TIDMAYM
Anglesey Mining plc
Projects:
100% of the Parys Mountain underground zinc-copper-lead-silver-gold deposit in
North Wales, UK where an updated Scoping Study was completed in 2017. The
results of this Study are positive and provide a clear route to develop the
project through to production.
12% of Labrador Iron Mines Holdings Limited, which was restructured during the
year, holds direct shipping iron ore deposits in Labrador and Quebec.
A 6% interest in, and management rights to, the Grangesberg Iron project in
Sweden, together with a right of first refusal to increase its interest to 51%.
Strategic report - Chairman's statement
To Anglesey Shareholders
It is pleasing to report, after several years of depressed market conditions,
that in several areas of significance to Anglesey Mining there are now real
signs of resurgence. I believe we have passed the bottom of the mining cycle
and there is a strong expectation of upward movement in metal prices,
particularly for zinc and to some extent for copper, in the near future. This
positive outlook is now being reflected in the capital markets where after
several years of depressed market conditions there is renewed investor interest
in the mining sector and the opportunity to raise new capital is being
demonstrated.
Parys Mountain - 2017 Scoping Study
Against this background of improving metal prices and increased investor
interest it would seem opportune that we have recently undertaken a new Scoping
Study on the Parys Mountain copper-lead-zinc project in North Wales which
demonstrates a viable mine development and a healthy financial rate of return.
The Scoping Study was prepared by Micon International Limited (Micon) and
Fairport Engineering Ltd (Fairport). The selected base case envisages a mining
rate of 1,000 tonnes per day, to produce an average annual output of 14,000
tonnes of zinc concentrate at 57% Zn, 7,200 tonnes of lead concentrate at 52%
Pb and 4,000 tonnes of copper concentrate at 25% Cu annually over an initial
mine life of eight years.
The overall net smelter return (NSR) for the three concentrates, including the
silver and gold precious metals contributions, is expected to total more than
$270 million at the forecast metal prices used for the base case calculations.
The base case yields a pre-tax net present value of $33.2 million, or GBP26.6
million, at a conservative 10 per cent discount rate, using present day metal
prices of $1.25 per pound for zinc, $1.00 per pound for lead, $2.50/pound for
copper, $17.50 per ounce for silver and $1,275 per ounce for gold and at an
exchange rate of GBP1.00 = $US1.25. With an estimated pre-production capital cost
of $53 million, or GBP42 million, this results in an indicated internal rate of
return (IRR) of 28.3%.
Using longer term metal price projections of $1.35 per pound for zinc and $3.00
per pound for copper the NPV10 would be $43.2 million, or GBP34.6 million. At an
8% discount rate, used to reflect the relatively low risks of the project given
its advanced level of development and low political risk in the UK, the NPV8
would be enhanced to $41 million, or GBP32.8 million, for the base case metal
price scenario and to $53 million, or GBP421.9 million for the higher longer-term
metal prices, with an IRR of 33%.
Importantly, the study was based on only the 2.1 million tonnes of indicated
resources reported by Micon in 2012. Micon had also reported a further 4.1
million tonnes of inferred resources which were not incorporated into the
Scoping Study. It is expected that a high proportion of these inferred
resources will be converted to indicated probable reserves once exploration
drilling from underground takes place. These additional resources would be
processed through the same concentrator plant and would significantly increase
the projected life of the mine, to perhaps double the projected mine-life to 15
or 18 years, and enhance the NPV.
I have been involved with the Parys Mountain project for many years, and I am
encouraged that many of the variables and moving parts, including metal prices,
treatment charges and used plant availability, have now moved in our favour and
present a real and realisable opportunity for the Parys Mountain project.
There is of course still much to be do but we now have a clear path forward.
Iron Ore
The price of iron ore doubled during calendar 2016, driven by increased Chinese
demand, reaching a two-year high of US$80 per tonne in December 2016 and moved
even higher in early 2017, hitting a high of US$97 per tonne in February 2017,
its highest level since mid-2014, before retreating somewhat to approximately
US$70 per tonne in July 2017. Our investments in Grangesberg Iron and in
Labrador Iron rely heavily for their future success on this commodity.
Grangesberg Iron
Our operations at Grangesberg have been restricted during the past year while
we continue to manage the project on behalf of both the company and
Grangesberg's other shareholders. The economics of Grangesberg are more
positive than many other iron ore projects but will still require both higher
long-term iron ore prices as well as major levels of capital expenditure. The
high-quality product from Grangesberg, together with the extensive existing
infrastructure and the potential for sales within Sweden's domestic markets,
will be key to making the project viable when iron prices do move. Together
with the other shareholders and stakeholders in Grangesberg we will continue to
investigate all options to develop a viable business plan for the project.
Labrador Iron
During the year Labrador Iron Mines Holdings Limited ("LIM") completed a
financial restructuring as part which creditors were issued with shares in LIM
and its subsidiary and as a result the group's holding in LIM was diluted from
15% to just under 12%. LIM is now debt free and continues to hold its iron ore
assets in Labrador and Quebec. Nevertheless, it will require a significant and
sustained increase in the price of iron ore for the Labrador operations to be
restarted.
Outlook
The outlook for Anglesey Mining is now brighter than at any time during the
last few years. Metal prices particularly zinc, copper and lead, which form
the basis of Parys Mountain revenue, seem set for their long-awaited upward
movement.
Based on the positive results of the Scoping Study we now plan to engage in
discussions with potential financiers or partners for the development of the
Parys Mountain project. Recommendations have been made by Micon and Fairport
regarding further work to optimise and enhance the project as the next step
ahead of mine development. It is hoped that financing for this work can be
arranged as speedily as possible and will be followed by subsequent financings
to move towards mine construction.
We expect that sterling will continue to be traded at relatively low levels
against the United States dollar for the foreseeable future whilst negotiations
over the Brexit withdrawal and the ensuing uncertainty around the actual exit
take effect. It may be that sterling will experience even further weakness in
the longer term, which would benefit the Parys Mountain project. Apart from
these matters we do not expect Brexit issues to unduly influence the group.
It is likely that China will continue to experience economic growth and will
make ever increasing demands for commodities that could be produced from your
Anglesey's projects. Normal industrial demand in the United States and Europe,
as well as larger developing countries, will also play an important part of the
commodity markets. China's continuing growth coupled with a reluctance by
major miners to embark on large new projects, generally in geographically and
politically difficult environments, should see continuing demand for metals
resulting in a long term and sustainable uplift in metal prices.
The strength in the markets and return of investor interest has been reflected
in the price of the Company's shares which has increased around fourfold from
this time last year. This has been coupled with strong trading volumes and
gave us the opportunity to raise funds on two occasions during the year.
I would like to thank all our shareholders, whether at a major investment level
or at smaller levels, for their continuing support during the difficult recent
years that we have been through.
We trust that your patience and support will soon be recognised and rewarded.
John F. Kearney
Chairman
28 July 2017
Strategic report - Operations
Principal activities and business review
Anglesey Mining is engaged primarily in the business of exploring and
evaluating its wholly owned Parys Mountain zinc, lead, copper project in North
Wales. Although site activities there have been limited during the year to care
and maintenance, a scoping and economic study bringing earlier reports up to
date has been prepared during the year.
Under various agreements the group participates in the management of the
Grangesberg iron ore property in Sweden in which it has a 6% holding and a
right of first refusal to acquire a further 51% ownership interest. The group
also has a 12% holding (2016 - 15%) in the Labrador iron project in eastern
Canada, currently in care and maintenance.
The aim of the group is 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 available where appropriate
Parys Mountain
The Parys Mountain property hosts a significant polymetallic zinc, copper,
lead, silver and gold deposit. The site has a head frame, a 300m deep
production shaft and planning permission for operations. The group has freehold
ownership of the minerals and surface land. Infrastructure is good, political
risk is low and the project enjoys the support of local people and government.
An independent JORC resource estimate completed in 2012 by Micon International
Limited reported a resource of 2.1 million tonnes at 6.9% combined base metals
in the indicated category and 4.1 million tonnes at 5.0% combined base metals
in the inferred category with substantial exploration potential.
Physical operations at Parys Mountain were again kept at a low level during the
past year, with only essential maintenance work carried out, while the main
focus of activity was undertaking a new scoping study.
Scoping Study 2017
The Scoping Study was prepared by Micon International Limited (Micon) and
Fairport Engineering Ltd (Fairport) and was completed in July 2017.
Development Plan
The original feasibility studies conducted on the Parys Mountain project in the
1990s envisaged production at a rate of 1,000 tpd being mined at depth through
the 300-metre-deep Morris Shaft. During the period 2006-2010 Anglesey Mining
carried out a detailed drilling programme on the White Rock Zone which lies
adjacent to the Morris Shaft and largely overlies the deeper Engine Zone
deposits, but which extends to surface. As a result of this drilling the 2012
resource estimate carried out by Micon included both the White Rock Zone and
the Engine Zone.
A new mining plan based on a surface decline to access the White Rock zone was
prepared. The proposed decline would be developed by mining contractors and
would be used as the initial means of access to the resource for development
and mining. Mined ore would be trucked up the decline to the proposed surface
processing plant. During the initial production phase from White Rock the
decline would continue to be driven to reach the current bottom of the Morris
Shaft and beyond. The shaft would then be dewatered and deepened by
approximately 150 metres and would be recommissioned as a hoisting shaft for
the remnant White Rock ore and for the deeper and more valuable Engine Zone
ore.
Production Alternatives
The initial work on the Scoping Study was designed on a throughput of 500
tonnes per day using conventional processing. As the first results became
available it became apparent that a higher daily production throughput would be
financially more attractive. Accordingly, assessment of increased throughput
alternatives of 700 tpd and 1,000 tpd were added to the initial scope of the
study.
In addition, the concept of adding a dense media separation plant ahead of the
main concentrator was reviewed. Dense media separation (DMS) is a process to
remove largely non-metal bearing material from the mine feed ahead of the
concentrator. This results in a substantial reduction in the tonnage of ore to
be treated by the concentrator. Obviously there are additional costs
associated with building and operating a DMS plant, and there is some loss of
metal associated with the DMS tailings, but overall inclusion of a DMS plant
improves the financial performance.
Concurrent with evaluation of these processing options, mine planning at 700
tpd and 1,000 tpd was also studied. Mining would be carried out initially from
the main decline using rubber-tyred equipment including drill jumbos,
load-haul-dump machines and trucks to remove development waste to surface and
production ore to the processing plant. It was concluded that after an initial
ramp-up period, the higher production level can be maintained. In due course,
the lower level of the shaft will be accessed from the decline and deepened as
originally planned. The existing hoist and headframe will be refurbished and
used to bring ore to the surface for delivery to the adjacent processing plant.
The processing plant was initially designed in a modular form with a capacity
of 500 tpd throughput expandable to 1,000 tpd to minimise up-front capital
costs. The plant will consist of crushing and grinding followed by
conventional three stage flotation to produce copper, zinc and lead
concentrates to be shipped to smelters in Europe. The study showed that the
best results can be obtained with higher throughputs. There is little
additional capital cost required for the higher throughput and this increase is
offset by lower operating costs and increased revenue.
Based on these outcomes it was concluded that the preferred development option
for the Parys Mountain is a 1,000 tpd mine and plant with a DMS section and a
mine life of approximately eight years.
Mineral Resources and Exploration Potential
The 2017 Scoping Study utilises the Micon 2012 JORC Code compliant resource
estimate of 2.1 million tonnes at 6.9% combined base metals in the indicated
category. Micon had also reported a further 4.1 million tonnes at 5.0%
combined base metals in the inferred category. These inferred mineral resources
are not included in the current study but would significantly extend the
projected operating life of the mine with a consequential increase in the
resultant estimated valuation.
As reported in 2012, the resource estimate was made using a gross metal product
value cut-off of $80 per tonne. It is noted that the cash operating cost of
the project, prior to royalties and taxes, is forecast at $47 per tonne. This
will enable some further review of the resource to be undertaken. A lower
cut-off grade would increase the tonnes in the indicated category at the same
time as reducing the grade. The larger tonnage would increase the mine life
but would reduce the annual revenue due to the lower feed grade to the plant.
An optimisation study will be required to determine the optimum cut-off grade
that would provide the maximum increased return over that currently reported.
In addition to the indicated and inferred resources reported by Micon, the
Parys Mountain area, over which the group holds the mineral rights, contains
numerous indications of mineralisation across several kilometres many of which
have been disclosed in earlier releases and reports. As most of these
indications have been encountered in drilling at some depth, further
exploration would be more effective from underground locations once mining
operations commence. Should any of these exploration efforts prove successful
an increased throughput and a further extended mine life would be the likely
outcome.
Capital and Operating Costs
The pre-production capital cost of the preferred option base case including
mining, DMS, concentrator and infrastructure is estimated at $53 million. The
initial capital cost for mine development is estimated to be $13 million, the
concentrator $29.5 million including $3 million for the DMS plant and
infrastructure $10 million, for a total of $53 million. Included within these
figures is a $4 million contingency provision.
The major component of capital costs is initially associated with the
processing plant and surface infrastructure. Capital costs have been
estimated based on quotes provided by equipment suppliers together with
construction costs forecast by Fairport. Capital costs for the processing plant
and infrastructure includes, when suitable, some used and reconditioned plant
which has been identified as readily available. The remainder would be new
equipment.
