. The administrative and other costs
excluding investment income and finance charges were £109,677 compared to
£141,022 in the previous year.
During the year there were no additions to fixed assets (2017 - nil) and
£100,319 (2017 - £84,196) was capitalised in respect of the Parys Mountain
property as mineral property exploration and evaluation.
At 31 March 2018 the group held mineral property exploration and evaluation
assets with a carrying value of £15.0 million. These carrying values are
supported by the results of the 2017 Scoping Study may not reflect the
realizable value of the properties if they were offered for sale at this time.
The group’s cash balance at 31 March 2018 was £137,113 (2017 - £392,293)
the reduction being due to ongoing operating and capital expenses. The foreign
exchange loss of £42 (2017 – gain £178) shown in the income statement
arises on cash balances held in Swedish Krona (in 2017 there was also a
Canadian dollar balance).
At 31 March 2018 the company had 177,608,051 ordinary shares in issue,
unchanged from the previous year.
Financial instruments
The group’s use of financial instruments is described in note 24.
Employment, community and donations
The group is an equal opportunity employer in all respects and aims for high
standards from and for its employees. At 31 March 2018 the company had five
male directors; there were no female directors or employees. It also aims to
be a valued and responsible member of the communities which it operates in or
affects. There are no social, community or human rights issues which require
the provision of further information in this report.
Environment
The group currently has no operations and consequently its effect on the
environment is very slight, being limited to the operation of two small
offices, where recycling and energy usage minimisation are encouraged. It is
not practical or useful to quantify the effects of these measures.
Risks and uncertainties
The directors have carried out a robust 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 some of which have been
described above in regard to particular projects. The board believes the
principal risks facing the group are adequately disclosed in these financial
statements and that there are no other risks of comparable magnitude which
need to be disclosed. In reviewing the risks facing the group, the board
considers it is sufficiently close to the group’s operations and aware of
its activities to be able to adequately monitor risk without the establishment
of any formal process. The group may become subject to 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, mineral reserves, mineral
resources, results of exploration, capital costs, mining production costs and
reclamation and post closure costs, could differ materially from those
currently anticipated by reason of factors such as changes in general economic
conditions and conditions in the financial markets, changes in demand and
prices for minerals that the group expects to produce, legislative,
environmental and other judicial, regulatory, political and competitive
developments in areas in which the group operates, technological and
operational difficulties encountered in connection with the group’s
activities, labour relations, costs and changing foreign exchange rates and
other matters.
The mining industry is competitive in all of its phases. There is competition
within the mining industry for the discovery and acquisition of properties
considered to have commercial potential. The group faces competition from
other mining companies in connection with the acquisition and retention of
properties, mineral claims, leases and other mineral interests as well as for
the recruitment and retention of qualified employees and other personnel.
Development and liquidity risk
At March 31, 2018, the group had limited working capital and had not achieved
profitable operations and will need to generate additional financial resources
to fund its planned optimization and development programmes at Parys Mountain.
The group has relied primarily on equity financings to fund its working
capital requirements and on previous occasions has also relied on its largest
shareholder, Juno Limited, for financial support and may be required to do so
in the future to ensure the group will have adequate funds for its current
activities. There is a risk that additional funding may not be available on a
timely basis or on acceptable terms. Development of the Parys Mountain project
will be dependent on raising further funds from various sources.
Exploration and development risk
Exploration for minerals and development of mining operations involve risks,
many of which are outside the group’s control. 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.
Metal price risks
The prices of metals fluctuate widely and are affected by many factors outside
the group’s control. The relative prices of metals and future expectations
for such prices have a significant impact on the market sentiment for
investment in mining and mineral exploration companies. Metal price
fluctuations may be either exacerbated or mitigated by currency fluctuations
which affect the amount which might be received in sterling.
Foreign exchange risk
LIM is a Canadian company; Angmag AB and GIAB are Swedish companies.
Accordingly, the value of the 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 17 and 24.
Permitting, environment and social risk
The group holds planning permissions for the development of the Parys Mountain
property but further consents will be required to carry out proposed
activities and these may be subject to various operational conditions and
reclamation requirements.
Employee and personnel risk
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.
This report was approved by the board of directors on 31 July 2018 and signed
on its behalf by:
Bill Hooley
Chief executive officer
Directors report
The directors are pleased to submit their report and the audited accounts for
the year ended 31 March 2018.
The corporate governance statement which follows forms part of this report.
The principal activities of the group and other information is set out in the
strategic report section preceding this report. Certain matters relating to
financial performance, risk exposure and management, and future developments
which are required to be disclosed in the directors report have instead been
included within the strategic report.
Directors
The names of the directors are shown in the directors’ remuneration report
and biographical details are shown on the inside rear cover. All directors
remain in office. It is the company’s procedure to submit re-election
resolutions for all directors at the annual general meeting. The company
maintains a directors’ and officers’ liability policy on normal commercial
terms which includes third party indemnity provisions. The powers of the
directors are described in the Corporate Governance Report.
With regard to the appointment and replacement of directors, the company is
governed by its Articles, the Corporate Governance Code, the Companies Act and
related legislation. The Articles themselves may be amended by special
resolution of the shareholders. Under the Articles, any director appointed by
the board during the year must retire at the AGM following his appointment. In
addition, the Articles require that one-third of the remaining directors
retire by rotation at each general meeting and seek re-appointment. However it
is now the company’s practice to submit re-election resolutions for all
directors at each AGM.
Directors’ interests in material contracts
Juno Limited (Juno), which is registered in Bermuda, holds 32.6% of the
company’s ordinary share capital. The company has a controlling shareholder
agreement and working capital agreement with Juno. Advances made under the
working capital agreement are shown in note 19. Apart from these advances and
interest charges there were no transactions between the group and Juno or its
group during the year. An independent committee reviews and approves any
transactions and potential transactions with Juno. Danesh Varma is a director
and, through his family interests, a significant shareholder of Juno.
Bill Hooley and Danesh Varma are directors of Grangesberg Iron AB and of the
special purpose vehicle Eurmag 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. The group has a
liability to Eurmag AB, a subsidiary of Eurang, amounting to £280,835 at the
year end (2017 – £297,570). See also note 25.
There are no other contracts of significance in which any director has or had
during the year a material interest.
Substantial shareholders
At 20 July 2018 the following shareholder had advised the company of an
interest in the issued ordinary share capital:
Juno Limited notified an interest in 57,924,248 shares representing 32.6% of
the issued ordinary shares.
Shares
Allotment authorities and disapplication of pre-emption rights
The directors would usually wish to allot any new share capital on a
pre-emptive basis, however in the light of the group’s potential requirement
to raise further funds for the acquisition of new mineral ventures, other
activities and working capital, they believe that it is appropriate to have a
larger amount available for issue at their discretion without pre-emption than
is normal or recommended for larger listed companies. At this year's annual
general meeting, the directors will seek a renewal and replacement of the
company's existing share allotment authorities.
The authority sought in resolution 11 of the notice of the AGM is to enable
the directors to allot new shares and grant rights to subscribe for, or
convert other securities into shares, up to a nominal value of £590,000
(59,000,000 ordinary shares) which is approximately one third of the total
issued ordinary share capital of the company as at 20 July 2018. The directors
will consider issuing shares if they believe it would be appropriate to do so
in respect of business opportunities that arise consistent with the company's
strategic objectives. The directors have no present intention of exercising
this general authority, other than in connection with the potential issue of
shares pursuant to the company's employee share and incentive plans.
The purpose of resolution 12 is to authorise the directors to allot new shares
pursuant to the general authority given by resolution 11 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 £440,000
(44,000,000 ordinary shares). This aggregate nominal amount represents
approximately 25% of the issued ordinary share capital of the company at 20
July 2018. Whilst such authority is in excess of the 5% of existing issued
ordinary share capital which is commonly accepted and recommended for larger
listed companies, it will provide additional flexibility which the directors
believe is in the best interests of the group in its present circumstances.
The authority sought under resolution 12 will expire on 31 December 2018. The
directors intend to seek renewal of this authority at future annual general
meetings.
Rights and obligations attaching to shares
The rights and obligations attaching to the ordinary and deferred shares are
set out in the Articles of Association. Details of the issued share capital
are shown in note 21. Details of employee share schemes are set out in the
Directors Remuneration Report and in note 22.
Each ordinary share carries the right to one vote at general meetings of the
company. Holders of deferred shares, which are of negligible value, are not
entitled to attend, speak or vote at any general meeting of the company, nor
are they entitled to receive notice of general meetings.
Subject to the provisions of the Companies Act 2006, the rights attached to
any class may be varied with the consent of the holders of three-quarters in
nominal value of the issued shares of the class or with the sanction of an
extraordinary resolution passed at a separate general meeting of the holders
of the shares of the class.
There are no restrictions on the transfer of the company’s shares.
Voting rights
Votes may be exercised at general meetings in relation to the business being
transacted either in person, by proxy or, in relation to corporate members, by
corporate representative. The Articles provide that forms of proxy shall be
submitted not less than 48 hours (excluding any part of a day that is not a
working day) before the time appointed for holding the meeting or adjourned
meeting.
