TIDMAYM
Anglesey Mining plc
Annual Report 2012
A UK mining company listed on the London Stock Exchange
Anglesey holds 26% of Toronto-listed Labrador Iron Mines Holdings Limited (TSX:
LIM) which is now producing iron ore from its James deposit, one of LIM's
twenty direct shipping iron ore deposits in western Labrador and north-eastern
Quebec. Development of other deposits is underway and production of the high
grade hematite iron ore is targeted to grow from 2 million tonnes in 2012 to 5
million tonnes in 2015.
Anglesey is also carrying out exploration, development and pre-feasibility work
at its 100% owned Parys Mountain underground zinc-copper-lead-silver-gold
deposit in North Wales, UK.
Anglesey owns 17.8m LIM shares (26%) and has 159m of its own shares in issue.
Chairman's Statement
I am very pleased to be able to report another successful year for the company
highlighted by the establishment of Labrador Iron Mines as a fully-fledged iron
ore miner and the only independent mining company operating in the Labrador
Trough. We have also made significant progress at Parys Mountain and we are
increasing our efforts at this property in the current year. This year's net
income of GBP19.1 million was chiefly the result of a book gain on our holding in
LIM.
Shareholders will be only too well aware that junior and intermediate mining
stocks have generally performed poorly in share price terms during 2012. This
has been due to a combination of factors including doubts over financial
stability in Europe, less than satisfactory growth in the US economy and
concerns regarding the sustainability of economic growth and development in
China. This rapid decline in mining stocks has occurred whilst commodity prices
have largely been unaffected. The share prices of both Labrador Iron Mines and
Anglesey Mining have been badly impacted by this phenomenon despite the real
progress made by both companies in the period.
We believe that these significant shifts in investment sentiment have affected
us disproportionately, caused in part by the decision of a large institutional
shareholder to dispose of its shareholdings in both LIM and Anglesey. We are
adequately financed for current activities, cashflows into LIM are projected to
be significant and Anglesey is in a strong position to weather any short term
storms and to take advantage of new growth opportunities as well as proceeding
with the development of Parys Mountain.
Labrador Iron
Labrador Iron is Canada's newest iron ore producer, engaged in the mining of
iron ore and in the exploration and development of direct shipping iron ore
projects in the central part of the prolific Labrador Trough region, one of the
major iron ore producing regions in the world, situated in the Province of
Newfoundland and Labrador and in the Province of Québec, centred near the town
of Schefferville, Québec.
This has been an excellent year of progress for LIM. Initial production
commenced at the James Mine in June 2011 and achieved sales of 400,000 tonnes
of iron ore in its start-up 2011 season. Full scale production re-commenced in
April, 2012 and by the end of June 2012 over 650,000 tonnes of iron ore had
been mined and sold.
In April 2011 and March 2012 secondary fund-raisings for a total of almost
C$200 million were completed. At 31 March 2012, LIM had current assets of C$103
million (GBP64 million) including C$71 million (GBP44 million) in unrestricted
cash.
The Phase 3 expansion program of the Silver Yards processing plant, which
includes the installation of a second washing and screening plant and a new
magnetic separator to enhance the recovery of fines material, is expected to be
completed in mid-summer. This expansion is expected to increase plant
throughput to 12,000 tonnes per day, or an annual throughput of 2.0 million
tonnes per year, and is also expected to improve weight recoveries to between
75% and 80%.
Available railway capacity has been expanded from two operating trains in April
to four operating trains in June. An average of two shipments of iron ore are
anticipated each month during the operating year.
LIM now has measured and indicated resources of 44.6 million tonnes at 56.5%
iron in five DSO deposits and an additional 121 million tonnes of historical
resources in about 15 other deposits.
Production and sale of two million tonnes of iron ore is targeted for calendar
2012, leading on to the development of the Houston deposits, with the objective
of ramping up production towards five million tonnes of iron ore per year by
2015.
Iron ore prices strengthened from a low of approximately USD$115 per dry metric
tonne, (62% Fe CFR China basis), in October 2011 to USD$150 in the first
quarter of 2012. Moving into the second quarter of 2012, prices have softened
to approximately USD$135 by mid-June. Port inventories in China remain high,
while Chinese steelmakers are experiencing a squeezing of operating margins.
The spot market remains very volatile. General market concerns over the level
of debt in Europe continue to overhang perceptions for global growth in steel
demand.
Parys Mountain
In December 2011 geophysical and deep overburden sampling work began near the
Morris shaft where the target was shallower extensions of the Engine zones
already identified from the 280 metre level underground development. In January
2012 a drilling rig commenced work in the same area and by March 2012 had
completed 860 metres of core drilling in seven holes with several ore grade
intersections.
Following this Engine Zone programme and starting in April the rig drilled 558
metres in two holes from the edge of the Great Open Cast pit about 800 metres
east of the Morris shaft. These confirmed our geological interpretations and
whilst not returning significant intersections did provide the basis for
continuing exploration in that area.
In mid-May the rig moved to a location about 1.2 kilometres east of the Morris
Shaft and 600 metres east of the Garth Daniel area identified in 2005 and has
so far drilled three angled holes from the same drill site. These holes are the
furthest east of any drilling by Anglesey Mining.
Micon International has been retained to work on a scoping study for a small
scale stand-alone mining operation. This study which will incorporate both the
entire White Rock zone and the now compliant Engine Zone, will update their
2007 study which was based solely on the shallow portion of the White Rock
resources close to the Morris shaft. This concept has several advantages:
Phased development means initial capital expenditures are significantly reduced
- ore from the shallower zones being mined will be trucked to surface
Time to first mine production and cashflows will be reduced
Plant feed of around 500 tonnes per day will be relatively easy to sustain
Exploration and definition drilling of further deeper targets can be achieved
at much lower cost from underground
Cash from early operations will partially fund possible expansion to full scale
production at 1000 tonnes per day.
In July 2012 an agreement was reached with Intermine Limited whereby the net
profits royalty formerly due to Intermine has been bought out and all amounts
due have been discharged.
Financial
The LIM equity financings, which were completed at a price per share which
exceeds the group's carrying value per share, resulted in a profit on this
'deemed disposal' of almost GBP23 million and a corresponding increase in
Anglesey's carrying value of the investment in LIM. Anglesey's interest in LIM
is now 26% compared to 40% last year. The group's share of the LIM operating
loss, together with its own administrative expenses, which were reduced
slightly this year, resulted in reported net income of GBP19.1 million. At 31
March 2012 Anglesey had total net assets of GBP55.7 million including a healthy
cash balance of GBP3 million.
Outlook
The board believes that Anglesey Mining is now very well placed to generate
significant shareholder value over the next few years from both Parys Mountain
and Labrador Iron. The scoping study on the Parys Mountain project is scheduled
for completion in the autumn and in the meantime exploration drilling is
continuing. In Canada LIM's iron ore production is targeted to grow to 5
million tonnes per year by 2015. We remain convinced that any improvement in
the world economies and the return of investor confidence in the mining sector
will be reflected in the share prices of both Labrador Iron and Anglesey
Mining.
John F. Kearney
Chairman
24 July 2012
Directors' report
The directors are pleased to submit their report and the audited accounts for
the year ended 31 March 2012.
Principal activities and business review
The group's principal activities are the development and operation of the
Labrador iron project in eastern Canada in which the group now has a 26%
interest (2011 - 40%), and the Parys Mountain project in North Wales which is
wholly owned.
The James deposit in Labrador was the first to be developed and by June 2012
was producing at full capacity. LIM's target is to ship 2 million tonnes in the
2012 season. The trains and shipping arrangements required to move this
production to customers are operating well. Development work on the next
deposit at Houston is underway.
At Parys Mountain a programme of geophysical and overburden sampling work has
been completed and 1,815 metres of diamond coring in 11 holes was drilled
between January and the end of June 2012. An updated scoping study for the
Parys project is currently under preparation by Micon International and is
expected to be completed later in the year.
The group continues its search for other mineral exploration and development
opportunities.
The aim of the group is to continue to develop and operate the Labrador
projects, to create value in the Parys Mountain property, including by
co-operative arrangements where appropriate, and to actively engage in other
mineral ventures using the group's own resources together with such external
investment and finance as may be required.