Despite the quite wide spread in throughputs studied it became apparent that
the lower throughput options did not present significant savings in capital
cost. This is largely due to minimum equipment sizes required for several
units that could also accomplish the duty for the higher throughputs and with
the fixed items of work required for buildings, construction and infrastructure
that do not change materially across the throughput range. Mine development
capital costs are based on all new equipment and on mine contractor development
costs.
Operating costs have been developed by Micon and Fairport based on current
knowledge and experience. Cash operating costs at the higher levels of
production are forecast at around $47 per tonne of ore treated. Whilst capital
costs were fairly constant across the throughput spectrum, operating cash costs
per tonne of ore mined and milled varied significantly with the higher
throughputs benefitting from much lower costs. This lead to the clear
conclusion that the higher the throughput the better the financial result.
The following table shows the key financial outcomes derived for each of the
alternatives.
500tpd no 700 tpd no 700 tpd with 1,000 tpd
DMS DMS DMS with DMS
Life of Mine (Years) 16 12 12 8
Initial Capital Cost $m 48 50 52 53
Operating cash cost $/t 63 55 53 47
NPV10 $m * 9.0 21.6 19.3 33.2
IRR % * 13.8 20.3 18.8 28.3
Payback (Years) * 7 5 5 4
* Pre-Tax Based on Cu $2.50/lb, Zn $1.25/lb, Pb $1.00/lb, Ag $17.50/oz, Au
$1,275/oz
Selected Base Case Option - 1,000 tpd
The 1,000 tpd option is clearly the most favourable financial outcome. The
additional capital cost required is only $5 million higher than the lowest cost
option and at these levels that is not considered critical. The inclusion of
the DMS plant results in the rejection of approximately 37% of mined material
ahead of the concentrator. Included within this is approximately 4.5% of the
metal in feed that will be permanently lost to tailings. As a result of the
application of the DMS the net concentrator feed to the floatation circuits
will be approximately 700 tpd.
The NPV and IRR generated are significantly better at 1,000 tpd than the lower
throughput options. Therefore the 1,000 tpd option has been chosen as the base
case for further consideration. No detailed study was carried out on a 1,000
tpd throughput without the DMS. However, a short study indicated that it is
likely that DMS will be far more favourable when the plant capacity is expanded
to around 1,500 tpd which should occur when the inferred resources are upgraded
to the indicated category. The incorporation of DMS is therefore considered
advisable and prudent.
Metal Production
Metallurgical performance and recovery is based on the large volume of
information available from test work on Parys Mountain ores over the years.
Total base metal recovery in the concentrator to each of the three copper, zinc
and lead concentrates is forecast to be 89.8% and taking into account the DMS
losses overall recovery will be approximately 85.7%. Significant amounts of
silver and gold will report to each of the concentrates. Some free gold will
be recovered by gravity methods ahead of the concentrates and will be sold as
Welsh gold.
It is expected that each of the three base metal concentrates will be sold to
smelters in Europe. Smelter payment terms and penalties have been based on
treatment charges currently prevailing from these smelters. It is possible
that better terms could be obtained from Chinese smelters from time to time but
the cost of shipping to the Far East compared to the proximity of shipping to
continental Europe is likely to make such options less viable.
On average 14,000 tonnes of zinc concentrate at 57% Zn, 7,200 tonnes of lead
concentrate at 52% Pb and 4,000 tonnes of copper concentrate at 25% Cu, will be
produced annually. These figures will vary somewhat during the life of the
mine as mine feed varies depending upon the particular ore bodies being mined
at any time. This will result in average annual metal production into
concentrates of 17.6 million pounds of zinc ,8.3 million pounds of lead and 2.2
million pounds of copper.
Using estimated shipping costs, smelter terms and penalties, the overall NSR
for the three concentrates, including the precious metals, is expected to total
in excess of $270 million at the metal prices used for the base case. This
would represent a NSR of approximately 72% of the metal value in concentrates
delivered to the smelters.
Project Financial Results
The base case yields a pre-tax net present value of $33.2 million, or GBP26.6
million, at a conservative 10 per cent discount rate, using present day metal
prices of $1.25 per pound for zinc, $1.00 per pound for lead, $2.50/pound for
copper, $17.50 per ounce for silver and $1,275 per ounce for gold and at an
exchange rate of GBP1.00 = $US1.25. With an estimated pre-production capital cost
of $53 million, or GBP42 million, this results in an indicated internal rate of
return (IRR) of 28.3%.
Using longer term metal price projections of $1.35 per pound for zinc and $3.00
per pound for copper the NPV10 would be $43.2 million, or GBP34.6 million. At an
8% discount rate, used to reflect the relatively low risks of the project given
its advanced level of development and low political risk in the UK, the NPV8
would be enhanced to $41 million, or GBP32.8 million, for the base case metal
price scenario and to $53 million, orGBP421.9 million for the higher longer-term
metal prices, with an IRR of 33%.
The pre-tax net present values, at 10% and 8% discount rates, and internal
rates of return, are illustrated in the table below, all at a sterling:US
dollar exchange rate of GBP1.00 = $US1.25.
Pre-Tax Cash Flows
Metal Prices
Zinc Silver Undiscounted NPV 10% NPV 8% IRR
US$/lb Lead Copper US$/oz Gold $M $M $M %
US$/lb US$/lb US$/oz
1.25 17.50 91.2 33.2 41.0 28.3
1.00 2.50 1,275
1.35 17.5 110.8 43.2 52.4 33.1
1.00 3.00 1,275
Foreign Exchange assumed to be GBP1.00: $1.25US
Further work on Parys Mountain
Both Micon and Fairport have recommended that further work to optimise and
enhance the project as the next step ahead of mine development, including more
detailed mine and stope design, underground geotechnical studies, additional
infill drilling in some locations, more detailed engineering studies,
additional metallurgical test work including work to improve recovery of
specific metals to their own concentrate, and review of tailings management and
paste processes. Several opportunities for cost reduction or productivity
improvement have been identified for further study. It is planned to carry out
these and other activities as suitable funds are available. This will then
lead to the generation of more detailed production and costing feasibility
reviews to support project financing to move towards mine construction.
The directors are of the opinion that the Parys Mountain project is at an
advanced stage and the existence of the current JORC resource estimate, the new
scoping study and the original feasibility study, together with the valid
planning permissions, represent a solid base from which to move the project
towards production. There is in addition substantial exploration potential on
the property.
Grangesberg Iron AB
The Grangesberg iron ore mine is situated in the mineral-rich Bergslagen
district of central Sweden about 200 kilometres north-west of Stockholm. Until
its closure in 1989 due to prevailing market conditions, Grangesberg had mined
in excess of 150 million tonnes of iron ore. GIAB is a private Swedish company
founded in 2007 which in 2014 completed (with assistance from the group) a
financial and capital restructuring of the mine. GIAB holds a 25 year
exploitation permit covering the previously mined Grangesberg underground
mining operations granted by the Swedish Mining Inspectorate in May 2013.
The group has a direct 6% interest in GIAB and, until June 2018, a right of
first refusal over 51% of the enlarged share capital of GIAB. This right has
been granted in exchange for the group continuing to co-manage GIAB on a cost
recovery basis. The group also has shareholder and cooperation agreements such
that it holds operatorship of GIAB subject to certain conditions and appoints
two out of five directors to the board of GIAB.
In September 2014 an NI 43-101 Technical Report was prepared by Roscoe Postle
Associates Inc ("RPA") showing a compliant resource estimate for the
Grangesberg Mine of 115.2 million tonnes at 40.2% Fe in the indicated category
and 33.1 million tonnes at 45.2% Fe in the inferred category. RPA concluded
that the Grängesberg iron ore deposit hosts a significant iron resource that
has excellent potential for expansion at depth.
During the coming year, Grangesberg will continue to operate under the
direction of the group. It is planned that subject to the availability of
adequate funding, Grangesberg will advance a number of environmental studies
and other activities as a pre-requisite to a definitive feasibility study.
Labrador Iron
The group has an investment holding of 12% (2016 -15%) in Labrador Iron Mines
Holdings Limited which in the three years up to 2013 produced a total of 3.6
million dry metric tonnes of iron ore from its properties in Labrador, Canada.
Since then mining operations have been suspended due to low iron ore prices. In
December 2016 LIM completed a financial restructuring which resulted in the
conversion of liabilities into equity of LIM and its subsidiaries. As a result,
the group's interest in LIM has been diluted from 15% to 12%.
LIM continues to own all of its direct shipping iron ore projects in the
central part of the Labrador Trough region, one of the major iron ore producing
regions in the world, containing extensive iron ore resources, and where LIM
owns processing plants and equipment and rail infrastructure and facilities
being held on care and maintenance.
Other activities
The directors continue to seek out new properties suitable for development
within a relatively short time frame and within the financing capability likely
to be available to the group.
Performance
The directors expect to be judged by results of project development and/or
exploration and by their success in creating long term value for shareholders.
The group holds shares in mineral companies and has interests in exploration
and evaluation properties and, until economically recoverable reserves can be
identified, there are no standardised performance indicators which can usefully
be employed to gauge the performance of the group, other than the market price
of the company's shares.
The chief external factors affecting the ability of the group to move forward
are primarily the demand for metals and minerals, levels of metal prices and
exchange rates; these and other factors are dealt with in the risks and
uncertainties section below.
Financial results and position
The group has no revenues from the operation of its properties. The loss for
the year ended 31 March 2017 after tax was GBP307,968 compared to a loss of GBP
256,450 in the 2016 fiscal year. The administrative and other costs excluding
investment income and finance charges were GBP141,022 compared to GBP112,279 in the
previous year.
During the year there were no additions to fixed assets (2016 - nil) and GBP
84,196 (2016 - GBP49,433) was capitalised in respect of the Parys Mountain
property as mineral property exploration and evaluation, the increase being
largely due to the expenses of the scoping study.
At 31 March 2017 the group held mineral property exploration and evaluation
assets with a carrying value of GBP15.0 million. These carrying values may not
reflect the realizable value of the properties if they were offered for sale at
this time.
The group's cash balance at 31 March 2017 was GBP392,293 (2016 - GBP11,504) the
increase being due to two placings of new shares for cash during the year which
raised GBP493,037 net of share issue costs. The foreign exchange gain of GBP178
(2016 - loss GBP2,039) shown in the income statement arises on cash balances held
in Canadian dollars and Swedish Krona.
At 31 March 2017 the company had 177,608,051 (2016 - 160,608,051) ordinary
shares in issue following the two share placings referred to above.
Financial instruments
The group's use of financial instruments is described in note 24.
Employment, community, donations and environment
The group is an equal opportunity employer in all respects and aims for high
standards from and for its employees. At 31 March 2017 the company had five
male directors; there were no female directors or employees. It also aims to be
a valued and responsible member of the communities which it operates in or
affects.
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 may be subject to various reclamation and operational conditions. The
group currently has no operations and consequently its effect on the
environment is very slight, being limited to the operation of two small
offices, where recycling and energy usage minimisation are taken seriously and
encouraged. It is not practical or useful to quantify the effects of these
measures. There are no social, community or human rights issues which require
the provision of further information in this report.
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, costs and changing foreign exchange rates and other matters.
The mining industry is competitive in all of its phases. There is competition
within the mining industry for the discovery and acquisition of properties
considered to have commercial potential. The group faces competition from other
mining companies in connection with the acquisition and retention of
properties, mineral claims, leases and other mineral interests as well as for
the recruitment and retention of qualified employees and other personnel.
Development and liquidity risk
On previous occasions and during the year the group has relied upon its largest
shareholder, Juno Limited, for financial support and may be required to do so
in the future to ensure the group will have adequate funds for its current
activities. In the absence of support from Juno Limited the group would be
dependent on the proceeds of share issues or other sources of funding.
Developing the Parys project will be dependent on raising further funds from
various sources.
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 currency fluctuations which affect the
amount which might be received by the group in sterling.
Foreign exchange
LIM is a Canadian company; Angmag AB and GIAB are Swedish companies.
Accordingly the value of the group's holdings in these companies is affected by
exchange rate risks. 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 sterling - see notes 17 and 24.
Permitting, environment and social
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 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
specifically the chairman, chief executive and finance director. The loss of
these persons or the group's inability to attract and retain additional highly
skilled and experienced employees for any areas in which the group might engage
may adversely affect its business or future operations.
This report was approved by the board of directors on 28 July 2017 and signed
on its behalf by:
Bill Hooley
Chief executive officer
Directors' report
The directors are pleased to submit their report and the audited accounts for
the year ended 1H31 March 2017.
The corporate governance statement which follows forms part of this report. The
principal activities of the group and other information is set out in the
strategic report section preceding this report. Certain matters relating to
financial performance, risk exposure and management, and future developments
which are required to be disclosed in the directors report have instead been
included within the strategic report.
Directors
The names of the directors are shown in the directors' remuneration report and
biographical details are shown on the inside rear cover. All directors remain
in office except Roger Turner who retired on 29 July 2016. The directors wish
to place on record their appreciation for his services to the company over a
period of ten years. It is the company's procedure to submit re-election
resolutions for all directors at the annual general meeting. The company
maintains a directors' and officers' liability policy on normal commercial
terms which includes third party indemnity provisions. The powers of the
directors are described in the Corporate Governance Report.
With regard to the appointment and replacement of directors, the company is
governed by its Articles, the Corporate Governance Code, the Companies Act and
related legislation. The Articles themselves may be amended by special
resolution of the shareholders. Under the Articles, any director appointed by
the board during the year must retire at the AGM following his appointment. In
addition, the Articles require that one-third of the remaining directors retire
by rotation at each general meeting and seek re-appointment. However it is now
the company's practice to submit re-election resolutions for all directors at
each AGM.
