Anglesey Mining plc
A UK mining company listed on the London Stock Exchange
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 route to develop the project through to production.
12% of Labrador Iron Mines Holdings Limited which 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 57%.
Chairman’s statement
To Anglesey Shareholders
The improvement in base metal prices, which began in 2016,
continued in 2017 and into 2018. The zinc price increased from
US$1.00 per pound in January 2017 to a 10-year high of US$1.63 per pound in February 2018. From January 2016, the zinc price more than doubled
making it one of the better performing metals over the two-year
period. Expectations of an increase in the supply of zinc
concentrates towards the end of 2018 have led to the recent decline
in the zinc price to the $1.15 per
pound range.
The price of copper increased substantially in the second half
of 2017 and ended the year at US$3.25
per pound, a 30% increase from the end of 2016. Lead also performed
well in 2017, rising from US$0.92 per
pound in January 2017 to US$1.22 per pound in January 2018. Although all metal prices softened
in mid -summer 2018 in response to global geopolitical uncertainty,
there is a strong expectation of a continued positive outlook for
base metals, particularly for zinc and copper.
Parys Mountain - 2017 Scoping
Study
In July 2017 a new Scoping Study
on the Parys Mountain copper-lead-zinc project in North Wales, was prepared by Micon
International Limited (Micon) and Fairport Engineering Ltd. The
Scoping Study 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, over an initial
mine life of eight years.
The Scoping Study demonstrates a viable mine development and a
healthy financial rate of return. For example, using assumptions of
longer term metal price projections of $1.35 per pound for zinc and $3.00 per pound for copper, and using an 8%
discount rate, to reflect the relatively low political risk in the
UK, the indicated NPV would be $52
million or £42 million, with an IRR of 30%.
Path towards Production
Following completion of the positive 2017 Scoping Study,
Anglesey has been working to progress the Parys Mountain project
towards production. We have previously described four key steps in
the development of the project which are: the conversion of the
Scoping Study to a Definitive Feasibility Study, the commencement
of an Environmental Impact Assessment, the recruitment of key
corporate staff and securing project finance. Whilst a Definitive
Feasibility Study to develop the project to a suitable status for
bank debt financing might be the ideal course, the Parys Mountain
project is not yet at the stage to undertake a Definitive
Feasibility Study.
A Definitive Feasibility Study can be defined as a comprehensive
technical and economic study to demonstrate that development of a
mine is reasonably justified. The results of the study may serve as
the basis for a decision by a financial institution to finance the
development of the project. However, a Preliminary Feasibility
Study is an intermediate step in the engineering process to
evaluate the technical and economic viability of a mining project,
occurring between a Scoping Study and a DFS.
The 2017 Scoping Study recommended further work as interim steps
towards undertaking a PFS, including more detailed mine planning
and design, more engineering studies, additional metallurgical test
work and a review of tailings management and environmental and
planning permissions, all of which will require new and further
financing. During the year the Scoping Study has been subject to
detailed examination and review with the aim of enhancing the
economics of the project to attract the capital financing necessary
to achieve our target of getting the Parys Mountain Mine into
production at the earliest date possible.
Optimisation Studies
The 2017 Scoping Study was based on mining only the 2.1 million
tonnes of indicated resources reported by Micon in 2012. Micon had
reported a further 4.1 million tonnes of inferred resources which
were not incorporated into the Scoping Study. Of the inferred
resources currently estimated, the Engine Zone, which lies at
depths up to 600m, is of higher grade
in most areas.
Development of even half of these inferred resources, which were
not included in the Scoping Study, would significantly increase the
projected life of the Parys Mountain mine from the initial eight
years to perhaps double the projected mine-life to 15 or 18 years
with potential positive outcomes on the project economics.
Anglesey is working on a revised mine model with the objective
of incorporating some of the inferred resources, including part of
the higher-grade Engine Zone inferred resources, into the earlier
years of the mine plan and thereby increasing the project life of
the mine to at least 10 years. In parallel, the cut-off grade used
to determine the resources included in the Scoping Study can be
tested to determine if this cut-off grade can be lowered to
increase the mineable tonnage and thereby further extend the
projected mine life.
The Scoping Study also recommended further metallurgical
investigation to improve recoveries and minimise metal losses from
the DMS plant, particularly for gold and silver via the gravity
concentration circuit. The proposed metallurgical work would help
to confirm the design and selection of key process items such as
the grinding circuit and the flotation cells and finalise the
process flow sheet and mass balance before carrying out any
detailed engineering works. A preliminary proposal for additional
laboratory test work, with an estimated cost of £100,000, has been
obtained which requires representative samples of the ore which
currently may not be available. The recommended metallurgical
review will be carried out to the extent possible using existing
data and technical information.
Environmental Studies
Completion of a feasibility study requires an evaluation of the
planning and environmental aspects of the proposed development. An
external review of the planning permissions and associated licence
requirements has confirmed that the planning permissions previously
granted remain valid and in force and that development and
operation of the Parys Mountain Mine will require various
environmental assessments and permits granted by Natural Resources
Wales. It is proposed that some further environmental baseline and
investigative work be carried out to bring the database up to date
and to comply with the current level of requirements.
Financing and Marketing
Based on the positive results of the Scoping Study, we have
commenced discussions with potential financiers for the development
of the Parys Mountain project. It is expected that this development
will occur in stepped progressions, to be followed by sequential
financings to move towards mine construction.
The Parys Mountain Mine will produce three separate marketable
concentrates for each of the base metals to be mined: zinc, lead
and copper. In addition, a small quantity of gravity concentrate
containing silver and gold will be produced. The concentrates are
likely be sold to one or more of the smelting and refining
operations in Europe. Anglesey has
also commenced preliminary discussions with potential
end-purchasers of the concentrates with a view to entering
long-term supply contracts provided these can be linked to
investment or other funding or commercial arrangements as part of
the financing for the development of the project.
Iron Ore
The group’s investments in Grangesberg Iron and in Labrador Iron
are heavily dependent on the future price of iron ore. In 2017 the
price of 62% Fe iron ore ranged from US$55 to US$97,
while averaging US$71 per tonne, and
during the first six months of 2018 ranged from US$65 to US$80 per
tonne. Over the past two years there has been a substantial shift
in the iron ore market favouring higher grade quality (+65% Fe)
product, with premiums paid for 65% Fe exceeding 30% of the 62% Fe
spot price. As a result, high grade iron ore products are currently
commanding high premiums to this spot price while sub-commodity
grades (<60% Fe) with high impurities are suffering increasing
penalties, resulting in a widening divergence in actual market sale
prices. These market conditions and the resultant strong premium
for ~65% Fe products are expected to continue in the medium term
based on the current global project pipeline, to the potential
benefit of our projects.
Grangesberg Iron
Anglesey continues to manage the Grangesberg iron ore project in
Sweden. The high-quality product
expected to be produced from Grangesberg, together with the
potential for sales within Sweden’s domestic markets, make
Grangesberg more attractive than many other undeveloped iron ore
projects. Although Grangesberg will benefit from extensive existing
infrastructure the project will still require high levels of
capital expenditure. Together with the other shareholders and
stakeholders in Grangesberg we continue to evaluate all options to
develop a viable way forward for the project.
Labrador Iron
The group holds a 12% interest in Labrador Iron Mines Holdings
Limited (LIM) which owns extensive iron ore resources and
facilities in its Schefferville Projects in Labrador and Quebec,
Canada. LIM has not undertaken mining operations since 2013,
primarily due to the low iron ore price environment, but maintains
its iron ore assets on a stand-by care and maintenance basis and,
subject to securing financing, is positioned to resume mining
operations as soon as economic conditions warrant.
Outlook
The 2017 Scoping Study demonstrated a viable mine development at
Parys Mountain with a healthy financial rate of return. The outlook
for metal prices, particularly zinc, copper and lead, which form
the basis of the Parys Mountain revenue, remains very positive.
Our objective is to phase the development and financing of Parys
Mountain in logical, sequential and parallel steps by undertaking
the various optimisations studies and programmes, completing a
prefeasibility or feasibility study and progressing Parys Mountain
towards production as quickly as the necessary financing and
technical timelines allow.
As well as maintaining a watching brief on the iron ore projects
in Canada and Sweden, Anglesey also plans to pursue new
opportunities for mineral exploration and development projects, in
the context of the current resource cycle, with a focus on advanced
copper exploration or development projects. We plan to enhance our
board and small management team by recruiting experienced
executives to help execute our plans and deliver our
objectives.
We believe that given the world’s continuing demand for metals
and the shortage of attractive advanced projects, the strong
technical base and political stability associated with all of
Anglesey’s projects, particularly Parys Mountain, finance for
project development will become available.
Once again, I would like to thank all our shareholders for their
patience and continuing support.
John F. Kearney
Chairman
31 July 2018
Strategic report - operations
Principal activities and business
review
Anglesey Mining is engaged primarily in the evaluating and
developing its wholly owned Parys Mountain zinc, lead, copper
project in North Wales. In 2017 a
new Scoping Study demonstrated a viable mine development and a
healthy financial rate of return. Site activities during the year
have continued to be limited to care and maintenance, though the
Scoping Study has been subject to detailed examination and review
with the aim of further optimising the development of the Parys
Mountain project.
