Anglesey Mining PLC Annual Financial Report -5-


30 July 2014 
 
 
Report of the auditors 
 
Opinion on the financial statements 
 
We have audited the financial statements of Anglesey Mining plc for the year 
ended 31 March 2014 which comprise the Group Income Statement, the Group 
Consolidated 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. 
 
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 2014 and of the group's 
loss for the year then ended; 
 
the group financial statements have been properly prepared in accordance with 
IFRSs as adopted by the European Union; 
 
the parent company financial statements have been properly prepared in 
accordance with IFRSs as adopted by the European Union and as applied in 
accordance with the provisions of the Companies Act 2006; and 
 
the financial statements have been prepared in accordance with the 
requirements of the Companies Act 2006 and, as regards the group financial 
statements, Article 4 of the IAS Regulation. 
 
Our assessment of the risks of material misstatement 
 
In arriving at our audit opinion, the risks of material misstatement which had 
the greatest effect on our overall audit strategy, the allocation of our 
resources in the audit and directing the efforts of the engagement team, were 
as follows: 
 
Potential impairment of capitalised costs associated with the 
exploration and evaluation of the Parys Mountain mine site 
 
The risk: The group has held rights to explore and mine the site for a number 
of years but has not completed exploration and evaluation activities and 
feasibility assessments to an extent where the site has been confirmed as 
being commercial viable and mining activities commenced. There is a risk that 
accounting criteria associated with the capitalisation of exploration and 
evaluation expenditure may no longer be appropriate and that capitalised costs 
exceed the value in use i.e. there is an indication of potential impairment. 
Any assessment of the value in use is highly judgemental based on the 
directors' assessment of long term metal commodity prices, the estimated 
mineral deposits from independent experts' studies, costs associated with 
mineral extraction and sale, discount rates and exchange rate factors. 
 
Our response: Our audit work included, but was not restricted to, a review of 
the directors' assessment of the criteria for the capitalisation of 
exploration and evaluation expenditure and whether there are any indicators of 
impairment to capitalised costs. The directors concluded that there were 
indicators of potential impairment and our work included a review of the 
integrity of the discounted cash flow model used by the directors to make an 
assessment as to whether actual impairment had occurred, as well as using our 
professional scepticism to challenge and test the key assumptions for 
sensitivity to the model. These key assumptions included the expected future 
revenue and costs associated with the extraction and sale of the mineral 
deposits, future market prices, currency exchange rates, demand for the 
minerals and the discount rate utilised in the financial model. 
 
Potential impairment of the investment in the subsidiary, Parys Mountain Mines 
Limited, in the company financial statements 
 
The risk: The cost of the investment in and loan due from the subsidiary, 
Parys Mountain Mines Limited, held in the balance sheet of the company, is 
supported by the future cash flows associated with the recovery of the 
exploration and evaluation assets following the development of the Parys 
Mountain site held by Parys Mountain Mines Limited. If there were impairment 
in the exploration and evaluation assets, this would have a direct impact on 
the carrying value of the investment in and loan due from the subsidiary, 
which may need to be written down in the company's accounts. 
 
Our response: In conjunction with our work associated with the potential 
impairment of the exploration and evaluation assets held within Parys Mountain 
Mine Limited, we considered whether there was an indication that the cost of 
the investment in and loan due from the subsidiary required writing down in 
the company. As there was no impairment of the asset held by Parys Mountain 
Mine Limited, there is no indication that the carrying value of the investment 
in and loan due from the company was not recoverable. 
 
Going concern 
 
The risk: The accounts are prepared on a going concern basis in accordance 
with IAS1 `Presentation of Financial Statements'. Given the cash position of 
the group at the year end, and net cash outflows since the year end, we 
identified that there is a potential material uncertainty that the group does 
not have sufficient cash resources to continue in operation for at least 12 
months from the dates of authorising these financial statements. 
 
Our response: We evaluated the directors' assessment of the group's ability to 
continue as a going concern. In particular, we reviewed the cash flow 
forecasts including key assumptions to assess the risk of the inability to 
meet liabilities as they fall due. We have considered the group's reliance on 
ongoing support from its largest shareholder, Juno Limited and the availability 
of other sources of finance to the group to support the going concern 
assumption. 
 
The audit procedures relating to the above mentioned matters were designed in 
the context of our audit of the financial statements as a whole. Our opinion 
on the financial statements is not modified with respect to any of these risks 
and we do not express an opinion on these individual risks. 
 
Our assessment and application of materiality 
 
We apply the concept of materiality both in planning and performing our audit, 
and in evaluating the effect of misstatements on the financial statements and 
our audit. Materiality is used so we can plan and perform our audit to obtain 
reasonable, rather than absolute, assurance about whether the financial 
statements are free from material misstatement. 
 
The level of materiality we set is based on our assessment of the magnitude of 
misstatements that, individually or in aggregate, could reasonably be expected 
to have influence on the economic decisions of the users of the financial 
statements. The overall materiality level we set for the group's financial 
statements was GBP424,000. This has been calculated with reference to the 
group's net assets, of which it represents approximately 3%. Net assets 
represents shareholders' funds and we have determined it to be one of the 
principal benchmarks within the financial statements relevant to shareholders, 
as the group has no revenues and is still exploring and evaluating mineral 
sites in which it retains an interest. 
 
We agreed with the Audit Committee that we would report to it all audit 
differences in excess of GBP13,000, as well as differences below that threshold 
that, in our view, warranted reporting on qualitative grounds 
 
 
Scope of the audit of the financial statements 
 
An audit involves obtaining evidence about the amounts and disclosures in the 
financial statements sufficient to give reasonable assurance that the 
financial statements are free from material misstatement, whether caused by 
fraud or error. This includes an assessment of: whether accounting policies 
are appropriate to the group's circumstances and have been consistently 
applied and adequately disclosed, the reasonableness of significant accounting 
estimates made by the directors and the overall presentation of the financial 
statements. In addition, we read all the financial and non-financial 
information in the annual report in order to identify material inconsistencies 
with the audited financial statements and to identify any information that is 
apparently materially incorrect based on, or materially inconsistent with, the 
knowledge acquired by us in the course of performing the audit. If we become 
aware of any apparent material misstatements or inconsistencies we consider 
the implications for our report. 
 
There are 6 legal entities accounting for 100% of the group's operating loss, 
100% of net assets and 100% of total assets all of which were subject to full 
scope audits for the year ended 31 March 2014. The audit of all the entities 
within the group was undertaken by the group audit team. 
 
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 Strategic Report and 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 and rules 7.2.5 and 7.2.6 of the Disclosure and Transparency Rules. 
 
Matters on which we are required to report by exception 
 
We have no exceptions to report arising from the following responsibilities: 
 
Under the Companies Act 2006, we are required 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
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