Directors' interests in material contracts
Juno Limited (Juno), which is registered in Bermuda, holds 32.6% of the
company's ordinary share capital. The company has a controlling shareholder
agreement and working capital agreement with Juno. Advances made under the
working capital agreement are shown in note 19. Apart from these advances and
interest charges there were no transactions between the group and Juno or its
group during the year. An independent committee reviews and approves any
transactions and potential transactions with Juno. Danesh Varma is a director
and, through his family interests, a significant shareholder of Juno.
Bill Hooley and Danesh Varma are directors of Grangesberg Iron AB and of the
special purpose vehicle Eurmag AB. Danesh Varma has been associated with the
Grangesberg project since 2007 when he became a director of Mikula Mining
Limited, a company subsequently renamed Eurang Limited, previously involved in
the Grangesberg project. He did not take part in the decision to enter into the
Grangesberg project when this was approved by the board. The group has a
liability to Eurmag AB a subsidiary of Eurang amounting to GBP297,570 at the year
end (2016 - GBP245,461). See also note 25.
There are no other contracts of significance in which any director has or had
during the year a material interest.
Substantial shareholders
At 18 July 2017 the following shareholder had advised the company of an
interest in the issued ordinary share
capital: Juno Limited notified an interest in 57,924,248 shares representing
32.6% of the issued ordinary shares.
Shares
Allotment authorities and disapplication of pre-emption rights
The directors would usually wish to allot any new share capital on a
pre-emptive basis, however in the light of the group's potential requirement to
raise further funds for the acquisition of new mineral ventures, other
activities and working capital, they believe that it is appropriate to have a
larger amount available for issue at their discretion without pre-emption than
is normal or recommended for larger listed companies. At this year's annual
general meeting, the directors will seek a renewal and replacement of the
company's existing share allotment authorities.
The authority sought in resolution 11 of the notice of the AGM is to enable the
directors to allot new shares and grant rights to subscribe for, or convert
other securities into shares, up to a nominal value of GBP590,000 (59,000,000
ordinary shares) which is approximately one third of the total issued ordinary
share capital of the company as at 18 July 2017. The directors will consider
issuing shares if they believe it would be appropriate to do so in respect of
business opportunities that arise consistent with the company's strategic
objectives. The directors have no present intention of exercising this general
authority, other than in connection with the potential issue of shares pursuant
to the company's employee share and incentive plans.
The purpose of resolution 12 is to authorise the directors to allot new shares
pursuant to the general authority given by resolution 11 in connection with a
pre-emptive offer or offers to holders of other equity securities if required
by the rights of those securities or as the board otherwise considers
necessary, or otherwise up to an aggregate nominal amount of GBP440,000
(44,000,000 ordinary shares). This aggregate nominal amount represents
approximately 25% of the issued ordinary share capital of the company at 18
July 2017. Whilst such authority is in excess of the 5% of existing issued
ordinary share capital which is commonly accepted and recommended for larger
listed companies, it will provide additional flexibility which the directors
believe is in the best interests of the group in its present circumstances. The
authority sought under resolution 12 will expire on 31 December 2018. The
directors intend to seek renewal of this authority at future annual general
meetings.
Rights and obligations attaching to shares
The rights and obligations attaching to the ordinary and deferred shares are
set out in the Articles of Association. Details of the issued share capital are
shown in note 21. Details of employee share schemes are set out in the
Directors Remuneration Report and in note 22.
Each ordinary share carries the right to one vote at general meetings of the
company. Holders of deferred shares, which are of negligible value, are not
entitled to attend, speak or vote at any general meeting of the company, nor
are they entitled to receive notice of general meetings.
Subject to the provisions of the Companies Act 2006, the rights attached to any
class may be varied with the consent of the holders of three-quarters in
nominal value of the issued shares of the class or with the sanction of an
extraordinary resolution passed at a separate general meeting of the holders of
the shares of the class.
There are no restrictions on the transfer of the company's shares.
Voting rights
Votes may be exercised at general meetings in relation to the business being
transacted either in person, by proxy or, in relation to corporate members, by
corporate representative. The Articles provide that forms of proxy shall be
submitted not less than 48 hours (excluding any part of a day that is not a
working day) before the time appointed for holding the meeting or adjourned
meeting.
No member shall be entitled to vote at 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.
Dividend
The group has no revenues and the directors are unable to recommend a dividend
(2016 - nil).
Going concern
The directors have considered the business activities of the group as well as
its principal risks and uncertainties as set out in this report. When doing so
they have carefully applied the guidance given in the Financial Reporting
Council's documents 'Going concern and liquidity risk: Guidance for directors
of UK companies 2009' and 'Guidance on Risk Management, Internal Control and
Related Financial and Business Reporting' issued in September 2014.
The financial statements are prepared on a going concern basis. The validity of
the going concern basis is dependent on finance being available for the
continuing working capital requirements of the group for the foreseeable
future, being a period of at least twelve months from the date of approval of
the accounts. Whilst the group has such working capital, the long term
operations of the group are dependent on its ability to raise adequate
financing. The group relies on equity financing and support from its
shareholders to fund its working capital requirements. The group will need to
generate additional financial resources in the future in order to meet its
planned business objectives and continue as a going concern. Additional
financing will be required to continue the development of the group's
properties and in the longer term to put the Parys Mountain Mine into
production.
The directors recognise that the long term continuing operations of the group
are dependent upon its ability to raise adequate financing and that this
represents an uncertainty which may cast doubt about the group's ability to
continue as a going concern. The directors have a reasonable expectation that
the required financing will be raised and are actively pursuing various
financing options with certain shareholders and financial institutions
regarding proposals for financing. The directors have reasonable expectations
that these financing discussions will be successful and therefore the financial
statements have been prepared on the going concern basis.
Greenhouse Gas emissions
The group does not itself undertake any activities or processes which lead to
the production of greenhouse gases. The extent to which its administrative and
management functions result in greenhouse gas emissions is slight and the
directors do not believe that any useful purpose would be served by attempting
to quantify the amounts of these emissions.
Report on payments to governments
The group is required to disclose payments made to governments in countries
where exploration or extraction activities are undertaken and hereby reports
that any such payments made in the year were below the minimum disclosable
level.
Post balance sheet events
There are no post balance sheet events to report.
Statement of directors' responsibilities
The directors are responsible for preparing the annual report and the financial
statements. The directors are required to prepare the financial statements for
the group in accordance with International Financial Reporting Standards as
adopted by the European Union ("IFRS") and have also elected to prepare
financial statements for the company in accordance with IFRS. Company law
requires the directors to prepare group and parent company financial statements
for each financial year. Under that law they are required to the prepare the
financial statements in accordance with IFRS, the Companies Act 2006 and, in
relation to the group financial statements, Article 4 of the IAS Regulation.
Under company law the directors must not approve the financial statements
unless they are satisfied that they give a true and fair view of the state of
affairs of the group and parent company financial statements and of their
profit and loss for that period.
In preparing the financial statements the directors are required to:
* select suitable accounting policies and then apply them consistently;
* make judgements and estimates that are reasonable and prudent;
* state that the financial statements comply with IFRSs as adopted by the
European Union; and
* prepare the financial statements on the going concern basis unless it is
inappropriate to presume that the group and the parent company will
continue in business.
The directors confirm that they consider the annual report and accounts,
taken as a whole, is fair, balanced and understandable and provides the
information necessary for shareholders to assess the company and group's
performance, business model and strategy.
The directors are responsible for keeping adequate accounting records that
are sufficient to show and explain the parent company's transactions and
disclose with reasonable accuracy at any time the financial position of the
parent company and the group and enable them to ensure that the financial
statements comply with the Companies Act 2006. They are also responsible
for safeguarding the assets of the parent company and the group and hence
for taking reasonable steps for the prevention and detection of fraud and
other irregularities.
Under applicable law and regulations the, the directors are also
responsible for preparing a Strategic Report, Directors' Report,
Remuneration Report and Corporate Governance Statement that comply with
that law and those regulations.
The directors are responsible for the maintenance and integrity of the
group website. Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from legislation in
other jurisdictions.
Each of the directors, whose names and functions are listed on the inside
rear cover, confirm that, to the best of their knowledge:
* the group financial statements, which have been prepared in accordance with
IFRSs as adopted by the EU, give a true and fair view of the assets,
liabilities, financial position and loss of the group; and
* the Strategic and Directors' Reports include a fair review of the
development and performance of the business and the position of the group,
together with a description of the principal risks and uncertainties that
it faces.
Auditor
Each of the directors in office at the date of approval of the annual report
confirms that so far as they are aware there is no relevant audit information
of which the company's auditor is unaware and that each director has taken all
of the steps which they ought to have taken as a director in order to make
themselves aware of that information and to establish that the company's
auditor is aware of that information. This confirmation is given and should be
interpreted in accordance with the provisions of s418 of the Companies Act
2006.
A resolution to reappoint Mazars LLP as auditor and to authorise the directors
to fix their remuneration will be proposed at the annual general meeting.
This report was approved by the board of directors on 28 July 2017 and signed
on its behalf by:
Danesh Varma
Company Secretary
Independent auditor's report to the members of Anglesey Mining plc
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 2017 and of the
group's loss for the year then ended;
* the group financial statements have been properly prepared in accordance
with International Financial Reporting Standards (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.
We have audited the financial statements of Anglesey Mining PLC for the
year ended 31 March 2017, which comprise the Group Income Statement, the
Consolidated Statement of Comprehensive income, the Group and Company
Statements of Financial Position, the Group and Company Statements of
Changes in Equity, the Group and Company Statements of Cash Flow and the
related notes. The financial reporting framework that has been applied in
their preparation is applicable law and IFRSs as adopted by the European
Union and, as regards the parent company financial statements, as applied
in accordance with the provisions of the Companies Act 2006.
Our assessment of the risks of material misstatement
The assessed risks of material misstatement described below are those that had
the greatest effect on our audit strategy, the allocation of resources in the
audit and directing the efforts of the engagement team:
The risk Our response
Going concern
We evaluated the directors' assessment
The financial statements are prepared of the group's ability to continue as
on a going concern basis in accordance a going concern. In particular, we
with IAS 1 'Presentation of Financial reviewed and challenged the cash flow
Statements'. forecasts including key assumptions to
During the year GBP493,037 net was assess the risk of the group's
raised through two placings of new inability to meet liabilities as they
ordinary shares. At the year end the fall due. We have considered the
group held cash and cash equivalents group's reliance on ongoing support
of GBP392,293 had net current assets of from its largest shareholder, Juno
GBP301,339 and net assets of GBP Limited, including their ability to
12,260,888. Net cash used in provide adequate funds for the group's
operating activities in the year was GBP current and future activities and the
141,498. availability of other sources of
In note 2 the Directors describe: finance to the group to support the
their assessment of going concern; going concern assumption.
that funding is sufficient to meet In the absence of support from Juno
current liabilities as they fall due Limited, the Directors consider that
for the foreseeable future; that the the going concern status of the group
group relies on equity finance and would be dependent on the raising of
support from its shareholders to fund funds from share issues or from
its working capital requirements; and accessing alternative sources of
that additional financing will be funding. Whilst discussions with
required to continue the development shareholders and financial
of the group's properties and in the institutions are ongoing the ability
longer term to put the Parys Mountain of the group to raise sufficient
Mine into production. finance to complete development of its
Whilst the directors' opinion is they various projects is not certain.
have a reasonable expectation that These conditions indicate the
required funding will be raised, in existence of an uncertainty which may
the event that sufficient funding to cast doubt about the group and
continue the group's developments and company's ability to ultimately
projects cannot be raised then there continue as a going concern. However,
would be significant doubt about the as funding is sufficient to meet
group's ability to remain a going current liabilities for the
concern. foreseeable future we concur with the
directors' assessment that the
accounts should be prepared on the
going concern basis.
Potential impairment of capitalised
costs associated with the exploration Our audit work included, but was not
and evaluation of the Parys Mountain restricted to, a review of the
mine site directors' assessment of the criteria
for the capitalisation of exploration
The group has held rights to explore and evaluation expenditure and whether
and mine the site for a number of there are any indicators of impairment
years but has not completed to capitalised costs. The directors
exploration and evaluation activities concluded that there was an indicator
or feasibility assessments to an of potential impairment. As a result,
extent where the site has been the directors' carried out an
confirmed as being commercially viable impairment review based on value in
and mining activities commenced. There use methodology to determine the
is a risk that accounting criteria recoverable amount of the Parys
associated with the capitalisation of Mountain project. Their assessment
exploration and evaluation expenditure based on the net present value of the
may no longer be appropriate and that future cash flows did not indicate
capitalised costs exceed the value in that an impairment of the asset was
use. Any assessment of the value in required.
use is highly judgemental and is based Our work included an audit of the
on the directors' assessment of a integrity of the discounted cash flow
number of factors, including: long model used by the directors to make an
term metal commodity prices; the assessment as to whether impairment
estimated mineral deposits from had occurred, as well as using our
independent experts' studies; costs professional scepticism to challenge
associated with mineral extraction and and test the key assumptions including
sale; discount rates; and exchange their sensitivity to the model. These
rate factors. key assumptions included the expected
future revenue and costs associated
with the extraction and sale of the
mineral deposits, future metal prices,
currency exchange rates, demand for
the minerals and the discount rate
utilised in the financial model. Our
work did not indicate that impairment
to exploration and evaluation assets
was required.