No member shall be entitled to vote at any meeting unless all monies presently
payable in respect of their shares have been paid. 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 company’s share plans contain provisions
relating to a change of control. Outstanding awards and options would normally
vest and become exercisable on a change of control, subject to the
satisfaction of any performance conditions.
Dividend
The group has no revenues and the directors are unable to recommend a dividend
(2017 – nil).
Going concern
The directors have considered the business activities of the group as well as
its principal risks and uncertainties as set out in this report. When doing so
they have carefully applied the guidance given in the Financial Reporting
Council’s documents ‘Going concern and liquidity risk: Guidance for
directors of UK companies 2009’ and ‘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 of the group for the foreseeable
future, being a period of at least twelve months from the date of approval of
the accounts. During the year the group depleted its working capital. At 31
March 2018, the group had cash and cash equivalent reserves of £137,000 and
net assets of £12 million and will need to generate additional financial
resources to fund its planned optimization and development programmes. Based
on the current cash reserves and committed support from its largest
shareholder, Juno Limited, the group has sufficient finance available for the
continuing working capital requirements of the group on a status quo basis for
at least twelve months from the date of the financial statements.
The group will need to generate additional financial resources to meet its
planned business objectives, progress the ongoing development of the Parys
Mountain project and continue as a going concern. The plans to phase the
development of the project by undertaking the various optimisation programmes
and completing a prefeasibility or feasibility study to progress the Parys
Mountain Mine towards production require interim funding to finance the
further studies and optimisation 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 on previous occasions the group has relied on its
largest shareholder, Juno Limited, for financial support and may be required
to do so in the future to ensure the group will have adequate funds for its
current activities and to continue as a going concern.
The directors recognise that the continuing operations of the group are
dependent upon its ability to raise adequate financing and that there is a
risk that additional funding may not be available on a timely basis or on
acceptable terms. The directors are actively pursuing various financing
options with certain shareholders and financial institutions regarding
proposals for financing and have engaged in discussions with a range of
investors, including a number of private equity funds. Whilst these
discussions are not finalised 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. However, given the
limited financial resources currently available, and that there is no
guarantee that such funding will be available in the short term, there is a
risk that the group will not have sufficient financial resources to fund its
short-term project funding requirements, and therefore there exists a material
uncertainty concerning the ability of the group and the company to continue as
a going concern.
Greenhouse gas emissions
The group does not itself undertake any activities or processes which lead to
the production of greenhouse gases. The extent to which its administrative and
management functions result in greenhouse gas emissions is slight and the
directors do not believe that any useful purpose would be served by attempting
to quantify the amounts of these emissions.
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 any such payments made in the year were below the minimum disclosable
level.
Post balance sheet events
There are no post balance sheet events to report.
Statement of directors’ responsibilities
The directors are responsible for preparing the annual report and the
financial statements. The directors are required to prepare the financial
statements for the group in accordance with International Financial Reporting
Standards as adopted by the European Union (“IFRS”) and have also elected
to prepare financial statements for the company in accordance with IFRS.
Company law requires the directors to prepare group and parent company
financial statements for each financial year. Under that law they are required
to the prepare the financial statements in accordance with IFRS, the Companies
Act 2006 and, in relation to the group financial statements, Article 4 of the
IAS Regulation.
Under company law the directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the group and parent company financial statements and of their
profit and loss for that period.
In preparing the financial statements the directors are required to:
* select suitable accounting policies and then apply them consistently;
* make judgements and estimates that are reasonable and prudent;
* state that the financial statements comply with IFRSs as adopted by the
European Union; and
* prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the group and the parent company will continue
in business.
The directors confirm that they consider the annual report and accounts, taken
as a whole, is fair, balanced and understandable and provides the information
necessary for shareholders to assess the company and group’s performance,
business model and strategy.
The directors are responsible for keeping adequate accounting records that are
sufficient to show and explain the parent company’s transactions and
disclose with reasonable accuracy at any time the financial position of the
parent company and the group and enable them to ensure that the financial
statements comply with the Companies Act 2006. They are also responsible for
safeguarding the assets of the parent company and the group and hence for
taking reasonable steps for the prevention and detection of fraud and other
irregularities.
Under applicable law and regulations the, the directors are also responsible
for preparing a Strategic Report, Directors’ Report, Remuneration Report and
Corporate Governance Statement that comply with that law and those
regulations.
The directors are responsible for the maintenance and integrity of the group
website. Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation in other
jurisdictions.
Each of the directors, whose names and functions are listed on the inside rear
cover, confirm that, to the best of their knowledge:
* the group financial statements, which have been prepared in accordance with
IFRSs as adopted by the EU, give a true and fair view of the assets,
liabilities, financial position and loss of the group; and
* the Strategic and Directors’ Reports include a fair review of the
development and performance of the business and the position of the group,
together with a description of the principal risks and uncertainties that it
faces.
Auditor
Each of the directors in office at the date of approval of the annual report
confirms that so far as they are aware there is no relevant audit information
of which the company’s auditor is unaware and that each director has taken
all of the steps which they ought to have taken as a director in order to make
themselves aware of that information and to establish that the company’s
auditor is aware of that information. This confirmation is given and should be
interpreted in accordance with the provisions of s418 of the Companies Act
2006.
During the year the company invited tenders from three firms including Mazars
in respect of the audit and decided to retain Mazars as auditor, consequently
a resolution to reappoint Mazars LLP as auditor and to authorise the directors
to fix their remuneration will be proposed at the annual general meeting.
This report was approved by the board of directors on 31 July 2018 and signed
on its behalf by:
Danesh Varma
Company Secretary
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
2018 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 International
Financial Reporting Standards (IFRSs) as adopted by the European Union and, as
regards the parent company financial statements, as applied in accordance with
the provisions of the Companies Act 2006.
In our opinion:
* the financial statements give a true and fair view of the state of the
group’s and of the parent company’s affairs as at 31 March 2018 and of the
group’s loss for the year then ended;
* the group financial statements have been properly prepared in accordance
with IFRSs as adopted by the European Union;
* the parent company financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union and as applied in
accordance with the provisions of the Companies Act 2006; and
* the financial statements have been prepared in accordance with the
requirements of the Companies Act 2006 and, as regards the group financial
statements, Article 4 of the IAS regulation.
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 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 public interest 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
We draw attention to Note 2 in the financial statements concerning the
applicability of the going concern basis of preparation. As detailed in the
financial statements and the Strategic Report, the parent company and group
are not generating revenue. Its business model requires generation of
additional financial resources to meet its planned business objectives and to
progress the ongoing development of the Parys Mountain project.
At 31 March 2018 the group and parent company had net assets of £12m and
£11m respectively and cash and cash equivalent reserves of £137k and £133k.
During the year, the group has depleted their remaining cash balance and will
need to generate additional financial resources to fund its planned
optimization and development programs. The group is reliant on equity
financings or further support from the major shareholder, Juno Limited.
In Note 2, the directors explain that to date they have successfully raised
funds to finance ongoing expenditure and that they are in the process of
securing additional funding sufficient to finance the next steps in order to
progress the development of the Parys Mountain project. As the directors are
confident that the group will raise the additional funding, they have prepared
the accounts on the going concern basis. However, until the group secures
sufficient investment to fund the short-term project funding requirements as
described in Note 2, there is a material uncertainty that casts a significant
doubt about the group’s and parent company’s ability to continue as a
going concern.
Our opinion is not modified in respect of this matter.
Conclusions relating to principal risks, going concern and viability statement
Other than as above under ‘Material uncertainty related to going concern’,
we have nothing to report in respect of the following information in the
annual report, in relation to which the ISAs (UK) require us to report to you
whether we have anything material to add or draw attention to:
* the disclosures in the annual report set out on pages 8 and 9 that describe
the principal risks and explain how they are being managed or mitigated;
* the directors’ confirmation set out on page 8 in the annual report that
they have carried out a robust assessment of the principal risks facing the
group, including those that would threaten its business model, future
performance, solvency or liquidity;
* the directors’ statement set out on page 11 in the financial statements
about whether the directors considered it appropriate to adopt the going
concern basis of accounting in repairing the financial statements and the
directors’ identification of any material uncertainties to the group and the
parent company’s ability to continue to do so over a period of at least
twelve months from the date of approval of the financial statements;
* whether the directors’ statement relating to going concern required under
the Listing Rules in accordance with Listing Rule 9.8.6R(3) is materially
inconsistent with our knowledge obtained in the audit; or
* the directors’ explanation set out on page 11 in the annual report as to
how they have assessed the prospects of the group, over what period they have
done so and why they consider that period to be appropriate, and their
statement as to whether they have a reasonable expectation that the group will
be able to continue in operation and meet its liabilities as they fall due
over the period of their assessment, including any related disclosures drawing
attention to any necessary qualifications or assumptions.
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.
