REG-Anglesey Mining PLC: Half-year Report for six months to 30 September 2020
11/12/2020 07:15
Anglesey Mining plc
Half yearly report for the six months to 30 September 2020
Chairman’s Statement and Management Report
The period since our Annual Report in September has been very encouraging for
the minerals industry in general and for Anglesey Mining in particular. We
have made good advances on a number of fronts and the prices of all the main
metals in which we are interested have advanced significantly. Two of our
projects have moved forward through the commissioning of development studies
and the results of both these should be available in the coming weeks.
Share Issue and Financings
In August we reported on a private placing that raised £200,000. Associated
with that placing was the issue of a matching number of warrants and I am
pleased to report that these warrants have all now been exercised raising an
additional £225,000, for a total of £425,000. The support shown by the new
incoming investors has been most welcome and the Company’s share price has
moved forward substantially from below 2p a share at the time of the
placing. We believe that this demonstrates increasing support from the
market and that investors are beginning to recognise the value and potential
of Anglesey’s assets.
Covid-19
Despite the continuing and pervasive presence of Covid-19 throughout the
world, the effect is proving quite positive for commodity prices. We believe
that encouraging developments with vaccines will lead to stability in general
economic and operating conditions and the inevitable stimulus relief and
infrastructure programmes will bolster demand for all metals.
Commodity Prices
Over the period, all the metals in which we have an interest have continued to
increase in price, some of them substantially. This applies to both base
metals and precious metals and also to iron ore.
With the continuing pressure on current operating mines in some countries
because of Covid, a shortfall in supply is dominating the base metal markets
and this is likely to continue for some time to come. This shortfall is
accompanied by increasing demand from major infrastructure and Covid relief
programmes, particularly in China, which are likely to continue through 2021
and into 2022 and provide ongoing support for base metal and iron ore prices.
Of particular importance to Parys Mountain is the price of copper which will
be the mainstay of the project in the long term. Copper has made significant
recent gains and now trades at over $3.50 per pound, the highest level for
more than 7 years. This is significantly higher than the price of $2.50 per
pound that was used in the 2017 Micon study. Similarly, zinc is now back up
to the $1.25 per pound price used in the 2017 study. A mine at Parys
Mountain would also produce meaningful quantities of gold and silver, the
prices of which reached multi-year highs in 2020 before easing somewhat after
the US presidential election. The price outlook for these metals remains very
bullish in the face of expected worldwide deficit spending by many
governments.
Iron ore has been showing good strength over the last two years but has been
particularly strong in 2020 with 62% Fe iron fines, which would be the main
product from Labrador Iron Mines Houston project, now trading at over $145 per
tonne CFR China. This is an increase of over 57% for the current year. Of
more importance to the Grangesberg project in Sweden is that the premiums for
higher grade >65% Fe products continue to be supported and have grown by over
20% during the last month.
We expect this support for all the commodities that are of interest to
Anglesey to continue as the lingering effects of the Covid crisis, coupled
with the continuation of the stimulus programme in China and similar projects
being launched in other countries, all begin to take effect.
Parys Mountain
At the beginning of October, we awarded a contract to Micon International
Limited (Micon) to prepare a Preliminary Economic Assessment Report (PEA) on
the Parys Mountain copper, zinc, lead, gold and silver project located on the
island of Anglesey in North Wales. This PEA follows on from the optimisation
studies carried out by QME Mining Technical Services during the last two years
and will utilise the outcomes from the QME studies, including capital and
operating cost estimates as well as the up to 10 million tonnes of potentially
mineable material identified by QME. We hope that the PEA will confirm a
mining and production plan at a higher daily throughput and over a longer
total production life than demonstrated in Micon’s 2017 Scoping Study.
This should lead to improved financial forecasts for the Parys Mountain
project from those generated in 2017.
Micon has made good progress with this PEA and we expect to be in a position
to release details of Micon’s findings before or just after the Christmas
break.
Iron Ore
Grangesberg - Sweden
Anglesey continues to manage Grangesberg Iron AB (“GIAB”) which holds the
Grangesberg iron ore project in Central Sweden. We have made two further cash
investments into GIAB and Anglesey now holds 20% of the company directly,
together with a right of first refusal on a further 50% holding.
