Anglesey Mining plc - Annual Report 2019
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 a
further optimisation study is currently underway.
12% of Labrador Iron Mines Holdings Limited which holds direct
shipping iron ore deposits in Labrador and Quebec.
A 8.7% interest in, and management rights to, the Grangesberg
Iron project in Sweden, together
with a right of first refusal to increase its interest to
58.8%.
Chairman’s statement
To Anglesey Shareholders
Metal prices are a key factor in the outlook for the mining and
mineral exploration industry as a whole and for Anglesey Mining in
particular. Despite the current geopolitical uncertainty caused by
fears of trade wars and tariffs, there is a general expectation of
a continued positive outlook for base metals, particularly for zinc
and copper, and more recently for iron ore.
The first half of 2018 saw a continued improvement in base metal
prices which stalled mid-year as the optimism provided by shrinking
metal inventories and generally declining mine production was
overshadowed by the growing threat of a US-China trade war,
tariffs, potential interest rate hikes in the US, uncertainty in
Europe and a general slowdown in
the global economy. These conditions caused most metal prices to
retreat in the second half of 2018, before stabilizing towards year
end
After having risen consistently for almost two years, the prices
of zinc and copper began falling in mid-2018. Prices softened
throughout the second half of 2018 and the first half of 2019 in
response to the US/China trade
conflict and concerns of slowing global economic growth. The zinc
price improved through the first quarter of 2019, reaching a high
of US$1.37 per pound (US$3,000/tonne) in mid-April, before weakening in
the second quarter of 2019 as the opening of several large new zinc
mines negatively impacted the price.
The expectations for supply and demand fundamentals are positive
for 2019. According to the International Lead and Zinc Study Group
global demand for refined zinc metal is expected to rise in the
second half of 2019 and the expectation is that global demand for
refined zinc will exceed global supply, drawing down stocks.
Meanwhile, global demand for lead increased slightly year on year
as demand for batteries for the new vehicle market increased.
Metal stocks on the LME remain below long-term average levels.
With low or no copper mine production growth, the expansion of
China’s smelting capacity and its demand for imported concentrates
and the recent reduction in copper concentrate treatment charges,
the outlook for the remainder of 2019 is for the copper price to
trend upwards.
During the last year the substantial changes in the iron ore
market favouring higher quality (+65% Fe) product has continued to
result in very healthy premiums for higher grade product. Over the
first half of 2019, the base price of 62% Fe jumped to a five year
high of over US$120 per tonne, as a
result of tailings dam failures affecting the Brazilian operations
of Vale and a cyclone temporarily disrupting Australian production
of both Rio and BHP.
Parys Mountain – Moving steadily forward
In 2017 a new Scoping Study on the Parys Mountain
copper-lead-zinc project located on the island of Anglesey in
North Wales, was prepared by Micon
International Limited 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, annually over an initial mine life
of eight years.
The Scoping Study demonstrates a viable mine development and a
healthy financial rate of return based on copper prices of
$US2.50 per pound, zinc of
$US1.25 per pound and lead of
$US1.00 per pound, generating an
overall net smelter return of $US270
million with an IRR of 28% and an NPV10 of $US43 million. 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 NPV indicated would be
$52 million, or £42 million, with an
IRR of 30%.
Following completion of the positive 2017 Scoping Study,
Anglesey has been working to progress the Parys Mountain project
towards production. The Study recommended further work as interim
steps towards undertaking a feasibility study, 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.
In late 2018, Anglesey entered into a Project Development and
Cooperation Agreement with QME Mining Technical Services, a
division of QME Ltd, to carry out an agreed programme of design,
engineering and optimisation studies relating to the future
development of Parys Mountain. The Agreement with QME will see the
completion of a substantial part of the recommended further work on
mine planning and design and project optimisation at no cost to
Anglesey and at no dilution to Anglesey’s current shareholders.
The primary objective is to determine the optimum production
plan for Parys Mountain, utilising all available and potential
means of accessing both the indicated resources and inferred
resources, at various “cut-off” grades.
