REG-Anglesey Mining PLC: Half yearly report 30 September 2022
25/11/2022 10:00
Anglesey Mining plc
Half yearly report for the six months to 30 September 2022
Chairman’s Statement and Management Report
This interim period of 2022 has provided shareholders with some very positive
news generated from the significant progress at both our Parys Mountain
copper-zinc-lead project and our iron ore projects in Sweden and Canada.
At Parys Mountain we completed the first drilling programme since 2012, began
environmental studies and appointed Knight Piésold to undertake both the
design stage for the tailings management system together with the geotechnical
assessment of the underground development. We also continued our engagement
with local planning and regulatory authorities and local councils.
Meanwhile in Sweden, a Pre-Feasibility Study Update for the Grängesberg Iron
Ore Project was completed with very encouraging results, while in Canada
Labrador Iron Mines continued to advance its Houston direct shipping iron ore
project toward production.
Unfortunately, we have not yet seen the benefits of this positive news flow
through into the Anglesey Mining share price. Global uncertainty continues to
be a theme for investors with both economic and political volatility,
inflation concerns and conflict in Ukraine impacting flows of money into the
more speculative end of the market.
The Conundrum of Net Zero and More Mines
As many commentators have written over the last couple of years, metals are
critical for the climate transition and the clean energy technologies needed
to meet the world’s climate action goals will require much more metal. There
are many statistics available to support this argument with more mainstream
commentary almost every week.
Critical raw materials – which include the copper, zinc and silver that will
be produced from Parys Mountain – are fundamental to the increased
deployment of renewable energy, installation of battery storage capacity and
the mass shift to electric vehicles. According to the United Nations Economic
Commission for Europe (UNECE), over the next two decades, demand is expected
to rise over 40% for copper and rare earth elements. The International Energy
Agency also states that global battery and mineral supply chains need to
expand 10-fold to meet projected needs for critical minerals by 2030.
At the recent COP27 gathering at Sharm el Sheikh in Egypt, the UNECE warned
that urgent action is needed on sustainable financing and the use of critical
raw materials. It was stated that without scaled-up efforts to finance and
sustainably manage the critical raw materials needed for a rapid renewables
and clean energy shift, countries of the pan-European and North American
regions will face significant challenges to deliver on the Paris Agreement and
Sustainable Development Goals.
H.E. Mr Mahmoud Mohieldin, UN Climate Change High-Level Champion for COP27 and
UN Special Envoy on Financing the 2030 Agenda for Sustainable Development
stated that ‘a resilient, sustainable and ethical supply of critical raw
materials is essential for clean energy, mobility transitions and digital
transformation. We can’t afford to not act on critical raw materials,
because the cost of inaction is much higher’.
Despite the significant global macro headwinds, the prices of the metals to be
produced at Parys Mountain remained consistently above those used in the 2021
Independent Preliminary Economic Assessment (PEA). The PEA utilised the
three-year trailing metal prices as of September 2020 that included US$2.81/lb
Cu and US$1.20/lb Zn, which compares to US$3.84/lb Cu and US$1.41/lb Zn
respectively at the time of writing.
At the current metal prices, copper production from a Parys Mountain mine
would represent 50% of the net smelter revenue under the expanded case of
3,000 tonnes per day. The PEA indicates production of 75,000 tonnes of copper
over the project’s 12-year mine life; when combined with the other metals
produced this equates to an average copper equivalent production rate of
14,000 tonnes per year over the proposed life of the operation.
As a consequence, our Board continues to remain very confident that the medium
and long-term outlook for most minerals, particularly for copper which will
represent 50% of production at Parys Mountain, is very encouraging.
At Grängesberg, a very positive update of the PFS indicates production of 2.3
to 2.5Mtpa of iron ore concentrate grading 70% Fe that generates strong
economic returns, including a NPV8% of US$688 million post-tax using an iron
ore price of US$120pt, and confirming that the Grängesberg iron ore mine has
the potential to be restarted as one of Europe’s largest individual
producers of high-grade iron ore concentrates.
The conflict in Ukraine has highlighted the strategic positioning of
Grängesberg. Prior to the conflict, Russia and Ukraine each supplied
approximately 30% of all iron ore into the European steel market. With the
future uncertainty around this supply, a long-term source of iron ore could be
highly sought after by European and Middle Eastern steel producers.
Grängesberg, with the high-grade nature of its concentrate, existing
infrastructure and favourable location in southern Sweden in proximity to
European steel mills, represents a highly strategic opportunity.