Potential impairment of the investment
in the subsidiary, Parys Mountain
Mines Limited, in the parent company
financial statements In conjunction with our work
associated with the potential
The cost of the investment in and loan impairment of the exploration and
due from the subsidiary, Parys evaluation assets held within Parys
Mountain Mines Limited, held in the Mountain Mine Limited, we considered
balance sheet of the company, is directors' assessment on whether there
supported by the future cash flows was an indication that the cost of the
associated with the recovery of the investment in and loan due from the
exploration and evaluation assets subsidiary required writing down in
following the development of the Parys the company. As there was no
Mountain site held by Parys Mountain impairment of the asset held by Parys
Mines Limited. If there were Mountain Mines Limited, we concur with
impairment in the exploration and management's view that there is no
evaluation assets, this would have a indicator of impairment in the
direct impact on the carrying value of carrying value of the investment in
the investment in and loan due from and loan due from the company was not
the subsidiary, which may need to be recoverable.
written down in the company's
accounts.
The Audit Committee's consideration of these risks is set out on page 20.
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.
Going concern
Other than the matters highlighted above under the risk entitled 'Going
concern' within our assessment of the risks of material misstatement, we have
nothing further to add or draw attention to in relation to:
* the directors' confirmation on page 8 of the Annual Report, that they have
carried out a robust assessment of the principal risks facing the entity,
including those that would threaten its business model, future performance,
solvency or liquidity;
* the disclosures in the Annual Report that describe those risks and explain
how they are being managed or mitigated;
* the directors' statement on page 10 of the Annual Report about whether they
have considered it appropriate to adopt the going concern basis of
accounting in preparing the financial statements and their identification
of any material uncertainties to the Group's ability to continue to do so
over a period of at least twelve months from the date of approval of the
financial statements;
* the directors' explanation on pages 10 & 31 of the Annual Report as to how
they have assessed the prospects of the entity, over what period they have
done so and why they consider that period to be appropriate, and their
statement as to whether they have a reasonable expectation that the Group
will be able to continue in operation and meet its liabilities as they fall
due over the period of their assessment, including any related disclosures
drawing attention to any necessary qualifications or assumptions.
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 the users of the financial statements may take based on the
information included in the financial statements.
Based on our professional judgement the level of overall materiality we set for
the financial statements is outlined below:
Overall Group GBP368,000
materiality:
Benchmark applied: This has been calculated with reference to the
group's net assets, of which it represents
approximately 3%.
Basis for chosen Net assets represents shareholders' funds and we have
benchmark: determined it to be the principal benchmark 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.
3% has been chosen to reflect the level of
understanding of the stakeholders of the Group in
relation to the inherent uncertainties around
accounting estimates and judgements.
We agreed with the Audit Committee that we would report to the Committee all
audit differences in excess of GBP11,000, as well as differences below that
threshold that, in our view, warranted reporting on qualitative grounds. We
also report to the Audit Committee on disclosure matters that we identified
during the course of assessing the overall presentation of the financial
statements.
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 and parent company'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 to identify
material inconsistencies with the audited financial statements and to identify
any information that is apparently 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 7 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 2017. 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.
In our opinion, based on the work undertaken in the course of the audit:
* the information given in the Strategic Report and Directors' Report for the
financial year for which the financial statements are prepared is
consistent with the financial statements and those reports have been
prepared in accordance with applicable legal requirements;
* the information given in the Corporate Governance Statement about internal
control and risk management systems in relation to financial reporting
processes and about share capital structures, in compliance with rules
7.2.5 and 7.2.6 in the Disclosure Rules and Transparency Rules sourcebook
made by the Financial Conduct Authority (the FCA Rules), is consistent with
the financial statements and has been prepared in accordance with
applicable legal requirements; and
* the information given in the Corporate Governance Statement about the
company's corporate governance code and practices and about its
administrative, management and supervisory bodies and their committees
complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA Rules.
Matters on which we are required to report by exception
Companies Act 2006
In light of the knowledge and understanding of the group and the parent company
and its environment obtained in the course of the audit, we have not identified
material misstatements in:
* the Strategic Report or the Directors' Report; or
* the information about internal control and risk management systems in
relation to financial reporting processes and about share capital
structures, given in compliance with rules 7.2.5 and 7.2.6 of the FCA
Rules.
We have nothing to report in respect of the following matters in relation
to which the Companies Act 2006 requires us to report to you if, in our
opinion:
* adequate accounting records have not been kept by the parent company, or
returns adequate for our audit have not been received from branches not
visited by us; or
* the parent company financial statements 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.
ISAs (UK and Ireland)
Under the ISAs (UK and Ireland), we are required to report to you if, in our
opinion, information in the annual report is:
* materially inconsistent with the information in the audited financial
statements; or
* apparently materially incorrect based on, or materially inconsistent with,
our knowledge of the company acquired in the course of performing our
audit; or
* is otherwise misleading.
In particular we are required to consider whether we have identified any
inconsistencies between our knowledge acquired during the audit and the
directors' statement that they consider the annual report is fair, balanced
and understandable and whether the annual report appropriately discloses
those matters that we communicated to the audit committee which we consider
should have been disclosed.
We have no exceptions to report arising from these responsibilities.
Listing Rules
Under the Listing Rules we are required to review:
* the directors' statement, set out on page 10, in relation to going concern
and longer-term viability; and
* the part of the Corporate Governance Statement relating to the company's
compliance with certain provisions of the UK Corporate Governance Code
specified for our review.
We have nothing to report having performed our review.
Respective responsibilities of directors and auditor
As explained more fully in the Directors' Responsibilities Statement set out on
page 11, 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 ISAs (UK and Ireland). Those
standards require us to comply with the Auditing Practices Board'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.
Robert Neate (Senior Statutory Auditor)
for and on behalf of Mazars LLP
Chartered Accountants and Statutory Auditor
Tower Bridge House, St. Katharine's Way, London, E1W 1DD
Date: 28 July 2017
Financial statements
Group income statement
All attributable to equity holders of the company
Notes Year ended 31 Year ended 31
March 2017 March 2016
All operations are continuing
GBP GBP
Revenue - -
Expenses (141,022) (112,279)
Equity-settled employee benefits 22 (9,479) -
Investment income 6 146 335
Finance costs 7 (157,791) (142,467)
Foreign exchange gain/(loss) 178 (2,039)
Loss before tax 4 (307,968) (256,450)
Taxation 8 - -
Loss for the period (307,968) (256,450)
Loss per share
Basic - pence per share 9 (0.2)p (0.2)p
Diluted - pence per share 9 (0.2)p (0.2)p
Group statement of comprehensive income
Loss for the period (307,968) (256,450)
Other comprehensive income
Items that may subsequently be reclassified to profit or loss:
Exchange difference on (35,053) (7,294)
translation of foreign
holding
Total comprehensive loss (343,021) (263,744)
for the period
Statement of financial position of the group
31 March 2017 31 March 2016
Notes
GBP GBP
Assets
Non-current assets
Mineral property exploration and 10 15,010,822 14,926,626
evaluation
Property, plant and equipment 11 204,687 204,687
Investments 14 86,660 86,660
Deposit 15 123,118 123,078
15,425,287 15,341,051
Current assets
Other receivables 16 23,603 32,759
Cash and cash equivalents 17 392,293 11,504
415,896 44,263
Total assets 15,841,183 15,385,314
Liabilities
Current liabilities
Trade and other payables 18 (114,557) (136,259)
17
(114,557) (136,259)
Net current assets/(liabilities) 301,339 (91,996)
Non-current liabilities
Loans 19 (3,415,738) (3,097,662)
Long term provision 20 (50,000) (50,000)
(3,465,738) (3,147,662)
Total liabilities (3,580,295) (3,283,921)
Net assets 12,260,888 12,101,393
Equity
Share capital 21 7,286,914 7,116,914
Share premium 10,171,986 9,848,949
Currency translation reserve (73,510) (38,457)
Retained losses (5,124,502) (4,826,013)
Total shareholders' equity 12,260,888 12,101,393
The financial statements of Anglesey Mining plc were approved by the board of
directors, authorised
for issue on 28 July 2017 and signed on its behalf by:
John F. Kearney, Chairman
Danesh Varma, Finance Director
Statement of financial position of the company
31 March 31 March
2017 2016
Notes GBP GBP
Assets
Non-current assets
Investments 13 14,228,552 14,144,127
14,228,552 14,144,127
Current assets
Other receivables 16 12,759 15,433
Cash and cash equivalents 17 388,880 7,867
401,639 23,300
Total assets 14,630,191 14,167,427
Liabilities
Current liabilities
Trade and other payables 18 (107,571) (117,435)
(107,571) (117,435)
Net current assets/(liabilities) 294,068 (94,135)
Non-current liabilities
Loan 19 (3,118,168) (2,852,201)
(3,118,168) (2,852,201)
Total liabilities (3,225,739) (2,969,636)
Net assets 11,404,452 11,197,791
Equity
Share capital 21 7,286,914 7,116,914
Share premium 10,171,986 9,848,949
Retained losses (6,054,448) (5,768,072)
Shareholders' equity 11,404,452 11,197,791
The company reported a loss for the year ended 31 March 2017 of GBP295,855 (2016
- GBP242,692). The financial statements of Anglesey Mining plc registered number
1849957 were approved by the board of directors and authorised for issue on 28
July 2017 and signed on its behalf by:
John F. Kearney, Chairman
Danesh Varma, Finance Director
Statements of changes in equity
All attributable to equity holders of the company.
Group Share Share Currency Retained Total
capital premium translation losses
reserve
GBP GBP GBP GBP GBP
Equity at 1 April 2015 7,116,914 9,848,949 (31,163) 12,365,137
(4,569,563)
Total comprehensive loss for
the year:
Loss for the year - - - (256,450) (256,450)
Exchange difference on - - (7,294) - (7,294)
translation of foreign
holding
Total comprehensive loss for - - (7,294) (256,450) (263,744)
the year
Equity at 31 March 2016 7,116,914 9,848,949 (38,457) 12,101,393
(4,826,013)
Total comprehensive loss for
the year:
Loss for the year - - - (307,968) (307,968)
Exchange difference on - - (35,053) - (35,053)
translation of foreign
holding
Total comprehensive loss for - - (35,053) (307,968) (343,021)
the year
Shares issued 170,000 365,200 - - 535,200
Share issue expenses - (42,163) - - (42,163)
Equity-settled employee - - - 9,479 9,479
benefits
Equity at 31 March 2017 7,286,914 10,171,986 (73,510) 12,260,888
(5,124,502)
Company Share Share Retained Total
capital premium losses
GBP GBP GBP GBP
Equity at 1 April 2015 7,116,914 9,848,949 11,440,483
(5,525,380)
Total comprehensive loss for
the year:
Loss for the year - - (242,692) (242,692)
Total comprehensive loss for - - (242,692) (242,692)
the year
Equity at 31 March 2016 7,116,914 9,848,949 11,197,791
(5,768,072)
Total comprehensive loss for
the year:
Loss for the year - - (295,855) (295,855)
Total comprehensive loss for - - (295,855) (295,855)
the year
Shares issued 170,000 365,200 - 535,200
Share issue expenses - (42,163) - (42,163)
Equity-settled employee - - 9,479 9,479
benefits
Equity at 31 March 2017 7,286,914 10,171,986 11,404,452
(6,054,448)
Statement of cash flows of the group
Notes Year ended 31 Year ended 31
March 2017 March 2016
GBP GBP
Operating activities
Loss for the period (307,968) (256,450)
Adjustments for:
Investment income 6 (146) (335)
Finance costs 7 157,791 142,467
Equity-settled employee benefits 9,479 -
Foreign exchange movement (178) 2,039
(141,022) (112,279)
Movements in working capital
Decrease/(increase) in 9,156 (1,782)
receivables
(Decrease)/increase in payables (9,632) 14,775
Net cash used in operating (141,498) (99,286)
activities
Investing activities
Investment income 106 63
Mineral property exploration and (96,034) (49,506)
evaluation
Net cash used in investing activities (95,928) (49,443)
Financing activities
Loans 125,000 65,399
Share issue proceeds net of 493,037 -
expenses
Net cash generated from financing 618,037 65,399
activities
Net increase/(decrease) in cash and cash 380,611 (83,330)
equivalents
Cash and cash equivalents at start 11,504 96,873
of period
Foreign exchange movement 178 (2,039)
Cash and cash equivalents at end 17 392,293 11,504
of period
Statement of cash flows of the company
Notes Year ended Year ended
31 March 31 March
2017 2016
GBP GBP
Operating activities
Loss for the period 23 (295,855) (242,692)
Adjustments for:
Equity-settled employee benefits 9,479 -
Finance costs 140,967 127,718
(145,409) (114,974)
Movements in working capital
Decrease/(increase) in 2,674 (1,488)
receivables
(Decrease)/increase in payables (9,864) 14,775
Net cash used in operating (152,599) (101,687)
activities
Investing activities
Investments and long term loans (84,425) (27,101)
Net cash used in investing (84,425) (27,101)
activities
Financing activities
Loans 125,000 64,567
Share issues net of expenses 493,037 -
Net cash generated from financing 618,037 64,567
activities
Net increase/(decrease) in cash and cash 381,013 (64,221)
equivalents
Cash and cash equivalents at start 7,867 72,088
of period
Cash and cash equivalents at end 17 388,880 7,867
of period
Notes to the financial statements
1 General information
Anglesey Mining plc is domiciled and incorporated in England and Wales under
the Companies Act. The nature of the group's operations and its principal
activities are set out in note 3 and in the strategic report. The registered
office address is as shown on the rear cover.