As part of its work QME is developing a revised mine model with
the objective of incorporating more of the indicated resources and
some of the inferred resources, including part of the higher-grade
Engine Zone inferred resources, into the earlier years of the mine
plan with the intention of bringing forward cashflows and
increasing the projected life of the Parys Mountain mine to at
least 10 years, with potential positive outcomes on the project
economics.
QME has undertaken a detailed review of various development and
mining alternatives for Parys Mountain. In its preliminary work to
date, QME has identified the potential for improvements in the
development plans contained in the 2017 Scoping Study which 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.
The QME studies have suggested that the project can be further
improved if the potential mineable tonnage can be increased by
using a lower cut-off grade and generating a revised mine
development plan. This second stage of the process is ongoing with
completion scheduled for the end of 2019. Subject to financing
being available, this work would then form the basis for
commissioning an updated scoping or preliminary feasibility
study.
Following delivery of the optimisation studies, and the
subsequent completion of a feasibility study, QME will have the
option to undertake at QME’s investment, the mine development
component of the Parys Mountain project, including decline and
related underground development and shaft development, in
consideration of which QME would earn a 30% undivided joint venture
interest in the Parys Mountain project. If exercised this would
significantly reduce the capital cost to the group for the
development of the mine.
Grangesberg Iron
Anglesey continues to manage the Grangesberg iron ore project in
Sweden, about 200 kilometres
north-west of Stockholm. Until its
closure in 1989 due to then prevailing market conditions, the
Grangesberg mine had produced in excess of 150 million tonnes of
iron ore. A Technical Report prepared by Roscoe Postle Associates
Inc in 2014 estimated a resource 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 and concluded that the
Grangesberg deposit hosts a significant iron resource that has
excellent potential for expansion at depth.
The high-quality product that Grangesberg will be expected to
produce, which would attract premium prices in the current iron ore
market, together with the potential for sales within the adjacent
European markets, make Grangesberg more attractive than many other
undeveloped iron ore projects.
Labrador Iron
The group holds a 12% interest in Labrador Iron Mines Holdings
Limited (LIM) which owns extensive iron ore resources in its
Schefferville Projects in Labrador
and in Quebec, Canada. LIM has not
undertaken mining operations since 2013 but maintains its iron ore
assets on a stand-by care and maintenance basis. The Houston property, which is planned as LIM’s
next direct shipping mine project, is situated in Labrador about 25 km southeast of the town of
Schefferville, and is estimated to
contain a resource of 40.6 million tonnes grading 57.6% iron.
Subject to securing financing, LIM plans to pursue development of
the Houston Project and resume mining operations when economic
conditions warrant. When in full production, the Houston deposits are expected to produce
consistent saleable product of about 2 million tonnes per year,
with an initial mine-life of 10 years.
Outlook
We remain confident that demand for metals will remain strong
and the outlook for commodity prices will remain positive for the
foreseeable future. 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 Parys Mountain revenue, remains very
positive.
We will also continue to review the commercial and development
opportunities for our iron ore projects as the medium-term outlook
for iron ore is also positive.
Anglesey also plans to pursue new opportunities for mineral
exploration and development projects, with a focus on advanced
copper and other base metal exploration or development
projects.
I would like to thank the current directors for their ongoing
diligence and support in moving the Parys Mountain mine project
forward and again thank all our shareholders for their continued
confidence and support.
John F. Kearney
Chairman
30 July 2019
Strategic report - operations
Principal activities and business review
Anglesey Mining is engaged primarily in the business of
exploring and evaluating its wholly owned Parys Mountain zinc,
lead, copper project in North
Wales. In 2017 a new Scoping Study prepared by Micon
International Limited and Fairport Engineering Ltd. demonstrated a
viable mine development and a healthy financial rate of return.
In late 2018 QME, an Irish contracting and consulting group
commenced an optimisation project of this Scoping Study. Site
activities during the year have continued to be limited to care and
maintenance.