Labrador Iron
In 2011 the James deposit was mined between June and December. A total of
approximately 1.2 million tonnes of ore and about 3 million tonnes of waste
were extracted at an average rate of approximately 16,000 tonnes per day. Of
the total production to the end of December, approximately 440,000 tonnes were
direct rail ore, at an average grade of approximately 65% iron, of which
approximately 340,000 tonnes were moved by rail directly to Sept-Îles without
further processing. LIM considers the 2011 operating season as having been a
short, start-up and testing year during which the Schefferville Projects had
not yet reached commercial production.
Mining recommenced in early April 2012 and total ore production for sale for
2012 is on track to reach the target of
2 million tonnes.
A total of 44.6 million tonnes of NI 43-101 compliant measured and indicated
resources have now been estimated in the James, Redmond, Knob Lake, Houston and
Denault deposits. The remaining deposits have a historical resource estimated
at approximately 121 million tons of direct shipping iron ore, based on work
carried out by the Iron Ore Company of Canada prior to the closure of its
Schefferville operations in 1984. The historical estimate was prepared
according to the standards used by IOC and, while still considered relevant, is
not compliant with NI 43-101.
Development of the deposits is planned to be in stages with James, the first
stage, now in full production. The Houston project which will follow and exceed
James is now in development and first production is scheduled for 2013. It is
expected that overall production and sales will be 2 million tonnes in 2012
growing to 5 million tonnes from James, Houston and several smaller deposits by
2015.
Silver Yards Processing Plant
The Silver Yards facility, located 1 km from the James deposits and 3 km by
road from Schefferville, includes a railway spur connected to the Schefferville
to Sept-Îles railway line. The processing facility operates on a seasonal,
weather dependent, basis and re-started for the 2012 operating season in
mid-May 2012.
An expansion of the plant was completed in autumn 2011. This second phase
expansion was designed specifically to deal with fine material, of which there
was more than originally expected, and resulted in an improved throughput and
recovery rate later in the year. Procurement and construction for a further
expansion of the Silver Yards processing plant to increase its production
capacity and to recover ultra-fine material commenced towards the end of 2011
and is now well advanced with an expected completion by the summer of 2012.
This expansion is intended to increase plant throughput to 12,000 tonnes per
day and improve weight recovery to above 75%. In addition, a camp expansion,
establishing grid power, various water management enhancements and other
upgrade works on the Silver Yards plant are anticipated during 2012.
Transport and Port
Iron ore from the James Mine is transported by rail from the Silver Yards plant
site, via the 6 km spur line, the Tshiuetin Rail Transportation Inc. railway
and the Quebec North Shore and Labrador railway, to the port of Sept-Îles,
where the ore is unloaded and stockpiled for shipping. During the short 2011
start-up season, a total of approximately 565,000 tonnes of iron ore was railed
to Sept-Îles. LIM has purchased or leased a total of 545 rail cars and plans to
operate four trains of 120 cars each during the 2012 operating season. LIM
operates a rail car maintenance and repair facility at its Centre Ferro
location in Sept-Îles.
The port of Sept-Îles, situated 530 km down river from Québec City on the North
Shore of the Gulf of St. Lawrence on the Atlantic Ocean, serves the Québec and
Labrador mining industry and is a large, year-round natural harbour, the most
important port for the shipment of iron ore in North America. All iron ore
railed to Sept-Îles in 2011 was sold to the Iron Ore Company of Canada ("IOC")
under a confidential sales contract. LIM signed a second iron ore sales
agreement for the sale to IOC of all iron ore produced in 2012 under which all
shipments will be handled by IOC through its port facilities at Sept-Îles. LIM
will have no requirement to install and operate such facilities for its own use
during 2012 and did not operate any such facilities in 2011.
LIM is currently in discussion with the Sept-Îles Port Authority and with other
port operators regarding the potential use of the port's proposed new
multi-user deep water dock, also in connection with rail transportation,
storage, reclaim and ship-loading and trans-shipment of its iron ore products
in the port.
Houston
The Houston deposits are situated in Labrador about 15 km southeast of the
James Mine and Silver Yards Processing Plant and approximately 20 km from
Schefferville, Québec. In March 2012 Houston received environmental approval
and project release from the Government of Newfoundland and Labrador. Tree
clearance there is now underway and mine construction work is planned to
commence later in the year.
The Houston deposits have a combined measured and indicated resource of 22.9
million tonnes at an average grade of 57.2% Fe and an inferred resource of 3.7
million tonnes at an average grade of 56.5% Fe. LIM expects initial production
of Houston ore, including in-pit dry crushing and screening, will commence in
the second half of 2013 and will build up to 3 million tonnes per annum by
2015.
Parys Mountain
The Parys Mountain property is a significant UK base metal deposit where a
feasibility study carried out in 1991 identified a resource of 6.5 million
tonnes containing zinc, copper and lead with small amounts of silver and gold.
The study demonstrated the technical and economic viability of bringing the
property into production at a rate of 350,000 tonnes per annum, producing zinc,
copper and lead concentrates.
At Parys there is a head frame, a 300m deep production shaft and planning
permission for operations in place, consequently the lead time to production is
expected to be relatively short. The group has freehold ownership of the
minerals and surface land and there is substantial exploration potential.
Infrastructure is good, political risk is low and the project has the support
of local people and government.
Activity at Parys Mountain has significantly increased during the year. In
December 2011 geophysical work and overburden sampling was undertaken west of
the shaft, followed by a diamond drilling programme where 866 metres in seven
holes were drilled in the shallow Engine zone by April 2012. This programme
provided useful definition of the shallow Engine zone in the White Rock area
with several ore grade intersections and the identification of some new
resources. Following this the drill was moved to a new area south of the Great
Open Cast where 558 metres in two holes were drilled encountering minor
mineralisation and providing useful information for further exploration.
In Mid-May the rig moved to a location about 1.2 kilometres east of the Morris
Shaft and 600 metres east of the Garth Daniel area identified in 2005 and is
currently drilling its third angled hole from the same drill site. The first
two holes encountered relatively wide mineralised intersections which have been
sent for assay. These holes are the furthest east of any drilling by Anglesey
Mining.
Micon International is currently working on resource estimate updates of the
White Rock and Engine zones close to the shaft. Micon has also commenced an
update to the scoping study of the White Rock mine, originally prepared in
2007, which would target near surface resources as a first stage development
option, using a decline for mining at a reduced production rate compared with
the 1991 study which envisaged 1000 tonnes per day of ore being mined through
the shaft. It is planned that, having established the operation, the White Rock
mine would lead to the subsequent development of the deeper lying resources at
a higher daily rate.
In July 2012 an agreement was reached with Intermine Limited in respect of the
net profits royalty which it held. A cash payment of C$1,000,000 (GBP630,000) was
made and 2,000,000 ordinary shares in the company issued to discharge the
amount due to Intermine at 31 March 2012 of GBP759,680 and to buy out and cancel
the royalty in its entirety.
The directors considered whether an impairment review was required in respect
of the Parys mineral asset on the balance sheet and believe that it is not.
Operation of the mine and the receipt of cashflows from it are dependent on
finance being available to fund the development of the property.
Dolaucothi
No work was carried out at Dolaucothi during the year and in May 2012 it was
decided to relinquish the property. There are no costs associated with this
decision.
Other activities
Management continues to search for new properties suitable for development
within a relatively short time frame and within the financing capability likely
to be available to the group.
Performance
The directors expect to be judged by results of project development and/or
exploration and by their success in creating long term value for shareholders.
The group holds shares in its associate Labrador Iron Mines Holdings Limited
and has interests in exploration and evaluation properties and, until
economically recoverable reserves can be developed, 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 and the
shares of its associate.
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.
Dividend
The group has no revenues and the directors are unable to recommend a dividend
(2011 - nil).
Financial position
The group has no revenues from the operation of its properties. The profit for
the year after tax was GBP19,386,555 compared to a loss of GBP1,445,657 in 2011.
Of this 2012 profit GBP23,374,274 was attributable to the effects of LIM
financings in April 2011 and March 2012; the only comparable transactions in
2011 resulted in a profit of GBP294,560. LIM's fund raisings have diluted the
company's holding in LIM; because this holding is shown in the financial
statements at a cost below the net price per share of the fund raising, the
transactions result in a profit for Anglesey. If the effects of these
transactions is excluded the comparable figures were losses of GBP3,987,719 in
2012 and GBP1,740,217 in 2011. Most of the increase in these losses was in the
Labrador associate where expenses connected with the establishment of
transportation arrangements were incurred and charged to the income statement.