These financial statements are presented in pounds sterling because that is the
currency of the primary economic environment in which the group has been
operating. Foreign operations are included in accordance with the policies set
out in note 2.
2 Significant accounting policies
Basis of Accounting
The group and company financial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS) as adopted by the
European Union and therefore the group financial statements comply with Article
4 of the EU IAS Regulation.
The financial statements have been prepared on the historical cost basis except
for the fair valuation of certain financial assets. The principal accounting
policies adopted are set out below.
Going concern
The financial statements are prepared on a going concern basis. The validity of
the going concern basis is dependent on finance being available for the
continuing working capital requirements of the group for the foreseeable
future, being a period of at least twelve months from the date of approval of
the accounts. Whilst the group has such working capital, the long term
operations of the group are dependent on its ability to raise adequate
financing. The group relies on equity financing and support from its
shareholders to fund its working capital requirements. The group will need to
generate additional financial resources in the future in order to meet its
planned business objectives and continue as a going concern. Additional
financing will be required to continue the development of the group's
properties and in the longer term to put the Parys Mountain Mine into
production.
The directors recognise that the long term continuing operations of the group
are dependent upon its ability to raise adequate financing and that this
represents an uncertainty which may cast doubt about the group's ability to
continue as s going concern. The directors have a reasonable expectation that
the required financing will be raised and are actively pursuing various
financing options with certain shareholders and financial institutions
regarding proposals for financing. The directors have reasonable expectations
that these financing discussions will be successful and therefore the financial
statements have been prepared on the going concern basis.
Basis of consolidation
The consolidated financial statements incorporate the financial statements of
the company and entities controlled by the company (its subsidiaries) made up
to 31 March each year. Control is achieved where the company has the power to
govern the financial and operating policies of an investee entity so as to
obtain benefits from its activities.
On acquisition, the assets and liabilities and contingent liabilities of a
subsidiary are measured at their fair values at the date of acquisition. Any
excess of the cost of acquisition over the fair values of the identifiable net
assets acquired is recognised as goodwill. Any deficiency of the cost of
acquisition below the fair values of the identifiable net assets acquired (i.e.
discount on acquisition) is credited to the income statement in the period of
acquisition. The results of subsidiaries acquired or disposed of during the
year are included in the group income statement from the effective date of
acquisition or up to the effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial statements of
subsidiaries to bring the accounting policies used into line with those used by
the group. All intra-group transactions, balances, income and expenses are
eliminated on consolidation.
Revenue recognition
Interest income is accrued on a time basis, by reference to the principal
outstanding and at the effective interest rate applicable, which is the rate
that exactly discounts estimated future cash receipts through the expected life
of the financial asset to that asset's net carrying amount.
Foreign currencies
Transactions in currencies other than pounds sterling are recorded at the rates
of exchange prevailing on the dates of the transactions. At the end of each
reporting period, monetary assets and liabilities that are denominated in
foreign currencies are retranslated at the rates prevailing on the period end
date. Non-monetary assets and liabilities carried at fair value that are
denominated in foreign currencies are translated at the rates prevailing at the
date when the fair value was determined. Gains and losses arising on
retranslation are included in net profit or loss for the period.
On consolidation, the assets and liabilities of the group's overseas operations
are translated at exchange rates prevailing on the period end date. Exchange
differences arising, if any, are classified as items of other comprehensive
income and transferred to the group's translation reserve within equity.
Such translation differences are reclassified to profit or loss, and recognised
as income or as expense, in the period in which there is a disposition of the
operation.
Segmental analysis
Operating segments are identified on the basis of internal reports about
components of the group that are regularly reviewed by the chief operating
decision-maker.
Retirement benefit costs
Payments to defined contribution retirement benefit schemes are charged as an
expense as they fall due. There are no defined benefit retirement schemes.
Equity-settled employee benefits
The group provides equity-settled benefits to certain employees. Equity-settled
employee benefits are measured at fair value at the date of grant. The fair
value determined at the grant date is expensed on a straight-line basis over
the vesting period, based on the group's estimate of shares that will
eventually vest and adjusted for the effect of non-market based vesting
conditions.
Fair value is measured by use of a Black-Scholes model.
Taxation
Deferred tax is the tax expected to be payable or recoverable on differences
between the carrying amounts of assets and liabilities in the financial
statements and the corresponding tax bases used in the computation of taxable
profit, and is accounted for using the period end liability method. Deferred
tax liabilities are generally recognised for all taxable temporary differences
and deferred tax assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible temporary
differences can be utilised. Such assets and liabilities are not recognised if
the temporary difference arises from goodwill or from the initial recognition
(other than in a business combination) of other assets and liabilities in a
transaction that affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary differences
arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the group is able to control the reversal of the
temporary difference and it is probable that the temporary difference will not
reverse in the foreseeable future.
The carrying amount of any deferred tax assets is reviewed at each period end
date and reduced to the extent that it is no longer probable that sufficient
taxable profits will be available to allow all or part of the asset to be
recovered.
Deferred tax is calculated at the tax rates that are expected to apply in the
period when the liability is settled or the asset is realised. Deferred tax is
charged or credited in the income statement, except when it relates to items
charged or credited directly to equity, in which case the deferred tax is also
dealt with in equity.
The charge for current tax is based on the results for the year as adjusted for
items which are non-taxable or disallowed. It is calculated using rates that
have been enacted or substantively enacted by the balance sheet date.
Property, plant and equipment
The group's freehold land is stated in the statement of financial position at
cost. The directors consider that the residual value of buildings, based on
prices prevailing at the date of acquisition and at each subsequent reporting
date as if the asset were already of the age and in the condition expected at
the end of its useful life, is such that any depreciation would not be
material.
Plant and office equipment are stated in the statement of financial position at
cost, less depreciation. Depreciation is charged on a straight line basis at
the annual rate of 25%. Residual values and the useful lives of these assets
are also reviewed annually.
Intangible assets - mineral property exploration and evaluation costs
Intangible assets are stated in the statement of financial position at cost,
less accumulated amortisation and provisions for impairment.
Costs incurred prior to obtaining the legal rights to explore a mineral
property are expensed immediately to the income statement. Mineral property
exploration and evaluation costs are capitalised until the results of the
projects, which are usually based on geographical areas, are known; these
include an allocation of administrative and management costs as determined
appropriate to the project by management.
Where a project is successful, the related exploration costs are amortised over
the life of the estimated mineral reserve on a unit of production basis. Where
a project is terminated, the related exploration costs are expensed
immediately. Where no internally-generated intangible asset can be recognised,
development expenditure is recognised as an expense in the period in which it
is incurred.
Impairment of tangible and intangible assets
The values of mineral properties are reviewed annually for indications of
impairment and when these are present a review to determine whether there has
been any impairment is carried out. They are written down when any impairment
in their value has occurred and are written off when abandoned. Where a
provision is made or reversed it is dealt with in the income statement in the
period in which it arises.
Investments
Investments in subsidiaries are shown at cost less provisions for impairment in
value. Income from investments in subsidiaries together with any related
withholding tax is recognised in the income statement in the period to which it
relates.
Investments which are not subsidiaries are shown at cost unless there is a
practical method of determining a reliable fair value, in which case that fair
value is used.
Impairment of investment
Financial assets are assessed for indicators of impairment at the end of each
reporting period. Financial assets are considered to be impaired when there is
objective evidence that, as a result of one or more events that occurred after
the initial recognition of the financial asset, the estimated future cash flows
of the investment have been affected.
For financial assets carried at amortised cost, the amount of the impairment
loss recognised is the difference between the asset's carrying amount and the
present value of estimated future cash flows, discounted at the financial
asset's original effective interest rate.
For an equity instrument that does not have a quoted price in an active market,
and that is not carried at fair value because its fair value cannot be reliably
measured, the amount of the impairment loss is measured as the difference
between the carrying amount of the financial asset and the present value of
estimated future cash flows discounted at the current market rate of return for
a similar financial asset.
Provisions
Provisions are recognised when the group has a present obligation as a result
of a past event and it is probable that the group will be required to settle
that obligation. Provisions are measured at the directors' best estimate of the
expenditure required to settle that obligation at the end of the reporting
period and are discounted to present value where the effect is material.
Financial instruments
Financial assets and liabilities are initially recognised and subsequently
measured based on their classification as "loans and receivables", "available
for sale financial assets" or "other financial liabilities".
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They are
included in current assets, except where they mature more than 12 months after
the period end date: these are classified as non-current assets.
(a) Trade and other receivables. Trade and other receivables are measured at
initial recognition at fair value and are subsequently measured at amortised
cost using the effective interest rate method. Appropriate allowances for
estimated irrecoverable amounts are recognised in the income statement when
there is objective evidence that the asset is impaired.
(b) Cash and cash equivalents. The group considers all highly liquid
investments which are readily convertible into known amounts of cash and have a
maturity of three months or less when acquired to be cash equivalents. The
management believes that the carrying amount of cash equivalents approximates
fair value because of the short maturity of these financial instruments.
(c) Available for sale financial assets. Unlisted shares held by the group
that are classified as being AFS are stated at cost on the basis that the
shares are not quoted and a reliable fair value is not able to be estimated.
Dividends on AFS equity instruments are recognised in profit or loss when the
group's right to receive the dividends is established.
The fair value of AFS monetary assets denominated in a foreign currency is
determined in that foreign currency and translated at the spot rate at the
balance sheet date. The foreign exchange gains and losses that are recognised
in profit or loss are determined based on amortised cost of the monetary asset.
Other foreign exchange gains and losses are recognised in other comprehensive
income.
(d) Trade and other payables. Trade payables are not interest bearing and are
initially recognised at fair value and subsequently measured at amortised cost
using the effective interest rate method.
(e) Deposits. Deposits are recognised at fair value on initial recognition and
are subsequently measured at amortised cost using the effective interest rate
method.
(f) Loans. Loans are recognised at fair value on initial recognition and are
subsequently measured at amortised cost using the effective interest rate
method.
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received,
net of direct issue costs.
Leases
Leases are classified as finance leases whenever the terms of the lease
transfer substantially all the risks and rewards of ownership to the lessee.
All other leases are classified as operating leases.
Mining lease payments are recognised as an operating expense in the income
statement on a straight line basis over the lease term unless they relate to
mineral property exploration and evaluation in which case they are capitalised.
There are no finance leases or other operating leases.
New accounting standards
The group and company have adopted the amendments to the following accounting
standards interpretation:
Annual Improvements 2010 - 2012 cycle amendments to IFRS2, IFRS3, IFRS8,
IFRS13, IAS 16 and IAS24.
Annual Improvements 2012 - 2014 cycle amendments to IFRS5, IFRS7, IAS19 and
IAS34.
There has been no impact of adopting the amendments.
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:
* Amendment to IAS 7 Statement of Cash Flows: Disclosure initiative.
Effective 1 January 2017 and expected to be endorsed by the EU in Q2 2017.
Early application is permitted.
* Amendment to IAS 12 Income Taxes: Recognition of deferred tax assets for
unrealised losses. Effective 1 January 2017 and expected to be endorsed by
the EU in Q2 2017.
Early Annual Improvements to IFRSs (2014 - 2016).
Effective 1 January 2017 and expected to be endorsed by the EU in Q3 2017.
* Amendment to IAS 40 Investment Property: Transfers of investment property.
Effective 1 January 2018 and expected to be endorsed by the EU in Q3 2017.
Early application is permitted.
* Amendment to IFRS 2 Share-based Payment: Classification and measurement of
share-based payment transactions. Effective 1 January 2018 and expected to
be endorsed by the EU in Q3 2017. Early application is permitted.
* IFRS 9 Financial Instruments. Effective 1 January 2018. Early application
is permitted.
* IFRS 15 Revenue from Contracts with Customers. Effective 1 January 2018.
Early application is permitted
* Clarifications to IFRS 15 Revenue from Contracts with Customers. Effective
1 January 2018 and expected to be endorsed by the EU in Q2 2017. Early
application is permitted.
Annual Improvements to IFRSs (2014 - 2016).
Effective 1 January 2018 and expected to be endorsed by the EU in Q3 2017.
* IFRIC 22 Foreign Currency Transactions and Advance Consideration. Effective
1 January 2018 and expected to be endorsed by the EU in Q3 2017. Early
application is permitted.
* IFRS 16 Leases. Effective 1 January 2019 and expected to be endorsed by the
EU in Q4 2017. Early application is permitted with application of IFRS 15
Revenue from Contracts with Customers.
The directors expect that the adoption of the above pronouncements (with
the possible exceptions of IFRS9 and IFRS16) will have no material impact
to the financial statements in the period of initial application other than
disclosure. IFRS 9 is still ongoing and yet to be adopted by the EU. The
group is not yet generating any revenue consequently the implementation of
IFRS15 will have no impact at present. The directors have not yet assessed
the full impact IFRS16 on these financial statements.
The directors do not consider the adoption of the amendments resulting from
the Annual Improvements 2012 - 2014 cycle will result in a material impact
on the financial information of the group and company. These amendments to
IFRS 5, IFRS 7, IAS 19 and IAS 34 are effective for accounting periods
beginning on or after 1 January 2016.
There have been no other new or revised International Financial Reporting
Standards, International Accounting Standards or Interpretations that are
in effect since that last annual report that have a material impact on the
financial statements.