In addition, 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 in the Labrador Iron Mines in
eastern Canada, currently in care
and maintenance.
The group’s objective is to phase the development and financing
of the Parys Mountain project by undertaking various optimisation
programmes, completing a prefeasibility or feasibility study and
progressing the Parys Mountain Mine towards production.
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.
In July 2017 a new Scoping Study
using the 2012 resource estimate was prepared by Micon and Fairport
Engineering Ltd. The Scoping Study demonstrates a viable
development mining 1,000 tpd to produce lead, zinc and copper
concentrates and yielding a healthy financial rate of return.
Development
Plan
During the period 2006-2010 Anglesey Mining carried out a
detailed drilling programme on the White Rock Zone which lies
adjacent to the existing 300m deep
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 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. It
proposed that a decline would be developed by mining contractors
and would be used as the initial means of access to the resource
for development and mining. During the initial production phase
from the White Rock zone 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 recommissioned as a
hoisting shaft for the remnant White
Rock ore and for the deeper and more valuable Engine Zone
ore. 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 planned adjacent processing plant. The
existing hoist and headframe would be refurbished and used to bring
ore to the surface for delivery to the processing plant through the
deepened shaft.
The 2017 Scoping Study concluded that the preferred development
option for Parys Mountain is a 1,000 tpd mine and plant with a
Dense Media Separation (DMS) section and that after an initial
ramp-up period, the higher production level can be maintained. This
would result in a mine life of approximately eight years based only
on the indicated resources.
Metal
Production
The proposed processing 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. 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 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
and will be sold as Welsh gold.
Smelter payment terms and penalties have been based on
indicative treatment charges currently prevailing from European
smelters.
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.
Life of mine average annual metal production into concentrates is
forecast at 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 net smelter revenue of
approximately 72% of the metal value in concentrates delivered to
the smelters.
Project Financial
Results
The pre-production capital cost of the base case including
mining, DMS, concentrator and infrastructure is estimated at
$56 million, including a $4 million contingency. The initial capital cost
for mine development is estimated to be $16
million, the concentrator $29.5
million including $3 million
for the DMS plant, and infrastructure $10
million. Operating costs were developed by Micon and
Fairport based on current knowledge and experience which at the
higher levels of production are forecast at around $47 per tonne of ore treated.
The base case yields a pre-tax net present value of $33 million, or £26 million, at a conservative 10
per cent discount rate, using metal prices of $1.25 per pound for zinc, $1.00 per pound for lead, $2.50 per pound for copper, $17.50 per ounce for silver and $1,275 per ounce for gold and at an exchange rate
of £1.00 = $US1.25. With an estimated
pre-production capital cost of $56
million, or £45 million, this results in an indicated
internal rate of return (IRR) of 26%.
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
$40 million, or £32 million, for the
base case metal price scenario. The project is sensitive to metal
prices and exchange rates. Using metal price projections of
$1.35 per pound for zinc and
$3.00 per pound for copper the NPV10
would be $43 million, or £35 million
and the NPV8 $52 million, or £42
million, with an IRR of 30%.
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 £1.00 = $US1.25.
Metal
Prices |
Pre-Tax
Cash Flows |
Zinc
US$/lb |
Lead US$/lb |
Copper
US$/lb |
Silver
US$/oz |
Gold
US$/oz |
Undiscounted
$M |
NPV10%
$M |
NPV8%
$M |
IRR
% |
1.25 |
1.00 |
2.50 |
17.50 |
1,275 |
91.2 |
33.2 |
40.2 |
26 |
1.35 |
1.00 |
3.00 |
17.50 |
1,275 |
110.8 |
43.5 |
52.3 |
30 |
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 Scoping Study but if utilised would significantly
extend the projected operating life of the mine with a
consequential increase in the resultant estimated valuation.
While the inclusion of inferred resources does not meet the
strict criteria for feasibility studies used by banks for loan
evaluation, given the detailed geological knowledge of Parys
Mountain now available it would be acceptable to utilise some of
this inferred resource for comparative financial modelling. To
evaluate potential optimisation of the project some additional mine
planning and scheduling will be carried out on the inferred
resource and the results input to the financial model.
As reported in 2012, the resource estimate was made using a
gross metal product value cut-off of $80 per tonne. The 2017 Scoping Study estimated
the cash operating cost, prior to royalties and taxes, at
$47 per tonne. Use of a lower cut-off
grade would increase the tonnes in the indicated category, but with
some reduction in grade, and increase the projected mine life.
Further optimisation studies are required to determine the optimum
cut-off grade that would provide the maximum increased return.
These studies are being carried out initially on the base financial
model, i.e. using the indicated resources only, and this will be
followed by the extended resources using some of the inferred
resources as detailed previously. These optimisation studies are of
necessity an on-going process. As more detailed mine costings are
developed, and as the increased tonnage potentially changes not
just mine life but also the grade of ore processed, a series of
iterations will be required to reach that optimum forecast
result.
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.
Further work on
Parys Mountain
The Scoping Study recommended 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, 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 fill
processes. Several opportunities for cost reduction or productivity
improvement have been identified.
Metallurgical
Studies
Fairport has recommended that additional metallurgical testwork
be carried out to increase confidence in a number of key areas
including the performance of the DMS plant, regrind work in the
lead circuit to improve concentrate quality, in the paste backfill
section to confirm geotechnical characteristics, and in improving
the overall water balance to reduce operating costs and discharge
requirements. There is insufficient ore of a representative nature
currently available to carry out all of this programme.
Environmental
Studies
A conditional planning permission was issued by Gwynedd County
Council in 1988 for ‘the development of a mining and milling
complex for the extraction and processing of metalliferous ores and
disposal of waste rock and slurry at Parys Mountain, Amlwch,
Gwynedd. In 1991 a second planning permission was granted to
develop a ‘Mine portal and spiral decline to access upper levels
of the ore body to provide a second means of egress’. Both
these planning permissions remain in force.
In the United Kingdom,
industrial and other development proposals, including mineral
development projects, are subject to two different processes: a) a
planning process through which a planning authority grants
permission for a specific development and, b) the environmental
permitting process through which permission is granted (in this
case by Natural Resources Wales) for the operation of an
installation or activity that could have an environmental
impact.
For planning purposes Parys Mountain is currently considered a
dormant site which cannot commence permitted activity until the
mineral planning authority has agreed conditions. An application
may need to be accompanied by an environmental statement under the
Environmental Impact Assessment (EIA) Regulations. The regulations
specify what type of developments should be subject to EIA.
Underground mineral workings require an EIA only if the development
is likely to have significant effects on the environment. The
planning authority may require an EIA as part of the review process
and has the responsibility for deciding if an EIA is required.
Several environmental studies have been undertaken within the
Parys Mountain area, dating back prior to 1988, when the first
planning permission for a new mine was obtained by Anglesey.
Baseline monitoring of environmental conditions was carried out at
various times in the 1980s and 1990s. There has also been an
extensive monitoring programme for water quality carried out by the
Environment Agency to assess the impacts of historic mining
activities in the area.
It is now proposed that some further environmental baseline and
investigative work be carried out to bring the database up to date
and to comply with the now current level of regulations. During the
year a report was prepared on the details of the work that will be
needed to meet these requirements and planning for commencement of
this work is advanced. It is stressed that the original planning
permissions that have been in place for a number of years remain
intact.
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.
The group holds a direct 6% interest in Grangesberg Iron AB
(GIAB) and, until June 2021, a right
of first refusal over 51% of the 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 three out of five
directors to the board of GIAB.
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.
In September 2014 an NI 43-101
Technical Report was prepared by Roscoe Postle Associates Inc
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.
Over the past two years there has been a substantial shift in
the iron ore market favouring higher grade quality (+65% Fe)
product, with premiums paid for 65% Fe exceeding 30% of the
reported 62% reported spot price. The high-quality product expected
to be produced from Grangesberg would attract such premium pricing
and, together with the potential for sales within Sweden’s domestic
markets, make Grangesberg more attractive than many other
undeveloped iron ore projects. Although Grangesberg benefits from
extensive existing infrastructure, development of the project will
still require high levels of capital expenditure.
Labrador Iron
The group has an investment holding of 12% (2017 - 12%) in
Labrador Iron Mines Holdings Limited. LIM owns extensive iron ore
resources and facilities in its exploration properties in
Labrador and in Quebec, Canada, one of the major iron ore
producing regions in the world.
In the three-year period of 2011 to 2013 LIM produced a total of
3.6 million dry metric tonnes of iron ore, all of which was sold in
23 cape-size shipments into the China spot market. LIM has not undertaken
mining operations since 2013, primarily due to the low iron ore
price environment, but maintains its properties on a stand-by care
and maintenance basis and, subject to securing financing, is
positioned to resume mining operations as soon as economic
conditions warrant.