Key audit matter Our response
Impairment of exploration and evaluation asset (group and company) The group has rights to explore and mine the Parys Mountain site for a number of years and have recently completed a further scoping study reaffirming the facts from old reports. As Our audit procedures included, but were not limited to: - Review of the new scoping study report, consideration of the independence and qualifications of experts used by management to perform these studies; - Challenge the consistency of management’s assumptions and forward looking information included in the impairment model; - Performing a sensitivity analysis on key assumptions used by the management in their assessment; - An arithmetic review of the impairment model prepared by management; and - Assessment of adequacy and completeness of the relevant financial statement disclosures. Based on the work performed above, no impairment to the exploration and evaluation asset was noted.
indicated in the new study reports, there are further studies required to optimise and enhance the project ahead of development. There is a risk that accounting criteria associated with the capitalisation of exploration and evaluation expenditure may no
longer be appropriate and that capitalised costs exceed the value in use. Any assessment of the value in use is highly judgemental based on a combination of independent experts studies and directors’ assessment of long term metal commodity prices, the
estimated mineral deposits, costs associated with mineral extraction and sale, discount rates , exchange rate factors and group’s ability to raise finances.
Impairment of investment in subsidiary (company) The cost of the investment in and loan due from the subsidiary, Parys Mountain Mines Limited, held in the balance sheet of the company, is supported by the future cash flows associated with the recovery of Our audit procedures included, but were not limited to: - Consideration of the results of the impairment review of the underlying exploration and evaluation asset held within the subsidiary; and - Assessment of the completeness and accuracy of the disclosures in the financial statements, using our financial reporting advisory team where necessary Based on the work performed, no impairment to the investment in subsidiary undertakings was noted.
the exploration and evaluation assets following the development of the Parys Mountain site held by Parys Mountain Mines Limited. If there were impairment in the exploration and evaluation assets included above, this would have a direct impact on the
carrying value of the investment in and the loan due from the subsidiary. Under the accounting policy included in Note 2 of the financial statements, investments are held at cost less accumulated impairments therefore there is a risk that the investment in
subsidiary undertaking is impaired as a result of indicators within the underlying assets of the subsidiary, the exploration and evaluation asset discussed above.
Our application of materiality
We apply the concept of materiality in planning and performing our audit, in
evaluating the effect of identified misstatements on the financial statements,
and in forming our audit opinion. The level of materiality we set is based on
our assessment of the magnitude of misstatements that, individually or in
aggregate, could reasonably be expected to have influence on the economic
decisions of the users of the financial statements.
We established materiality based on:
* For the consolidated accounts, group’s net assets represents shareholder
funds and we have determined it to be the principal benchmark within the
financial statements relevant to shareholders, as the group is pre revenue and
pre-production phase. We determined the financial statement materiality and
the performance materiality for the consolidated financial statements as a
whole to be £360,000 (representing approximately 3% of the group’s net
assets) and £270,000 (representing 70% of financial statement materiality)
respectively. A specific materiality of £80,000 is used for the audit of
Income statement areas
* For the parent statutory accounts, net assets is considered most appropriate
as the parent company is not meant to be trading and mainly holds investment
in subsidiaries. We determined the financial statement materiality for the
parent company’s financial statement as a whole to be £217,000
(representing approximatively 3% of the net assets) and £163,000
(representing 70% of financial statement materiality) respectively.
We agreed with the Audit Committee that we would report to that committee all
identified corrected and uncorrected audit differences in excess of £11,000
for the group and in excess of £7,000 for the parent company (representing 3%
of financial statement materiality) together with differences below that
threshold that, in our view, warranted reporting on qualitative grounds.
The range of performance materiality used within the components for the
purposes of the group audit was £3,000 to £224,000.
An overview of the scope of our audit
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, taking
into account the group’s and parent company’s accounting processes and
controls, and the industry in which it operates. We used the outputs of a risk
assessment, our understanding of the group and the parent company, and we also
considered qualitative factors in order to ensure that we obtained sufficient
coverage across all financial statement line items.
Our audit involved obtaining evidence about the amounts and disclosures in the
financial statements sufficient to give reasonable assurance that the
financial statements are free from material misstatement, whether caused by
fraud or error. The risks of material misstatement that had the greatest
effect on our audit, including the allocation of our resources and effort, are
discussed under “Key audit matters” within this report.
The legal entities within the group account for 100% of the group’s
operating loss, 100% of net assets and 100% of total assets, all of which were
subject to full scope audits for the year ended 31 March 2018. The audit of
all the entities within the group was undertaken by the group audit team.
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.
In this context, we also have nothing to report in regard to our
responsibility to specifically address the following items in the other
information and to report as uncorrected material misstatements of the other
information where we conclude that those items meet the following conditions:
* Fair, balanced and understandable set out on page 12 – the statement given
by the directors that they consider the annual report and financial statements
taken as a whole is fair, balanced and understandable and provides the
information necessary for shareholders to assess the group’s performance,
business model and strategy, is materially inconsistent with our knowledge
obtained in the audit; or
* Audit committee reporting set out on page 21 – the section describing the
work of the audit committee does not appropriately address matters
communicated by us to the audit committee; or
* Directors’ statement of compliance with the UK Corporate Governance Code
set out on page 20 – the parts of the directors’ statement required under
the Listing Rules relating to the company’s compliance with the UK Corporate
Governance Code containing provisions specified for review by the auditor in
accordance with Listing Rule 9.8.10R(2) do not properly disclose a departure
from a relevant provision of the UK Corporate Governance Code.
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 Rules 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 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 its 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 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.
Responsibilities of Directors
As explained more fully in the directors’ responsibilities statement set out
on page 12, 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.
A further description of our responsibilities for the audit of the financial
statements is located on the Financial Reporting Council’s website at
www.frc.org.uk/auditorsresponsibilities. This description forms part of our
auditor’s report.
Other matters which we are required to address
Following the recommendation of the audit committee, we were reappointed by
the Board of Directors on 21 February 2018 to audit the financial statements
for the year ended 31 March 2018 and subsequent financial periods. The period
of total uninterrupted engagement since reappointment is 1 year, covering the
year ended 31 March 2018.
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 company’s members as a body in accordance
with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work has been
undertaken so that we might state to the company’s members those matters we
are required to state to them in an auditor’s report and for no other
purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the company and the company’s members as
a body for our audit work, for this report, or for the opinions we have
formed.
Robert Neate (Senior Statutory Auditor)
for and on behalf of Mazars LLP
Chartered Accountants and Statutory Auditor
Tower Bridge House, St. Katharine’s Way, London, E1W 1DD
31 July 2018
Group income statement
All attributable to equity holders of the company
Notes Year ended 31 March 2018 Year ended 31 March 2017
All operations are continuing £ £
Revenue - -
Expenses (109,677) (141,022)
Equity-settled employee benefits 22 (9,324) (9,479)
Investment income 6 121 146
Finance costs 7 (159,267) (157,791)
Foreign exchange movement (42) 178
Loss before tax 4 (278,189) (307,968)
Taxation 8 - -
Loss for the period (278,189) (307,968)
Loss per share
Basic - pence per share 9 (0.2)p (0.2)p
Diluted - pence per share 9 (0.2)p (0.2)p
Group statement of comprehensive income
Loss for the period (278,189) (307,968)
Other comprehensive income
Items that may subsequently be reclassified to profit or loss:
Exchange difference on translation of foreign holding 31,489 (35,053)
Total comprehensive loss for the period (246,700) (343,021)
Group statement of financial position
31 March 2018 31 March 2017
Notes £ £
Assets
Non-current assets
Mineral property exploration and evaluation 10 15,111,141 15,010,822
Property, plant and equipment 11 204,687 204,687
Investments 14 86,660 86,660
Deposit 15 123,227 123,118
15,525,715 15,425,287
Current assets
Other receivables 16 19,790 23,603
Cash and cash equivalents 17 137,113 392,293
156,903 415,896
Total assets 15,682,618 15,841,183
Liabilities
Current liabilities
Trade and other payables 18 (65,870) (114,557)
(65,870) (114,557)
Net current assets 91,033 301,339
Non-current liabilities
Loans 19 (3,543,236) (3,415,738)
Long term provision 20 (50,000) (50,000)
(3,593,236) (3,465,738)
Total liabilities (3,659,106) (3,580,295)
Net assets 12,023,512 12,260,888
Equity
Share capital 21 7,286,914 7,286,914
Share premium 10,171,986 10,171,986
Currency translation reserve (42,021) (73,510)
Retained losses (5,393,367) (5,124,502)
Total shareholders' funds 12,023,512 12,260,888
The financial statements of Anglesey Mining plc which include the notes to the
accounts on pages 33 to 48 were
approved by the board of directors, authorised for issue on 31 July 2018 and
signed on its behalf by:
John F. Kearney, Chairman