Next steps
I firmly believe that Anglesey is positioned very strongly to advance its two
key assets at Parys Mountain and Grängesberg over the next year. At Parys
Mountain, the ongoing work programmes including a mineral resource update for
the White Rock and Engine Zones, additional metallurgical testwork and
environmental studies will continue to advance the project through the
production studies and permitting phases. Additionally, the initial review of
the Northern Copper Zone suggests that the system could be significantly
larger than currently modelled, although this will require additional drilling
to test prospective areas.
At Grängesberg, advancing the project to a Bankable Feasibility Study remains
the priority. This initially requires finalising some of the recommendations
from the PFS update, including baseline studies for the environmental impact
assessment and updating the mining reserve to include some improvements to the
proposed Grängesberg mine plan.
Operations and financial
In gearing up for the future, recruiting a new chief executive, reinstating
directors’ remuneration and increasing corporate activity, there have been
higher expenses for this period when compared to last year. The significant
expansions in operations at both assets have also led to growth in the value
of our investment in the properties.
The group had no revenue for the period. The loss for the six months to 30
September 2022 was £453,854 (2021 £298,055) and the expenditures on the
mineral property in the period were £320,887 compared to £42,412 in the
comparative period. Net current assets at 30 September 2022 were £539,077
compared to £796,920 at 31 March 2022.
The private placing in May 2022 has put Anglesey in a position to fund its
planned operations for the next 12 months.
Outlook
Despite global uncertainties and weak financial markets, we continue to be
encouraged by growing investor interest in Anglesey Mining recognising the
significant progress made over the last year. We also believe that the
commodity price outlook remains positive due to the ongoing decarbonisation of
the global economy, combined with renewed growth in China following relaxation
of its Zero Covid Policy, and western governments stimulating economies to
exit a potential recessionary environment.
Fundamentally, we believe that the backdrop for commodities remains positive.
Demand is forecast to increase, yet the supply side response has been
comparatively weak over the last 5-years leading to potential deficits across
the commodity space. Ultimately, this provides a very supportive backdrop for
our projects. Metals are a prerequisite for electrification: copper for
power generation, motors, transmission and energy storage, zinc for extending
the lifespan of products and lead for energy storage. Iron ore is essential
for steel which is used extensively in infrastructure and transportation.
Over the course of the next year, we look forward to advancing both Parys
Mountain and Grängesberg through the planned work programmes and
demonstrating the underlying values to both existing and potential
shareholders.
In closing, on behalf of the board of Directors, I would like to thank our
shareholders for their ongoing support, and I remain very confident that the
assets held by Anglesey will deliver significant value as they continue to be
progressed over the next year.
John F Kearney
Chairman
24 November 2022
Unaudited condensed consolidated income statement
. Notes Unaudited six months ended 30 September 2022 Unaudited six months ended 30 September 2021
All operations are continuing £ £
Revenue - -
Expenses (388,972) (215,267)
Investment income 20 35
Finance costs (79,789) (82,826)
Foreign exchange movement 85 3
Loss before tax (468,656) (298,055)
Taxation 8 - -
Loss for the period 7 (468,656) (298,055)
Loss per share
Basic - pence per share (0.2)p (0.1)p
Diluted - pence per share . (0.2)p (0.1)p
Unaudited condensed consolidated statement of comprehensive income
Loss for the period (468,656) (298,055)
Other comprehensive income
Items that may subsequently be reclassified to profit or loss:
Change in fair value of investment (176,428) (2,453,226)
Foreign currency translation reserve 4,967 (5,799)
Total comprehensive loss for the period (640,117) (2,757,080)
All attributable to equity holders of the company
Unaudited condensed consolidated statement of financial position
Notes 30 September 2022 31 March 2022
£ £
Assets
Non-current assets
Mineral property exploration and evaluation 9 16,032,590 15,711,703
Property, plant and equipment 204,687 204,687
Investments 10 1,847,914 2,024,342
Deposit 123,831 123,811
18,209,022 18,064,543
Current assets
Other receivables 75,498 57,123
Cash and cash equivalents 746,997 922,177
822,495 979,300
Total assets 19,031,517 19,043,843
Liabilities
Current liabilities
Trade and other payables (200,263) (366,418)
(200,263) (366,418)
Net current assets 622,232 612,882
Non-current liabilities
Loans (4,075,936) (4,307,095)
Long term provision (50,000) (50,000)
(4,125,936) (4,357,095)
Total liabilities (4,326,199) (4,723,513)
Net assets 14,705,318 14,320,330
Equity
Share capital 11 8,317,591 7,991,541
Share premium 12,152,844 11,453,789
Currency translation reserve (79,959) (84,926)
Retained losses (5,685,158) (5,040,074)
Total shareholders' funds 14,705,318 14,320,330
All attributable to equity holders of the company
Unaudited condensed consolidated statement of cash flows