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. The
directors have identified copper projects as the most potentially
attractive and the group is currently evaluating a number of early
stage opportunities.
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
2018 after tax was £278,189 compared to a loss of £307,968
in the 2017 fiscal year. The administrative and other costs
excluding investment income and finance charges were £109,677
compared to £141,022 in the previous year.
During the year there were no additions to fixed assets (2017 -
nil) and £100,319 (2017 - £84,196) was capitalised in respect of
the Parys Mountain property as mineral property exploration and
evaluation.
At 31 March 2018 the group held
mineral property exploration and evaluation assets with a carrying
value of £15.0 million. These carrying values are supported by the
results of the 2017 Scoping Study 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
2018 was £137,113 (2017 - £392,293) the reduction being due
to ongoing operating and capital expenses. The foreign exchange
loss of £42 (2017 – gain £178) shown in the income statement arises
on cash balances held in Swedish Krona (in 2017 there was also a
Canadian dollar balance).
At 31 March 2018 the company had
177,608,051 ordinary shares in issue, unchanged from the previous
year.
Financial instruments
The group’s use of financial instruments is described in note
24.
Employment, community and
donations
The group is an equal opportunity employer in all respects and
aims for high standards from and for its employees. At 31 March 2018 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. There are no social, community or human
rights issues which require the provision of further information in
this report.
Environment
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 encouraged. It is not practical or useful to
quantify the effects of these measures.
Risks and uncertainties
The directors have carried out a robust assessment of the
principal risks facing the group, including those that would
threaten its business model, future performance, solvency or
liquidity. 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. The board believes the principal
risks facing the group are adequately disclosed in these financial
statements and that there are no other risks of comparable
magnitude which need to be disclosed. In reviewing the risks facing
the group, the board considers it is sufficiently close to the
group’s operations and aware of its activities to be able to
adequately monitor risk without the establishment of any formal
process. The group may become subject to risks against which it
cannot insure or against which it may elect not to insure because
of high premium costs or other reasons. 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
At March 31, 2018, the group had
limited working capital and had not achieved profitable operations
and will need to generate additional financial resources to fund
its planned optimization and development programmes at Parys
Mountain. The group has relied primarily on equity financings to
fund its working capital requirements and on previous occasions has
also relied on 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. There is
a risk that additional funding may not be available on a timely
basis or on acceptable terms. Development of the Parys Mountain
project will be dependent on raising further funds from various
sources.
Exploration and development risk
Exploration for minerals and development of mining operations
involve risks, many of which are outside the group’s control.
Current operations are in politically stable environments and hence
unlikely to be subject to expropriation but exploration by its
nature is subject to uncertainties and unforeseen or unwanted
results are always possible.
Metal price risks
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 in sterling.
Foreign exchange risk
LIM is a Canadian company; Angmag AB and GIAB are Swedish
companies. Accordingly, the value of the holdings in these
companies is affected by exchange rate risks. Operations at Parys
Mountain are in the UK and exchange rate risks are minor. Most of
the cash balance at the year end was held in sterling – see notes
17 and 24.
Permitting, environment and social
risk
The group holds planning permissions 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
operational conditions and reclamation requirements.
Employee and personnel risk
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
31 July 2018 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 31 March
2018.
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. 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 £280,835 at the year end
(2017 – £297,570). 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 20 July 2018 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 £590,000 (59,000,000 ordinary shares) which is
approximately one third of the total issued ordinary share capital
of the company as at 20 July 2018.
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 £440,000 (44,000,000
ordinary shares). This aggregate nominal amount represents
approximately 25% of the issued ordinary share capital of the
company at 20 July 2018. 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 any meeting unless all
monies presently payable in respect of their shares have been paid.
Furthermore, no member shall be entitled to attend or vote at any
meeting if he has been served with a notice after failing to
provide the company with information concerning interests in his
shares.
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 (2017 – 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. During the
year the group depleted its working capital. At 31 March 2018, the group had cash and cash
equivalent reserves of £137,000 and net assets of £12 million and
will need to generate additional financial resources to fund its
planned optimization and development programmes. Based on the
current cash reserves and committed support from its largest
shareholder, Juno Limited, the group has sufficient finance
available for the continuing working capital requirements of the
group on a status quo basis for at least twelve months from the
date of the financial statements.
The group will need to generate additional financial resources
to meet its planned business objectives, progress the ongoing
development of the Parys Mountain project and continue as a going
concern. The plans to phase the development of the project by
undertaking the various optimisation programmes and completing a
prefeasibility or feasibility study to progress the Parys Mountain
Mine towards production require interim funding to finance the
further studies and optimisation programmes and, in the longer
term, senior financing to fund the capital and development costs to
put the Parys Mountain Mine into production.
The group has relied primarily on equity financings to fund its
working capital requirements and on previous occasions the group
has relied on 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 and to
continue as a going concern.
The directors recognise that the continuing operations of the
group are dependent upon its ability to raise adequate financing
and that there is a risk that additional funding may not be
available on a timely basis or on acceptable terms. The directors
are actively pursuing various financing options with certain
shareholders and financial institutions regarding proposals for
financing and have engaged in discussions with a range of
investors, including a number of private equity funds. Whilst these
discussions are not finalised 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. However, given the limited financial resources
currently available, and that there is no guarantee that such
funding will be available in the short term, there is a risk that
the group will not have sufficient financial resources to fund its
short-term project funding requirements, and therefore there exists
a material uncertainty concerning the ability of the group and the
company to continue as a going concern.
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.
During the year the company invited tenders from three firms
including Mazars in respect of the audit and decided to retain
Mazars as auditor, consequently 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
31 July 2018 and signed on its behalf
by:
Danesh Varma
Company Secretary
Independent auditor’s report to the
members of Anglesey Mining plc
Opinion
We have audited the financial statements of Anglesey Mining plc
(the ‘parent company’) and its subsidiaries (the ‘group’) for the
year ended 31 March 2018 which
comprise the Group Income Statement, the Group 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 Flows and notes to the
financial statements, including a summary of significant accounting
policies. The financial reporting framework that has been applied
in their preparation is applicable law and International Financial
Reporting Standards (IFRSs) as adopted by the European Union and,
as regards the parent company financial statements, as applied in
accordance with the provisions of the Companies Act 2006.
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 2018 and of the group’s loss
for the year then ended;
- the group financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union;
- the parent company financial statements have been properly
prepared in accordance with IFRSs as adopted by the European Union
and as applied in accordance with the provisions of the Companies
Act 2006; and
- the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006 and, as regards the
group financial statements, Article 4 of the IAS regulation.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
Auditor’s responsibilities for the audit of the financial
statements section of our report. We are independent of the company
in accordance with the ethical requirements that are relevant to
our audit of the financial statements in the UK, including the
FRC’s Ethical Standard, as applied to listed entities and public
interest entities and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe
that the audit evidence we have obtained is sufficient and
appropriate to provide a basis for our opinion.
Material uncertainty related to going concern
We draw attention to Note 2 in the financial statements
concerning the applicability of the going concern basis of
preparation. As detailed in the financial statements and the
Strategic Report, the parent company and group are not generating
revenue. Its business model requires generation of additional
financial resources to meet its planned business objectives and to
progress the ongoing development of the Parys Mountain
project.
At 31 March 2018 the group and
parent company had net assets of £12m and £11m respectively and
cash and cash equivalent reserves of £137k and £133k. During the
year, the group has depleted their remaining cash balance and will
need to generate additional financial resources to fund its planned
optimization and development programs. The group is reliant on
equity financings or further support from the major shareholder,
Juno Limited.
In Note 2, the directors explain that to date they have
successfully raised funds to finance ongoing expenditure and that
they are in the process of securing additional funding sufficient
to finance the next steps in order to progress the development of
the Parys Mountain project. As the directors are confident
that the group will raise the additional funding, they have
prepared the accounts on the going concern basis. However, until
the group secures sufficient investment to fund the short-term
project funding requirements as described in Note 2, there is a
material uncertainty that casts a significant doubt about the
group’s and parent company’s ability to continue as a going
concern.
Our opinion is not modified in respect of this matter.
Conclusions relating to principal risks, going concern and
viability statement
Other than as above under ‘Material uncertainty related to going
concern’, we have nothing to report in respect of the following
information in the annual report, in relation to which the ISAs
(UK) require us to report to you whether we have anything material
to add or draw attention to:
- the disclosures in the annual report set out on pages 8 and 9
that describe the principal risks and explain how they are being
managed or mitigated;
- the directors’ confirmation set out on page 8 in the annual
report that they have carried out a robust assessment of the
principal risks facing the group, including those that would
threaten its business model, future performance, solvency or
liquidity;
- the directors’ statement set out on page 11 in the financial
statements about whether the directors considered it appropriate to
adopt the going concern basis of accounting in repairing the
financial statements and the directors’ identification of any
material uncertainties to the group and the parent company’s
ability to continue to do so over a period of at least twelve
months from the date of approval of the financial statements;
- whether the directors’ statement relating to going concern
required under the Listing Rules in accordance with Listing Rule
9.8.6R(3) is materially inconsistent with our knowledge obtained in
the audit; or
- the directors’ explanation set out on page 11 in the annual
report as to how they have assessed the prospects of the group,
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.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy, the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
Key audit matter |
Our response |
Impairment of
exploration and evaluation asset (group and company)
The group has rights to explore and mine the Parys Mountain site
for a number of years and have recently completed a further scoping
study reaffirming the facts from old reports. As indicated in the
new study reports, there are further studies required to optimise
and enhance the project ahead of development.