Operating costs in the UK including finance charges were GBP503,000 compared to GBP
636,000 in the previous year.
During the year there were no additions to fixed assets (2011 - nil) and
GBP355,225 (2011 - GBP107,850) was capitalised in respect of the development of the
Parys Mountain property, a significant increase as a result of the cost of the
drilling programme at Parys Mountain. The Labrador properties are held in an
associated company.
The group's cash balance at 31 March 2012 was GBP3,150,644 (2011 - GBP3,671,247),
this decrease from last year being due to expenditures on the development of
Parys Mountain and administrative expenses. The foreign exchange loss of GBP
41,920 (2011 - loss GBP61,919) shown in the income statement arises on the cash
balances held in Canadian dollars.
At 31 March 2012 the company had 158,608,051 ordinary shares in issue, 450,000
more than last year as a result of the exercise of share options.
The directors believe that the group has adequate funding for its current and
proposed operations.
Risks and uncertainties
In conducting its business the group faces a number of risks and uncertainties
some of which have been described above in regard to particular projects.
However, there are also risks and uncertainties of a nature common to all
mineral projects and these are summarised below.
General mining risks
Actual results relating to, amongst other things, mineral reserves, mineral
resources, results of exploration, capital costs, mining production costs and
reclamation and post closure costs, could differ materially from those
currently anticipated by reason of factors such as changes in general economic
conditions and conditions in the financial markets, changes in demand and
prices for minerals that the group expects to produce, legislative,
environmental and other judicial, regulatory, political and competitive
developments in areas in which the group operates, technological and
operational difficulties encountered in connection with the group's activities,
labour relations matters, costs and changing foreign exchange rates and other
matters.
The mining industry is competitive in all of its phases. There is aggressive
competition within the mining industry for the discovery and acquisition of
properties considered to have commercial potential. The group faces strong
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
The company has adequate funds for its current and planned operations including
the continuing development of the Parys Mountain property. LIM is believed to
be fully funded for the foreseeable future.
Exploration and development
Exploration for minerals and development of mining operations involve risks,
many of which are outside the group's control. The group currently operates in
politically stable environments and hence is unlikely to be subject to
expropriation of its properties but exploration by its nature is subject to
uncertainties and unforeseen or unwanted results are always possible.
Metal prices
The prices of metals fluctuate widely and are affected by many factors outside
the group's control. The relative prices of metals and future expectations for
such prices have a significant impact on the market sentiment for investment in
mining and mineral exploration companies. Metal price fluctuations may be
either exacerbated or mitigated by international currency fluctuations which
affect the actual amount which might be received by the group in sterling.
Foreign exchange
The activities of LIM are carried out in Canada; the group's interest in LIM is
carried in the group accounts on an equity basis and is affected by an exchange
rate risk. Operations at Parys Mountain are in the UK and exchange rate risks
are minor. The majority of the cash balance at the year-end was held in
Canadian dollars - see notes 17 and 24.
Permitting, environment and social
LIM has the governmental, operating, environmental and other permissions
necessary for its current operations. Other permissions will be required as
other deposits are brought into production.
LIM conducts its operations in Labrador and Quebec, in areas which are subject
to conflicting First Nations land claims. There is a number of First Nations
peoples living in the Quebec-Labrador peninsula with overlapping claims to
asserted aboriginal land rights. Aboriginal claims to lands, and the
conflicting claims to traditional rights between aboriginal groups, which also
overlap the Quebec-Labrador provincial border, may have an impact on LIM's
ability to operate and develop the Schefferville deposits.
The group holds planning permission for the development of the Parys Mountain
property but further consents will be required to carry out proposed activities
and these permits may be subject to various reclamation and operational
conditions.
Employees and personnel
The group is dependent on the services of a small number of key executives
including the chairman, chief executive and finance director. The loss of these
persons or the group's inability to attract and retain additional highly
skilled and experienced employees for the operations of LIM or any other areas
in which the group might engage may adversely affect its business or future
operations.
Financial instruments
The group's use of financial instruments is not significant and is described in
note 24.
Directors
The names of the directors with biographical details are shown on the inside
rear cover. It is the company's procedure to submit re-election resolutions for
all directors at each annual general meeting.
The company maintains a directors' and officers' liability policy on normal
commercial termswhich 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.
Directors' interests in material contracts
Juno Limited (Juno), which is registered in Bermuda, holds 36.5% of the
company's ordinary share capital. The company has a controlling shareholder
agreement and working capital agreement with Juno. Advances made under the
working capital agreement are shown in note 19. Apart from interest charges
there were no transactions between the group and Juno or its group during the
year. An independent committee reviews and approves any transactions and
potential transactions with Juno. Danesh Varma is a director and, through his
family interests, a significant shareholder of Juno.
John Kearney is chairman and chief executive of LIM, Bill Hooley is a director
and vice-chairman of LIM and Danesh Varma is chief financial officer of LIM.
All three are shareholders of LIM, are entitled to remuneration from LIM and
have been granted options over the shares of LIM. There are no transactions
between LIM, the group and the company which are required to be disclosed.
There are no other contracts of significance in which any director has or had
during the year a material interest.
Directors' shareholdings
The interests of the directors in the share capital of the company, all of
which are beneficial, are set out below:
24 July 2012 31 March 2012 31 March 2011
Number of Number of Number of Number of Number of Number of
Director options ordinary options ordinary options ordinary
shares shares shares
John Kearney 5,000,000 - 5,000,000 - 5,000,000 -
Bill Hooley 2,500,000 100,000 2,500,000 100,000 2,500,000 100,000
Ian Cuthbertson 1,500,000 1,120,300 1,500,000 1,120,300 1,700,000 1,027,300
David Lean 450,000 - 450,000 - 700,000 -
Howard Miller 600,000 - 600,000 - 600,000 -
Roger Turner 500,000 - 500,000 - 500,000 -
Danesh Varma 1,000,000 - 1,000,000 - 1,000,000 -
11,550,000 1,220,300 11,550,000 1,220,300 12,000,000 1,127,300
Further details of directors' options are provided in the Directors'
Remuneration Report.
Substantial shareholders
At 5 July 2012 shareholders had advised the company of the following
interests in the issued ordinary share capital:
Percentage
Number of of share
Name shares capital
Juno Limited 57,924,248 36.5%
Passport Materials Master Fund LP /
Blackwell Partners LLC / Norges Bank
(Central Bank of Norway) 7,449,800 4.7%
Shares
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 for larger listed companies. In the case of allotments other than for
rights or other pre-emptive issues, it is proposed that such authority will be
for a nominal value of up to GBP396,000 of share capital being 39,600,000
ordinary shares, which is equivalent to 25% of the issued ordinary share
capital at 5 July 2012. Whilst such authority is in excess of the 5% of
existing issued ordinary share capital which is commonly accepted 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. It
is the directors' present intention to renew this power each year.
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 before the time appointed for holding the
meeting or adjourned meeting.
No member shall be entitled to vote at a general meeting or at a separate
meeting of the holders of any class of shares in the capital of the company,
either in person or by proxy, in respect of any share held by him unless all
monies presently payable by him in respect of that share have been paid.
Furthermore, no shareholder shall be entitled to attend or vote either
personally or by proxy at a general meeting or at a separate meeting of the
holders of that class of shares or on a poll if he has been served with a
notice after failing to provide the company with information concerning
interests in his shares required to be provided under the Companies Act 2006.
Significant agreements and change of control
There are no agreements between the company and its directors or employees that
provide for compensation for loss of office or employment that may occur
because of a takeover bid. The company's share plans contain provisions
relating to a change of control. Outstanding awards and options would normally
vest and become exercisable on a change of control, subject to the satisfaction
of any performance conditions.
Employment, community, donations and environment
The group, which for these purposes does not include LIM, is an equal
opportunity employer in all respects and aims for high standards from and for
its employees. It also aims to be a valued and responsible member of the
communities which it affects or operates in. Since there are no revenues from
operations, it is the group's general policy not to make charitable or
political donations and none were made during the year (2011 - nil).
The group has no operations; consequently its effect on the environment is very
slight, being limited to the operation of two small offices, where recycling
and energy usage minimisation are taken seriously and encouraged. It is not
practical or useful to quantify the effects of these measures. There are no
social or community issues which require the provision of further information
in this report.