In addition, under various agreements the group participates in
the management of the Grangesberg iron ore property in Sweden in which it increased its holding to
9%, following a small investment in late 2018, and a right of first
refusal to acquire a further 50% ownership interest. The group also
has a 12% holding in the Labrador Iron Mines in eastern
Canada, currently operating in
care and maintenance.
During 2019 the company made a private placement of
approximately 9.4 million new shares to raise a gross sum of
£200,000.
The group’s objective remains to phase the development and
financing of the Parys Mountain project by undertaking various
studies, 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 in
the indicated category at 6.9% combined base metals 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
International Limited and Fairport Engineering Ltd. The Scoping
Study demonstrates a viable mine development mining 1000 tpd to
produce lead, zinc and copper concentrates and yielding a healthy
financial rate of return.
Development Plan – 2017 Scoping
Study
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 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 processing plant proposed in the 2017 Scoping Study 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.
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, was projected 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% discount rate, using metal prices of $1.25 per pound for zinc, $1.00 per pound for lead, $2.50/pound for copper, $17.50 per ounce for silver and $1,275 per ounce for gold and at an exchange rate
of £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 Parys Mountain 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 $43.2 million, or
£34.6 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 |
QME Optimization Studies
The 2017 Scoping Study recommended further work as interim steps
towards undertaking a feasibility study, including more detailed
mine planning and design, more detailed engineering studies,
additional metallurgical test work and review of tailings
management and environmental and planning permissions, all of which
would normally require new and further financing.
In late 2018 Anglesey announced that it had entered into a
Project Development and Cooperation Agreement with QME Mining
Technical Services, a division of QME Ltd, to carry out an agreed
programme of engineering and optimisation studies relating to the
future development of Parys Mountain.
Summary of QME Work to-date.
QME has made significant progress including detailed reviews of
mine development capital and mine operating costs of the basic mine
plan using their extensive experience in mine development
throughout Europe.
In its preliminary work to date, QME has identified the
potential for improvements in the development plans contained in
the 2017 Scoping Study. The QME preliminary work has indicated
that, based on the projected life-of-mine operating cost, the NSR
cut-off for both the 2012 Mineral Resource Estimate and the 2017
Scoping Study was too high and that the optimum case can be
improved if the potential mineable tonnage can be increased using a
lower NSR cut-off.
QME developed a model to estimate the capital cost of contract
mine development and also to estimate the mine operating costs for
the life of mine during operations using either a contractor or
direct hire labour with contractor management, as two separate
cases. The purpose and benefit of using a contractor for initial
mine development is to defer capital expenditure on mining
equipment and also to ensure an efficient project start-up and mine
ramp-up with trained and experienced mine development management
and personnel.
The QME review work completed to date has generated revised mine
development capital and operating costs for a number of cases that
now enables support for a lower cut-off. The Micon 2012 Mineral
Resource Estimate generated an indicated resource of 2.1 million
tonnes using 2012 metal prices and a cut-off of $60/t. This was the resource used in the
2017 Scoping Study.
By using a lower cut off and updated prices QME identified
mineable material of approximately 5M
tonnes at $48/t cut-off, with an
indicated NSR of $93/t. This will
then give an opportunity to develop a new mining plan by
re-defining the mining shapes and the stoping plan, to be followed
by a new development plan and schedule, which is expected to
demonstrate a longer mine life.
The 2017 Scoping Study was based on the initial development and
production from the White Rock
zone using a newly developed decline eventually leading to
development of the deeper Engine Zone and then the rehabilitation
and use of the Morris Shaft as a hoisting facility. The QME review
examined whether different approaches to accessing the orebodies,
particularly by early dewatering, rehabilitation and
recommissioning of the Morris Shaft, could provide early access to
the higher-grade Engine zone resources.
QME estimated the cost of the shaft pump out and refurbishment
in order to access the 280m level for
exploration purposes. A similar exercise was carried out to
estimate the cost of deepening the shaft from the current
300m level down to 450m to permit in-shaft hoisting of ore after
initial production via the decline. It was confirmed that the shaft
will need to be refurbished for ore hoisting purposes, but the
potential utilisation of the shaft for early production would
require additional tonnage above that contemplated in the original
plan in the scoping study.