There is a risk that accounting criteria associated with the
capitalisation of exploration and evaluation expenditure may no
longer be appropriate and that capitalised costs exceed the value
in use.
Any assessment of the value in use is highly judgemental based on a
combination of independent experts studies and directors’
assessment of long term metal commodity prices, the estimated
mineral deposits, costs associated with mineral extraction and
sale, discount rates , exchange rate factors and group’s ability to
raise finances. |
Our audit procedures
included, but were not limited to:
- Review of the
new scoping study report, consideration of the independence and
qualifications of experts used by management to perform these
studies;
- Challenge the
consistency of management’s assumptions and forward looking
information included in the impairment model;
- Performing a
sensitivity analysis on key assumptions used by the management in
their assessment;
- An arithmetic
review of the impairment model prepared by management; and
- Assessment of
adequacy and completeness of the relevant financial statement
disclosures.
Based on the work performed above, no impairment to the exploration
and evaluation asset was noted. |
Impairment of
investment in subsidiary (company)
The cost of the investment in and loan due from the subsidiary,
Parys Mountain Mines Limited, held in the balance sheet of
the company, is supported by the future cash flows associated
with the recovery of the exploration and evaluation assets
following the development of the Parys Mountain site held by Parys
Mountain Mines Limited. If there were impairment in the exploration
and evaluation assets included above, this would have a direct
impact on the carrying value of the investment in and the loan due
from the subsidiary.
Under the accounting policy included in Note 2 of the financial
statements, investments are held at cost less accumulated
impairments therefore there is a risk that the investment in
subsidiary undertaking is impaired as a result of indicators within
the underlying assets of the subsidiary, the exploration and
evaluation asset discussed above. |
Our audit procedures
included, but were not limited to:
- Consideration
of the results of the impairment review of the underlying
exploration and evaluation asset held within the subsidiary;
and
- Assessment
of the completeness and accuracy of the disclosures in the
financial statements, using our financial reporting advisory team
where necessary
Based on the work performed, no impairment to the investment in
subsidiary undertakings was noted. |
Our application of materiality
We apply the concept of materiality in planning and performing
our audit, in evaluating the effect of identified misstatements on
the financial statements, and in forming our audit opinion. The
level of materiality we set is based on our assessment of the
magnitude of misstatements that, individually or in aggregate,
could reasonably be expected to have influence on the economic
decisions of the users of the financial statements.
We established materiality based on:
- For the consolidated accounts, group’s net assets represents
shareholder funds and we have determined it to be the principal
benchmark within the financial statements relevant to shareholders,
as the group is pre revenue and pre-production phase. We determined
the financial statement materiality and the performance materiality
for the consolidated financial statements as a whole to be £360,000
(representing approximately 3% of the group’s net assets) and
£270,000 (representing 70% of financial statement materiality)
respectively. A specific materiality of £80,000 is used for the
audit of Income statement areas
- For the parent statutory accounts, net assets is considered
most appropriate as the parent company is not meant to be trading
and mainly holds investment in subsidiaries. We determined the
financial statement materiality for the parent company’s financial
statement as a whole to be £217,000 (representing approximatively
3% of the net assets) and £163,000 (representing 70% of financial
statement materiality) respectively.
We agreed with the Audit Committee that we would report to that
committee all identified corrected and uncorrected audit
differences in excess of £11,000 for the group and in excess of
£7,000 for the parent company (representing 3% of financial
statement materiality) together with differences below that
threshold that, in our view, warranted reporting on qualitative
grounds.
The range of performance materiality used within the components
for the purposes of the group audit was £3,000 to £224,000.
An overview of the scope of our audit
We tailored the scope of our audit to ensure that we performed
sufficient work to be able to give an opinion on the financial
statements as a whole, taking into account the group’s and parent
company’s accounting processes and controls, and the industry in
which it operates. We used the outputs of a risk assessment, our
understanding of the group and the parent company, and we also
considered qualitative factors in order to ensure that we obtained
sufficient coverage across all financial statement line items.
Our audit involved 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. The risks
of material misstatement that had the greatest effect on our audit,
including the allocation of our resources and effort, are discussed
under “Key audit matters” within this report.
The legal entities within the group account 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 2018. The audit of all
the entities within the group was undertaken by the group audit
team.
Other information
The directors are responsible for the other information. The
other information comprises the information included in the annual
report other than the financial statements and our auditor’s report
thereon. Our opinion on the financial statements does not cover the
other information and, except to the extent otherwise explicitly
stated in our report, we do not express any form of assurance
conclusion thereon.
In connection with our audit of the financial statements, our
responsibility is to read the other information and, in doing so,
consider whether the other information is materially inconsistent
with the financial statements or our knowledge obtained in the
audit or otherwise appears to be materially misstated. If we
identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a
material misstatement in the financial statements or a material
misstatement of the other information. If, based on the work we
have performed, we conclude that there is a material misstatement
of this other information, we are required to report that fact.
We have nothing to report in this regard.
In this context, we also have nothing to report in regard to our
responsibility to specifically address the following items in the
other information and to report as uncorrected material
misstatements of the other information where we conclude that those
items meet the following conditions:
- Fair, balanced and understandable set out on page 12 –
the statement given by the directors that they consider the annual
report and financial statements taken as a whole is fair, balanced
and understandable and provides the information necessary for
shareholders to assess the group’s performance, business model and
strategy, is materially inconsistent with our knowledge obtained in
the audit; or
- Audit committee reporting set out on page 21 – the
section describing the work of the audit committee does not
appropriately address matters communicated by us to the audit
committee; or
- Directors’ statement of compliance with the UK Corporate
Governance Code set out on page 20 – the parts of the
directors’ statement required under the Listing Rules relating to
the company’s compliance with the UK Corporate Governance Code
containing provisions specified for review by the auditor in
accordance with Listing Rule 9.8.10R(2) do not properly disclose a
departure from a relevant provision of the UK Corporate Governance
Code.
Opinions 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 the
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 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 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
- information 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
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 are not in agreement
with the accounting records and returns; or
- certain disclosures of directors’ remuneration specified by law
are not made; or
- we have not received all the information and explanations we
require for our audit; or
- a corporate governance statement has not been prepared by the
parent company.
Responsibilities of Directors
As explained more fully in the directors’ responsibilities
statement set out on page 12, the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group’s and the parent company’s
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the
group or the parent company or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council’s website at www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor’s report.
Other matters which we are required to address
Following the recommendation of the audit committee, we were
reappointed by the Board of Directors on 21
February 2018 to audit the financial statements for the year
ended 31 March 2018 and subsequent
financial periods. The period of total uninterrupted engagement
since reappointment is 1 year, covering the year ended 31 March 2018.
The non-audit services prohibited by the FRC’s Ethical Standard
were not provided to the group or the parent company and we remain
independent of the group and the parent company in conducting our
audit.
Our audit opinion is consistent with the additional report to
the audit committee.