Danesh Varma, Finance Director
Company statement of financial position
31 March 2018 31 March 2017
Notes £ £
Assets
Non-current assets
Investments 13 14,325,116 14,228,552
14,325,116 14,228,552
Current assets
Other receivables 16 5,772 12,759
Cash and cash equivalents 17 132,589 388,880
138,361 401,639
Total assets 14,463,477 14,630,191
Liabilities
Current liabilities
Trade and other payables 18 (54,121) (107,571)
(54,121) (107,571)
Net current assets 84,240 294,068
Non-current liabilities
Loan 19 (3,262,401) (3,118,168)
(3,262,401) (3,118,168)
Total liabilities (3,316,522) (3,225,739)
Net assets 11,146,955 11,404,452
Equity
Share capital 21 7,286,914 7,286,914
Share premium 10,171,986 10,171,986
Retained losses (6,311,945) (6,054,448)
Shareholders' equity 11,146,955 11,404,452
The company reported a loss for the year ended 31 March 2018 of £266,821
(2017 - £295,855). The financial statements
of Anglesey Mining plc registered number 1849957 which include the notes to
the accounts were approved by the
board of directors and authorised for issue on 31 July 2018 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 2016 7,116,914 9,848,949 (38,457) (4,826,013) 12,101,393
Total comprehensive loss for the year:
Loss for the year - - - (307,968) (307,968)
Exchange difference on translation of foreign holding - - (35,053) - (35,053)
Total comprehensive loss for the year - - (35,053) (307,968) (343,021)
Transactions with owners:
Shares issued 170,000 365,200 - - 535,200
Share issue expenses - (42,163) - - (42,163)
Equity-settled employee benefits - - - 9,479 9,479
Equity at 31 March 2017 7,286,914 10,171,986 (73,510) (5,124,502) 12,260,888
Total comprehensive loss for the year:
Loss for the year - - - (278,189) (278,189)
Exchange difference on translation of foreign holding - - 31,489 - 31,489
Total comprehensive income/(loss) for the year - - 31,489 (278,189) (246,700)
Transactions with owners:
Equity-settled employee benefits - - - 9,324 9,324
Equity at 31 March 2018 7,286,914 10,171,986 (42,021) (5,393,367) 12,023,512
Company Share Share Retained Total
capital premium losses
£ £ £ £
Equity at 1 April 2016 7,116,914 9,848,949 (5,768,072) 11,197,791
Total comprehensive loss for the year:
Loss for the year - - (295,855) (295,855)
Total comprehensive loss for the year - - (295,855) (295,855)
Transactions with owners:
Shares issued 170,000 365,200 - 535,200
Share issue expenses - (42,163) - (42,163)
Equity-settled employee benefits - - 9,479 9,479
Equity at 31 March 2017 7,286,914 10,171,986 (6,054,448) 11,404,452
Total comprehensive loss for the year:
Loss for the year - - (266,821) (266,821)
Total comprehensive loss for the year - - (266,821) (266,821)
Transactions with owners:
Equity-settled employee benefits - - 9,324 9,324
Equity at 31 March 2018 7,286,914 10,171,986 (6,311,945) 11,146,955
Group statement of cash flows
Notes Year ended 31 March 2018 Year ended 31 March 2017
£ £
Operating activities
Loss for the period (278,189) (307,968)
Adjustments for:
Investment income 6 (121) (146)
Finance costs 7 159,267 157,791
Equity-settled employee benefits 22 9,324 9,479
Foreign exchange movement 42 (178)
(109,677) (141,022)
Movements in working capital
Decrease in receivables 3,813 9,156
Decrease in payables (53,730) (9,632)
Net cash used in operating activities (159,594) (141,498)
Investing activities
Investment income 12 106
Mineral property exploration and evaluation (95,556) (96,034)
Net cash used in investing activities (95,544) (95,928)
Financing activities
Loans - 125,000
Share issue proceeds net of expenses - 493,037
Net cash generated from financing activities - 618,037
Net (decrease)/increase in cash and cash equivalents (255,138) 380,611
Cash and cash equivalents at start of period 392,293 11,504
Foreign exchange movement (42) 178
Cash and cash equivalents at end of period 17 137,113 392,293
Company statement of cash flows
Notes Year ended 31 March 2018 Year ended 31 March 2017
£ £
Operating activities
Loss for the period 23 (266,821) (295,855)
Adjustments for:
Equity-settled employee benefits 9,324 9,479
Finance costs 144,234 140,967
(113,263) (145,409)
Movements in working capital
Decrease in receivables 6,987 2,674
Decrease in payables (53,451) (9,864)
Net cash used in operating activities (159,727) (152,599)
Investing activities
Investments and long term loans (96,564) (84,425)
Net cash used in investing activities (96,564) (84,425)
Financing activities
Loans - 125,000
Share issues net of expenses - 493,037
Net cash generated from financing activities - 618,037
Net (decrease)/increase in cash and cash equivalents (256,291) 381,013
Cash and cash equivalents at start of period 388,880 7,867
Cash and cash equivalents at end of period 17 132,589 388,880
Notes to the financial statements
1 General information
Anglesey Mining plc is domiciled and incorporated in England and Wales under
the Companies Act. 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 as shown on the rear cover.
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 International Financial Reporting Standards (IFRS) as adopted by the
European Union and therefore the group financial statements comply with
Article 4 of the EU IAS Regulation.
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 Financial Reporting
Council’s documents ‘Going concern and liquidity risk: Guidance for
directors of UK companies 2009’ and ‘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 of the group for the foreseeable
future, being a period of at least twelve months from the date of approval of
the accounts. During the year the group depleted its working capital. At 31
March 2018, the group had cash and cash equivalent reserves of £137,000 and
net assets of £12 million and will need to generate additional financial
resources to fund its planned optimization and development programmes. Based
on the current cash reserves and committed support from its largest
shareholder, Juno Limited, the group has sufficient finance available for the
continuing working capital requirements of the group on a status quo basis for
at least twelve months from the date of the financial statements.
The group will need to generate additional financial resources to meet its
planned business objectives, progress the ongoing development of the Parys
Mountain project and continue as a going concern. The plans to phase the
development of the project by undertaking the various optimisation programmes
and completing a prefeasibility or feasibility study to progress the Parys
Mountain Mine towards production require interim funding to finance the
further studies and optimisation 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 on previous occasions the group has relied on its
largest shareholder, Juno Limited, for financial support and may be required
to do so in the future to ensure the group will have adequate funds for its
current activities and to continue as a going concern.
The directors recognise that the continuing operations of the group are
dependent upon its ability to raise adequate financing and that there is a
risk that additional funding may not be available on a timely basis or on
acceptable terms. The directors are actively pursuing various financing
options with certain shareholders and financial institutions regarding
proposals for financing and have engaged in discussions with a range of
investors, including a number of private equity funds. Whilst these
discussions are not finalised 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. However, given the
limited financial resources currently available, and that there is no
guarantee that such funding will be available in the short term, there is a
risk that the group will not have sufficient financial resources to fund its
short-term project funding requirements, and therefore there exists a material
uncertainty concerning the ability of the group and the company to continue as
a going concern.
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
disposition 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
The group provides equity-settled benefits to certain 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. Deferred tax 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.
Intangible assets - mineral property exploration and evaluation costs
Intangible assets are stated in the statement of financial position at cost,
less accumulated amortisation and provisions for impairment.
Costs incurred prior to obtaining the legal rights to explore a mineral
property are expensed immediately to the income statement. Mineral property
exploration and evaluation costs are capitalised until the results of the
projects, which are usually based on geographical areas, are known; these
include an allocation of administrative and management costs as determined
appropriate to the project by management.
Where a project is successful, the related exploration costs are amortised
over the life of the estimated mineral reserve on a unit of production basis.
Where a project is terminated, the related exploration costs are expensed
immediately. Where no internally-generated intangible asset can be recognised,
development expenditure is recognised as an expense in the period in which it
is incurred.
Impairment of tangible and intangible assets
The values of mineral properties are reviewed annually for indications of
impairment and when these are present a review to determine whether there has
been any impairment is carried out. They are written down when any impairment
in their value has occurred and are written off when abandoned. Where a
provision is made or reversed it is dealt with in the income statement in the
period in which it arises.
Investments
Investments in subsidiaries are shown at 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 cost unless there is a
practical method of determining a reliable fair value, in which case that fair
value is used.
Impairment of investment
Financial assets are assessed for indicators of impairment at the end of each
reporting period. Financial assets are considered to be impaired when there is
objective evidence that, as a result of one or more events that occurred after
the initial recognition of the financial asset, the estimated future cash
flows of the investment have been affected.
For financial assets carried at amortised cost, the amount of the impairment
loss recognised is the difference between the asset's carrying amount and the
present value of estimated future cash flows, discounted at the financial
asset's original effective interest rate.
For an equity instrument that does not have a quoted price in an active
market, and that is not carried at fair value because its fair value cannot be
reliably measured, the amount of the impairment loss is measured as the
difference between the carrying amount of the financial asset and the present
value of estimated future cash flows discounted at the current market rate of
return for a similar financial asset.
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
Financial assets and liabilities are initially recognised and subsequently
measured based on their classification as “loans and receivables”,
“available for sale financial assets” or “other financial
liabilities”.
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They are
included in current assets, except where they mature more than 12 months after
the period end date: these are classified as non-current assets.