It was originally envisaged that the QME Optimisation Study
would be completed by the end of June
2019. The preliminary phase of the exercise has been
completed. The QME studies have suggested that the project can be
further improved if the mineable tonnage can be increased.
QME has suggested that additional studies are carried out and this
second stage of the process remains ongoing.
These additional studies will look at utilising some of the
inferred resources into the mining plan, continuing review of
cut-off grades and use of updated metal prices and it is expected
that this will generate a significant increase of tonnage in the
mineable tonnage in any future 2019 mining model. 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 is useful to include some of this inferred resource for
comparative financial modelling.
It is now expected that these additional studies will be
completed by the end of 2019 and, subject to financing being
available, would then form the basis for commissioning of an
updated scoping study or preliminary feasibility study.
Agreement with QME
QME Limited is based in Navan,
County Meath, Ireland from which
it operates several divisions and provides a wide range of services
in the fields of both mine development and mine operations to the
local and international mining community.
QME Mining Technical Services division undertakes contract
mining projects and employs an ‘in-house’ team of highly
experienced operations managers, underground supervisors, miners,
fitters and electricians. QME has carried out both large- and
small-scale underground mine development contracts, providing all
technical evaluation and budgeting services, personnel, management,
equipment and maintenance.
Under the Development Co-Operation Agreement with QME, the
Company has agreed to grant QME various rights and options relating
to the future development of Parys Mountain. On completion of the
optimisation study and delivery to Anglesey of the results
thereof:
(i)
the Company will award QME, on an exclusive basis, contracts for
the development of the decline and underground mine development,
including rehabilitation of the shaft. This will be done on terms
to be agreed following a decision by Anglesey to proceed with the
development of Parys Mountain;
(ii)
In the event Anglesey and QME are not able to agree terms the
Company may offer such contracts to third parties, subject to a
right of first refusal in favour of QME, and subject to a payment
by the Company to QME, upon the award of such contracts to a
third-party, of a break-fee; and
(iii) In
addition, the Company will grant to QME the right and option, upon
completion of a Prefeasibility Study (“PFS”), to undertake at QME’s
cost and investment, the mine development component of the Parys
Mountain project, including decline and related underground
development and shaft development, with a scope to be agreed, to
the point of commencement of production, in consideration of which
QME would earn a 30% undivided joint venture interest in the Parys
Mountain project.
Mineral Exploration Potential at Parys
Mountain
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 reports and releases.
Grangesberg Iron AB
The Grangesberg iron ore project 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, the Grangesberg mine had
produced in excess of 150 million tonnes of iron ore.
The group now holds a direct 8.7% interest in Grangesberg Iron
AB (GIAB) and a right of first refusal over 50.1% 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 resource estimate for the Grangesberg Mine of 115.2
million tonnes at 40.2% Fe in the indicated category and 33.1
million tonnes at 45.2% Fe in the inferred category. RPA concluded
that the Grängesberg iron ore deposit hosts a significant iron
resource that has excellent potential for expansion at depth.
During the last year the substantial changes in the iron ore
market favouring higher grade quality (+65% Fe) product has
continued to result in very healthy premiums for higher grade
product. Additionally, during this first half of 2019, following
production problems that have developed in Brazil as a result of a number of tailings dam
failures, the base price of 62% Fe has increased significantly.
The +67% Fe high-quality product expected to be produced from
Grangesberg, together with the recent announcement by LKAB,
Sweden’s largest iron ore producer, that its flagship Kiruna
project in northern Sweden will
have a shorter life than originally planned, makes the interest in
developing the Grangesberg project, albeit at significant capital
cost much more likely and make Grangesberg more attractive than
many other undeveloped iron ore projects.
Labrador Iron
The group has an investment holding of 12% (2018 -12%) in
Labrador Iron Mines Holdings Limited. LIM owns extensive iron ore
resources 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 that would be complementary to or provide synergies
with the group’s existing projects within the financing capability
likely to be available to the group. The directors have identified
copper and other VMS projects as the most potentially attractive
and the group continues to evaluate a number of early stage
opportunities.