Creditor payment policy
The group conducts its business on the normal trade credit terms of each of its
suppliers and tries to ensure that suppliers are paid in accordance with those
terms. The group's average creditor payment period at 31 March 2012 was 113
days (2011 - 47 days); several high value invoices from the drilling
contractor, dated before 31 March, were received after the year end and account
for the increase at 31 March 2012.
Going concern
The directors have considered the business activities of the group as well as
its principal risks and uncertainties as set out in this report. When doing so
they have carefully applied the guidance given in the Financial Reporting
Council's document "Going concern and liquidity risk: Guidance for directors of
UK companies 2009". Based on the group's cash flow forecasts and projections
for a twelve month period from the date of this report, and after making due
enquiry in the light of current and anticipated economic conditions, the
directors consider that the group and company have adequate resources to
continuein business for the foreseeablefuture. For this reason, the
goingconcern basis continues to be adopted in thepreparation of the financial
statements.
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 such financial statements in accordance with
IFRS, the Companies Act 2006 and, in relation to the group financial
statements, Article 4 of the IAS Regulation.
International Accounting Standard 1 requires that financial statements present
fairly for each financial year the group's financial position, financial
performance and cash flows. This requires the faithful representation of the
effects of transactions, other events and conditions in accordance with the
definitions and recognition criteria for assets, liabilities, income and
expenses set out in the International Accounting Standards Board's 'Framework
for the Preparation and Presentation of Financial Statements'. In virtually all
circumstances, a fair presentation will be achieved by compliance with all
applicable International Financial Reporting Standards.
Directors are also required to:
properly select and apply accounting policies;
present information, including accounting policies, in a manner that provides
relevant, reliable comparable and understandable information; and
provide additional disclosures when compliance with the specific requirements
in IFRS is insufficient to enable users to understand the impact of particular
transactions, other events and conditions on the entity's financial position
and financial performance.
The directors are responsible for keeping proper accounting records which
disclose with reasonable accuracy at any time the financial position of the
parent and the group, for safeguarding the assets, for taking reasonable steps
for the prevention and detection of fraud and other irregularities and for the
preparation of a directors' report and directors' remuneration report which
comply with the requirements of the Companies Act 2006.
The directors confirm that the financial statements have (a) been prepared in
accordance with applicable accounting standards; (b) give a true and fair view
of the results of the group and the assets, liabilities and financial position
of the group and the parent company; and (c) that the directors' report
includes a fair review of the development and performance of the business and
the position of the group and the parent company together with a description of
the principal risks and uncertainties that they face.
The directors are responsible for the maintenance and integrity of the group
website.
Auditor
Each of the directors in office at the date of approval of the annual report
confirms that so far as they are aware there is no relevant audit information
of which the company's auditor is unaware and that each director has taken all
of the steps which they ought to have taken as directors in order to make
themselves aware of that information. This confirmation is given and should be
interpreted in accordance with the provisions of s418 of the Companies Act
2006.
A resolution to reappoint Mazars LLP as auditors and to authorise the directors
to fix their remuneration will be proposed at the annual general meeting.
By order of the board
Ian Cuthbertson
Company Secretary
24 July 2012
Independent Auditors report to the members of Anglesey Mining plc
We have audited the financial statements of Anglesey Mining plc for the year
ended 31 March 2012 which comprise the Group Income Statement, the Group
Statement of Comprehensive Income, the Group and Company Statement of Financial
Position, the Group and Company Statement of Changes in Equity, the Group and
Company Statement of Cash Flows and the related notes. The financial reporting
framework that has been applied in their preparation is applicable law and
International Financial Reporting Standards (IFRSs) as adopted by the European
Union.
Respective responsibilities of directors and auditor
As explained more fully in the Directors' Responsibilities Statement on pages 9
and 10, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the financial
statements in accordance with applicable law and International Standards on
Auditing (UK and Ireland). Those standards require us to comply with the
Auditing Practices Board's (APB's) Ethical Standards for Auditors. This report
is made solely to the company's members as a body in accordance with Chapter 3
of Part 16 of the Companies Act 2006. Our audit work has been undertaken so
that we might state to the company's members those matters we are required to
state to them in an auditor's report and for no other purpose. To the fullest
extent permitted by law, we do not accept or assume responsibility to anyone
other than the company and the company's members as a body for our audit work,
for this report, or for the opinions we have formed.
Scope of the audit of the financial statements
A description of the scope of an audit of financial statements is provided on
the APB's web-site at
www.frc.org.uk/apb/scope/private.cfm.
Opinion on the financial statements
In our opinion the financial statements:
give a true and fair view of the state of the group's and of the parent
company's affairs as at 31 March 2012 and of the group's profit for the year
then ended;
have been properly prepared in accordance with IFRSs as adopted by the European
Union; and
have been prepared in accordance with the requirements of the Companies Act.
Opinion 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;
the information given in the Directors' Report for the financial year for which
the financial statements are prepared is consistent with the financial
statements; and
the information given in the Corporate Governance Statement with respect to
internal control and risk management systems in relation to financial reporting
processes and about share capital is consistent with the financial statements.
Matters on which we are required to report by exception
We have nothing to report in respect of the following matters where the
Companies Act 2006 requires us to report to you if, in our opinion:
adequate accounting records have not been kept, or returns adequate for our
audit have not been received from branches not visited by us; or
the parent company financial statements and the part of the Directors'
Remuneration Report to be audited are not in agreement with the accounting
records and returns; or
certain disclosures of directors' remuneration specified by law are not made;
or
we have not received all the information and explanations we require for our
audit; or
a Corporate Governance Statement has not been prepared by the company.
Under the Listing Rules we are required to review:
the directors' statement, set out on pages 9 and 10, in relation to going
concern;
the part of the Corporate Governance Statement relating to the company's
compliance with the nine provisions of the UK Corporate Governance Code for
reporting periods commencing on or after 29 June 2010 specified for our review;
and
certain elements of the report to the shareholders by the Board on directors'
remuneration.
Richard Metcalfe (Senior Statutory Auditor)
for and on behalf of Mazars LLP
Chartered Accountants and Statutory Auditor
Tower Bridge House, St. Katharine's Way, London, E1W 1DD
24 July 2012
Group income statement
All attributable to equity holders of the company
Year ended Year ended
31 March 31 March
Notes 2012 2011
All operations are continuing GBP GBP
Revenue - -
Expenses (396,807) (476,139)
Share of loss of associate 14 (3,484,140) (1,104,453)
Gains on deemed disposals in associate 14 23,374,274 294,560
Investment income 6 49,041 19,308
Finance costs 7 (113,899) (117,014)
Foreign exchange loss (41,914) (61,919)
Profit/(loss) before tax 4 19,386,555 (1,445,657)
Tax 8 - -
Profit/(loss) for the period 19,386,555 (1,445,657)
Profit/(loss) per share
Basic - pence per share 9 12.2 p (0.9)p
Diluted - pence per share 9 11.6 p (0.9)p
Consolidated statement of comprehensive income
Profit/(loss) for the period 19,386,555 (1,445,657)
Other comprehensive income:
Exchange difference on 14 (379,827) (360,273)
translation of foreign holding
Total comprehensive income/(loss) 19,006,728 (1,805,930)
for the period
Statement of financial position of the group
31 March 2012 31 March 2011
Notes GBP GBP
Assets
Non-current assets
Mineral property development 10 14,255,818 13,900,593
Property, plant and equipment 11 204,687 204,687
Interest in associate 14 41,240,859 21,073,132
Deposit 15 121,685 121,146
55,823,049 35,299,558
Current assets
Other receivables 16 64,991 22,469
Cash and cash equivalents 17 3,150,644 3,671,247
3,215,635 3,693,716
Total assets 59,038,684 38,993,274
Liabilities
Current liabilities
Trade and other payables 18 (1,040,961) (791,148)
(1,040,961) (791,148)
Net current assets 2,174,674 2,902,568
Non-current liabilities
Loan 19 (2,191,260) (2,077,361)
Long term provision 20 (42,000) (42,000)
(2,233,260) (2,119,361)
Total liabilities (3,274,221) (2,910,509)
Net assets 55,764,463 36,082,765
Equity
Share capital 21 7,096,914 7,092,414
Share premium 9,634,231 9,621,181
Currency translation reserve 3,241,170 3,620,997
Retained earnings 35,792,148 15,748,173
Total shareholders' equity 55,764,463 36,082,765
The financial statements of Anglesey Mining plc were approved by the board of
directors, authorised for issue on 24 July 2012 and signed on its behalf by:
John F. Kearney, Chairman
Ian Cuthbertson, Finance Director
Statement of financial position of the company
Notes 31 March 2012 31 March 2011
GBP GBP
Assets
Non-current assets
Investments 13 13,698,575 13,630,271
13,698,575 13,630,271
Current assets
Other receivables 16 24,071 15,031
Cash and cash equivalents 17 1,063,330 1,498,137
1,087,401 1,513,168
Total Assets 14,785,976 15,143,439
Liabilities
Current liabilities
Trade and other payables 18 (107,418) (100,371)
(107,418) (100,371)
Net current assets 979,983 1,412,797
Non-current liabilities
Loan 19 (2,191,260) (2,077,361)
(2,191,260) (2,077,361)
Total liabilities (2,298,678) (2,177,732)
Net assets 12,487,298 12,965,707
Equity
Share capital 21 7,096,914 7,092,414
Share premium 9,634,231 9,621,181
Retained losses (4,243,847) (3,747,888)
Shareholders' equity 12,487,298 12,965,707
The financial statements of Anglesey Mining plc registered number 1849957 were
approved by the board of directors and authorised for issue on 24 July 2012,
and signed on its behalf by:
John F. Kearney, Chairman
Ian Cuthbertson, Finance Director
Statements of changes in equity
All attributable to equity holders of the company.