Site activities have been kept at a low level but the growing support for
higher-grade iron ore like the premium product that Grangesberg would produce
have encouraged us to now actively seek out alternative development and
corporate strategies to move the project and GIAB forward.
We believe that the superior geographic location of the Grangesberg deposit
and its projected premium product specification could enable such alternative
approaches to be beneficial for the group in the coming periods.
Labrador - Canada
The group continues to hold a 12% interest in Labrador Iron Mines Holdings
Limited (LIM) which owns extensive iron ore resources in the Schefferville
area of Labrador and Quebec in Canada.
LIM holds direct shipping mineral resources of approximately 55 million tonnes
at an average grade of 56.8% in the Houston project. In addition LIM holds the
Elizabeth Taconite Project which has a current inferred mineral resource
estimated at 620 million tonnes at an average grade of 31.8% Fe.
LIM has recently appointed RPA of Toronto to carry out a PEA on the Houston
direct shipping iron ore project. Houston, which lies approximately 30
kilometres south of LIM’s previous James Mine operation, will be very
similar in design and operational characteristics to James and is therefore
well understood. It is expected that the PEA will look at an operation
producing approximately 2 million tonnes per year. The PEA is due for
completion early in 2021 and could provide the impetus to move Houston forward
to financing and production.
LIM’s former James Mine and the Silver Yards processing facility have been
in a progressive reclamation since the termination of mining at the James Mine
in 2014. This work is now virtually complete and has resulted in the release
of several reclamation bonds previously provided to regulatory authorities.
LIM’s Elizabeth Project represents an opportunity to develop a major new
taconite operation in the Schefferville region of the Labrador Trough which
would produce a high-grade saleable iron ore product. This would attract
premium prices in the current iron ore market.
Operations
As always, we have kept our corporate and operating costs at the lowest level
consistent with maintaining our assets in good order. We will continue this
policy going forward but we expect there will be some increase in costs as
project development activities continue. The recent private placing and
warrant exercise financings have put Anglesey in a position to support its
base operations for the immediate future.
Financial results
The group had no revenue for the period. The loss for the six months to 30
September 2020 was £152,882 (2019 £156,600) and the expenditures on the
mineral property in the period were £27,827 compared to £26,527 in the
comparative period. Net current assets at 30 September 2020 were £94,895
compared to £13,572 at 31 March 2020. Since the period end a further
£225,000 gross has been raised from the exercise of warrants.
Outlook
We have been much encouraged by the positive commodity price outlook and
increased investor interest over the last few months as we have been moving
all our projects forward. We are confident that this recent progress will
continue. We believe that the fundamentals that have driven commodity prices
upwards will continue for the foreseeable future and will provide solid
support for our projects. We look forward to completion by Micon of the
PEA on Parys Mountain, which should see that project move to the next
development stage during 2021. We are also confident that both LIM’s
Houston and GIAB’s Grangesberg iron ore projects will be advanced in the
coming year.
We are also actively reviewing two other base metal projects in established
geographical locations and we hope that we should be able to come to suitable
working arrangements with one of these in the coming months.
All in all, we are confident of the way forward and positive on the outlook
for Anglesey Mining for 2021.
I would like to thank shareholders for their continued and renewed support.