Performance
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 and the market sentiment
for investment in mining and mineral exploration companies. 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
2019 after tax was £234,621 compared to a loss of £278,189
in the 2018 fiscal year. The administrative and other costs
excluding investment income and finance charges were £75,538
compared to £109,677 in the previous year.
During the year there were no additions to fixed assets (2018 -
nil) and £54,747 (2018 - £100,319) was capitalised in respect of
the Parys Mountain property as mineral property exploration and
evaluation.
At 31 March 2019 the group held
mineral property exploration and evaluation assets with a carrying
value of £15.2 million. These carrying values are supported by the
results of the 2017 Scoping Study and 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
2019 was £6,012 (2018 - £137,113) the reduction being due to
ongoing operating and capital expenses. After year end a loan of
£100,000 was received from Juno Limited and the group also made a
placement for cash of new shares resulting in an inflow after fees
of £180,000.
At 31 March 2019 the company had
177,608,051 ordinary shares in issue, unchanged from the previous
year. At 18 July 2019 there were
186,975,732 ordinary shares in issue.
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 2019 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
usage 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
The group has relied on equity financing to fund its working
capital requirements and will need to generate additional financial
resources to fund future planned exploration programs.
On previous occasions and during the year the group has relied
upon its largest shareholder, Juno Limited, for financial support
and may be required to do so in the future to ensure the group will
have adequate funds for its current activities. In the absence of
support from Juno Limited the group would be dependent on the
proceeds of share issues or other sources of funding. Developing
the Parys project will be dependent on raising further funds from
various sources.
There is no assurance that the group will continue to obtain
additional financial resources and/or achieve positive cash flows
or profitability.
Exploration and development
Exploration for minerals and development of mining operations
involve risks, many of which are outside the group’s control.
Exploration by its nature is subject to uncertainties and
unforeseen or unwanted results are always possible. Mineral
exploration and development is a speculative business,
characterized by a number of significant risks including, among
other things, unprofitable efforts resulting not only from the
failure to discover mineral deposits but also from finding mineral
deposits that, though present, are insufficient in quantity and
quality to return a profit from production.
Substantial expenditures are required to develop the mining and
processing facilities and infrastructure at any mine site. No
assurance can be given that a mineral deposit can be developed to
justify commercial operations or that funds required for
development can be obtained on a timely basis and at an acceptable
cost. There can be no assurance that the group’s current
development programs will result in profitable mining operations..
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 prices
The prices of metals fluctuate widely and are affected by many
factors outside the group’s control. The relative prices of metals
and future expectations for such prices have a significant impact
on the market sentiment for investment in mining and mineral
exploration companies. Metal price fluctuations may be either
exacerbated or mitigated by currency fluctuations which affect the
amount which might be received by the group in sterling.
Foreign exchange
LIM is a Canadian company; Angmag AB and GIAB are Swedish
companies. Accordingly, the value of the group’s holdings in these
companies is affected by exchange rate risks. Operations at Parys
Mountain are in the UK and exchange rate risks are minor. Most of
the cash balance at the year end was held in sterling – see notes
17 and 24.
Permitting, environment and social
The group holds planning permissions for the development of the
Parys Mountain property but further environmental studies and
assessments and various approvals and consents will be required to
carry out proposed activities and these may be subject to various
operational conditions and reclamation requirements.
Employee and personnel
The group is dependent on the services of a small number of key
executives specifically the chairman, chief executive and finance
director. The loss of these persons or the group’s inability to
attract and retain additional highly skilled and experienced
employees for any areas in which the group might engage may
adversely affect its business or future operations.
Brexit
In the event that the UK leaves the European Union, the
directors believe that the effect on the specific operations of the
group would not be material.
This report was approved by the board of directors on
30 July 2019 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
2019.