Judgements made in applying accounting policies and key sources of estimation
uncertainty
The following critical judgements have been made in the process of applying the
group's accounting policies:
(a) In determining the treatment of exploration and evaluation expenditures the
directors are required to make estimates and assumptions as to future events
and circumstances. There are uncertainties inherent in making such assumptions,
especially with regard to: ore resources and the life of a mine; recovery
rates; production costs; commodity prices and exchange rates. Assumptions that
are valid at the time of estimation may change significantly as new information
becomes available and changes in these assumptions may alter the economic
status of a mining unit and result in resources or reserves being restated.
Operation of a mine and the receipt of cashflows from it are dependent on
finance being available to fund the development of the property.
(b) In connection with possible impairment of assets the directors assess each
potentially cash generating unit annually to determine whether any indication
of impairment exists. The judgements made when doing so are similar to those
set out above and are subject to the same uncertainties. See note 10 for
further detail.
Nature and purpose of equity reserves
The share premium reserve represents the consideration that has been received
in excess of the nominal value of shares on issue of new ordinary share
capital, less any direct costs of issue. The currency translation reserve
represents the variations on revaluation of overseas foreign subsidiaries and
associates. The retained earnings reserve represents profits and losses
retained in previous and the current period.
3 Segmental information
The group is engaged in the business of exploring and evaluating the
wholly-owned Parys Mountain project in North Wales, managing its interest in
the Grangesberg properties and has an investment in the Labrador iron project
in eastern Canada. In the opinion of the directors, the group's activities
comprise one class of business which is mine exploration, evaluation and
development. The group reports geographical segments; these are the basis on
which information is reported to the board. As yet there have been no site
expenses incurred in respect of the group's interest in Grangesberg and
management expenses are included in the UK total.
Income statement
analysis
2017 2016
UK Sweden Canada UK Sweden Canada Total
Total
GBP GBP GBP GBP GBP GBP GBP GBP
Expenses - - - -
(141,022) (141,022) (112,279) (112,279)
Equity-settled (9,479) - - (9,479) - - - -
employee
benefits
Investment 146 - - 146 335 - - 335
income
Finance costs (16,824) - (14,749) -
(140,967) (157,791) (127,718) (142,467)
Exchange rate 136 42 - 178 (1,976) (63) - (2,039)
loss
Loss for the (16,782) - (14,812) -
year (291,186) (307,968) (241,638) (256,450)
Assets and
liabilities
31 March 2017 31 March 2016
UK Sweden Canada UK Sweden Canada Total
Total
GBP GBP GBP GBP
GBP GBP GBP GBP
Non-current 15,338,627 86,659 1 15,425,287 15,254,391 86,659 1 15,341,051
assets
Current assets 414,655 1,241 - 415,896 43,069 1,194 - 44,263
Liabilities - -
(3,282,725) (297,570) (3,580,295) (3,038,460) (245,461) (3,283,921)
Net assets/ 12,470,557 1 12,260,888 12,259,000 1 12,101,393
liabilities (209,670) (157,608)
4 Operating result
The loss before taxation for the year has been arrived at
after charging/(crediting):
2017 2016
GBP GBP
Fees payable to the group's auditor:
for the audit of the annual 22,000 22,000
accounts
for the audit of subsidiaries' 3,000 3,000
accounts
for other services - taxation 2,000 2,000
compliance
for other services 800 800
Directors' remuneration - -
Foreign exchange (gain)/loss (178) 2,039
5 Staff costs
The average monthly number of persons employed (including
executive directors) was:
2017 2016
Administrative 3 3
3 3
Their aggregate remuneration was: GBP GBP
Wages and salaries 12,630 9,205
Social security costs 1,325 990
Other pension costs - -
13,955 10,195
Details of directors' remuneration and share options are given in the
directors' remuneration report.
6 Investment income
2017 2016
Loans and receivables
GBP GBP
Interest on bank deposits 6 63
Interest on site 140 272
re-instatement deposit
146 335
7 Finance costs
2017 2016
Loans and payables
GBP
GBP
Loan interest to Juno Limited 140,967 127,718
Loan interest to Eurmag AB 16,824 14,749
157,791 142,467
For both loans the interest shown is accrued and not required to be paid in
cash.
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 2017 of GBP1.3 million (2016 - GBP1.2 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 GBP12.5 million unclaimed
and available at 31 March 2017 (2016 - GBP12.5 million). No deferred tax asset is
recognised in respect of these allowances.
2017 2016
GBP GBP
Current tax - -
Deferred tax - -
Total tax - -
Domestic income tax is calculated at 20% of the estimated
assessed profit for the year.
In 2016 the rate used was 20%.
Taxation for other jurisdictions is calculated at the rates
prevailing in the relevant
jurisdictions.
The total charge for the year can be reconciled to the
accounting profit or loss as follows:
Loss for the year (307,968) (256,450)
Tax at the domestic income tax (61,594) (51,290)
rate of 20%
(2016 - 20%)
Tax effect of:
Expenses that are not deductible - -
in determining taxable
result:
Equity-settled 1,896 -
employee benefits
Unrecognised deferred tax on 59,698 51,290
losses
Total tax - -
9 Earnings per ordinary share
2017 2016
GBP GBP
Earnings
Loss for the year (307,968) (256,450)
Number of shares
Weighted average number of 164,276,544 160,608,051
ordinary shares for the purposes
of basic earnings per share
Shares deemed to be issued for no
consideration in respect of
employee options
Weighted average number of 164,276,544 160,608,051
ordinary shares
for the purposes of diluted
earnings per share
Basic earnings per share (0.2)p (0.2)p
Diluted earnings per share (0.2)p (0.2)p
As the group has a loss for the year ended 31 March 2017 the effect of the
outstanding share options is anti-dilutive and diluted earnings are reported to
be the same as basic earnings.
10 Mineral property exploration and evaluation costs - group
Parys
Mountain
Cost GBP
At 1 April 2015 14,877,193
Additions - site 27,045
Additions - rentals & 22,388
charges
At 31 March 2016 14,926,626
Additions - site 60,886
Additions - rentals & 23,310
charges
At 31 March 2017 15,010,822
Carrying amount
Net book value 2017 15,010,822
Net book value 2016 14,976,059
Included in the additions are mining lease expenses of GBP16,366 (2016 - GBP
16,200).
Potential impairment of mineral property
Accumulated exploration and evaluation expenditure in respect of the Parys
Mountain property is carried in the financial statements at cost less any
impairment provision, the need for which is reviewed each year.
This year the directors carried out an impairment review with an effective date
of 26 March 2017. The directors determined that value-in-use was the
appropriate methodology for calculating the recoverable amount of the Parys
project, as they consider the asset to be at the development stage from a
project perspective, given the ongoing scoping study work, the existence of
site infrastructure, the existing 300 metre shaft, 900 metres of horizontal
underground development, completed metallurgical testing and current valid
planning permission and as they are considering various options regarding
developing the asset further which will lead to expected future cash inflows.
In calculating the value in use, the directors have included the cash outflows
that are expected to be incurred before the asset is ready for use. The
calculation of the recoverable amount was based on the pre-tax discounted
future cash flows from the development and operation of the project at a
throughput of 500 tonnes per day over the initial projected mine life of 16
years during which time the indicated resources of 2.1 million tonnes would be
mined. The financial model included an assumption of a two year delay before
construction activities commence. There may be unexpected further delays due to
adverse changes in future mineral prices or delays in respect of financing.
The directors used past experience and an assessment of future conditions,
together with external sources of information, to determine the assumptions
which were adopted in the preparation of the financial model used to estimate
the cashflows.
Key assumptions
* Mine plan with development and mining of the indicated resources of 2.1
million tonnes only without inclusion of any of the 4.1 million tonnes of
inferred resources;
* Capital costs estimated at current costs when the expenditure is planned to
be incurred. Revenues and operating costs do not take into account any
inflation;
* Long-term estimates of metal prices were made by the directors and were as
follows: zinc 1.25 US$/lb; copper 2.50 US$/lb; lead 1.00 US$/lb; silver
US$17.50 per ounce and gold US$1275 per ounce. Exchange rate US$1.25/GBP1.00;
* A discount rate of 10% was considered by the directors to be appropriate
and has been applied to the estimated future cashflows. The discount rate
was selected by considering the estimated cost of capital and the time
value of money, reviewing discount rates applied by other mining companies,
and finally considering the risks associated with the project due to its
location in the United Kingdom with excellent access to existing
infrastructure and readiness for development, which were considered to be
at the lower level, together with the directors' allowance for unforeseen
risks.
Sensitivities
The sensitivity of the assumptions used in the cashflow model which would
significantly affect the pre-tax discounted net present value of the
projected Parys cashflows were tested. The sensitivities which follow are
the variation expressed in percent of each specific assumption which would,
on its own, reduce the calculated net present value to the carrying value
of the intangible asset in the accounts: copper price -36%, zinc price
-10%, lead price -24%, capital expenditure +15%, operating costs +18%, the
discount rate +16% (that is a 16% increase in the discount rate applied,
not an increase of 16 percentage points) and a reduction in tonnage mined
of 23%. The effect of an increased delay before the commencement of project
development would be to decrease the net present value by 9% for each year
of delay. The directors consider the sensitivities resulting from the
changes in assumptions stated above to be reasonably possible.
Other than the typical mining industry risk factors already taken into
consideration in the mine plan underlying the net present value calculation
the directors are not aware of any other risks which it would be reasonable
to consider when reviewing these sensitivities.
There are significant inferred resources available to the project, the
value of which is not included in the cash flow model as the inferred
resources were not incorporated in the underlying mine plan. It is expected
that a high proportion of these inferred resources will be converted to
indicated resources, or probable reserves, once exploration drilling from
underground takes place. Development and mining of these additional
resources would increase the projected life of the mine.
Conclusion
Based on the above parameters the directors concluded that no impairment
provision is necessary or appropriate to the carrying value of the
exploration and evaluation expenditure in respect of the Parys Mountain
project. However estimates of the net present value of any project, and
particularly one like Parys Mountain, are always subject to many factors
and wide margins of error. The directors believe that the estimates and
calculations supporting their conclusions have been carefully considered
and represent a fair representation of value in use of the property.
11 Property, plant and equipment
Group Freehold Plant & Office Total
land and equipment equipment
property
Cost GBP GBP GBP GBP
At 31 March 2015, 2016 204,687 17,434 5,487 227,608
and 2017
Depreciation
At 31 March 2015, 2016 - 17,434 5,487 22,921
and 2017
Carrying amount
At 31 March 2015, 2016 204,687 - - 204,687
and 2017
Company Freehold Plant & Office Total
land and equipment equipment
property
Cost GBP GBP GBP GBP
At 31 March 2015, 2016 - 17,434 5,487 22,921
and 2017
Depreciation
At 31 March 2015, 2016 - 17,434 5,487 22,921
and 2017
Carrying amount
At 31 March 2015, 2016 - - - -
and 2017
12 Subsidiaries - company
The subsidiaries of the company at 31 March 2017 and 2016 were as follows:
Name of company Country of Percentage Principal activity
incorporation owned
Parys Mountain Mines Limited1 England & 100% Development of the
Wales Parys Mountain
mining property
Parys Mountain Land Limited1 England & 100% Holder of part of
Wales the Parys Mountain
property
Parys Mountain Heritage England & 100% Holder of part of
Limited1 Wales the Parys Mountain
property
Labrador Iron plc2 Isle of Man 100% Holder of the
company's investment
in Labrador Iron
Mines Holdings
Limited
Angmag AB3 Sweden 100% Holder of the
company's investment
in GIAB
Anglo Canadian Exploration England & 100% Dormant
(Ace) Limited1 Wales
Registered office addresses:
1. - Parys Mountain, Amlwch, Anglesey, LL68 9RE
2. - Fort Anne, Douglas, Isle of Man, IM1 5PD
3. - Angmag AB, Box 1703, 111 87 Stockholm, Sweden
13 Investments - company
Shares at Capital Total
cost contributions
GBP GBP GBP
At 1 April 2015 104,025 14,117,026
14,013,001
Advanced - 27,101 27,101
At 31 March 2016 104,025 14,040,102 14,144,127
Advanced - 84,425 84,425
At 31 March 2017 104,025 14,124,527 14,228,552
The realisation of investments is dependent on finance being available for
development and on a number
of other factors. Interest is not charged on capital contributions.
14 Investments - group
Labrador Grangesberg Total
GBP GBP GBP
At 1 April 2015 1 86,659 86,660
Addition during period - -
At 31 March 2016 1 86,659 86,660
Addition during period - - -
At 31 March 2017 1 86,659 86,660
LIM
The group's investment in LIM is now classified as 'unquoted'. Based on the
difficulty of determining a fair market value the directors decided in 2015 to
write down the value of the LIM shares to a nominal value of GBP1 and to
reclassify it as Level 3 rather than Level 1 under the IFRS fair value
hierarchy. This treatment has been continued in 2016 and 2017.
Grangesberg
The group has, through its Swedish subsidiary Angmag AB, a 6% ownership
interest in GIAB, a Swedish company which holds rights over the Grangesberg
iron ore deposits. This investment has been initially recognised and
subsequently measured at cost, on the basis that the shares are not quoted and
a reliable fair value is not able to be estimated. The group has a right of
first refusal (expiring on 30 June 2018) over a further 51% of the equity of
GIAB together with management direction of the activities of GIAB, subject to
certain restrictions. The group has significant influence over certain relevant
activities of GIAB however equity accounting has not been applied in respect of
this influence as the directors consider this would not have any material
affect.