John F Kearney
Chairman
10th December 2020
Unaudited condensed consolidated income statement
Notes Unaudited six months ended 30 September 2020 Unaudited six months ended 30 September 2019
All operations are continuing £ £
Revenue - -
Expenses (68,439) (71,493)
Equity-settled employee benefits - -
Investment income 50 60
Finance costs (84,460) (85,190)
Foreign exchange movement (33) 23
Loss before tax (152,882) (156,600)
Taxation 8 - -
Loss for the period 7 (152,882) (156,600)
Loss per share
Basic - pence per share (0.1)p (0.1)p
Diluted - pence per share (0.1)p (0.1)p
Unaudited condensed consolidated statement of comprehensive income
Loss for the period (152,882) (156,600)
Other comprehensive income
Items that may subsequently be reclassified to profit or loss:
Exchange difference on translation of foreign holding 8,747 (22,397)
Total comprehensive loss for the period (144,135) (178,997)
All attributable to equity holders of the company
Unaudited condensed consolidated statement of financial position
Notes 30 September 2020 31 March 2020
£ £
Assets
Non-current assets
Mineral property exploration and evaluation 9 15,243,550 15,215,723
Property, plant and equipment 204,687 204,687
Investments 10 105,527 100,099
Deposit 123,798 123,748
15,677,562 15,644,257
Current assets
Other receivables 21,957 16,505
Cash and cash equivalents 206,309 95,311
228,266 111,816
Total assets 15,905,828 15,756,073
Liabilities
Current liabilities
Trade and other payables (133,371) (98,244)
(133,371) (98,244)
Net current assets 94,895 13,572
Non-current liabilities
Loans (4,056,656) (3,981,893)
Long term provision (50,000) (50,000)
(4,106,656) (4,031,893)
Total liabilities (4,240,027) (4,130,137)
Net assets 11,665,801 11,625,936
Equity
Share capital 11 7,505,591 7,380,591
Share premium 10,317,309 10,258,309
Currency translation reserve (71,719) (80,466)
Retained losses (6,085,380) (5,932,498)
Total shareholders' funds 11,665,801 11,625,936
All attributable to equity holders of the company
Unaudited condensed consolidated statement of cash flows
Notes Unaudited six months ended 30 September 2020 Unaudited six months ended 30 September 2019
£ £
Operating activities
Loss for the period (152,882) (156,600)
Adjustments for:
Investment income (50) (60)
Finance costs 84,460 85,190
Foreign exchange movement 33 (23)
(68,439) (71,493)
Movements in working capital
(Increase) in receivables (5,153) (4,733)
Increase/(decrease) in payables 27,862 (7,751)
Net cash used in operating activities (45,730) (83,977)
Investing activities
Mineral property exploration and evaluation (21,811) (30,487)
Investment (5,428) -
Net cash used in investing activities (27,239) (30,487)
Financing activities
Issue of share capital 184,000 170,000
Loan received - 100,000
Net cash generated from financing activities 184,000 100,000
Net increase in cash and cash equivalents 111,031 155,560
Cash and cash equivalents at start of period 95,311 6,012
Foreign exchange movement (33) 23
Cash and cash equivalents at end of period 206,309 161,595
All attributable to equity holders of the company
Unaudited condensed consolidated statement of changes in group equity
Share Share Currency translation reserve Retained losses Total
capital premium £ £ £
£ £
Equity at 1 April 2020 - audited 7,380,591 10,258,309 (80,466) (5,932,498) 11,625,936
Total comprehensive income for the period:
Exchange difference on translation of foreign holding - - 8,747 - 8,747
Loss for the period - - - (152,882) (152,882)
Total comprehensive income for the period - - 8,747 (152,882) (144,135)
Shares issued 125,000 75,000 - - 200,000
Share issue expenses - (16,000) - - (16,000)
Equity at 30 September 2020 - unaudited 7,505,591 10,317,309 (71,719) (6,085,380) 11,665,801
Comparative period
Equity at 1 April 2019 - audited 7,286,914 10,171,986 (57,116) (5,627,988) 11,773,796
Total comprehensive income for the period:
Exchange difference on translation of foreign holding - - (22,397) - (22,397)
Loss for the period - - - (156,600) (156,600)
Total comprehensive income for the period - - (22,397) (156,600) (178,997)
Shares issued 93,677 106,323 - - 200,000
Share issue expenses - (30,000) - - (30,000)
Equity at 30 September 2019 - unaudited 7,380,591 10,248,309 (79,513) (5,784,588) 11,764,799
All attributable to equity holders of the company
Notes to the accounts
1. Basis of preparation
This half-yearly financial report comprises the unaudited condensed
consolidated financial statements of the group for the six months ended 30
September 2020. It has been prepared in accordance with the Disclosure and
Transparency Rules of the Financial Conduct Authority, the requirements of IAS
34 - Interim financial reporting (as adopted by the European Union) and using
the going concern basis. The directors are not aware of any events or
circumstances which would make this inappropriate. It was approved by the
board of directors on 10 December 2020. It does not constitute financial
statements within the meaning of section 434 of the Companies Act 2006 and
does not include all of the information and disclosures required for annual
financial statements. It should be read in conjunction with the annual report
and financial statements for the year ended 31 March 2020 which is available
on request from the company or may be viewed at www.angleseymining.co.uk.