Share Share Currency Retained Total
Group capital GBP premium GBP translation earnings GBP GBP
reserve GBP
Equity at 1 April 2010 7,042,414 8,097,973 3,981,270 16,818,846 35,940,503
Total comprehensive income for the year:
Loss for the year - - - (1,445,657) (1,445,657)
Exchange difference on - - (360,273) - (360,273)
translation of foreign holding
Total comprehensive income for the year - - (360,273) (1,445,657) (1,805,930)
Shares issued for cash 50,000 1,528,225 - - 1,578,225
Share issue costs - (5,017) - - (5,017)
Equity-settled benefits credit:
- associate - - - 374,984 374,984
Equity at 31 March 2011 7,092,414 9,621,181 3,620,997 15,748,173 36,082,765
Total comprehensive income for the year:
Profit for the year - - - 19,386,555 19,386,555
Exchange difference on - - (379,827) - (379,827)
translation of foreign holding
Total comprehensive loss for the year - - (379,827) 19,386,555 19,006,728
Shares issued for cash 4,500 19,073 - - 23,573
Share issue costs - (6,023) - - (6,023)
Equity-settled benefits credit:
- associate - - - 657,420 657,420
Equity at 31 March 2012 7,096,914 9,634,231 3,241,170 35,792,148 55,764,463
Company Share Share Retained Total
capital GBP premium GBP losses GBP GBP
Equity at 1 April 2010 7,042,414 8,097,973 (3,145,657) 11,994,730
Total comprehensive income for the year:
Loss for the year - - (602,231) (602,231)
Total comprehensive loss for the year - - (602,231) (602,231)
Shares issued for cash 50,000 1,528,225 - 1,578,225
Share issue costs - (5,017) - (5,017)
Equity at 31 March 2011 7,092,414 9,621,181 (3,747,888) 12,965,707
Total comprehensive income for the year:
Loss for the year - - (495,959) (495,959)
Total comprehensive loss for the year - - (495,959) (495,959)
Shares issued for cash 4,500 19,073 - 23,573
Share issue costs - (6,023) - (6,023)
Equity at 31 March 2012 7,096,914 9,634,231 (4,243,847) 12,487,298
Statement of cash flows of the group
Year ended Year ended
31 March 31 March
Notes 2012 2011
GBP GBP
Operating activities
Profit/(loss) for the period 19,386,555 (1,445,657)
Adjustments for non-cash items:
Investment revenue 6 (49,041) (19,308)
Finance costs 7 113,899 117,014
Share of loss of associate 14 3,484,140 1,104,453
Gain on deemed disposal in associate 14 (23,374,274) (294,560)
Foreign exchange loss 41,914 61,919
(396,807) (476,139)
Movements in working capital
Increase in receivables (42,522) (14,142)
Increase/(decrease) in payables 7,047 (26,721)
Net cash used in operating activities (432,282) (517,002)
Investing activities
Investment revenue 6 48,502 18,736
Mineral property development 10 (112,459) (107,850)
Net cash used in investing activities (63,957) (89,114)
Financing activities
Net proceeds from issue of shares 17,550 1,573,208
Loan received -
Net cash generated from financing activities 17,550 1,573,208
Net (decrease)/increase in cash (478,689) 967,092
and cash equivalents
Cash and cash equivalents at start of period 3,671,247 2,766,074
Foreign exchange movement (41,914) (61,919)
Cash and cash equivalents at end of period 17 3,150,644 3,671,247
Statement of cash flows of the company
Year ended Year ended
Notes 31 March 31 March
2012 2011
GBP GBP
Operating activities
Loss for the period 23 (495,959) (602,231)
Adjustments for non-cash items:
Investment revenue (26,969) (3,545)
Finance costs 113,899 117,014
(409,029) (488,762)
Movements in working capital
Increase in receivables (9,040) (10,777)
Decrease/(increase) in payables 7,047 (65,994)
Net cash used in operating activities (411,022) (565,533)
Investing activities
Interest received 26,969 3,545
Investments and long term loans (161,904) (31,500)
Net cash used in investing activities (134,935) (27,955)
Financing activities
Net proceeds from issue of shares 17,550 1,573,208
Inter-company loan received 93,600 511,216
Net cash generated from financing activities 111,150 2,084,424
Net (decrease)/increase in cash and cash equivalents (434,807) 1,490,936
Cash and cash equivalents at start of period 1,498,137 7,201
Cash and cash equivalents at end of period 1,063,330 1,498,137
Notes to the Accounts
1 General information
Anglesey Mining plc is domiciled and incorporated in the United Kingdom under
the Companies Act. The nature of the group's operations and its principal
activities are set out in note 3 and in the business review section of the
directors' 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. The
principal accounting policies adopted are set out below.
Going concern
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 a period of twelve
months from the date of approval of the accounts. For the reasons set out in
the directors' report, the directors believe that the going concern basis is
appropriate for these accounts.
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.
Investment in associate
An associate is an entity over which the group exercises, or is in a position
to exercise, significant influence, but not control or joint control, through
participation in the financial or operating policy of the investee. In
considering the degree of control, any options or warrants over ordinary shares
which are capable of being exercised at the period end are taken into
consideration.
Where material, the results and assets and liabilities of associates are
incorporated in the financial statements using the equity method of accounting,
except when these associates are classified as held for sale. Investments in
associates are carried in the statement of financial position at cost adjusted
by any material post-acquisition changes in the net assets of the associates,
less any impairment of value in the individual investments.
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 equity and transferred to the
group's translation reserve. Such translation differences are recognised as
income or as expense in the period in which the operation is disposed.
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. The expected life used
in the model has been adjusted from the longer historical average life, based
on directors' estimates of the effects of non-transferability, exercise
restrictions, market conditions, age of recipients and behavioural
considerations.
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.
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, is such that any depreciation
would not be material. The carrying value is reviewed annually and any
impairment in value would be charged immediately to the income statement.
Plant, equipment, fixtures and motor vehicles are stated in the statement of
financial position at cost, less depreciation. Depreciation is charged on a
straight line basis at the following annual rates: plant and equipment 25% and
motor vehicles 25%. Residual values and the useful lives of these assets are
also reviewed annually.
Intangible assets - mineral property development 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
development costs are capitalised until the results of the projects, which are
usually based on geographical areas, are known. Mineral property development
costs 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.
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" 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) 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.
(d) Deposits. Deposits 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. There are no finance
leases or other operating leases.
New accounting standards
The group and company have adopted the amendments to the following
interpretation;
IFRS 19 Extinguishing Liabilities with Equity Instruments; Effective annual
periods beginning on or after 1 July 2010
The amendments resulting from the May 2010 annual improvement projects have
also been adopted in the year. These amendments are to IFRS 3, IFRS 7, IAS 1,
IAS 24, IAS 27 and IAS 34.
The impact of adopting the interpretation and amendments has been purely
presentational.
The group and the company have not applied the following IFRS, IAS and IFRICs
that are applicable and have been issued but are not yet effective.