(a) Trade and other receivables. Trade and other receivables are measured
at initial recognition at fair value and are subsequently measured at
amortised cost using the effective interest rate method. Appropriate
allowances for estimated irrecoverable amounts are recognised in the income
statement when there is objective evidence that the asset is impaired.
(b) Cash and cash equivalents. The group considers all highly liquid
investments which are readily convertible into known amounts of cash and have
a maturity of three months or less when acquired to be cash equivalents. The
management believes that the carrying amount of cash equivalents approximates
fair value because of the short maturity of these financial instruments.
(c) Available for sale financial assets. Unlisted shares held by the
group that are classified as being AFS are stated at cost on the basis that
the shares are not quoted and a reliable fair value is not able to be
estimated. Dividends on AFS equity instruments are recognised in profit or
loss when the group’s right to receive the dividends is established. The
fair value of AFS monetary assets denominated in a foreign currency is
determined in that foreign currency and translated at the spot rate at the
balance sheet date. The foreign exchange gains and losses that are recognised
in profit or loss are determined based on amortised cost of the monetary
asset. Other foreign exchange gains and losses are recognised in other
comprehensive income.
(d) Trade and other payables. Trade payables are not interest bearing and
are initially recognised at fair value and subsequently measured at amortised
cost using the effective interest rate method.
(e) Deposits. Deposits are recognised at fair value on initial recognition
and are subsequently measured at amortised cost using the effective interest
rate method.
(f) Loans. Loans are recognised at fair value on initial recognition and are
subsequently measured at amortised cost using the effective interest rate
method.
Equity instruments
Equity instruments issued by the company are recorded at the proceeds
received, net of direct issue costs.
Leases
Leases are classified as finance leases whenever the terms of the lease
transfer substantially all the risks and rewards of ownership to the lessee.
All other leases are classified as operating leases.
Mining lease payments are recognised as an operating expense in the income
statement on a straight line basis over the lease term unless they relate to
mineral property exploration and evaluation in which case they are
capitalised. There are no finance leases or other operating leases.
New accounting standards
Standards, amendments and interpretations adopted in the current financial
year:
The adoption of the following standards, amendments and interpretations in the
current year has not had a material impact on the financial statements of the
group or the company:
IAS 7 Statement of Cash Flows: Amendment in respect of the disclosure
initiative
IAS 12 Income Taxes: Amendment in relation to the recognition of deferred tax
assets for unrealised losses
Annual Improvements to IFRSs (2014 - 2016): Clarification of the scope of IFRS
12 Disclosure of Interests in Other Entities.
Standards, amendments and interpretations in issue but not yet effective:
Effective date
IAS 19 Employee Benefits: Amendment in relation to plan amendment, curtailment or settlement. 1 January 2019.
IAS 28 Investments in Associates and Joint Ventures: Amendment in relation to Long-term interests in Associates and Joint Ventures. 1 January 2018.
IFRS 2 Share-based Payment: Amendment in relation to classification and measurement of share-based payment transactions. 1 January 2019.
IFRS 9 Financial Instruments. 1 January 2018.
IFRS 9 Financial Instruments: Amendment in relation to Prepayment features with negative compensation. 1 January 2019.
IFRS 15 Revenue from Contracts with Customers. 1 January 2018.
IFRS 16 Leases. 1 January 2019.
Annual Improvements to IFRSs (2014 - 2016). 1 January 2018.
Annual Improvements to IFRSs (2015 - 2017). 1 January 2019 pending endorsement.
Conceptual Framework (Revised) and amendments to related references in IFRS Standards 1 January 2020 pending endorsement.
IFRIC 22 Foreign Currency Transactions and Advance Consideration. 1 January 2018.
IFRIC 23 Uncertainty over Income Tax Treatments. 1 January 2019 pending endorsement.
The directors’ impact assessment indicates that the adoption of the above
pronouncements (with the possible exception of IFRS16) will have no material
impact on the financial statements in the period of initial application other
than disclosure. The group is not yet generating any revenue consequently the
implementation of IFRS15 will have no impact until revenues begin. The
directors have not yet fully assessed the impact IFRS16 on these financial
statements but believe that since the group is a lessee in respect of mineral
leases only, the standard will not be applicable to the group’s financial
statements. IFRS 16 takes effect for financial years beginning after 1 January
2019.
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 group’s 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. There are uncertainties inherent in making such
assumptions, especially with regard to: ore resources and the life of a mine;
recovery rates; production costs; commodity prices and exchange rates.
Assumptions that are valid at the time of estimation may change significantly
as new information becomes available and changes in these assumptions may
alter the economic status of a mining unit and result in resources or reserves
being restated. Operation of a mine and the receipt of cashflows from it are
dependent on finance being available to fund the development of the property.
(b) In connection with possible impairment of assets the directors assess each
potentially cash generating unit annually to determine whether any indication
of impairment exists. The judgements made when doing so are similar to those
set out above and are subject to the same uncertainties. See note 10 for
further detail.
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 on 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. In the opinion of the directors, the group’s activities
comprise one class of business which is mine exploration, evaluation and
development. The group reports geographical segments; these are the basis on
which information is reported to the board. As yet there have been no site
expenses incurred in respect of the group’s interest in Grangesberg and
management expenses are included in the UK total.
Income statement analysis
2018 2017
UK Sweden Canada Total UK Sweden Canada Total
£ £ £ £ £ £ £ £
Expenses (109,677) - - (109,677) (141,022) - - (141,022)
Equity-settled employee benefits (9,324) - - (9,324) (9,479) - - (9,479)
Investment income 121 - - 121 146 - - 146
Finance costs (144,234) (15,033) - (159,267) (140,967) (16,824) - (157,791)
Exchange rate loss (16) (26) - (42) 136 42 - 178
Loss for the year (263,130) (15,059) - (278,189) (291,186) (16,782) - (307,968)
Assets and liabilities
31 March 2018 31 March 2017
UK Sweden Canada Total UK Sweden Canada Total
£ £ £ £ £ £ £ £
Non-current assets 15,439,055 86,659 1 15,525,715 15,338,627 86,659 1 15,425,287
Current assets 155,792 1,111 - 156,903 414,655 1,241 - 415,896
Liabilities (3,378,271) (280,835) - (3,659,106) (3,282,725) (297,570) - (3,580,295)
Net assets/liabilities 12,216,576 (193,065) 1 12,023,512 12,470,557 (209,670) 1 12,260,888
4 Loss before taxation
The loss before taxation for the year has been arrived at after charging/(crediting):
2018 2017
£ £
Fees payable to the group's auditor:
for the audit of the annual accounts 22,000 22,000
for the audit of subsidiaries' accounts 3,000 3,000
for other services - taxation compliance - 2,000
for other services - 800
Directors' remuneration - -
Foreign exchange movement 42 (178)
5 Staff costs
The average monthly number of persons employed (including executive directors) was:
2018 2017
Administrative 3 3
3 3
Their aggregate remuneration was: £ £
Wages and salaries 16,425 12,630
Social security costs 1,422 1,325
Other pension costs - -
17,847 13,955
The directors did not receive any remuneration during the year. Further
details are provided in the directors’ remuneration report together with
information on share options.
6 Investment income
2018 2017
Loans and receivables £ £
Interest on bank deposits 12 6
Interest on site re-instatement deposit 109 140
121 146
7 Finance costs
2018 2017
Loans and payables £ £
Loan interest to Juno Limited 144,234 140,967
Loan interest to Eurmag AB 15,033 16,824
159,267 157,791
For both loans the interest shown is accrued and will be repaid together with
the loan principal.
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 2018 of £1.4 million (2017 - £1.3 million)
which, in view of the group’s 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 £12.5 million
unclaimed and available at 31 March 2018 (2017 - £12.5 million). No deferred
tax asset is recognised in respect of these allowances.
2018 2017
£ £
Current tax - -
Deferred tax - -
Total tax - -
Domestic income tax is calculated at 19% of the estimated assessed profit for the year.
In 2017 the rate used was 20%.
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 (278,189) (307,968)
Tax at the domestic income tax rate of 19% (2017 - 20%) (52,856) (61,594)
Tax effect of:
Expenses that are not deductible in determining taxable result: - -
Equity-settled employee benefits 1,772 1,896
Unrecognised deferred tax on losses 51,084 59,698
Total tax - -
9 Earnings per ordinary share
2018 2017
£ £
Earnings
Loss for the year (278,189) (307,968)
Number of shares
Weighted average number of ordinary shares for the purposes of basic earnings per share 177,608,051 164,276,544
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 177,608,051 164,276,544
Basic earnings per share (0.2)p (0.2)p
Diluted earnings per share (0.2)p (0.2)p
As the group has a loss for the year ended 31 March 2018 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 2016 14,926,626
Additions - site 60,886
Additions - rentals & charges 23,310
At 31 March 2017 15,010,822
Additions - site 64,856
Additions - rentals & charges 35,463
At 31 March 2018 15,111,141
Carrying amount
Net book value 2018 15,111,141
Net book value 2017 15,010,822
Included in the additions are mining lease expenses of £11,208 (2017 -
£16,366).
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, the need for which is reviewed each year.