Use of the audit report
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
31 July 2018
Group income statement
All attributable to equity holders of the company
|
|
Notes |
Year
ended 31 March 2018 |
Year
ended 31 March 2017 |
All
operations are continuing |
|
£ |
£ |
|
Revenue |
|
- |
- |
|
Expenses |
|
(109,677) |
(141,022) |
|
Equity-settled
employee benefits |
22 |
(9,324) |
(9,479) |
|
Investment
income |
6 |
121 |
146 |
|
Finance
costs |
7 |
(159,267) |
(157,791) |
|
Foreign exchange
movement |
|
(42) |
178 |
|
|
|
|
|
Loss before tax |
4 |
(278,189) |
(307,968) |
|
|
|
|
|
|
Taxation |
8 |
- |
- |
|
|
|
|
|
Loss for the period |
|
(278,189) |
(307,968) |
|
|
|
|
|
|
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 |
|
(278,189) |
(307,968) |
|
Other comprehensive
income |
|
|
|
|
Items
that may subsequently be reclassified to profit or loss: |
|
|
|
Exchange
difference on
translation of foreign holding |
|
31,489 |
(35,053) |
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss for the period |
(246,700) |
(343,021) |
|
|
|
|
|
Group statement of financial
position
|
|
|
31
March 2018 |
31
March 2017 |
|
|
Notes |
£ |
£ |
Assets |
|
|
|
|
Non-current
assets |
|
|
|
|
Mineral property
exploration and evaluation |
10 |
15,111,141 |
15,010,822 |
|
Property, plant
and equipment |
11 |
204,687 |
204,687 |
|
Investments |
14 |
86,660 |
86,660 |
|
Deposit |
15 |
123,227 |
123,118 |
|
|
|
|
|
|
|
|
15,525,715 |
15,425,287 |
|
|
|
|
|
|
Current
assets |
|
|
|
|
Other
receivables |
16 |
19,790 |
23,603 |
|
Cash and cash
equivalents |
17 |
137,113 |
392,293 |
|
|
|
|
|
|
|
|
156,903 |
415,896 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
15,682,618 |
15,841,183 |
|
|
|
|
|
Liabilities |
|
|
|
|
Current
liabilities |
|
|
|
|
Trade and other
payables |
18 |
(65,870) |
(114,557) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(65,870) |
(114,557) |
|
|
|
|
|
|
Net current
assets |
|
91,033 |
301,339 |
|
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
Loans |
19 |
(3,543,236) |
(3,415,738) |
|
Long term
provision |
20 |
(50,000) |
(50,000) |
|
|
|
|
|
|
|
|
(3,593,236) |
(3,465,738) |
|
|
|
|
|
Total liabilities |
|
(3,659,106) |
(3,580,295) |
|
|
|
|
|
|
|
|
|
|
Net assets |
|
12,023,512 |
12,260,888 |
|
|
|
|
|
Equity |
|
|
|
|
Share
capital |
21 |
7,286,914 |
7,286,914 |
|
Share
premium |
|
10,171,986 |
10,171,986 |
|
Currency
translation reserve |
|
(42,021) |
(73,510) |
|
Retained
losses |
|
(5,393,367) |
(5,124,502) |
|
|
|
|
|
|
|
|
|
|
Total
shareholders' funds |
|
12,023,512 |
12,260,888 |
|
|
|
|
|
The financial statements of Anglesey Mining plc which include
the notes to the accounts on pages 33 to 48 were
approved by the board of directors, authorised for issue on
31 July 2018 and signed on its behalf
by:
John F. Kearney, Chairman
Danesh Varma, Finance Director
Company statement of financial
position
|
|
|
31
March 2018 |
31
March 2017 |
|
|
|
Notes |
£ |
£ |
|
Assets |
|
|
|
|
|
Non-current
assets |
|
|
|
|
|
Investments |
13 |
14,325,116 |
14,228,552 |
|
|
|
|
|
|
|
|
|
|
14,325,116 |
14,228,552 |
|
|
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
Other
receivables |
16 |
5,772 |
12,759 |
|
|
Cash and cash
equivalents |
17 |
132,589 |
388,880 |
|
|
|
|
|
|
|
|
|
|
138,361 |
401,639 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
14,463,477 |
14,630,191 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
Trade and other
payables |
18 |
(54,121) |
(107,571) |
|
|
|
|
|
|
|
|
|
|
(54,121) |
(107,571) |
|
|
|
|
|
|
|
|
Net current
assets |
|
84,240 |
294,068 |
|
|
|
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
|
Loan |
19 |
(3,262,401) |
(3,118,168) |
|
|
|
|
|
|
|
|
|
|
(3,262,401) |
(3,118,168) |
|
|
|
|
|
|
|
|
Total
liabilities |
|
(3,316,522) |
(3,225,739) |
|
|
|
|
|
|
|
Net assets |
|
11,146,955 |
11,404,452 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
Share
capital |
21 |
7,286,914 |
7,286,914 |
|
|
Share
premium |
|
10,171,986 |
10,171,986 |
|
|
Retained
losses |
|
(6,311,945) |
(6,054,448) |
|
|
|
|
|
|
|
Shareholders' equity |
|
11,146,955 |
11,404,452 |
|
|
|
|
|
|
|
The company reported a loss for the year ended 31 March 2018 of £266,821 (2017 - £295,855). The
financial statements
of Anglesey Mining plc registered number 1849957 which include the
notes to the accounts were approved by the
board of directors and authorised for issue on 31 July 2018 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
capital |
Share
premium |
Currency translation reserve |
Retained losses |
Total |
|
|
£ |
£ |
£ |
£ |
£ |
|
Equity at 1
April 2016 |
7,116,914 |
9,848,949 |
(38,457) |
(4,826,013) |
12,101,393 |
|
|
|
|
|
|
|
|
Total
comprehensive loss for the year: |
|
|
|
|
|
|
Loss for the
year |
- |
- |
- |
(307,968) |
(307,968) |
|
Exchange
difference on
translation of foreign holding |
- |
- |
(35,053) |
- |
(35,053) |
|
Total
comprehensive loss for the year |
- |
- |
(35,053) |
(307,968) |
(343,021) |
|
Transactions
with owners: |
|
|
|
|
|
|
Shares
issued |
170,000 |
365,200 |
- |
- |
535,200 |
|
Share issue
expenses |
- |
(42,163) |
- |
- |
(42,163) |
|
Equity-settled
employee benefits |
- |
- |
- |
9,479 |
9,479 |
|
|
|
|
|
|
|
|
Equity at 31
March 2017 |
7,286,914 |
10,171,986 |
(73,510) |
(5,124,502) |
12,260,888 |
|
|
|
|
|
|
|
|
Total
comprehensive loss for the year: |
|
|
|
|
|
|
Loss for the
year |
- |
- |
- |
(278,189) |
(278,189) |
|
Exchange
difference on
translation of foreign holding |
- |
- |
31,489 |
- |
31,489 |
|
|
|
|
|
|
|
|
Total
comprehensive income/(loss) for the year |
- |
- |
31,489 |
(278,189) |
(246,700) |
|
Transactions
with owners: |
|
|
|
|
|
|
Equity-settled
employee benefits |
- |
- |
- |
9,324 |
9,324 |
|
|
|
|
|
|
|
|
Equity at 31
March 2018 |
7,286,914 |
10,171,986 |
(42,021) |
(5,393,367) |
12,023,512 |
|
|
|
|
|
|
|
|
Company |
|
Share
capital |
Share
premium |
Retained
losses |
Total |
|
|
|
£ |
£ |
£ |
£ |
|
Equity at 1
April 2016 |
|
7,116,914 |
9,848,949 |
(5,768,072) |
11,197,791 |
|
|
|
|
|
|
|
|
Total
comprehensive loss for the year: |
|
|
|
|
|
|
Loss for the
year |
|
- |
- |
(295,855) |
(295,855) |
|
|
|
|
|
|
|
|
Total
comprehensive loss for the year |
|
- |
- |
(295,855) |
(295,855) |
|
Transactions
with owners: |
|
|
|
|
|
|
Shares
issued |
|
170,000 |
365,200 |
- |
535,200 |
|
Share issue
expenses |
|
- |
(42,163) |
- |
(42,163) |
|
Equity-settled
employee benefits |
|
- |
- |
9,479 |
9,479 |
|
|
|
|
|
|
|
|
Equity at 31
March 2017 |
|
7,286,914 |
10,171,986 |
(6,054,448) |
11,404,452 |
|
|
|
|
|
|
|
|
Total
comprehensive loss for the year: |
|
|
|
|
|
|
Loss for the
year |
|
- |
- |
(266,821) |
(266,821) |
|
|
|
|
|
|
|
|
Total
comprehensive loss for the year |
|
- |
- |
(266,821) |
(266,821) |
|
Transactions
with owners: |
|
|
|
|
|
|
Equity-settled
employee benefits |
|
- |
- |
9,324 |
9,324 |
|
|
|
|
|
|
|
|
Equity at 31
March 2018 |
|
7,286,914 |
10,171,986 |
(6,311,945) |
11,146,955 |
|
|
|
|
|
|
|
Group statement of cash flows
|
|
Notes |
Year
ended 31 March 2018 |
Year
ended 31 March 2017 |
|
|
|
£ |
£ |
Operating activities |
|
|
|
|
Loss for the
period |
|
(278,189) |
(307,968) |
|
Adjustments
for: |
|
|
|
|
Investment
income |
6 |
(121) |
(146) |
|
Finance
costs |
7 |
159,267 |
157,791 |
|
Equity-settled
employee benefits |
22 |
9,324 |
9,479 |
|
Foreign exchange
movement |
|
42 |
(178) |
|
|
|
|
|
|
|
|
(109,677) |
(141,022) |
|
Movements in
working capital |
|
|
|
|
Decrease in
receivables |
|
3,813 |
9,156 |
|
Decrease in
payables |
|
(53,730) |
(9,632) |
|
|
|
|
|
Net
cash used in operating activities |
|
(159,594) |
(141,498) |
|
|
|
|
|
Investing activities |
|
|
|
|
Investment
income |
|
12 |
106 |
|
Mineral property
exploration and evaluation |
|
(95,556) |
(96,034) |
|
|
|
|
|
Net
cash used in investing activities |
(95,544) |
(95,928) |
|
|
|
|
|
Financing activities |
|
|
|
|
Loans |
|
- |
125,000 |
|
Share issue
proceeds net of expenses |
|
- |
493,037 |
|
|
|
|
|
Net
cash generated from financing activities |
|
- |
618,037 |
|
|
|
|
|
Net
(decrease)/increase in cash and cash equivalents |
(255,138) |
380,611 |
Cash
and cash equivalents at start of period |
|
392,293 |
11,504 |
Foreign exchange movement |
|
(42) |
178 |
|
|
|
|
|
Cash and cash equivalents at end of period |
17 |
137,113 |
392,293 |
|
|
|
|
|
Company statement of cash flows
|
|
Notes |
Year
ended 31 March 2018 |
Year
ended 31 March 2017 |
|
|
|
£ |
£ |
Operating activities |
|
|
|
|
Loss for the
period |
23 |
(266,821) |
(295,855) |
|
Adjustments
for: |
|
|
|
|
Equity-settled
employee benefits |
|
9,324 |
9,479 |
|
Finance
costs |
|
144,234 |
140,967 |
|
|
|
|
|
|
|
|
(113,263) |
(145,409) |
|
Movements in
working capital |
|
|
|
|
Decrease in
receivables |
|
6,987 |
2,674 |
|
Decrease in
payables |
|
(53,451) |
(9,864) |
|
|
|
|
|
Net
cash used in operating activities |
|
(159,727) |
(152,599) |
|
|
|
|
|
Investing activities |
|
|
|
|
Investments and
long term loans |
|
(96,564) |
(84,425) |
|
|
|
|
|
Net
cash used in investing activities |
|
(96,564) |
(84,425) |
|
|
|
|
|
Financing activities |
|
|
|
|
Loans |
|
- |
125,000 |
|
Share issues net
of expenses |
|
- |
493,037 |
|
|
|
|
|
Net
cash generated from financing activities |
|
- |
618,037 |
|
|
|
|
|
Net
(decrease)/increase in cash and cash equivalents |
|
(256,291) |
381,013 |
Cash
and cash equivalents at start of period |
|
388,880 |
7,867 |
|
|
|
|
|
Cash
and cash equivalents at end of period |
17 |
132,589 |
388,880 |
|
|
|
|
|
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 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. During the
year the group depleted its working capital. At 31 March 2018, the group had cash and cash
equivalent reserves of £137,000 and net assets of £12 million and
will need to generate additional financial resources to fund its
planned optimization and development programmes. Based on the
current cash reserves and committed support from its largest
shareholder, Juno Limited, the group has sufficient finance
available for the continuing working capital requirements of the
group on a status quo basis for at least twelve months from the
date of the financial statements.