Notes Unaudited six months ended 30 September 2022 Unaudited six months ended 30 September 2021
£ £
Operating activities
Loss for the period (468,656) (152,882)
Adjustments for:
Investment income (20) (50)
Finance costs 79,789 84,460
Foreign exchange movement (85) 33
(388,972) (68,439)
Movements in working capital
(Increase) in receivables (18,375) (5,153)
(Decrease)/increase in payables (131,982) 27,862
Net cash used in operating activities (539,329) (45,730)
Investing activities
Mineral property exploration and evaluation (355,542) (21,811)
Investment - (5,428)
Net cash used in investing activities (355,542) (27,239)
Financing activities
Issue of share capital 797,951 184,000
Loan repaid (78,345) -
Currency translation changes - -
Net cash generated from financing activities 719,606 184,000
Net (decrease)/increase in cash and cash equivalents (175,265) 111,031
Cash and cash equivalents at start of period 922,177 95,311
Foreign exchange movement 85 (33)
Cash and cash equivalents at end of period 16 746,997 206,309
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 2022 - audited 7,991,541 11,453,789 (84,926) (5,040,074) 14,320,330
Total comprehensive loss for the period:
Loss for the period - - - (468,656) (468,656)
Change in fair value of investment - - - (176,428) (176,428)
Exchange difference on translation of foreign holding - - 4,967 - 4,967
Total comprehensive loss for the period - - 4,967 (645,084) (640,117)
Shares issued 326,050 780,020 - - 1,106,070
Share issue expenses - (80,965) - - (80,965)
Equity at 30 September 2022 - unaudited 8,317,591 12,152,844 (79,959) (5,685,158) 14,705,318
Comparative period
Equity at 1 April 2021 - audited 7,765,591 10,941,509 (90,533) (2,207,510) 16,409,057
Total comprehensive loss for the period:
Loss for the period - - - (298,055) (298,055)
Change in fair value of investment - - - (2,453,226) (2,453,226)
Exchange difference on translation of foreign holding - - (5,799) - (5,799)
Total comprehensive loss for the period - - (5,799) (2,751,281) (2,757,080)
Shares issued - - - - -
Share issue expenses - - - - -
Equity at 30 September 2021 - unaudited 7,765,591 10,941,509 (96,332) (4,958,791) 13,651,977
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 2022. 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 UK) and using the going
concern basis. The directors are not aware of any events or circumstances
which would make this inappropriate. 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 2022 which is available
on request from the company or may be viewed at
www.angleseymining.co.uk/accounts.
The financial information contained in this report in respect of the year
ended 31 March 2022 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 by the company’s auditor.
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 2022. There are no new
standards, amendments to standards or interpretations that are expected to
have a material impact on the group's results.
The group has not applied certain new standards, amendments and
interpretations to existing standards that have been issued but are not yet
effective. They are either not expected to have a material effect on the
consolidated financial statements or they are not currently relevant for the
group.
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 2022 remain the same for this
half-yearly period and for the period to 31 March 2023. They 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 2022 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 UK); 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 24 November
2022 and authorised for issue on behalf of the board by Jo Battershill, 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 £0.298 million (loss to 30 September 2020 £0.298m), by
272,244,959 (2020 – 225,475,732) - 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 trading revenues. The cost of all activities charged in the
income statement relates to exploration and evaluation 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 2022
UK Sweden - investment Canada - investment Total
£ £ £ £
Expenses (388,972) - - (388,972)
Investment income 20 - - 20
Finance costs (74,356) (5,433) - (79,789)
Exchange rate movements - 85 - 85
Loss for the period (463,308) (5,348) - (468,656)
Unaudited six months ended 30 September 2021
UK Sweden - investment Canada - investment Total
£ £ £ £
Expenses (215,267) - - (215,267)
Investment income 35 - - 35
Finance costs (77,117) (5,709) - (82,826)
Exchange rate movements - 3 - 3
Loss for the period (292,349) (5,706) - (298,055)
Assets and liabilities
` 30 September 2022
UK Sweden investment Canada investment Total
£ £ £ £
Non current assets 16,361,108 110,157 1,737,757 18,209,022
Current assets 821,326 1,169 - 822,495
Liabilities (3,988,376) (337,823) - (4,326,199)
Net assets/(liabilities) 13,194,058 (226,497) 1,737,757 14,705,318
Audited 31 March 2022
UK Sweden investment Canada investment Total
£ £ £ £
Non current assets 16,040,201 110,157 1,914,185 18,064,543
Current assets 978,199 1,101 - 979,300
Liabilities (4,385,674) (337,839) - (4,723,513)
Net assets/(liabilities) 12,632,726 (226,581) 1,914,185 14,320,330
8. Deferred tax
There is an unrecognised deferred tax asset of £1.4 million (31 March 2022 -
£1.4m) 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 £13.2 million (unchanged from 31
March 2022) 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 £320,887 was incurred (six
months to 30 September 2021 - £394,310). There have been no indicators of
impairment during the period.