This year the directors carried out an impairment review with an effective
date of 26 March 2018. The directors determined that value-in-use was the
appropriate methodology for calculating the recoverable amount of the Parys
project, as they consider the asset to be at the development stage from a
project perspective, given the ongoing scoping study work, the existence of
site infrastructure, the existing 300 metre shaft, 900 metres of horizontal
underground development, completed metallurgical testing and current valid
planning permission and as they are considering various options regarding
developing the asset further which will lead to expected future cash inflows.
In calculating the value in use, the directors have included the cash outflows
that are expected to be incurred before the asset is ready for use. The
calculation of the recoverable amount was based on the pre-tax discounted
future cash flows from the development and operation of the project at a
throughput of 1000 tonnes per day over the initial projected mine life of 9
years during which time the indicated resources of 2.1 million tonnes would be
mined. The financial model included an assumption of a two year delay before
construction activities commence. There may be unexpected further delays due
to adverse changes in future mineral prices or delays in respect of financing.
The directors used past experience and an assessment of future conditions,
together with external sources of information, to determine the assumptions
which were adopted in the preparation of the financial model used to estimate
the cashflows.
Key assumptions
* Mine plan with development and mining of the indicated resources of 2.1
million tonnes only without inclusion of any of the 4.1 million tonnes of
inferred resources.
* Capital costs estimated at current costs when the expenditure is planned to
be incurred. Revenues and operating costs do not take into account any
inflation.
* Long-term estimates of metal prices were made by the directors and were as
follows: zinc 1.25 US$/lb; copper 2.50 US$/lb; lead 1.00 US$/lb; silver
US$17.50 per ounce and gold US$1275 per ounce. The exchange rate used was
US$1.35/£1.00 approximating the rate at the date of the impairment review.
The Scoping Study used a rate of US$1.25/£1.00.
* A discount rate of 10% was considered by the directors to be appropriate and
has been applied to the estimated future cashflows. The discount rate was
selected by considering the estimated cost of capital and the time value of
money, reviewing discount rates applied by other mining companies, and finally
considering the risks associated with the project due to its location in the
United Kingdom with excellent access to existing infrastructure and readiness
for development, which were considered to be at the lower level, together with
the directors’ allowance for unforeseen risks.
These assumptions are unchanged from those used in the impairment assessment
of the previous year, except that the exchange rate used in 2017 was
US$1.25/£1.00.
Sensitivities
The sensitivity of the assumptions used in the cashflow model which would
significantly affect the pre-tax discounted net present value of the projected
Parys cashflows were tested. The sensitivities which follow are the variation
expressed in percent of each specific assumption which would, on its own,
reduce the calculated net present value to the carrying value of the
intangible asset in the accounts: copper price -32%, zinc price -8%, lead
price -20%, capital expenditure +12%, operating costs +10%, the discount rate
+21% (that is a 21% increase in the discount rate applied, not an increase of
16 percentage points) and a reduction in tonnage mined of 10%. The effect of
an increased delay before the commencement of project development would be to
decrease the net present value by 10% (a decrease in rate, as earlier) for
each year of delay. The directors consider the sensitivities resulting from
the changes in assumptions stated above to be reasonably possible.
Other than the typical mining industry risk factors already taken into
consideration in the mine plan underlying the net present value calculation
the directors are not aware of any other risks which it would be reasonable to
consider when reviewing these sensitivities.
There are significant inferred resources available to the project, the value
of which is not included in the cash flow model as the inferred resources were
not incorporated in the underlying mine plan. It is expected that a high
proportion of these inferred resources will be converted to indicated
resources, or probable reserves, once exploration drilling from underground
takes place. Development and mining of these additional resources would
increase the projected life of the mine.
Conclusion
Based on the above parameters the directors concluded that no impairment
provision is necessary or appropriate to the carrying value of the exploration
and evaluation expenditure in respect of the Parys Mountain project. However
estimates of the net present value of any project, and particularly one like
Parys Mountain, are always subject to many factors and wide margins of error.
The directors believe that the estimates and calculations supporting their
conclusions have been carefully considered and represent a fair representation
of value in use of the property.
11 Property, plant and equipment
Group Freehold land & property Plant & equipment Office equipment Total
Cost £ £ £ £
At 31 March 2016, 2017 and 2018 204,687 17,434 5,487 227,608
Depreciation
At 31 March 2016, 2017 and 2018 - 17,434 5,487 22,921
Carrying amount
At 31 March 2016, 2017 and 2018 204,687 - - 204,687
Company Freehold land & property Plant & equipment Office equipment Total
Cost £ £ £ £
At 31 March 2016, 2017 and 2018 - 17,434 5,487 22,921
Depreciation
At 31 March 2016, 2017 and 2018 - 17,434 5,487 22,921
Carrying amount
At 31 March 2016, 2017 and 2018 - - - -
12 Subsidiaries - company
The subsidiaries of the company at 31 March 2018 and 2017 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 2016 104,025 14,040,102 14,144,127
Advanced - 84,425 84,425
At 31 March 2017 104,025 14,124,527 14,228,552
Advanced - 96,564 96,564
At 31 March 2018 104,025 14,221,091 14,325,116
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 2016 1 86,659 86,660
Addition during period - - -
At 31 March 2017 1 86,659 86,660
Addition during period - - -
At 31 March 2018 1 86,659 86,660
LIM
The group’s investment in LIM is now classified as ‘unquoted’. Based on
the difficulty of determining a fair market value the directors decided in
2015 to write down the value of the LIM shares to a nominal value of £1.
Grangesberg
The group has, through its Swedish subsidiary Angmag AB, a 6% ownership
interest in GIAB, a Swedish company which holds rights over the Grangesberg
iron ore deposits. This investment has been initially recognised and
subsequently measured at cost, on the basis that the shares are not quoted and
a reliable fair value is not able to be estimated. The group has until June
2021 a right of first refusal over a further 51% of the equity of GIAB
together with management direction of the activities of GIAB, subject to
certain restrictions. The group has significant influence over certain
relevant activities of GIAB however equity accounting has not been applied in
respect of this influence as the directors consider this would not have any
material affect.
15 Deposit
Group
2018 2017
£ £
Site re-instatement deposit 123,227 123,118
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 Other receivables
Group Company
2018 2017 2018 2017
£ £ £ £
Other 19,790 23,603 5,772 12,759
The carrying value of the receivables approximates to their fair value.
17 Cash and cash equivalents
Group Company
2018 2017 2018 2017
£ £ £ £
Held in sterling 136,001 389,734 132,589 388,880
Held in Canadian dollars 1 1,318 - -
Held in US dollars 417 467 - -
Held in Swedish krona 694 774 - -
137,113 392,293 132,589 388,880
The carrying value of the cash approximates to its fair value.
18 Trade and other payables
Group Company
2018 2017 2018 2017
£ £ £ £
Trade payables (17,631) (46,557) (11,383) (46,572)
Other accruals (48,239) (68,000) (42,738) (60,999)
(65,870) (114,557) (54,121) (107,571)
The carrying value of the trade and other payables approximates to their fair
value.
19 Loans
Group Company
2018 2017 2018 2017
£ £ £ £
Loan from Juno Limited (3,262,401) (3,118,168) (3,262,401) (3,118,168)
Loan from Eurmag AB (280,835) (297,570) - -
(3,543,236) (3,415,738) (3,262,401) (3,118,168)
Juno: There has been no change in the loan principal during the year. The loan
is provided under a working capital agreement, denominated in sterling,
unsecured and carries interest 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. 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.
Eurmag: There has been no change in the loan principal during the year. 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
1 April 2017 Cash flows Non cash movements 31 March 2018
£ £ £ £
Loan from Juno Limited (3,118,168) - (144,233) (3,262,401)
Loan from Eurmag AB (297,570) - 16,735 (280,835)
(3,415,738) - (127,498) (3,543,236)
The Juno loan relates to the group and company. The Eurmag loan relates to the
group only. The non cash movements in loans represent accrued interest
together with a foreign exchange gain of £31,722 in respect of the loan from
Eurmag AB.
20 Long term provision
Group
2018 2017
£ £
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.
21 Share capital
Ordinary shares of 1p Deferred shares of 4p Total
Issued and Nominal Number Nominal Number Nominal
fully paid value £ value £ value £
At 31 March 2016 1,606,081 160,608,051 5,510,833 137,770,835 7,116,914
Shares issued for cash 170,000 17,000,000 - - 170,000
At 31 March 2017 and 31 March 2018 1,776,081 177,608,051 5,510,833 137,770,835 7,286,914
The deferred shares are non-voting, have no entitlement to dividends and have
negligible rights to return of capital on a winding up.
No shares were issued during the year.
22 Equity-settled employee benefits
The group has two share-based employee remuneration plans: the 2004 Unapproved
share option plan which plan has now closed; (all the options outstanding in
respect of this plan lapsed during the year and no options were granted or
forfeited in the year) and the current 2014 Unapproved share option plan. The
terms of these are very similar; each 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 to date have
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
top quartile of the FTSE 100 index. The vesting period for any options granted
since 2004 has been one year. Options are forfeited if the employee leaves
employment with the group before the options vest.