The group will need to generate additional financial resources
to meet its planned business objectives, progress the ongoing
development of the Parys Mountain project and continue as a going
concern. The plans to phase the development of the project by
undertaking the various optimisation programmes and completing a
prefeasibility or feasibility study to progress the Parys Mountain
Mine towards production require interim funding to finance the
further studies and optimisation programmes and, in the longer
term, senior financing to fund the capital and development costs to
put the Parys Mountain Mine into production.
The group has relied primarily on equity financings to fund its
working capital requirements and on previous occasions the group
has relied on 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 and to
continue as a going concern.
The directors recognise that the continuing operations of the
group are dependent upon its ability to raise adequate financing
and that there is a risk that additional funding may not be
available on a timely basis or on acceptable terms. The directors
are actively pursuing various financing options with certain
shareholders and financial institutions regarding proposals for
financing and have engaged in discussions with a range of
investors, including a number of private equity funds. Whilst these
discussions are not finalised 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. However, given the limited financial resources
currently available, and that there is no guarantee that such
funding will be available in the short term, there is a risk that
the group will not have sufficient financial resources to fund its
short-term project funding requirements, and therefore there exists
a material uncertainty concerning the ability of the group and the
company to continue as a going concern.
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
Standards, amendments and interpretations adopted in the current
financial year:
The adoption of the following standards, amendments and
interpretations in the current year has not had a material impact
on the financial statements of the group or the company:
IAS 7 Statement of Cash Flows: Amendment in respect of the
disclosure initiative
IAS 12 Income Taxes: Amendment in relation to the recognition of
deferred tax assets for unrealised losses
Annual Improvements to IFRSs (2014 - 2016): Clarification of the
scope of IFRS 12 Disclosure of Interests in Other Entities.
Standards, amendments and interpretations in issue but not yet
effective:
|
Effective date |
IAS 19 Employee Benefits: Amendment
in relation to plan amendment, curtailment or settlement. |
1 January 2019. |
IAS 28 Investments in Associates and
Joint Ventures: Amendment in relation to Long-term interests in
Associates and Joint Ventures. |
1 January 2018. |
IFRS 2 Share-based Payment:
Amendment in relation to classification and measurement of
share-based payment transactions. |
1 January 2019. |
IFRS 9 Financial Instruments. |
1 January 2018. |
IFRS 9 Financial Instruments:
Amendment in relation to Prepayment features with negative
compensation. |
1 January 2019. |
IFRS 15 Revenue from Contracts with
Customers. |
1 January 2018. |
IFRS 16 Leases. |
1 January 2019. |
Annual Improvements to IFRSs (2014 -
2016). |
1 January 2018. |
Annual Improvements to IFRSs (2015 -
2017). |
1 January 2019 pending
endorsement. |
Conceptual Framework (Revised) and
amendments to related references in IFRS Standards |
1 January 2020 pending
endorsement. |
IFRIC 22 Foreign Currency
Transactions and Advance Consideration. |
1 January 2018. |
IFRIC 23 Uncertainty over Income Tax
Treatments. |
1 January 2019 pending
endorsement. |
The directors’ impact assessment indicates that the adoption of
the above pronouncements (with the possible exception of IFRS16)
will have no material impact on the financial statements in the
period of initial application other than disclosure. The group is
not yet generating any revenue consequently the implementation of
IFRS15 will have no impact until revenues begin. The directors have
not yet fully assessed the impact IFRS16 on these financial
statements but believe that since the group is a lessee in respect
of mineral leases only, the standard will not be applicable to the
group’s financial statements. IFRS 16 takes effect for financial
years beginning after 1 January
2019.
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 |
|
|
|
|
|
|
|
|
2018 |
2017 |
|
UK |
Sweden |
Canada |
Total |
UK |
Sweden |
Canada |
Total |
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
Expenses |
(109,677) |
- |
- |
(109,677) |
(141,022) |
- |
- |
(141,022) |
Equity-settled
employee benefits |
(9,324) |
- |
- |
(9,324) |
(9,479) |
- |
- |
(9,479) |
Investment income |
121 |
- |
- |
121 |
146 |
- |
- |
146 |
Finance costs |
(144,234) |
(15,033) |
- |
(159,267) |
(140,967) |
(16,824) |
- |
(157,791) |
Exchange rate
loss |
(16) |
(26) |
- |
(42) |
136 |
42 |
- |
178 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the year |
(263,130) |
(15,059) |
- |
(278,189) |
(291,186) |
(16,782) |
- |
(307,968) |
|
|
|
|
|
|
|
|
|
Assets and
liabilities |
|
|
|
|
|
|
|
|
|
31 March 2018 |
31 March 2017 |
|
UK |
Sweden |
Canada |
Total |
UK |
Sweden |
Canada |
Total |
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
Non-current
assets |
15,439,055 |
86,659 |
1 |
15,525,715 |
15,338,627 |
86,659 |
1 |
15,425,287 |
Current assets |
155,792 |
1,111 |
- |
156,903 |
414,655 |
1,241 |
- |
415,896 |
Liabilities |
(3,378,271) |
(280,835) |
- |
(3,659,106) |
(3,282,725) |
(297,570) |
- |
(3,580,295) |
|
|
|
|
|
|
|
|
|
Net
assets/liabilities |
12,216,576 |
(193,065) |
1 |
12,023,512 |
12,470,557 |
(209,670) |
1 |
12,260,888 |
|
|
|
|
|
|
|
|
|
4 Loss before
taxation
The loss
before taxation for the year has been arrived at after
charging/(crediting): |
|
|
2018 |
|
2017 |
|
|
£ |
|
£ |
|
Fees payable to the
group's auditor: |
|
|
|
|
for the audit of the annual
accounts |
22,000 |
|
22,000 |
|
for the audit of subsidiaries'
accounts |
3,000 |
|
3,000 |
|
for other services - taxation
compliance |
- |
|
2,000 |
|
for other services |
- |
|
800 |
|
Directors'
remuneration |
- |
|
- |
|
Foreign exchange
movement |
42 |
|
(178) |
|
|
|
|
|
|
5 Staff costs
The
average monthly number of persons employed (including executive
directors) was: |
|
|
|
|
|
|
|
2018 |
|
2017 |
|
Administrative |
3 |
|
3 |
|
|
3 |
|
3 |
|
|
|
|
|
|
Their aggregate
remuneration was: |
£ |
|
£ |
|
Wages and
salaries |
16,425 |
|
12,630 |
|
Social security
costs |
1,422 |
|
1,325 |
|
Other pension
costs |
- |
|
- |
|
|
|
|
|
|
|
17,847 |
|
13,955 |
|
|
|
|
|
|
The directors did not receive any remuneration during the year.
Further details are provided in the directors’ remuneration report
together with information on share options.