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 31.0% of the company’s ordinary
share capital. The company has a controlling shareholder agreement
and working capital agreement with Juno and note 19 sets out
movements under this working capital agreement. There was none
during the year however £100,000 was advanced on 2 April 2019. Apart from any 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 £300,087 at the year end
(2018 – £280,835). See also note 25.
There are no other contracts of significance in which any
director has or had during the year a material interest.
Substantial shareholders
At 18 July 2019 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
31% 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 £620,000 (62,000,000 ordinary shares) which is
approximately one third of the total issued ordinary share capital
of the company as at 18 July 2019.
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 £460,000 (46,000,000
ordinary shares). This aggregate nominal amount represents
approximately 25% of the issued ordinary share capital of the
company at 18 July 2019. 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 2020. The
directors intend to seek renewal of this authority at future annual
general meetings.
Rights and obligations attached to shares
The rights and obligations attached 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 (2018 – 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 and at 31 March 2019 had cash and cash equivalent
reserves of £6,012 and net assets of £11.8 million. Immediately
after the year end the group received £100,000 from Juno Limited
under a long-running working capital agreement. A further £180,000
net was received as a result of a placing of new shares in
May 2019. Based on the current cash
reserves and the committed support of Juno, 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 and its
largest shareholder Juno Limited to fund its working capital
requirements 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
A loan of £100,000 was received from Juno Limited on
2 April 2019 under the terms of a
working capital agreement.
On 17 May 2019, 9,367,681 new
ordinary shares, representing approximately 5.3% of the company’s
current issued share capital, were placed with an institution at a
price of 2.135 pence per share to
raise a total of £200,000 gross and £180,000 net.
Otherwise there are no events after the period end 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 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, are 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 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.
This report was approved by the board of directors on
30 July 2019 and signed on its behalf
by:
Danesh Varma
Company Secretary
Independent auditors 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 2019 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 2019 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 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 and are in the process of getting the Parys Mountain mining
project ready to move into development. Its business model requires
generation of additional financial resources to progress the
ongoing development of the Parys Mountain project.
At 31 March 2019 the group and
parent company had net current liabilities of £61k and £56k
respectively and cash and cash equivalent reserves of £6k and £4k.
Subsequent to the year end, the group has received a £100k loan
from its major shareholder, Juno Limited and issued further shares
with net proceeds of £180k. The group therefore has sufficient
resources to support its on-going non-project related expenditure
for the foreseeable future, however the current level of resources
may not be sufficient to finance the short-term project needs.
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, as
described in Note 2, until the group secures sufficient investment
for short-term funds required for the additional studies and
ultimately for the production phase in the longer term, , a
material uncertainty exists that may cast a significant doubt on
the group’s and parent company’s ability to continue as a going
concern.
Our opinion is not modified in respect of this matter.
The impact of uncertainties due to United Kingdom exiting the European Union on
our audit
The Directors' view on the impact of Brexit is disclosed on page
8.
The terms on which the United
Kingdom may withdraw from the European Union are not clear,
and it is therefore not currently possible to evaluate all the
potential implications to the group and parent company's trade,
customers, suppliers and the wider economy.
We considered the impact of Brexit on the group and parent
company as part of our audit procedures, applying a standard firm
wide approach in response to the uncertainty associated with the
group and parent company's future prospects and performance.
However, no audit should be expected to predict the unknowable
factors or all possible implications for the group and parent
company and this is particularly the case in relation to
Brexit.
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 7 and 8
that describe the principal risks and explain how they are being
managed or mitigated;
- the directors’ confirmation set out on page 7 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 10 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 10 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.
In addition to the matter described in the Material Uncertainty
Related to Going Concern section, we summarise below other key
audit matters in forming our audit opinion above, together with an
overview of the principal audit procedures performed to address
each matter and, where relevant, key observations arising from
those procedures.
These matters, together with our findings, were communicated to
those charged with governance through our Audit Completion
Report.
Key audit matter |
Our response |
Impairment of
exploration and evaluation asset (group)
The group’s accounting policy in respect of its exploration and
evaluation asset is set out under “mineral property exploration and
evaluation costs” and its accounting policy in respect of
impairment is set out under “impairment of tangible and intangible
assets” in Note 2 to the financial statements.