The financial information contained in this report in respect of the year
ended 31 March 2020 has been extracted from the report and financial
statements for that year which have been filed with the Registrar of
Companies. The report of the auditors on those accounts did not contain a
statement under section 498(2) or (3) of the Companies Act 2006 and was not
qualified. The half-yearly results for the current and comparative periods
have not been audited or reviewed.
2. Significant accounting policies
The accounting policies applied in these unaudited condensed consolidated
financial statements are consistent with those set out in the annual report
and financial statements for the year ended 31 March 2020.
New accounting standards
Standards, amendments and interpretations adopted in the current financial
period:
The adoption of the following standards, amendments and interpretations in the
current financial period has not had a material impact on the financial
statements of the group or the company.
IFRS 9 Financial Instruments (Amendment)
IFRS 16 Leases
IFRIC 23 Uncertainty over Income Tax Treatments
IAS 19 Employee Benefits (Amendment) Plan Amendment
IAS 28 Investments in Associates and Joint Ventures (Amendment)
Standards, amendments and interpretations in issue but not yet effective:
Effective date
Amendments to IAS 1 and IAS 8: Definition of Material 1 January 2020
Amendment to IFRS 3 Business Combinations: Definition of a Business 1 January 2020
Conceptual Framework (Revised) and amendments to related references in IFRS Standards 1 January 2020
IFRS 17 Insurance Contracts Expected date not available
The adoption of the above standards and interpretations is not expected to
lead to any changes to the group’s accounting policies or have any other
material impact on the financial position or performance of the group.
There have been no other new or revised International Financial Reporting
Standards, International Accounting Standards or Interpretations that are in
effect since that last annual report that have a material impact on the
financial statements.
3. Risks and uncertainties
The principal risks and uncertainties set out in the group's annual report and
financial statements for the year ended 31 March 2020 remain the same for this
half-yearly financial report and can be summarised as: development risks in
respect of mineral properties, especially in respect of permitting and metal
prices; liquidity risks during development; and foreign exchange risks. More
information is to be found in the 2020 annual report – see note 1 above.
4. Statement of directors' responsibilities
The directors confirm to the best of their knowledge that:
(a) the unaudited condensed consolidated financial statements have been
prepared in accordance with the requirements of IAS 34 Interim financial
reporting (as adopted by the European Union); and
(b) the interim management report includes a fair review of the information
required by the FCA's Disclosure and Transparency Rules (4.2.7 R and 4.2.8 R).
This report and financial statements were approved by the board on 10 December
2020 and authorised for issue on behalf of the board by Bill Hooley, chief
executive officer and Danesh Varma, finance director.
5. Activities
The group is engaged in mineral property development and currently has no
turnover. There are no minority interests or exceptional items.
6. Earnings per share
The loss per share is computed by dividing the loss attributable to ordinary
shareholders of £0.153 million (loss to 30 September 2019 £0.157m), by
189,571,360 (2019 – 184,569,825) - the weighted average number of ordinary
shares in issue during the period. Where there are losses the effect of
outstanding share options is not dilutive.
7. Business and geographical segments
There are no revenues. The cost of all activities charged in the income
statement relates to exploration and development of mining properties. The
group's income statement and assets and liabilities are analysed as follows by
geographical segments, which is the basis on which information is reported to
the board.
Income statement analysis
Unaudited six months ended 30 September 2020
UK Sweden - investment Canada - investment Total
£ £ £ £
Expenses (68,439) - - (68,439)
Investment income 50 - - 50
Finance costs (77,117) (7,343) - (84,460)
Exchange rate movements - (33) - (33)
Loss for the period (145,506) (7,376) - (152,882)
Unaudited six months ended 30 September 2019
UK Sweden - investment Canada - investment Total
£ £ £ £
Expenses (71,493) - - (71,493)
Investment income 60 - - 60
Finance costs (77,048) (8,142) - (85,190)
Exchange rate movements - 23 - 23
Loss for the period (148,481) (8,119) - (156,600)
Assets and liabilities
` 30 September 2020
UK Sweden investment Canada investment Total
£ £ £ £
Non current assets 15,572,035 105,526 1 15,677,562
Current assets 227,117 1,149 - 228,266
Liabilities (3,921,276) (318,751) - (4,240,027)
Net assets/(liabilities) 11,877,876 (212,076) 1 11,665,801
Audited 31 March 2020
UK Sweden investment Canada investment Total
£ £ £ £
Non current assets 15,544,158 100,098 1 15,644,257
Current assets 110,716 1,100 - 111,816
Liabilities (3,809,032) (321,105) - (4,130,137)
Net assets/(liabilities) 11,845,842 (219,907) 1 11,625,936
8. Deferred tax
There is an unrecognised deferred tax asset of £1.3 million (31 March 2020 -
£1.3m) which, in view of the group's results, is not considered to be
recoverable in the short term. There are also capital allowances, including
mineral extraction allowances, exceeding £12.8 million (unchanged from 31
March 2020) unclaimed and available. No deferred tax asset is recognised in
the condensed financial statements.