6 Investment income
|
|
2018 |
|
2017 |
|
Loans and
receivables |
|
£ |
|
£ |
|
Interest on bank
deposits |
|
12 |
|
6 |
|
Interest on site
re-instatement deposit |
|
109 |
|
140 |
|
|
|
|
|
|
|
|
|
121 |
|
146 |
|
|
|
|
|
|
|
7 Finance costs
|
|
2018 |
|
2017 |
|
Loans and
payables |
|
£ |
|
£ |
|
Loan interest to Juno
Limited |
|
144,234 |
|
140,967 |
|
Loan interest to
Eurmag AB |
|
15,033 |
|
16,824 |
|
|
|
|
|
|
|
|
|
159,267 |
|
157,791 |
|
|
|
|
|
|
|
For both loans the interest shown is accrued and will be repaid
together with the loan principal.
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 2018 of £1.4 million (2017 -
£1.3 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 £12.5 million unclaimed and available at
31 March 2018 (2017 - £12.5 million).
No deferred tax asset is recognised in respect of these
allowances.
|
2018 |
|
2017 |
|
|
£ |
|
£ |
|
Current tax |
- |
|
- |
|
Deferred tax |
- |
|
- |
|
|
|
|
|
|
Total tax |
- |
|
- |
|
|
|
|
|
|
Domestic
income tax is calculated at 19% of the estimated assessed profit
for the year. |
|
In 2017 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 |
(278,189) |
|
(307,968) |
|
|
|
|
|
|
Tax at the domestic
income tax rate of 19%
(2017 - 20%) |
(52,856) |
|
(61,594) |
|
Tax effect
of: |
|
|
|
|
Expenses that are not
deductible
in
determining taxable result: |
- |
|
- |
|
Equity-settled employee benefits |
1,772 |
|
1,896 |
|
Unrecognised deferred
tax on losses |
51,084 |
|
59,698 |
|
|
|
|
|
|
Total tax |
- |
|
- |
|
|
|
|
|
|
9 Earnings per
ordinary share
|
2018 |
|
2017 |
|
|
£ |
|
£ |
|
Earnings |
|
|
|
|
Loss for the year |
(278,189) |
|
(307,968) |
|
|
|
|
|
|
Number of
shares |
|
|
|
|
Weighted average
number of ordinary shares for the purposes of basic earnings per
share |
177,608,051 |
|
164,276,544 |
|
Shares deemed to be issued for no consideration in respect of
employee options |
|
|
|
|
Weighted average
number of ordinary shares
for the purposes of diluted earnings per share |
177,608,051 |
|
164,276,544 |
|
|
|
|
|
|
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 2018 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 |
£ |
At 31 March 2016 |
14,926,626 |
Additions - site |
60,886 |
Additions - rentals
& charges |
23,310 |
|
|
At 31 March 2017 |
15,010,822 |
Additions - site |
64,856 |
Additions - rentals
& charges |
35,463 |
|
|
At 31 March 2018 |
15,111,141 |
|
|
Carrying
amount |
|
Net book value
2018 |
15,111,141 |
Net book value
2017 |
15,010,822 |
|
|
Included in the additions are mining lease expenses of £11,208
(2017 - £16,366).
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 2018. 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 1000 tonnes per day
over the initial projected mine life of 9 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. The exchange rate used was
US$1.35/£1.00 approximating the rate
at the date of the impairment review. The Scoping Study used a rate
of US$1.25/£1.00.
- 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.
These assumptions are unchanged from those used in the
impairment assessment of the previous year, except that the
exchange rate used in 2017 was US$1.25/£1.00.
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 -32%, zinc price
-8%, lead price -20%, capital expenditure +12%, operating costs
+10%, the discount rate +21% (that is a 21% increase in the
discount rate applied, not an increase of 16 percentage points) and
a reduction in tonnage mined of 10%. The effect of an increased
delay before the commencement of project development would be to
decrease the net present value by 10% (a decrease in rate, as
earlier) 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 land & property |
Plant
& equipment |
Office
equipment |
Total |
Cost |
£ |
£ |
£ |
£ |
At 31 March 2016, 2017
and 2018 |
204,687 |
17,434 |
5,487 |
227,608 |
Depreciation |
|
|
|
|
At 31 March 2016, 2017
and 2018 |
- |
17,434 |
5,487 |
22,921 |
Carrying
amount |
|
|
|
|
At 31 March 2016, 2017
and 2018 |
204,687 |
- |
- |
204,687 |
Company |
Freehold land & property |
Plant
& equipment |
Office
equipment |
Total |
Cost |
£ |
£ |
£ |
£ |
At 31 March 2016, 2017
and 2018 |
- |
17,434 |
5,487 |
22,921 |
Depreciation |
|
|
|
|
At 31 March 2016, 2017
and 2018 |
- |
17,434 |
5,487 |
22,921 |
Carrying
amount |
|
|
|
|
At 31 March 2016, 2017
and 2018 |
- |
- |
- |
- |
12 Subsidiaries - company
The subsidiaries of the company at 31
March 2018 and 2017 were as follows:
Name of company |
Country of
incorporation |
Percentage owned |
Principal activity |
Parys Mountain Mines
Limited1 |
England & Wales |
100% |
Development of the
Parys Mountain mining property |
Parys Mountain Land
Limited1 |
England & Wales |
100% |
Holder of part of the
Parys Mountain property |
Parys Mountain Heritage
Limited1 |
England & Wales |
100% |
Holder of part of 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 (Ace)
Limited1 |
England & Wales |
100% |
Dormant |
Registered office addresses:
1. - Parys Mountain, Amlwch, Anglesey, LL68 9RE
2. - Fort Anne, Douglas, Isle of
Man, IM1 5PD
3. - Box 1703, 111 87 Stockholm,
Sweden
13 Investments - company
|
Shares at cost |
|
Capital contributions |
|
Total |
|
|
£ |
|
£ |
|
£ |
|
At 1 April 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 |
|
Advanced |
- |
|
96,564 |
|
96,564 |
|
|
|
|
|
|
|
|
At 31 March 2018 |
104,025 |
|
14,221,091 |
|
14,325,116 |
|
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 |
|
£ |
£ |
£ |
At 1 April
2016 |
1 |
86,659 |
86,660 |
Addition during
period |
- |
- |
- |
At 31 March
2017 |
1 |
86,659 |
86,660 |
Addition during
period |
- |
- |
- |
|
|
|
|
At 31 March
2018 |
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 £1.
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 until June 2021 a right of first refusal 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 |
|
|
|
|
|
|
2018 |
|
2017 |
|
|
|
|
|
|
£ |
|
£ |
|
|
|
|
|
Site re-instatement
deposit |
123,227 |
|
123,118 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
£ |
|
£ |
|
£ |
|
£ |
|
Other |
19,790 |
|
23,603 |
|
5,772 |
|
12,759 |
|
|
|
|
|
|
|
|
|
|
The carrying value of the receivables approximates to their fair
value.
17 Cash and cash equivalents
|
Group |
|
Company |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
£ |
|
£ |
|
£ |
|
£ |
|
Held in sterling |
136,001 |
|
389,734 |
|
132,589 |
|
388,880 |
|
Held in Canadian
dollars |
1 |
|
1,318 |
|
- |
|
- |
|
Held in US
dollars |
417 |
|
467 |
|
- |
|
- |
|
Held in Swedish
krona |
694 |
|
774 |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
137,113 |
|
392,293 |
|
132,589 |
|
388,880 |
|
|
|
|
|
|
|
|
|
|
The carrying value of the cash approximates to its fair
value.
18 Trade and other payables
|
Group |
|
Company |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
£ |
|
£ |
|
£ |
|
£ |
|
Trade payables |
(17,631) |
|
(46,557) |
|
(11,383) |
|
(46,572) |
|
Other accruals |
(48,239) |
|
(68,000) |
|
(42,738) |
|
(60,999) |
|
|
|
|
|
|
|
|
|
|
|
(65,870) |
|
(114,557) |
|
(54,121) |
|
(107,571) |
|
|
|
|
|
|
|
|
|
|
The carrying value of the trade and other payables approximates
to their fair value.
19 Loans
|
Group |
|
Company |
|
|
2018 |
|
2017 |
|
2018 |
|
2017 |
|
|
£ |
|
£ |
|
£ |
|
£ |
|
Loan from Juno
Limited |
(3,262,401) |
|
(3,118,168) |
|
(3,262,401) |
|
(3,118,168) |
|
Loan from Eurmag
AB |
(280,835) |
|
(297,570) |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
(3,543,236) |
|
(3,415,738) |
|
(3,262,401) |
|
(3,118,168) |
|
|
|
|
|
|
|
|
|
|
Juno: 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: There has been no change in the loan principal
during the year. 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.
Changes in liabilities arising from
financing activities
|
1 April 2017 |
Cash flows |
Non cash movements |
31 March 2018 |
|
£ |
£ |
£ |
£ |
Loan from Juno
Limited |
(3,118,168) |
- |
(144,233) |
(3,262,401) |
Loan from Eurmag
AB |
(297,570) |
- |
16,735 |
(280,835) |
|
|
|
|
|
|
(3,415,738) |
- |
(127,498) |
(3,543,236) |
|
|
|
|
|
The Juno loan relates to the group and company. The Eurmag loan
relates to the group only. The non cash movements in loans
represent accrued interest together with a foreign exchange gain of
£31,722 in respect of the loan from Eurmag AB.