2018 2017
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 8,000,000 11.72 4,500,000 19.27
Granted during the period - - 3,500,000 2.00
Forfeited during the period - - - -
Exercised during the period - - - -
Expired during the period 3,800,000 - - -
Outstanding at the end of the period 4,200,000 2.50 3.1 8,000,000 11.72 2.5
Exercisable at the end of the period 4,200,000 2.50 3.1 4,500,000 19.27 0.9
There were expenses in respect of equity-settled employee remuneration for the
year ended 31 March 2018 of £9,324 (2017 – £9,479). This represents the
remainder of the charge in relation to options granted in September 2016.
A summary of options granted and outstanding, all of which are over ordinary
shares of 1 pence, is as follows:
Scheme Number Nominal value £ Exercise price Exercisable from Exercisable until
2004 Unapproved 700,000 7,000 5.00p 27 March 2010 27 March 2019
2014 Unapproved 3,500,000 35,000 2.00p 30 September 2017 30 September 2021
Total 4,200,000 42,000
23 Results attributable to Anglesey Mining plc
The loss after taxation in the parent company amounted to £266,821 (2017
loss £295,855). 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.
24 Financial instruments
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 of the group consists of debt, which includes
the borrowings disclosed in note 19, 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
group's policy that no trading in financial instruments be undertaken. The
main risks arising from the group's financial instruments are currency risk
and interest rate risk. The board reviews and agrees policies for managing
each of these risks and these are summarised below.
Interest rate risk
The amounts advanced under the Juno loans are at a fixed rate of interest of
10% per annum and those from Eurmag 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.
Trade creditors are payable on normal credit terms which are usually 30 days.
The loans due to Juno and Angmag carry a notice period of 367 days. Juno, in
keeping with its practice since drawdown commenced more than 10 years ago, has
indicated that it has no current intention of demanding repayment. No such
notice had been received by 20 July 2018 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. As a result, the
group has no currency exposure in respect of this loan. Currency risk in
respect of the book value of the investment in LIM is no longer significant.
In respect of the investment in Grangesberg in Sweden if the rate of exchange
between the Swedish Krona and sterling were to weaken against sterling by 10%
there would be a loss to the group of £8,686 (2017 - £9,138) and if it were
to move in favour of sterling by a similar amount there would be a gain of
£10,616 (2017 - £11,168). Regarding liabilities denominated in Krona if the
rate of exchange between the Swedish Krona and sterling were to weaken against
sterling by 10% there would be a gain to the group of £25,530 (2017 -
£27,052) and if it were to move in favour of sterling by a similar amount
there would be a loss of £31,204 (2017 - £33,063). These gains or losses
would be recorded in other comprehensive income.
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 Available for sale assets Loans & receivables
31 March 2018 31 March 2017 31 March 2018 31 March 2017
£ £ £ £
Investments 1 1 - -
Deposit - - 123,227 123,118
Other receivables - - 19,790 23,603
Cash and cash equivalents - - 137,113 392,293
- -
1 1 280,130 539,014
Financial liabilities measured at amortised cost
31 March 2018 31 March 2017
£ £
Trade payables (17,631) (46,557)
Other payables (48,239) (68,000)
Loans (3,543,236) (3,415,738)
(3,609,106) (3,530,295)
Company
Loans & receivables Financial liabilities measured at amortised cost
31 March 2018 31 March 2017 31 March 2018 31 March 2017
£ £ £ £
Other receivables 5,772 12,759 - -
Cash and cash equivalents 132,589 388,880 - -
Trade payables - - (11,383) (46,572)
Other payables - - (42,738) (60,999)
Loan - - (3,262,401) (3,118,168)
138,361 401,639 (3,316,522) (3,225,739)
25 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 holds 32.6% of the
company’s issued ordinary share capital. The group has the following
agreements with Juno: (a) a controlling shareholder agreement dated September
1996 and (b) a consolidated working capital agreement of 12 June 2002.
Interest payable to Juno is shown in note 7 and the balance due to Juno is
shown in note 19. There were no transactions between the group and Juno or its
group during the year. Danesh Varma is a director and, through his family
interests, a significant shareholder of Juno.
Grangesberg
Bill Hooley and Danesh Varma are directors of Grangesberg Iron AB and of the
special purpose vehicle Eurmag 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. The group has a
liability to Eurmag AB a subsidiary of Eurang amounting to £280,835 at the
year end (2017 – £297,570) – see note 19.
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.
26 Mineral holdings
Parys
(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 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 £11,208 is payable for the year
beginning 23 March 2017; 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 mining lease from the Crown dated December 1991 there is an annual
lease payment of £5,000. A royalty of 4% of gross sales of gold and silver
from the lease area is also payable. The lease may be terminated at 12
months’ notice and otherwise expires in 2020.
Lease payments
All the group’s leases may be terminated 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
2018 - £17,126; between 1 April 2019 and 31 March 2024 - £91,076. 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.
27 Material non cash transactions
There were no material non-cash transactions in the year.
28 Commitments
Other than commitments under leases (note 26) there is no capital expenditure
authorised or contracted which is not provided for in these accounts (2017 -
nil).
29 Contingent liabilities
There are no contingent liabilities (2017 - nil).
30 Events after the period end
There are no events after the period end to report.
Notice of Annual General Meeting
Notice is given that the 2018 annual general meeting of Anglesey Mining plc
will be held at the offices of the company's lawyers, DLA Piper UK LLP, 3
Noble Street, London, EC2V 7EE on 20 September 2018 at 11.00 a.m. to consider
and, if thought fit, to pass the following resolutions. Resolutions 1 to 11
will be proposed as ordinary resolutions and resolution 12 will be proposed as
a special resolution:
As ordinary business
1. To receive the annual accounts and directors' and auditor’s reports for
the year ended 31 March 2018.
2. To approve the directors' remuneration report for the year ended 31 March
2018.
3. To approve the directors' remuneration policy in the directors’
remuneration report for the year ended 31 March 2018.
4. To reappoint John F. Kearney as a director.
5. To reappoint Bill Hooley as a director.
6. To reappoint David Lean as a director.
7. To reappoint Howard Miller as a director.
8. To reappoint Danesh Varma as a director.
9. To reappoint Mazars LLP as auditor.
10. To authorise the directors to determine the remuneration of the auditor.
As special business
11. 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 £590,000, provided that (unless previously
revoked, varied or renewed) this authority shall expire on 31 December 2019,
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).
12. 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 resolution 11 above 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 £440,000
and (unless previously revoked, varied or renewed) this power shall expire on
31 December 2019, 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
31 July 2018
Notes to the notice of AGM
Entitlement to attend and vote
1. The right to vote at the meeting is determined by reference to
the register of members. Only those shareholders registered in the register of
members of the Company as at the close of business on 17 September 2018 (or,
if the meeting is adjourned, 48 hours (excluding any part of a day that is not
a working day) before the date and time of the adjourned meeting) shall be
entitled to attend and vote at the meeting in respect of the number of shares
registered in their name at that time. Changes to entries in the register of
members after that time shall be disregarded in determining the rights of any
person to attend or vote (and the number of votes they may cast) at the
meeting.
Proxies
2. A shareholder is entitled to appoint another person as his or
her proxy to exercise all or any of his or her rights to attend and to speak
and vote at the meeting. A proxy need not be a member of the Company. 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. Failure to specify the
number of shares each proxy appointment relates to or specifying a number
which when taken together with the numbers of shares set out in the other
proxy appointments is in excess of the number of shares held by the
shareholder may result in the proxy appointment being invalid. A proxy may be
appointed only in accordance with the procedures set out in note 3 and the
notes to the proxy form. The appointment of a proxy will not preclude a
shareholder from attending and voting in person at the meeting.
3. A form of proxy is enclosed. When appointing more than one
proxy, complete a separate proxy form in relation to each appointment.
Additional proxy forms may be obtained by contacting the Company's registrar
Capita Asset Services, Proxies, The Registry, 34 Beckenham Road, Kent BR3 4TU
or the proxy form may be photocopied. State clearly on each proxy form the
number of shares in relation to which the proxy is appointed. To be valid, a
proxy form must be received by post or (during normal business hours only) by
hand at the offices of the Company's registrar, Capita Asset Services,
Proxies, The Registry, 34 Beckenham Road, Kent BR3 4TU, no later than 11.00
a.m. on 17 September 2018 (or, if the meeting is adjourned, no later than 48
hours (excluding any part of a day that is not a working day) before the time
of any adjourned meeting).
Corporate representatives
4. A shareholder which is a corporation may authorise one or more
persons to act as its representative(s) at the meeting. Each such
representative may exercise (on behalf of the corporation) the same powers as
the corporation could exercise if it were an individual shareholder, provided
that (where there is more than one representative and the vote is otherwise
than on a show of hands) they do not do so in relation to the same shares.
Total voting rights
5. As at 20 July 2018 (being the last practicable date before the
publication of this notice), the issued share capital consists of 177,608,051
ordinary shares 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 20 July 2018 are 177,608,051.