IFRS 7 Financial Instruments: Amendments enhancing disclosure about
transfers of financial assets; Issued - October 2010; Effective - Annual period
beginning on or after 1 January 2011
IFRS 7 Financial Instruments: Amendments related to the offsetting of
assets and liabilities; Issued - December 2011; Effective - Annual periods
beginning on or after 1 July 2011
IFRS 9 Financial Instruments; Original issue; Issued - November 2009;
Effective - Annual periods beginning on or after 1 January 2015
IFRS 10 Consolidated Financial Statements: Original issue; Issued - May
2011; Effective - Annual periods beginning on or after 1 January 2013
IFRS 11 Joint Arrangements: Original issue; Issued - May 2011; Effective -
Annual periods beginning on or after 1 January 2013
IFRS 12 Disclosure of Interests in Other Entities: Original issue; Issued -
May 2011; Effective - Annual periods beginning on or after 1 January 2013
IFRS 13 Fair Value Measurement: Original issue; Issued - May 2011; Effective
- Annual periods beginning on or after 1 January 2013
IAS 1 Presentation of Financial Statements: Amendments to revise the way
other comprehensive income is presented; Issued - June 2011; Effective - Annual
periods beginning on or after 1 July 2012
IAS 12 Income Taxes: Limited scope amendments (recovery of underlying
assets); Issued - December 2010; Effective - Annual periods beginning on or
after 1 January 2012
IAS 19 Employee Benefits: Amendment standard resulting from the
post-employment benefits and termination projects; Amended - June 2011;
Effective - Annual periods beginning on or after 1 January 2013
IAS 27 Separate Financial Statements (as amended in 2011): Original issue;
Issued - May 2011; Effective - Annual periods beginning on or after 1 January
2013
IAS 28 Investments in Associated and Joint Ventures: Original issue;
Issued - May 2011; Effective - Annual periods beginning on or after 1 January
2013
IAS 32 Financial Instruments: Presentation: Amendments relating to the
offsetting of assets and liabilities; Issued - December 2011; Effective -
Annual periods beginning on or after January 2014
IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine: Effective
- Annual periods beginning on or after 1 January 2013
The directors expect that the adoption of the above pronouncements will have no
material impact to the financial statements in the period of initial
application other than disclosure.
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) The directors' believe, after careful consideration, that the group could
influence but does not control the activities and operations of Labrador Iron
Mines Holdings Limited (LIM), and that it is correctly accounted for on an
equity basis as an associate company.
(b) In determining the treatment of exploration, evaluation and development
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.
(c) 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.
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.
The currency translation reserve represents the 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 operating the Labrador iron project in
eastern Canada in which it had a 26% interest at 31 March 2012 and developing
the wholly-owned Parys Mountain project in North Wales. In the opinion of the
directors, the group's activities comprise one class of business which is mine
development. The group reports geographical segments; these are the basis on
which information is reported to the board.
Income statement analysis
2012 2011
UK Canada - Total UK Canada - Total
associate associate
GBP GBP GBP GBP GBP GBP
Expenses (396,807) - (396,807) (476,139) - (476,139)
Share of loss in associate - (3,484,140) (3,484,140) - (1,104,453) (1,104,453)
Gain on deemed disposals - 23,374,274 23,374,274 - 294,560 294,560
Investment income 49,041 - 49,041 19,308 - 19,308
Finance costs (113,899) - (113,899) (117,014) - (117,014)
Exchange rate loss (41,914) - (41,914) (61,919) - (61,919)
Loss/(profit) for the year (503,579) 19,890,134 19,386,555 (635,764) (809,893) (1,445,657)
Assets and liabilities
31 March 2012 31 March 2011
UK Canada - Total UK Canada - Total
associate associate
GBP GBP GBP GBP GBP GBP
Assets 17,797,825 41,240,859 59,038,684 17,920,142 21,073,132 38,993,274
Liabilities (3,274,221) - (3,274,221) (2,910,509) - (2,910,509)
Net assets 14,523,604 41,240,859 55,764,463 15,009,633 21,073,132 36,082,765
4 Operating result
The operating result for the year has been arrived at after charging:
2012 2011
GBP GBP
Fees payable to the group's auditors:
for the audit of the annual accounts 28,871 27,795
for the audit of subsidiaries' accounts 5,000 5,000
for other services - taxation 9,547 15,000
Directors' remuneration 112,297 92,478
Foreign exchange loss 41,914 61,919
5 Staff costs
The average monthly number of persons employed (including executive directors)
was:
2012 2011
Administrative 3 3
3 3
Their aggregate remuneration was: GBP GBP
Wages and salaries 73,297 53,478
Social security costs 12,868 58,308
Other pension costs 20,000 20,547
106,165 132,333
Details of directors' remuneration and share options are given in the
directors' remuneration report.
6 Investment income
2012 2011
GBP GBP
Loans and receivables
Interest on bank deposits 48,502 18,736
Interest on site re-instatement deposit 539 572
49,041 19,308
7 Finance costs
2012 2011
Loans and payables GBP GBP
Loan interest to Juno Limited 113,899 117,014
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 2012 of GBP1.2 million (2011 - GBP1.1 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 GBP11.8 million unclaimed
and available at 31 March 2012 (2011 - GBP11.4 million). No deferred tax asset is
recognised in respect of these allowances.
2012 2011
GBP GBP
Current tax - -
Deferred tax - -
Total tax - -
Domestic income tax is calculated at 26% of the estimated assessed profit for
the year. In 2011 the
rate used was 28% and the change this year is due to a change in Corporation
Tax rates. 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:
Profit/(loss) for the year 19,386,555 (1,445,657)
Tax at the domestic income tax rate of
26% (2011 - 28%) 5,040,504 (404,784)
Tax effect of:
Expenses that are not deductible
in determining taxable
result - 271
Gains on deemed disposals in associate (6,077,311) (82,477)
Share of loss of associate 905,876 309,247
Tax losses for which no deferred tax
asset
was recognised 130,931 177,743
Total tax - -
9 Earnings per ordinary share
2012 2011
GBP GBP
Earnings
Profit/(loss) for the year 19,386,555 (1,445,657)
Number of shares
Weighted average number of ordinary shares
for the purposes of basic earnings per
share 158,403,406 154,199,146
Shares deemed to be issued for no
consideration in respect of employee
options 8,884,238 -
Weighted average number of ordinary shares
for the purposes of diluted earnings per
share 167,287,644 154,199,146
Basic earnings per share 12.2p (0.9)p
Diluted earnings per share 11.6p (0.9)p
10 Mineral property development costs - group
Parys Dolaucothi Total
Mountain
Cost GBP GBP GBP
At 1 April 2010 13,792,743 194,065 13,986,808
Additions - site 27,693 - 27,693
Additions - rentals &
charges 80,157 - 80,157
At 31 March 2011 13,900,593 194,065 14,094,658
Additions - site 259,156 - 259,156
Additions - rentals &
charges 96,069 - 96,069
Write off - (194,065) (194,065)
At 31 March 2012 14,255,818 - 14,255,818
Impairment provision
At 1 April 2010 and 2011 - (194,065) (194,065)
Write back - 194,065 194,065
At 31 March 2012 - - -
Carrying amount
Net book value 2012 14,255,818 - 14,255,818
Net book value 2011 13,900,593 - 13,900,593
Included in the additions are mining lease expenses of GBP11,225 (2011 - GBP
10,925).
The Parys Mountain property is currently being explored and evaluated and there
are no grounds to believe that the discounted present value of the future cash
flows from the project is less than the carrying value, so no impairment review
has been presented.