The group has held rights to explore and mine the Parys Mountain
site for a number of years and have completed a further scoping
study in 2017 reaffirming the facts from old reports. As indicated
in the study reports, there are still further studies to optimise
and enhance the project ahead of development, some of which are
currently underway.
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 the group’s
ability to raise finances. |
Our audit procedures
included, but were not limited to:
Based on the work performed above, no impairment to the exploration
and evaluation asset was noted. |
Impairment of
investment in subsidiary (company)
The group’s accounting policies in respect of investments and
impairment of investments are set out under “investments” and
“impairment of investments” in Note 2 to the financial
statements
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 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:
Based on the work performed, no impairment to the investment in
subsidiary undertakings was noted. |
Our application of materiality
The scope of our audit was influenced by our application of
materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations,
helped us to determine the scope of our audit and the nature,
timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating
the effect of misstatements, both individually and on the financial
statements as a whole. Based on our professional judgement, we
determined materiality for the financial statements as a whole as
follows:
Group
Overall materiality |
£353,000 |
How we determined it |
3% of group’s net assets |
Rationale
for benchmark applied |
Group’s net assets
represents shareholders’ funds and we have determined it to be the
principal benchmark within the financial statements relevant to
shareholders, as the group does not generate revenue and is in
pre-production phase. |
Performance
materiality & specific materiality |
Performance materiality is set as 75% of financial statement
materiality being £265,000.
Specific materiality of £80,000 is used for the audit of group
income statement. |
Reporting threshold |
3% of financial statement
materiality being £11,000. |
Parent company
Overall materiality |
£210,000 |
How we determined it |
75% of company’s net assets |
Rationale for benchmark
applied |
Net assets is considered most
appropriate as the parent company is none-trading and mainly holds
investment in subsidiaries |
Performance materiality |
Performance materiality is set at
75% of financial statement materiality being £158,000. |
Reporting threshold |
3% of financial statement
materiality being £6,000. |
The range of performance materiality used within the components
for the purposes of the group audit was £3,000 to £222,000.
An overview of the scope of our audit
As part of designing our audit, we determined materiality and
assessed the risk of material misstatement in the financial
statements. In particular, we looked at where the directors made
subjective judgements such as making assumptions on significant
accounting estimates.
We gained an understanding of the legal and regulatory framework
applicable to the group and parent company, the structure of the
group and the parent company and the industry in which it operates.
We considered the risk of acts by the company which were contrary
to the applicable laws and regulations including fraud. We designed
our audit procedures to respond to those identified risks,
including non-compliance with laws and regulations (irregularities)
that are material to the financial statements.
We focused on laws and regulations that could give rise to a
material misstatement in the financial statements, including, but
not limited to, the Companies Act 2006. We tailored the scope of
our group audit to ensure that we performed sufficient work to be
able to give an opinion on the financial statements as a whole. We
used the outputs of a risk assessment, our understanding of the
parent company and group’s accounting processes and controls and
its environment and considered qualitative factors in order to
ensure that we obtained sufficient coverage across all financial
statement line items.
Our tests included, but were not limited to, 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
irregularities including fraud or error, review of minutes of
directors’ meetings in the year and enquiries of management. As a
result of our procedures, we did not identify any Key Audit Matters
relating to irregularities, including fraud.
The primary responsibility for the prevention and detection of
irregularities including fraud rests with both those charge with
governance and management. As with any audit, there remained a risk
of non-detection of irregularities, as these may involve collusion,
forgery, intentional omissions, misrepresentations or the override
of internal controls
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.
Our group audit scope included an audit of the group and parent
financial statements of Anglesey Mining Plc. The legal entities
within the group account for 100% of the group’s operating loss,
100% of group’s net assets and 100% of group’s total assets.
Based on our risk assessment, all entities within the group were
subject to a full scope audit performed by the group audit team. At
the parent level we also tested the consolidation process and
carried out overall analytical procedures to confirm our conclusion
that there were no additional risks of material misstatement of the
aggregated financial information.