20 Long term provision
|
Group |
|
|
|
|
|
|
2018 |
|
2017 |
|
|
|
|
|
|
£ |
|
£ |
|
|
|
|
|
Provision for site
reinstatement |
(50,000) |
|
(50,000) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The provision for site reinstatement covers the estimated costs
of reinstatement at the Parys Mountain site of the work done and
changes made by the group up to the date of the accounts. These
costs would be payable on completion of mining activities (which is
estimated to be 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 of
1p |
Deferred shares of
4p |
Total |
|
Issued and
fully paid |
Nominal
value £ |
Number |
Nominal
value £ |
Number |
Nominal
value £ |
|
|
|
|
|
|
|
|
At 31 March 2016 |
1,606,081 |
160,608,051 |
5,510,833 |
137,770,835 |
7,116,914 |
|
Shares issued for
cash |
170,000 |
17,000,000 |
- |
- |
170,000 |
|
At 31 March 2017
and
31 March 2018 |
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.
No shares were issued during the year.
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; (all
the options outstanding in respect of this plan lapsed during the
year 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.
|
|
2018 |
|
|
2017 |
|
|
Options |
Weighted average exercise price in pence |
Remaining contractual life in years |
Options |
Weighted average exercise price in pence |
Remaining contractual life in years |
Outstanding at
beginning of period |
8,000,000 |
11.72 |
|
4,500,000 |
19.27 |
|
Granted during
the period |
- |
- |
|
3,500,000 |
2.00 |
|
Forfeited during
the period |
- |
- |
|
- |
- |
|
Exercised during
the period |
- |
- |
|
- |
- |
|
Expired during
the period |
3,800,000 |
- |
|
- |
- |
|
Outstanding at
the end of the period |
4,200,000 |
2.50 |
3.1 |
8,000,000 |
11.72 |
2.5 |
Exercisable at
the end of the period |
4,200,000 |
2.50 |
3.1 |
4,500,000 |
19.27 |
0.9 |
There were expenses in respect of equity-settled employee
remuneration for the year ended 31 March
2018 of £9,324 (2017 – £9,479). This represents the
remainder of the charge in relation to options granted in
September 2016.
A summary of options granted and outstanding, all of which are
over ordinary shares of 1 pence, is
as follows:
Scheme |
Number |
Nominal value £ |
Exercise price |
Exercisable from |
Exercisable until |
|
|
|
|
|
|
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 2017 |
30
September 2021 |
|
|
|
|
|
|
Total |
4,200,000 |
42,000 |
|
|
|
23 Results attributable to
Anglesey Mining plc
The loss after taxation in the parent company amounted to
£266,821 (2017 loss £295,855). 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 20 July 2018 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 book value 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 £8,686 (2017 - £9,138) and if
it were to move in favour of sterling by a similar amount there
would be a gain of £10,616 (2017 - £11,168). 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 £25,530 (2017 - £27,052) and if it
were to move in favour of sterling by a similar amount there would
be a loss of £31,204 (2017 - £33,063). 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 assets |
Loans & receivables |
|
31 March 2018 |
31 March 2017 |
31 March 2018 |
31 March 2017 |
|
£ |
£ |
£ |
£ |
Investments |
1 |
1 |
- |
-
|
Deposit |
- |
- |
123,227 |
123,118 |
Other
receivables |
- |
- |
19,790 |
23,603 |
Cash and cash
equivalents |
- |
- |
137,113 |
392,293 |
|
- |
- |
|
|
|
1 |
1 |
280,130 |
539,014 |
|
|
|
|
|
|
Financial liabilities measured at amortised
cost |
|
|
|
31 March 2018 |
31 March 2017 |
|
|
|
£ |
£ |
|
|
Trade
payables |
(17,631) |
(46,557) |
|
|
Other
payables |
(48,239) |
(68,000) |
|
|
Loans |
(3,543,236) |
(3,415,738) |
|
|
|
|
|
|
|
|
(3,609,106) |
(3,530,295) |
|
|
|
|
|
|
|
Company |
|
|
|
|
|
Loans & receivables |
Financial liabilities measured at amortised
cost |
|
31 March 2018 |
31 March 2017 |
31 March 2018 |
31 March 2017 |
|
£ |
£ |
£ |
£ |
Other
receivables |
5,772 |
12,759 |
- |
- |
Cash and cash
equivalents |
132,589 |
388,880 |
- |
- |
|
|
|
|
|
Trade
payables |
- |
- |
(11,383) |
(46,572) |
Other
payables |
- |
- |
(42,738) |
(60,999) |
Loan |
- |
- |
(3,262,401) |
(3,118,168) |
|
|
|
|
|
|
138,361 |
401,639 |
(3,316,522) |
(3,225,739) |
|
|
|
|
|
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. 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 £280,835 at the year end
(2017 – £297,570) – 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 £11,208 is payable for the
year beginning 23 March 2017; the
base part of this rent increases to £20,000 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
£5,000. 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 2018 -
£17,126; between 1 April 2019 and
31 March 2024 - £91,076. 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 (2017 - nil).
29 Contingent liabilities
There are no contingent liabilities (2017 - nil).
30 Events after the period
end
There are no events after the period end to report.
Notice of Annual General Meeting
Notice is given that the 2018 annual general meeting of Anglesey
Mining plc will be held at the offices of the company's lawyers,
DLA Piper UK LLP, 3 Noble Street, London, EC2V 7EE on 20
September 2018 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
- To receive the annual accounts and directors' and auditor’s
reports for the year ended 31 March
2018.
- To approve the directors' remuneration report for the year
ended 31 March 2018.
- To approve the directors' remuneration policy in the directors’
remuneration report for the year ended 31
March 2018.
- To reappoint John F. Kearney as
a director.
- To reappoint Bill Hooley as a
director.
- To reappoint David Lean as a
director.
- To reappoint Howard Miller as a
director.
- To reappoint Danesh Varma as a
director.
- To reappoint Mazars LLP as auditor.
- 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 £590,000, provided that (unless previously revoked,
varied or renewed) this authority shall expire on 31 December 2019, 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 11 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 12(a) above, up to an
aggregate nominal amount of £440,000
and (unless previously revoked, varied or renewed) this power
shall expire on 31 December 2019,
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
31 July 2018
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 17
September 2018 (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 17 September
2018 (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 20 July 2018 (being the last practicable date
before the publication of this notice), the issued share capital
consists of 177,608,051 ordinary shares of £0.01 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 20 July
2018 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 £100
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
John F.
Kearney |
Irish, aged 67, chairman, is a
mining executive with more than 40 years’ experience in the mining
industry and is chairman and CEO of Labrador Iron Mines Holdings
Limited. He is also chairman of Canadian Zinc Corporation, Buchans
Resources Limited, Xtierra plc and Conquest Resources Limited. He
is a director of 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.
He is resident in Canada. |
Bill
Hooley |
aged 71, chief executive, is a
mining engineering graduate from 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
Varma |
Canadian, aged 68, finance director
and company secretary is a 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 Buchans Resources Limited, Xtierra Inc. and Conquest
Resources Limited. |
David
Lean |
Australian, aged 71, non-executive
director, is a chartered accountant. He has over 30 years’
experience in the commercial 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, remuneration and nomination committees. |
Howard
Miller |
aged 74, non-executive director, a
lawyer with over 40 years’ 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 a member
of the remuneration, audit and nomination committees and the senior
independent director. |
Glossary
AGM - the annual general meeting to be held on 20 September 2018
DFS - Definitive Feasibility Study
DMS - dense media separation, a process for the elimination of
low-density waste from crushed ore
EIA - environmental impact assessment
GIAB - Grangesberg Iron AB, a privately owned Swedish
company
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
PFS - Preliminary Feasibility Study
tonne - metric tonne of 2,204.6 pounds avoirdupois
SEK - Swedish Krona
tpd - tonnes per day
Anglesey Mining plc, Parys Mountain, Amlwch, Anglesey, LL68
9RE
Phone 01407 831275
mail@angleseymining.co.uk
London office
Painters’ Hall Chambers
8 Little Trinity Lane, London,
EC4V 2AN
Phone 07740 932766
Registrars
Link Asset Services
The Registry, 34 Beckenham Road,
Beckenham, Kent BR3 4TU
Share dealing phone 0371 664 0445
Helpline phone 0371 664 0300
Calls cost 12p per minute plus your phone company’s access charge.
If you are outside the United
Kingdom, please call +44 371 664 0300. Calls outside the
United Kingdom will be charged at
the applicable international rate. Lines are open between 9.00am and 5.30pm, Monday to Friday
excluding public holidays in England and Wales
Registered office
Tower Bridge House, St. Katharine’s Way, London, E1W 1DD
www.angleseymining.co.uk
Company registered number 01849957