9. Mineral property exploration and evaluation costs
Mineral property exploration and evaluation costs incurred by the group are
carried in the unaudited condensed consolidated financial statements at cost,
less an impairment provision if appropriate. The recovery of these costs is
dependent upon the successful development and operation of the Parys Mountain
project which is itself conditional on finance being available to fund such
development. During the period expenditure of £27,827 was incurred (six
months to 30 September 2019 - £26,527). There have been no indicators of
impairment during the period.
10. Investments
Labrador Grangesberg Total
£ £ £
At 1 April 2019 1 97,794 97,795
Change during the period - 2,304 2,304
At 31 March 2020 1 100,098 100,099
Change during the period - 5,428 5,428
At 30 September 2020 1 105,526 105,527
Labrador: The group’s investment is classified as ‘unquoted’ and is
held at a nominal value of £1.
Grangesberg: At the date of these statements the group has a 20.0% (10% at
31 March 2020) holding in Grangesberg Iron AB (an unquoted Swedish company)
and a right of first refusal over shares amounting to a further 51% of that
company. 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. During the period the group subscribed
for new shares in GIAB and obtained further shares in exchange for services
provided by it to Grangesberg.
11. Share capital
Ordinary shares of 1p Deferred shares of 4p Total
Issued and Nominal Number Nominal Number Nominal
fully paid value £ value £ value £
At 1 April 2020 1,869,758 186,975,732 5,510,833 137,770,835 7,380,591
Issued in the period 125,000 12,500,000 125,000
At 30 September 2020 1,994,758 199,475,732 5,510,833 137,770,835 7,505,591
The deferred shares are non-voting, have no entitlement to dividends and have
negligible rights to return of capital on a winding up.
On 24 August 2020 a placing of 12.500,000 new ordinary shares was made to an
institution, representing approximately 6.3% of the company’s then current
issued share capital, at 1.6 pence per share to raise a total of £200,000
gross and £184,000 net. Together with that placing warrants that could raise
an additional £225,000 gross during the following 12 months were granted to
the same institution. All of these warrants had been exercised by the date of
these statements.
12. Financial instruments
Group Financial assets classified at fair value through other comprehensive income Financial assets measured at amortised cost
30 September 2020 31 March 2020 30 September 2020 31 March 2020
£ £ £ £
Investments 105,527 102,403 - -
Deposit - - 123,798 123,748
Other receivables - - 21,957 16,505
Cash and cash equivalents - - 206,309 95,311
- -
105,527 102,403 352,064 235,564
Financial liabilities measured at amortised cost
30 September 2020 31 March 2020
£ £
Trade payables (12,299) (13,537)
Other payables (121,072) (84,707)
Loans (4,056,656) (3,981,893)
(4,190,027) (4,080,137)
13. Events after the reporting period
None.
14. Related party transactions
None.
Anglesey Mining plc
Directors:
John Kearney
Chairman
Bill
Hooley
Chief executive
Danesh Varma
Finance director
Howard Miller Non
executive
Parys Mountain site: Parys Mountain, Amlwch, Anglesey, LL68 9RE Phone
01407 831275
London office: Painter's Hall Chambers, 8 Little Trinity Lane, London, EC4V
2AN Phone 020 7062 3782
Registered office: Tower Bridge House, St. Katharine's Way, London, E1W 1DD
Web site:
www.angleseymining.co.uk
E-mail: mail@angleseymining.co.uk
Shares listed on the London Stock Exchange - LSE:AYM
Company registration number 1849957
Share registrars: Link Asset Services www.linkassetservices.com
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