15 Deposit
Group
2017 2016
GBP GBP
Site re-instatement deposit
123,118 123,078
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
2017 2016 2017 2016
GBP GBP GBP GBP
Other
23,603 32,759 12,759 15,433
The carrying value of the receivables approximates to their fair value.
17 Cash and cash equivalents
Group Company
2017 2016 2017 2016
GBP GBP GBP GBP
Held in sterling 388,880 7,867
389,734 9,120
Held in Canadian dollars
1,318 1,190 - -
Held in US dollars
467 408 - -
Held in Swedish krona
774 786 - -
388,880 7,867
392,293 11,504
The carrying value of the cash approximates to its fair value.
18 Trade and other payables
Group Company
2017 2016 2017 2016
GBP GBP GBP GBP
Trade payables
(46,557) (77,465) (46,572) (64,142)
Other accruals
(68,000) (58,794) (60,999) (53,293)
(114,557) (136,259) (107,571) (117,435)
The carrying value of the trade and other payables approximates to their fair
value.
19 Loans
Group Company
2017 2016 2017 2016
GBP GBP GBP GBP
Loan from Juno Limited (3,118,168) (2,852,201)
(3,118,168) (2,852,201)
Loan from Eurmag AB
(297,570) (245,461) - -
(3,118,168) (2,852,201)
(3,415,738) (3,097,662)
Juno: Apart from advances amounting to GBP125,000 there has been no change in the
loan principal during the year. The loan is provided under a working capital
agreement, denominated in sterling, unsecured and carries interest at 10% per
annum on the principal only. It is repayable from any future financing
undertaken by the company, or on demand following a notice period of 367 days.
The terms of the facility were approved by an independent committee of the
board. The carrying value of the loan approximates to its fair value.
Eurmag: The loan arose in connection with the acquisition of the investment in
Grangesberg. It is the subject of a letter agreement, denominated in Swedish
Krona, is unsecured and carries interest at 6.5% per annum on the principal
only. It is repayable from any future financing undertaken by the company, or
on demand following a notice period of 367 days. The terms of the facility were
approved by an independent committee of the board. The carrying value of the
loan approximates to its fair value.
20 Long term provision
Group
2017 2016
GBP GBP
Provision for site (50,000) (50,000)
reinstatement
The provision for site reinstatement covers the estimated costs of
reinstatement at the Parys Mountain site of the work done and changes made by
the group up to the date of the accounts. These costs would be payable on
completion of mining activities (which is estimated to be more than 20 years'
after mining commences) or on earlier abandonment of the site. The provision
has not been discounted because the impact of doing so is not material to the
financial statements. There are significant uncertainties inherent in the
assumptions made in estimating the amount of this provision, which include
judgements of changes to the legal and regulatory framework, magnitude of
possible contamination and the timing, extent and costs of required restoration
and rehabilitation activity.
21 Share capital
Ordinary shares Deferred shares Total
of 1p of 4p
Issued and Nominal Number Nominal Number Nominal
fully paid value GBP value GBP value GBP
At 31 March 2015 and 1,606,081 160,608,051 5,510,833 137,770,835 7,116,914
2016
Shares issued for 170,000 17,000,000 - - 170,000
cash
At 31 March 2017 1,776,081 177,608,051 5,510,833 137,770,835 7,286,914
-
The deferred shares are non-voting, have no entitlement to dividends and have
negligible rights to return of capital on a winding up.
On 14 December 2016 12,000,000 ordinary shares with an aggregate nominal value
of GBP120,000 were issued for cash by way of a placing at 2.585 pence each and on
20 March 2017 5,000,000 ordinary shares with an aggregate nominal value of GBP
50,000 were allotted for cash by way of a placing at 4.5 pence each.
22 Equity-settled employee benefits
The group has two share-based employee remuneration plans: the 2004 Unapproved
share option plan which plan has now closed (and no options were granted or
forfeited in the year) and the current 2014 Unapproved share option plan. The
terms of these are very similar; each plan provides for a grant price equal to
or above the average quoted market price of the ordinary shares for the three
trading days prior to the date of grant. All options granted to date have
carried a performance criterion, namely that the company's share price
performance from the date of grant must exceed that of the companies in the top
quartile of the FTSE 100 index. The vesting period for any options granted
since 2004 has been one year. Options are forfeited if the employee leaves
employment with the group before the options vest.
2017 2016
Options Weighted Remaining Options Weighted Remaining
average contractual average contractual
exercise life in exercise life in
price in years price in years
pence pence
Outstanding at beginning 4,500,000 19.27 6,050,000 17.06
of period
Granted during the 3,500,000 2.00 - -
period
Forfeited during the - - - -
period
Exercised during the - - - -
period
Expired during the - - 1,550,000 4.13
period
Outstanding at the end 8,000,000 11.72 2.5 4,500,000 19.27 1.9
of the period
Exercisable at the end 4,500,000 19.27 0.9 4,500,000 19.27 1.9
of the period
The group recognised expenses of GBP9,479 in respect of equity-settled employee
remuneration in respect of the year ended 31 March 2017 (2016 - nil). The
inputs to the Black-Scholes model used in the calculation of this amount were
as follows:
2017
Weighted average share price in 1.30
pence
Weighted average exercise price in 2.00
pence
Expected volatility 75%
Expected life 3
Risk free rate 5%
Expected dividends -
Expected volatility was determined by calculating the historical volatility of
the share price over the previous three years. The expected life used in the
model has been adjusted, based on management's best estimate, for the effects
of non-transferability, exercise restrictions and behavioural considerations.
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 3,800,000 38,000 21.90p 26 November 26 November
2008 2017
2004 Unapproved 700,000 7,000 5.00p 27 March 2010 27 March 2019
2014 Unapproved 3,500,000 35,000 2.00p 30 September 30 September
2017 2021
Total 8,000,000 80,000
23 Results attributable to Anglesey Mining plc
The loss after taxation in the parent company amounted to GBP295,855 (2016 loss
GBP242,692). The directors have taken advantage of the exemptions available under
section 408 of the Companies Act 2006 and not presented an income statement for
the company alone.
24 Financial instruments
Capital risk management
There have been no changes during the year in the group's capital risk
management policy.
The group manages its capital to ensure that entities in the group will be able
to continue as going concerns while optimising the debt and equity balance. The
capital structure of the group consists of debt, which includes the borrowings
disclosed in note 19, the cash and cash equivalents and equity comprising
issued capital, reserves and retained earnings.
The group does not enter into derivative or hedging transactions and it is the
group's policy that no trading in financial instruments be undertaken. The main
risks arising from the group's financial instruments are currency risk and
interest rate risk. The board reviews and agrees policies for managing each of
these risks and these are summarised below.
Interest rate risk
The amounts advanced under the Juno loans are at a fixed rate of interest of
10% per annum and those from Eurmag are at a fixed rate of 6.5% per annum. As a
result the group is not exposed to interest rate fluctuations. Interest
received on cash balances is not material to the group's operations or results.
The company (Anglesey Mining plc) is exposed to minimal interest rate risks.
Liquidity risk
The group has ensured continuity of funding through a mixture of issues of
shares and the working capital agreement with Juno Limited.
Trade creditors are payable on normal credit terms which are usually 30 days.
The loans due to Juno and Angmag carry a notice period of 367 days. Juno, in
keeping with its practice since drawdown commenced more than 10 years ago, has
indicated that it has no current intention of demanding repayment. No such
notice had been received by 18 July 2017 in respect of either of the loans and
they are classified as having a maturity date between one and two years from
the period end.
Currency risk
The presentational currency of the group and company is pounds sterling. The
loan from Juno Limited is denominated in pounds sterling. As a result, the
group has no currency exposure in respect of this loan. Currency risk in
respect of the investment in LIM is no longer significant.
In respect of the investment in Grangesberg in Sweden if the rate of exchange
between the Swedish Krona and sterling were to weaken against sterling by 10%
there would be a loss to the group of GBP9,138 (2016 - GBP8,768) and if it were to
move in favour of sterling by a similar amount there would be a gain of GBP11,168
(2016 - GBP10,716). Regarding liabilities denominated in Krona if the rate of
exchange between the Swedish Krona and sterling were to weaken against sterling
by 10% there would be a gain to the group of GBP27,052 (2016 - GBP22,315) and if it
were to move in favour of sterling by a similar amount there would be a loss of
GBP33,063 (2016 - GBP27,273). These gains or losses would be recorded in other
comprehensive income.
Potential exchange variations in respect of other foreign currencies are not
material.
Credit risk
The directors consider that the entity has limited exposure to credit risk as
the entity has immaterial receivable balances at the year-end on which a third
party may default on its contractual obligations. The carrying amount of the
group's financial assets represents its maximum exposure to credit risk. Cash
is deposited with BBB or better rated banks.
Group Available for sale Loans &
assets receivables
31 March 31 March 31 March 31 March
2017 2016 2017 2016
GBP GBP GBP GBP
Financial assets
Investments 1 1 - -
Deposit - - 123,118 123,078
Other receivables - - 23,603 32,759
Cash and cash - - 392,293 11,504
equivalents
- -
1 1 539,014 167,341
Company
Loans &
receivables
31 March 31 March
2017 2016
GBP GBP
Financial assets
Other receivables 12,759 15,433
Cash and cash 388,880 7,867
equivalents
Financial
liabilities
Trade & other - -
payables
Loan - -
401,639 23,300
25 Related party transactions
Transactions between Anglesey Mining plc and its subsidiaries are summarised in
note 13.
Juno Limited
Juno Limited (Juno) which is registered in Bermuda holds 32.6% of the company's
issued ordinary share capital. The group has the following agreements with
Juno: (a) a controlling shareholder agreement dated September 1996 and (b) a
consolidated working capital agreement of 12 June 2002. Interest payable to
Juno is shown in note 7 and the balance due to Juno is shown in note 19. Except
as set out in note 19, there were no transactions between the group and Juno or
its group during the year. Danesh Varma is a director and, through his family
interests, a significant shareholder of Juno.
Grangesberg
Bill Hooley and Danesh Varma are directors of Grangesberg Iron AB and of the
special purpose vehicle Eurmag AB; Danesh Varma has been associated with the
Grangesberg project since 2007 when he became a director of Mikula Mining
Limited, a company subsequently renamed Eurang Limited, previously involved in
the Grangesberg project. He did not take part in the decision to enter into the
Grangesberg project when this was approved by the board. The group has a
liability to Eurmag AB a subsidiary of Eurang amounting to GBP297,570 at the year
end (2016 - GBP245,461) - see note 19.
Key management personnel
All key management personnel are directors and appropriate disclosure with
respect to them is made in the directors' remuneration report.
There are no other contracts of significance in which any director has or had
during the year a material interest.
26 Mineral holdings
Parys
(a) Most of the mineral resources delineated to date are under the western
portion of Parys Mountain, the freehold and minerals of which are owned by the
group. A royalty of 6% of net profits after deduction of capital allowances, as
defined for tax purposes, from production of freehold minerals is payable. The
mining rights over and under this area, and the leasehold area described in (b)
below, are held in the Parys Mountain Mines Limited subsidiary.
(b) Under a lease from Lord Anglesey dated December 2006, the subsidiary Parys
Mountain Land Limited holds the eastern part of Parys Mountain, formerly known
as the Mona Mine. An annual certain rent of GBP10,866 is payable for the year
beginning 23 March 2016; the base part of this rent increases to GBP20,000 when
extraction of minerals at Parys Mountain commences; this rental is
index-linked. A royalty of 1.8% of net smelter returns from mineral sales is
also payable. The lease may be terminated at 12 months' notice and otherwise
expires in 2070.
(c) Under a mining lease from the Crown dated December 1991 there is an annual
lease payment of 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 expires in 2020.
Lease payments
All the group's leases may be terminated with 12 months' notice. If they are
not so terminated, the minimum payments due in respect of the leases and
royalty agreement are analysed as follows: within the year commencing 1 April
2017 - GBPError! Not a valid link.; between 1 April 2017 and 31 March 2023 - GBP
Error! Not a valid link.. Thereafter the payments will continue at
proportionate annual rates, in some cases with increases for inflation, for so
long as the leases are retained or extended.
27 Material non cash transactions
There were no material non-cash transactions in the year.
28 Commitments
Other than commitments under leases (note 26) there is no capital expenditure
authorised or contracted which is not provided for in these accounts (2016 -
nil).
29 Contingent liabilities
There are no contingent liabilities (2016 - nil).
30 Events after the period end
There are no events after the period end to report.
Glossary
AGM - the annual general meeting to be held on 1 September 2017.
GIAB - Grangesberg Iron AB, a privately owned Swedish company which has a 25
year mining permit covering iron deposits at Grangesberg in Sweden.
JORC - Australasian Joint Ore Reserves Committee - a set of minimum standards
for public reporting and displaying information related to mineral properties.
IRR - internal rate of return
LIM - Labrador Iron Mines Holdings Limited and its group of companies.
mtpa - million tonnes per annum.
NPV - net present value
NSR - net smelter return
tonne - metric tonne of 2,204.6 pounds avoirdupois, used for measuring current
mineral production and resources.
SEK - Swedish Krona.
tpd - tonnes per day
Notice of AGM
Notice is given that the 2017 annual general meeting of Anglesey Mining plc
will be held at the offices of the company's lawyers, DLA Piper UK LLP, 1
London Wall, London, EC2Y 5EZ on 1 September 2017 at 11.00 a.m. to consider
and, if thought fit, to pass the following resolutions. Resolutions 1 to 11
will be proposed as ordinary resolutions and resolution 12 will be proposed as
a special resolution:
As ordinary business
1. To receive the annual accounts and directors' and auditor's reports for the
year ended 31 March 2017.