11 Property, plant and equipment
Group Freehold land Plant & Office Total
and property equipment equipment
Cost GBP GBP GBP GBP
At 1 April 2010 204,687 17,434 5,487 227,608
At 31 March
2010, 2011 and
2012 204,687 17,434 5,487 227,608
Depreciation
At 1 April 2010 - 17,434 5,487 22,921
At 31 March
2010, 2011 and
2012 - 17,434 5,487 22,921
Carrying amount
At 31 March
2010, 2011 and
2012 204,687 - - 204,687
Company Freehold land Plant & Office Total
and property equipment equipment
Cost GBP GBP GBP GBP
At 1 April 2010 - 17,434 5,487 22,921
At 31 March
2010, 2011 and
2012 - 17,434 5,487 22,921
Depreciation
At 1 April 2010 - 17,434 5,487 22,921
At 31 March
2010, 2011 and
2012 - 17,434 5,487 22,921
Carrying amount
At 31 March
2010, 2011 and
2012 - - - -
12 Subsidiaries - company
The subsidiaries of the company at 31 March 2011 and 2012 were as follows:
Name of Country of Percentage Principal activity
company incorporation owned
Labrador Iron Isle of Man 100% Holder of the company's
plc investment in Labrador Iron
Mines Holdings Limited, an
associated company
Anglo England & 100% Holder of the Dolaucothi
Canadian Wales property
Exploration
(Ace) Limited
Parys England & 100% Development of the Parys
Mountain Wales Mountain mining property
Mines Limited
Parys England & 100% Holder of part of the Parys
Mountain Land Wales Mountain property
Limited
Parys England & 100% Holder of part of the Parys
Mountain Wales Mountain property
Heritage
Limited
13 Investments - company
Shares at cost Loans Total
GBP GBP GBP
At 1 April 2010 100,103 14,009,884 14,109,987
Advanced - 31,500 31,500
Repaid - (511,216) (511,216)
At 31 March 2011 100,103 13,530,168 13,630,271
Advanced - 161,904 161,904
Repaid - (93,600) (93,600)
At 31 March 2012 100,103 13,598,472 13,698,575
The realisation of investments is dependent on finance being available for
development and other
factors as set out in more detail in note 10.
No interest was charged in the year on inter-company loans.
14 Investment in associate
At 31 March 2012 the group had a 26% interest in Labrador Iron Mines Holdings
Limited (LIM), a company registered in Ontario Canada, which is independently
managed and is accounted for in these financial statements as an associate
company. LIM is the 100% owner and operator of a series of iron ore properties
in Labrador and Quebec, many of which were formerly held and initially explored
by the group.
At 31 March 2011 the group's interest in LIM was 40%, however following further
issues of shares by LIM in April and May 2011 and March 2012, the group's
interest was reduced to 26%. The fully diluted interest of the group was 25%
(2011 - 38%). The group's holding of 17,789,100 LIM shares has remained
unchanged since 31 March 2010.
31 March 31 March
2012 2011
GBP GBP
Values in group financial statements:
Value brought forward from previous
period 21,073,132 21,868,314
Group's share of (losses), adjusted
to eliminate any fair value uplift
in associate's accounts (3,484,140) (1,104,453)
Group's share of equity-settled
benefits included in (losses) above
and now added back 657,420 374,984
Profit on deemed disposals
following
LIM share issues 23,374,274 294,560
Exchange rate movement (379,827) (360,273)
Amount carried in the group
accounts - being the value of
group's share of net assets of the
associate without any fair value
adjustment in respect of mineral
properties 41,240,859 21,073,132
The group's interest in LIM is held in these financial statements at original
cost to the group, adjusted by material post-acquisition changes in the net
assets of the associate and any impairment of value in the individual
investments. It is adjusted to reflect the exchange rate current at the end of
the accounting period.
The profit on deemed disposal shown above is an adjustment to the group's
carrying value of the associate arising as a result of LIM's issue of new
shares. This dilutes the group's holding in LIM, however since the shares were
issued at a price per share which exceeds the group's carrying value per share,
the effect on the group's investment is an increase in the carrying value.
The published fair value of the group's investment in LIM at 31 March 2012 is GBP
51 million (2011 - GBP156 million). This is derived by valuing the group's
shareholding in LIM at the LIM share price quoted in Toronto on 31 March 2012
of C$4.59 (2011 - $13.69) per common share.
At 5 July 2012 the published fair value of the group's investment in LIM was GBP
28 million based on a share price of C$2.57 per common share at that date. The
carrying value of the interest in LIM would be affected by this price only if
there were considered to be an impairment of the underlying assets to LIM or a
disposal of LIM.
The directors have considered whether there has been any impairment to the
carrying value of the group's investment in LIM; in their opinion there is
none.
Values as shown in the published
accounts of the associate (100%)
including a fair value uplift in 31 March 31 March
respect of mineral properties, 2012 2011
after conversion into sterling: GBP GBP
Total assets 238,839,086 144,330,241
Total liabilities (29,348,232) (32,512,158)
Total net assets 209,490,854 111,818,083
2012 2011
Revenues - -
(Loss) for the year (9,285,932) (2,512,113)
Reconciliation of values shown in the associate's
published accounts with the group accounts C$ C$
Shareholders' equity in associate $333,090,458 $174,436,210
Less: fair value uplift net of tax - see note below $(84,891,020) $(92,773,711)
$248,199,438 $81,662,499
Group share - 26% (2011 - 40%) $65,572,966 $32,874,088
Group carrying value after
conversion to sterling GBP41,240,859 GBP21,073,132
In the financial statements of LIM the Labrador mineral properties are carried
at a fair value derived from the value ascribed to the Labrador companies in
the December 2007 Canadian flotation, after subsequent adjustments. If the
group were to use a similar basis for its accounts, its share of this fair
value uplift, net of tax, would add approximately GBP14 million (2011 - GBP24
million) to group net assets.
The associated undertakings of the group were as follows:
Name of company Country of Percentage Principal
incorporation owned activity
31 31
March March
2012 2011
Labrador Iron Mines Holdings Canada 26% 40% Holding company
Limited (LIM)
Labrador Iron Mines Limited, Canada 26% 40% Development of
a 100% owned subsidiary of iron mines in
LIM Labrador
LabRail Inc, a 100% owned Canada 26% 40% Transport
subsidiary of LIM operations
Centre Ferro Ltd, a 100% Canada 26% 40% Property holding
owned subsidiary of LIM
Schefferville Mines Inc, a Canada 26% 40% Development of
100% owned subsidiary of LIM iron mines in
Quebec
The group holds its interest in these associated companies through Labrador
Iron plc, a 100% owned subsidiary.
15 Deposit
Group Company
2012 2011 2012 2011
GBP GBP GBP GBP
Site re-instatement deposit 121,685 121,146 - -
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
2012 2011 2012 2011
GBP GBP GBP GBP
Other 64,991 22,469 24,071 15,031
The carrying value of the receivables approximates to their fair value.
17 Cash
Group Company
2012 2011 2012 2011
GBP GBP GBP GBP
Held in sterling 1,092,216 1,498,838 1,063,330 1,498,137
Held in Canadian dollars 2,058,428 2,172,409 - -
3,150,644 3,671,247 1,063,330 1,498,137
The carrying value of the cash approximates to its fair value.
18 Trade and other payables
Group Company
2012 2011 2012 2011
GBP GBP GBP GBP
Trade creditors (207,331) (32,319) (41,021) (30,494)
Property royalties and
rentals - note 26 d (759,680) (681,398) - -
Taxes (30,398) (33,881) (30,398) (33,881)
Other accruals (43,552) (43,550) (35,999) (35,996)
(1,040,961) (791,148) (107,418) (100,371)
The carrying value of the trade and other payables approximates to their fair
value.
19 Loan
Group Company
2012 2011 2012 2011
GBP GBP GBP GBP
Loan from Juno Limited (2,191,260) (2,077,361) (2,191,260) (2,077,361)
The loan from Juno Limited 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.
20 Long term provision
Group Company
2012 2011 2012 2011
GBP GBP GBP GBP
Provision for site reinstatement (42,000) (42,000) - -
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 in more than 20
years' time) or on earlier abandonment of the site. 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. There has been no movement
during the year.
21 Share capital
Ordinary shares of 1p Deferred shares of 4p Total
Nominal Number Nominal Number Nominal
value GBP value GBP value GBP
Issued and fully paid
At 1 April 2010 1,531,581 153,158,051 5,510,833 137,770,835 7,042,414
Issued 14 January
2011 50,000 5,000,000 - - 50,000
At 31 March 2011 1,581,581 158,158,051 5,510,833 137,770,835 7,092,414
Issued 5 April 2011 2,500 250,000 - - 2,500
Issued 22 March 2012 2,000 200,000 2,000
At 31 March 2012 1,586,081 158,608,051 5,510,833 137,770,835 7,096,914
The deferred shares are non-voting, have no entitlement to dividends and have
negligible rights to return of capital on a winding up.
The issues of shares on 5 April 2011 and 22 March 2012 were in respect of the
exercise of directors' share options for total proceeds to the group of GBP
23,573.