Nominated Persons
6. Where a copy of this notice is being received by a person who
has been nominated to enjoy information rights under section 146 of the
Companies Act 2006 ("Act") ("Nominated Person"):
(a) the Nominated Person may have a right under an agreement between him/her
and the shareholder by whom he/she was nominated, to be appointed, or to have
someone else appointed, as a proxy for the meeting; or
(b) if the Nominated Person has no such right or does not wish to exercise
such right, he/she may have a right under such an agreement to give
instructions to the shareholder as to the exercise of voting rights. The
statement of the rights of shareholders in relation to the appointment of
proxies in note 2 does not apply to a Nominated Person. The rights described
in such notes can only be exercised by shareholders of the Company.
Shareholders' right to require circulation of resolutions to be proposed at
the meeting
7. A shareholder or shareholders meeting the qualification
criteria set out in note 10 below may require the Company to give shareholders
notice of a resolution which may properly be proposed and is intended to be
proposed at the meeting in accordance with section 338 of the Act. A
resolution may properly be proposed unless (i) it would, if passed, be
ineffective (whether by reason of inconsistency with any enactment or the
Company's constitution or otherwise), (ii) it is defamatory of any person, or
(iii) it is frivolous or vexatious. The business which may be dealt with at
the meeting includes a resolution circulated pursuant to this right. Any such
request must (i) identify the resolution of which notice is to be given, by
either setting out the resolution in full or, if supporting a resolution
requested by another shareholder, clearly identifying the resolution which is
being supported (ii) comply with the requirements set out in note 11 below,
and (iii) be received by the Company no later than six weeks before the
meeting.
Shareholders' right to have a matter of business dealt with at the meeting
8. A shareholder or shareholders meeting the qualification
criteria set out in note 10 below may require the Company to include in the
business to be dealt with at the meeting any matter (other than a proposed
resolution) which may properly be included in the business in accordance with
section 338A of the Act. A matter may properly be included unless (i) it is
defamatory of any person, or (ii) it is frivolous or vexatious. Any such
request must (i) identify the matter to be included in the business, by either
setting out the matter in full or, if supporting a matter requested by another
shareholder, clearly identifying the matter which is being supported (ii) set
out the grounds for the request (iii) comply with the requirements set out in
note 11 below and (iv) be received by the Company no later than six weeks
before the meeting.
Website publication of audit concerns
9. A shareholder or shareholders who meet the qualification
criteria set out in note 10 below may require the Company to publish on its
website a statement setting out any matter that such shareholders propose to
raise at the meeting relating to either the audit of the Company's accounts
(including the auditors' report and the conduct of the audit) that are to be
laid before the meeting or any circumstances connected with an auditor of the
Company ceasing to hold office since the last annual general meeting of the
Company in accordance with section 527 of the Act. Any such request must (i)
identify the statement to which it relates, by either setting out the
statement in full or, if supporting a statement requested by another
shareholder, clearly identify the statement which is being supported (ii)
comply with the requirements set out in note 11 below and (iii) be received by
the Company at least one week before the meeting. Where the Company is
required to publish such a statement on its website (i) it may not require the
shareholders making the request to pay any expenses incurred by the Company in
complying with the request (ii) it must forward the statement to the Company's
auditors no later than the time when it makes the statement available on the
website and (iii) the statement may be dealt with as part of the business of
the meeting.
Notes 7, 8 and 9 above: qualification criteria and methods of making requests
10. In order to require the Company (i) to circulate a resolution to
be proposed at the meeting as set out in note 7, (ii) to include a matter in
the business to be dealt with at the meeting as set out in note 8, or (iii) to
publish audit concerns as set out in note 9, the relevant request must be made
by (i) a shareholder or shareholders having a right to vote at the meeting and
holding at least five per cent of the total voting rights of the Company or
(ii) at least 100 shareholders having a right to vote at the meeting and
holding, on average, at least £100 of paid up share capital. For information
on voting rights, including the total voting rights of the Company, see note 5
above and the website referred to in note 15 below.
11. Any request by a shareholder or shareholders to require the
Company (i) to circulate a resolution to be proposed at the meeting as set out
in note 7 (ii) to include a matter in the business to be dealt with at the
meeting as set out in note 8 or (iii) to publish audit concerns as set out in
note 9 may be made either (a) in hard copy, by sending it to Anglesey Mining
plc, Tower Bridge, St Katharine's Way, London E1W 1DD (marked for the
attention of the Company Secretary); or (b) in electronic form, by sending an
email to danesh@angleseymining.co.uk; and must state the full name(s) and
address(es) of the shareholder(s) and (where the request is made in hard copy
form) must be signed by the shareholder(s).
Questions at the meeting
12. Shareholders have the right to ask questions at the meeting
relating to the business being dealt with at the meeting in accordance with
section 319A of the Act. The Company must answer any such question unless: (a)
to do so would interfere unduly with the preparation for the meeting or would
involve the disclosure of confidential information; (b) the answer has already
been given on a website in the form of an answer to a question; or (c) it is
undesirable in the interests of the Company or the good order of the meeting
that the question be answered.
Documents available for inspection
13. The following documents will be available for inspection during
normal business hours at the registered office of the Company from the date of
this notice until the time of the meeting. They will also be available for
inspection at the place of the meeting from at least 15 minutes before the
meeting until it ends: (a) copies of the service contracts of the executive
directors, (b) copies of the letters of appointment of the non-executive
directors and (c) the Articles of Association of the Company.
Biographical details of directors
14. Biographical details of all those directors who are offering
themselves for reappointment at the meeting are set out in the annual report
and accounts.
Website providing information about the meeting
15. The information required by section 311A of the Act to be published
in advance of the meeting, which includes the matters set out in this notice
and information relating to the voting rights of shareholders, is available at
www.angleseymining.co.uk.
Directors
John F. Kearney Irish, aged 67, chairman, is a mining executive with more than 40 years’ experience in the mining industry and is chairman and CEO of Labrador Iron Mines Holdings Limited. He is also chairman of Canadian Zinc Corporation, Buchans Resources Limited, Xtierra plc and Conquest Resources Limited. He is a director of the Mining Association of Canada and has degrees in law and economics from University College Dublin and an MBA from Trinity College Dublin. He is a member of the nomination committee.
He is resident in Canada.
Bill Hooley aged 71, chief executive, is a mining engineering graduate from the Royal School of Mines and has extensive experience in many countries including the UK and Australia. He is vice-chairman and a director of Labrador Iron Mines Holdings Limited and since May 2014 a director of Grangesberg Iron AB and Eurmag AB. He has been a director of a number of other companies involved in the minerals industry. He is a Fellow of the Australasian Institute of Mining and Metallurgy.
Danesh Varma Canadian, aged 68, finance director and company secretary is a chartered accountant and a member of the Chartered Institute of Taxation. He is a director of Labrador Iron Mines Holdings Limited and since May 2014 has been a director of Grangesberg Iron AB and Eurmag AB. He is also chief financial officer of Buchans Resources Limited, Xtierra Inc. and Conquest Resources Limited.
David Lean Australian, aged 71, non-executive director, is a chartered accountant. He has over 30 years’ experience in the commercial aspects of the mining industry most of which was with major base and precious metal mining houses. Currently he is involved in trading mineral products. He is a member of the audit, remuneration and nomination committees.
Howard Miller aged 74, non-executive director, a lawyer with over 40 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 is a member of the remuneration, audit and nomination committees and the senior independent director.
Glossary
AGM - the annual general meeting to be held on 20 September 2018
DFS - Definitive Feasibility Study
DMS - dense media separation, a process for the elimination of low-density
waste from crushed ore
EIA - environmental impact assessment
GIAB - Grangesberg Iron AB, a privately owned Swedish company
JORC - Australasian Joint Ore Reserves Committee - a set of minimum standards
for public reporting and displaying information related to mineral properties
IRR - internal rate of return
LIM - Labrador Iron Mines Holdings Limited and its group of companies
mtpa - million tonnes per annum
NPV - net present value
NSR - net smelter return
PFS - Preliminary Feasibility Study
tonne - metric tonne of 2,204.6 pounds avoirdupois
SEK - Swedish Krona
tpd - tonnes per day
Anglesey Mining plc, Parys Mountain, Amlwch, Anglesey, LL68 9RE
Phone 01407 831275
mail@angleseymining.co.uk
London office
Painters’ Hall Chambers
8 Little Trinity Lane, London, EC4V 2AN
Phone 07740 932766
Registrars
Link Asset Services
The Registry, 34 Beckenham Road,
Beckenham, Kent BR3 4TU
Share dealing phone 0371 664 0445
Helpline phone 0371 664 0300
Calls cost 12p per minute plus your phone company’s access charge. If you
are outside the United Kingdom, please call +44 371 664 0300. Calls outside
the United Kingdom will be charged at the applicable international rate. Lines
are open between 9.00am and 5.30pm, Monday to Friday excluding public holidays
in England and Wales
Registered office
Tower Bridge House, St. Katharine’s Way, London, E1W 1DD
www.angleseymining.co.uk
Company registered number 01849957
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