2. To approve the directors' remuneration policy report for the year ended 31
March 2017.
3. To approve the directors' remuneration report for the year ended 31 March
2017.
4. To reappoint John F. Kearney as a director.
5. To reappoint Bill Hooley as a director.
6. To reappoint David Lean as a director.
7. To reappoint Howard Miller as a director.
8. To reappoint Danesh Varma as a director.
9. To reappoint Mazars LLP as auditor.
10. To authorise the directors to determine the remuneration of the auditor.
As special business
11. That, pursuant to section 551 of the Companies Act 2006 ("Act"), the
directors be and are generally and unconditionally authorised to exercise all
powers of the Company to allot shares in the Company or to grant rights to
subscribe for or to convert any security into shares in the Company up to an
aggregate nominal amount of GBP590,000, provided that (unless previously revoked,
varied or renewed) this authority shall expire on 31 December 2018, save that
the Company may make an offer or agreement before this authority expires which
would or might require shares to be allotted or rights to subscribe for or to
convert any security into shares to be granted after this authority expires and
the directors may allot shares or grant such rights pursuant to any such offer
or agreement as if this authority had not expired.
This authority is in substitution for all existing authorities under section
551 of the Act (which, to the extent unused at the date of this resolution, are
revoked with immediate effect).
12. That pursuant to section 570 of the Act, the directors be and are generally
empowered to allot equity securities (within the meaning of section 560 of the
Act) for cash pursuant to the authority granted under section 551 of the Act
pursuant to resolution 12 above as if section 561(1) of the Act did not apply
to any such allotment, provided that this power shall be limited to the
allotment of equity securities:
(a) in connection with an offer of equity securities (whether by way of a
rights issue, open offer or otherwise) (i) to holders of ordinary shares in the
capital of the company in proportion (as nearly as practicable) to the
respective numbers of ordinary shares held by them; and (ii) to holders of
other equity securities in the capital of the company, as required by the
rights of those securities or, subject to such rights, as the directors
otherwise consider necessary but subject to such exclusions or other
arrangements as the directors may deem necessary or expedient in relation to
treasury shares, fractional entitlements, record dates or any legal or
practical problems under the laws of any territory or the requirements of any
regulatory body or stock exchange; and
(b) otherwise than pursuant to paragraph 14(a) above, up to an aggregate
nominal amount of GBP440,000
and (unless previously revoked, varied or renewed) this power shall expire on
31 December 2018, save that the Company may make an offer or agreement before
this power expires which would or might require equity securities to be
allotted for cash after this power expires and the directors may allot equity
securities for cash pursuant to any such offer or agreement as if this power
had not expired. This power is in substitution for all existing powers under
section 570 of the Act which, to the extent effective at the date of this
resolution, are revoked with immediate effect.
By order of the board
Danesh Varma
Company secretary
28 July 2017
Notes to the notice of AGM
Entitlement to attend and vote
1. The right to vote at the meeting is determined by reference to the
register of members. Only those shareholders registered in the register of
members of the Company as at the close of business on 29 August 2017 (or, if
the meeting is adjourned, 48 hours (excluding any part of a day that is not a
working day) before the date and time of the adjourned meeting) shall be
entitled to attend and vote at the meeting in respect of the number of shares
registered in their name at that time. Changes to entries in the register of
members after that time shall be disregarded in determining the rights of any
person to attend or vote (and the number of votes they may cast) at the
meeting.
Proxies
2. A shareholder is entitled to appoint another person as his or her
proxy to exercise all or any of his or her rights to attend and to speak and
vote at the meeting. A proxy need not be a member of the Company. A shareholder
may appoint more than one proxy in relation to the meeting, provided that each
proxy is appointed to exercise the rights attached to a different share or
shares held by that shareholder. Failure to specify the number of shares each
proxy appointment relates to or specifying a number which when taken together
with the numbers of shares set out in the other proxy appointments is in excess
of the number of shares held by the shareholder may result in the proxy
appointment being invalid. A proxy may be appointed only in accordance with the
procedures set out in note 3 and the notes to the proxy form. The appointment
of a proxy will not preclude a shareholder from attending and voting in person
at the meeting.
3. A form of proxy is enclosed. When appointing more than one proxy,
complete a separate proxy form in relation to each appointment. Additional
proxy forms may be obtained by contacting the Company's registrar Capita Asset
Services, Proxies, The Registry, 34 Beckenham Road, Kent BR3 4TU or the proxy
form may be photocopied. State clearly on each proxy form the number of shares
in relation to which the proxy is appointed. To be valid, a proxy form must be
received by post or (during normal business hours only) by hand at the offices
of the Company's registrar, Capita Asset Services, Proxies, The Registry, 34
Beckenham Road, Kent BR3 4TU, no later than 11.00 a.m. on 29 August 2017 (or,
if the meeting is adjourned, no later than 48 hours (excluding any part of a
day that is not a working day) before the time of any adjourned meeting).
Corporate representatives
4. A shareholder which is a corporation may authorise one or more persons
to act as its representative(s) at the meeting. Each such representative may
exercise (on behalf of the corporation) the same powers as the corporation
could exercise if it were an individual shareholder, provided that (where there
is more than one representative and the vote is otherwise than on a show of
hands) they do not do so in relation to the same shares.
Total voting rights
5. As at 18 July 2017 (being the last practicable date before the
publication of this notice), the issued share capital consists of 177,608,051
ordinary shares of GBP0.01 each, carrying one vote each and 21,529,451 Deferred A
Shares and 116,241,384 Deferred B Shares which do not carry any rights to vote.
Therefore, the total voting rights as at 18 July 2017 are 177,608,051.
Nominated Persons
6. Where a copy of this notice is being received by a person who has been
nominated to enjoy information rights under section 146 of the Companies Act
2006 ("Act") ("Nominated Person"):
(a) the Nominated Person may have a right under an agreement between him/her
and the shareholder by whom he/she was nominated, to be appointed, or to have
someone else appointed, as a proxy for the meeting; or
(b) if the Nominated Person has no such right or does not wish to exercise such
right, he/she may have a right under such an agreement to give instructions to
the shareholder as to the exercise of voting rights. The statement of the
rights of shareholders in relation to the appointment of proxies in note 2 does
not apply to a Nominated Person. The rights described in such notes can only be
exercised by shareholders of the Company.
Shareholders' right to require circulation of resolutions to be proposed at the
meeting
7. A shareholder or shareholders meeting the qualification criteria set
out in note 10 below may require the Company to give shareholders notice of a
resolution which may properly be proposed and is intended to be proposed at the
meeting in accordance with section 338 of the Act. A resolution may properly be
proposed unless (i) it would, if passed, be ineffective (whether by reason of
inconsistency with any enactment or the Company's constitution or otherwise),
(ii) it is defamatory of any person, or (iii) it is frivolous or vexatious. The
business which may be dealt with at the meeting includes a resolution
circulated pursuant to this right. Any such request must (i) identify the
resolution of which notice is to be given, by either setting out the resolution
in full or, if supporting a resolution requested by another shareholder,
clearly identifying the resolution which is being supported (ii) comply with
the requirements set out in note 11 below, and (iii) be received by the Company
no later than six weeks before the meeting.
Shareholders' right to have a matter of business dealt with at the meeting
8. A shareholder or shareholders meeting the qualification criteria set
out in note 10 below may require the Company to include in the business to be
dealt with at the meeting any matter (other than a proposed resolution) which
may properly be included in the business in accordance with section 338A of the
Act. A matter may properly be included unless (i) it is defamatory of any
person, or (ii) it is frivolous or vexatious. Any such request must (i)
identify the matter to be included in the business, by either setting out the
matter in full or, if supporting a matter requested by another shareholder,
clearly identifying the matter which is being supported (ii) set out the
grounds for the request (iii) comply with the requirements set out in note 11
below and (iv) be received by the Company no later than six weeks before the
meeting.
Website publication of audit concerns
9. A shareholder or shareholders who meet the qualification criteria set
out in note 10 below may require the Company to publish on its website a
statement setting out any matter that such shareholders propose to raise at the
meeting relating to either the audit of the Company's accounts (including the
auditors' report and the conduct of the audit) that are to be laid before the
meeting or any circumstances connected with an auditor of the Company ceasing
to hold office since the last annual general meeting of the Company in
accordance with section 527 of the Act. Any such request must (i) identify the
statement to which it relates, by either setting out the
statement in full or, if supporting a statement requested by another
shareholder, clearly identify the statement which is being supported (ii)
comply with the requirements set out in note 11 below and (iii) be received by
the Company at least one week before the meeting. Where the Company is required
to publish such a statement on its website (i) it may not require the
shareholders making the request to pay any expenses incurred by the Company in
complying with the request (ii) it must forward the statement to the Company's
auditors no later than the time when it makes the statement available on the
website and (iii) the statement may be dealt with as part of the business of
the meeting.
Notes 7, 8 and 9 above: qualification criteria and methods of making requests
10. In order to require the Company (i) to circulate a resolution to be
proposed at the meeting as set out in note 7, (ii) to include a matter in the
business to be dealt with at the meeting as set out in note 8, or (iii) to
publish audit concerns as set out in note 9, the relevant request must be made
by (i) a shareholder or shareholders having a right to vote at the meeting and
holding at least five per cent of the total voting rights of the Company or
(ii) at least 100 shareholders having a right to vote at the meeting and
holding, on average, at least GBP100 of paid up share capital. For information on
voting rights, including the total voting rights of the Company, see note 5
above and the website referred to in note 15 below.
11. Any request by a shareholder or shareholders to require the Company (i)
to circulate a resolution to be proposed at the meeting as set out in note 7
(ii) to include a matter in the business to be dealt with at the meeting as set
out in note 8 or (iii) to publish audit concerns as set out in note 9 may be
made either (a) in hard copy, by sending it to Anglesey Mining plc, Tower
Bridge, St Katharine's Way, London E1W 1DD (marked for the attention of the
Company Secretary); or (b) in electronic form, by sending an email to
danesh@angleseymining.co.uk; and must state the full name(s) and address(es) of
the shareholder(s) and (where the request is made in hard copy form) must be
signed by the shareholder(s).
Questions at the meeting
12. Shareholders have the right to ask questions at the meeting relating to
the business being dealt with at the meeting in accordance with section 319A of
the Act. The Company must answer any such question unless: (a) to do so would
interfere unduly with the preparation for the meeting or would involve the
disclosure of confidential information; (b) the answer has already been given
on a website in the form of an answer to a question; or (c) it is undesirable
in the interests of the Company or the good order of the meeting that the
question be answered.
Documents available for inspection
13. The following documents will be available for inspection during normal
business hours at the registered office of the Company from the date of this
notice until the time of the meeting. They will also be available for
inspection at the place of the meeting from at least 15 minutes before the
meeting until it ends: (a) copies of the service contracts of the executive
directors, (b) copies of the letters of appointment of the non-executive
directors and (c) the Articles of Association of the Company.
Biographical details of directors
14. Biographical details of all those directors who are offering themselves
for reappointment at the meeting are set out in the annual report and accounts.
Website providing information about the meeting
15. The information required by section 311A of the Act to be published in
advance of the meeting, which includes the matters set out in this notice and
information relating to the voting rights of shareholders, is available at
www.angleseymining.co.uk.
Directors
Irish, aged 66, chairman, is a mining executive with more than 40
John F. years' experience in the mining industry and is chairman and CEO
Kearney of Labrador Iron Mines Holdings Limited. He is also chairman of
Canadian Zinc Corporation, Minco plc, Xtierra plc and Conquest
Resources Limited. He is a director of Avnel Gold Mining Limited
and the Mining Association of Canada and has degrees in law and
economics from University College Dublin and an MBA from Trinity
College Dublin. He is a member of the nomination committee and is
resident in Canada.
Bill aged 70, chief executive, is a mining engineering graduate from
Hooley the Royal School of Mines and has extensive experience in many
countries including the UK and Australia. He is vice-chairman and
a director of Labrador Iron Mines Holdings Limited and since May
2014 a director of Grangesberg Iron AB and Eurmag AB. He has been
a director of a number of other companies involved in the minerals
industry. He is a Fellow of the Australasian Institute of Mining
and Metallurgy.
Danesh Canadian, aged 67, finance director and company secretary is a
Varma chartered accountant and a member of the Chartered Institute of
Taxation. He is a director of Labrador Iron Mines Holdings Limited
and since May 2014 has been a director of Grangesberg Iron AB and
Eurmag AB. He is also chief financial officer of Minco plc,
Xtierra Inc. and Conquest Resources Limited.
Australian, aged 70, non-executive director, is a chartered
David accountant. He has over 30 years' experience in the commercial
Lean aspects of the mining industry most of which was with major base
and precious metal mining houses. Currently he is involved in
trading mineral products. He is a member of the audit and
nomination committees and from 30 July 2016 the remuneration
committee.
Howard aged 73, non-executive director, a lawyer with over 40 years'
Miller experience in the legal and mining finance sector in Africa,
Canada and the UK. He has extensive experience in the financing of
resource companies. He is chairman of Avnel Gold Mining Limited.
He is a member of the remuneration, audit and nomination
committees and the senior independent director.
END
(END) Dow Jones Newswires
July 31, 2017 02:00 ET (06:00 GMT)
Anglesey Mining (LSE:AYM)
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