10. Investments
Labrador Grangesberg Total
£ £ £
At 1 April 2021 4,053,507 110,157 4,163,664
Net change during the period (2,139,322) - (2,139,322)
At 31 March 2022 1,914,185 110,157 2,024,342
Net change during the period (176,428) - (176,428)
At 30 September 2022 1,737,757 110,157 1,847,914
Labrador – Canada
The group has an investment in Labrador Iron Mines Holdings Limited, (LIM) a
Canadian company which is carried at fair value through other comprehensive
income. The group’s holding of 19,289,100 shares in LIM (11% of LIM’s
total issued shares) is valued at the closing price traded on the OTC Markets
in the United States. In the directors’ assessment this market is
sufficiently active to give the best measure of fair value, which on 30
September 2022 was 10 US cents per share. At 17 November 2022 the price was 10
cents.
Grangesberg - Sweden
The group has, through its Swedish subsidiary Angmag AB, a 19.9% ownership
interest (31 March 22 – 19.9%) in Grangesberg Iron AB an unquoted Swedish
company (GIAB) which holds rights over the Grangesberg iron ore deposits.
The directors assessed the fair value of the investment in GIAB under IFRS 9
and consider the cost at the date of transition and the investment’s value
at the period end to approximate the fair value at these dates. Following
negotiation the group has, until June 2023, a right of first refusal over a
further 50.1% of the total equity of GIAB together with management direction
of the activities of GIAB, subject to certain restrictions. Although the group
has significant influence over certain relevant activities of GIAB, equity
accounting has not been applied in respect of this influence as the directors
consider this would not have any material effect. The group’s share in the
net assets of GIAB at 31 March 2022 was approximately £216,000. There are no
accounts on which to base an equivalent figure for 30 September 2022 but in
the opinion of the directors it is unlikely to be significantly different from
the value at 31 March 2022.
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 2021 2,254,758 225,475,732 5,510,833 137,770,835 7,765,591
Issued in the period 225,950 22,595,000 - - 225,950
At 31 March 2022 2,480,708 248,070,732 5,510,833 137,770,835 7,991,541
Issued in the period 326,050 32,604,989 - - 326,050
At 30 September 2022 2,806,758 280,675,721 5,510,833 137,770,835 8,317,591
The deferred shares are non-voting, have no entitlement to dividends and have
negligible rights to return of capital on a winding up.
On 16 May 2022 a placing of 25,423,989 new ordinary shares was made at 3.4
pence per share to several institutions and two of the directors, representing
approximately 10% of the then current issued share capital to raise a total of
£865,000. At the same time Juno converted part of its loan, at the issue
price, into 6,681,000 new ordinary shares.
12. Financial instruments
Group Financial assets classified at fair value through other comprehensive income Financial assets measured at amortised cost
30 September 2022 31 March 2022 30 September 2022 31 March 2022
£ £ £ £
Investments 1,847,914 2,024,342 - -
Deposit - - 123,831 123,811
Other receivables - - 75,498 57,123
Cash and cash equivalents - - 746,997 922,177
- -
1,847,914 2,024,342 946,326 1,103,111
Financial liabilities measured at amortised cost
30 September 2022 31 March 2022
£ £
Trade payables (108,505) (106,236)
Other payables (91,758) (260,182)
Loans (4,075,936) (4,307,095)
(4,276,199) (4,673,513)
13. Events after the reporting period
None.
14. Related party transactions
None.
Anglesey Mining plc
Directors
John Kearney
Chairman
Jo Battershill
Chief executive
Danesh Varma
Finance director
Howard Miller
Non executive
Andrew King
Non executive
Namrata Verma Non
executive
Registered office address - Parys Mountain, Amlwch, Anglesey, LL68 9RE
Phone 01407 831275 Email mail@angleseymining.co.uk
London office Green Park House, 15 Stratton Street, London W1J
8LQ
Registrars Link Group, 29 Wellington Street,
Leeds, LS1 4DL
Share dealing phone 0371 664 0445 Helpline phone 0371 664 0300
Company registered number 1849957
Web site www.angleseymining.co.uk Shares listed AIM -
AYM
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