22 Equity-settled employee benefits
2004 Unapproved share option plan
The group 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.
If the options remain unexercised after a period of 10 years from the date of
grant, they expire. Options are forfeited if the employee leaves employment
with the group before the options vest.
2012 2011
Weighted Weighted
average average
Options exercise Options exercise
price in price in
pence pence
Outstanding at beginning of period 12,000,000 10.69 14,500,000 10.07
Granted during the period - - - -
Forfeited during the period - - - -
Exercised during the period 450,000 5.24 2,500,000 7.13
Expired during the period - - - -
Outstanding at the end of the period 11,550,000 10.90 12,000,000 10.69
Exercisable at the end of the period 11,550,000 10.90 12,000,000 10.69
No options were granted, forfeited or expired during the year or the prior
year. The options outstanding at 31 March 2012 had a weighted average
exercise price of 10.90 pence (2011 - 10.69 pence), and a weighted average
remaining contractual life of 4.0 years (2011 - 5 years). As all options had
vested by 31 March 2010, the group recognised no expenses in respect of
equity-settled employee remuneration in respect of the years ended 31 March
2011 and 2012.
A summary of options granted and outstanding, all of which are over ordinary
shares of 1 pence, is as follows:
Scheme Number Nominal Exercise Exercisable Exercisable
Value GBP price from until
2004 Unapproved 5,500,000 55,000 4.13p 22 October 2004 21 October 2014
2004 Unapproved 1,550,000 15,500 10.625p 15 January 2007 14 January 2016
2004 Unapproved 3,800,000 38,000 21.90p 26 November 2008 26 November 2017
2004 Unapproved 700,000 7,000 5.00p 27 March 2010 27 March 2019
Total 11,550,000 115,500
23 Results attributable to Anglesey Mining plc
The loss after taxation in the parent company amounted to GBP495,959 (2011 loss GBP
602,231). 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 Juno loans are at a fixed rate of interest of 10% per annum and 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.
Liquidity risk
The group has ensured continuity of funding through a mixture of issues of
shares, sales of shares in the group's associate LIM 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 carry a notice period of 367 days; in keeping with its
practice since drawdown commenced more than 10 years ago, Juno has indicated
that it has no current intention of demanding repayment and no such notice had
been received by 5 July 2012. However the Juno loan is classified as having a
maturity date between one and two years from the period end date.
Currency risk
The functional currency of the 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.
At the year end the group held C$3,272,849 in Canadian dollars, equivalent to GBP
2,058,428. If the rate of exchange between Canadian dollars and sterling were
to move against sterling by 10% there would be a loss to the group of GBP187,000
and if it were to move in favour of sterling by a similar amount there would be
a gain of GBP229,000.
The company (Anglesey Mining plc) is not exposed to interest rate risks.
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.
The financial instruments of the group and the company are:
Group Company
Loans & receivables Other financial Loans & receivables Other financial
liabilities liabilities
31 March 31 March 31 March 31 March 31 March 31 March 31 March 31 March
2012 2011 2012 2011 2012 2011 2012 2011
GBP GBP GBP GBP GBP GBP GBP GBP
Financial assets
Deposit 121,685 121,146 - - - - - -
Other debtors 64,991 22,469 - - 24,071 15,031 - -
Cash and cash 3,150,644 3,671,247 - - 1,063,330 1,498,137 - -
equivalents
Financial liabilities
Trade creditors - - (207,331) (32,319) - - (41,021) (30,494)
- - - -
Loans due to Juno (2,191,260) (2,077,361) (2,191,260) (2,077,361)
3,337,320 3,814,862 1,087,401 1,513,168
(2,398,591) (2,109,680) (2,232,281) (2,107,855)
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 36.5% 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
other than the accrual of interest due to Juno. Danesh Varma is a director and,
through his family interests, a significant shareholder of Juno.
Labrador Iron
Labrador Iron Mines Holdings Limited (LIM) is a related party. There are no
transactions between LIM, the group and the company which are required to be
disclosed.
John Kearney is chairman of LIM, Bill Hooley is a director and chief operations
officer of LIM and Danesh Varma is chief financial officer of LIM. All three
are shareholders of LIM, are entitled to remuneration from LIM and have been
granted options over the shares of LIM.
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 GBP5,725 is payable for the year
beginning 23 March 2011; the base part of this rent increases to GBP10,000 from
23 March 2012 and to GBP20,000 when extraction of minerals at Parys Mountain
commences; all of these rental figures are 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 terminates in 2070.
(c) Under a mining lease from the Crown dated December 1991 there is an annual
lease payment of GBP5,000. 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 terminates in 2020.
(d) A royalty agreement with Intermine Limited required annual payments of
C$50,000 (approximately GBP31,000) until production commences at the Parys
Mountain mine and a royalty of 4% of net profits (as defined after various
deductions) generated from production at the mine. The royalty agreement also
provided an option to buy out the royalty and advance payments.
The agreement may be terminated at 12 months' notice on abandonment of the
property. At 31 March 2012 the group had not paid all of the amounts under this
agreement. Intermine Limited holds a charge over the mining rights held by
Parys Mountain Mines Limited to secure the payment of royalties in respect of
minerals produced in the areas described in (a) and (b) above.
In July 2012 an agreement was reached with Intermine Limited in respect of this
net profits royalty. A cash payment of C$1,000,000 (GBP630,000) was made and
2,000,000 ordinary shares in the company issued to discharge the amount due to
Intermine of GBP759,680 at 31 March 2012 and to buy out and cancel the royalty in
its entirety and release the charge.
Dolaucothi
Under a mining lease from the Crown dated August 1997, a subsidiary, Anglo
Canadian Exploration (Ace) Limited, had an obligation to make annual lease
payments of GBP4,200 and to pay a royalty of 4% of gross sales of gold and silver
from production at the Dolaucothi mine. This lease terminated in May 2012 and
no further amounts are payable.
Lease payments
All the group's leases and the royalty agreement 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 2012 - GBP46,500; between 1 April 2013 and 31 March 2018
- GBP236,000. Thereafter the payments will continue at proportionate annual
rates, in some cases with increases for inflation, so long as the leases and
royalty agreement 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 (2011 -
nil).
29 Contingent liabilities
There are no contingent liabilities (2011 - nil).
30 Events after the period end
Since the year end the market value of the group's shareholding in LIM has
fallen below the amount at which it is held in the statement of financial
position - see note 14.
In July 2012 an agreement was reached with Intermine Limited. A cash payment of
C$1,000,000 (GBP630,000) was made and 2,000,000 ordinary shares in the company
issued - see note 26(d).
Otherwise there are no events after the period end to report.
Glossary
C$ - Canadian dollars. At 31 March 2012 GBP1 sterling was equivalent to C$1.59
(2011 - C$1.56).
DRO - direct railing ore - iron ore which can be mined and sold without any
further processing.
DSO - direct shipping ore - iron ore which can be mined and sold after a simple
washing and screening operation.
Hematite or haematite - iron oxide Fe2O3, one of the most abundant forms of
iron ore. Chemically pure hematite is about 71% iron.
JORC - Australasian Joint Ore Reserves Committee - a set of minimum standards
for public reporting and displaying information related to mineral properties.
NI 43-101 - a standard equivalent to JORC used in Canada.
tonne - metric tonnes of 2,204.6 pounds, used for measuring current mineral
production and resources.
ton - short ton of 2,000 pounds, used for measuring historic resources in
Canada.
About Anglesey Mining plc
Anglesey holds 26% of Toronto-listed Labrador Iron Mines Holdings Limited which
is now producing iron ore from its James deposit, one of LIM's twenty direct
shipping iron ore deposits in western Labrador and north-eastern Quebec.
Anglesey is also carrying out development and exploration work at its 100%
owned Parys Mountain zinc-copper-lead deposit in North Wales, UK where there is
estimated to be a total historical resource in excess of 7 million tonnes at
over 9% combined copper, lead and zinc.
For further information, please contact:
Bill Hooley, Chief Executive +44 (0)1492 541981;
Ian Cuthbertson, Finance Director +44 (0)1248 361333;
Samantha Harrison / Klara Kaczmarek: RFC Ambrian +44 (0)2076 344700;
Emily Fenton / Jos Simson: Tavistock Communications +44 (0)20 7920 3155
END
Anglesey Mining (LSE:AYM)
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Anglesey Mining (LSE:AYM)
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