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 11 –
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 20 – 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 19 – 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 and the part of the
directors’ remuneration report to be audited are not in agreement
with the accounting records and returns; or
- certain disclosures of directors’ remuneration specified by law
are not made; or
- we have not received all the information and explanations we
require for our audit; or
- a corporate governance statement has not been prepared by the
parent company.
Responsibilities of Directors
As explained more fully in the directors’ responsibilities
statement set out on page 11, the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, 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 2 years, covering the years ended
31 March 2018 and 31 March 2019.
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
30 July 2019
Group income statement
All attributable to equity holders of the company
|
|
Notes |
Year
ended 31 March 2019 |
Year
ended 31 March 2018 |
All
operations are continuing |
|
£ |
£ |
|
Revenue |
|
- |
- |
|
Expenses |
|
(75,538) |
(109,677) |
|
Equity-settled
employee benefits |
22 |
- |
(9,324) |
|
Investment
income |
6 |
233 |
121 |
|
Finance
costs |
7 |
(159,336) |
(159,267) |
|
Foreign exchange
movement |
|
20 |
(42) |
|
|
|
|
|
Loss before tax |
4 |
(234,621) |
(278,189) |
|
|
|
|
|
|
Taxation |
8 |
- |
- |
|
|
|
|
|
Loss for the period |
|
(234,621) |
(278,189) |
|
|
|
|
|
|
Loss per
share |
|
|
|
|
Basic - pence
per share |
9 |
(0.1)p |
(0.2)p |
|
Diluted - pence
per share |
9 |
(0.1)p |
(0.2)p |
|
|
|
|
|
Group statement of comprehensive
income
Loss for the period |
|
(234,621) |
(278,189) |
|
Other comprehensive
income |
|
|
|
|
Items
that may subsequently be reclassified to profit or loss: |
|
|
|
Exchange
difference on
translation of foreign holding |
|
(15,095) |
31,489 |
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss for the period |
(249,716) |
(246,700) |
|
|
|
|
|
Group statement of financial
position
|
|
|
31
March 2019 |
31
March 2018 |
|
|
Notes |
£ |
£ |
Assets |
|
|
|
|
Non-current
assets |
|
|
|
|
Mineral property
exploration and evaluation |
10 |
15,165,888 |
15,111,141 |
|
Property, plant
and equipment |
11 |
204,687 |
204,687 |
|
Investments |
14 |
97,795 |
86,660 |
|
Deposit |
15 |
123,460 |
123,227 |
|
|
|
|
|
|
|
|
15,591,830 |
15,525,715 |
|
|
|
|
|
|
Current
assets |
|
|
|
|
Other
receivables |
16 |
19,215 |
19,790 |
|
Cash and cash
equivalents |
17 |
6,012 |
137,113 |
|
|
|
|
|
|
|
|
25,227 |
156,903 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
15,617,057 |
15,682,618 |
|
|
|
|
|
Liabilities |
|
|
|
|
Current
liabilities |
|
|
|
|
Trade and other
payables |
18 |
(86,539) |
(65,870) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(86,539) |
(65,870) |
|
|
|
|
|
|
Net current
(liabilities)/assets |
|
(61,312) |
91,033 |
|
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
Loans |
19 |
(3,706,722) |
(3,543,236) |
|
Long term
provision |
20 |
(50,000) |
(50,000) |
|
|
|
|
|
|
|
|
(3,756,722) |
(3,593,236) |
|
|
|
|
|
Total liabilities |
|
(3,843,261) |
(3,659,106) |
|
|
|
|
|
|
|
|
|
|
Net assets |
|
11,773,796 |
12,023,512 |
|
|
|
|
|
Equity |
|
|
|
|
Share
capital |
21 |
7,286,914 |
7,286,914 |
|
Share
premium |
|
10,171,986 |
10,171,986 |
|
Currency
translation reserve |
|
(57,116) |
(42,021) |
|
Retained
losses |
|
(5,627,988) |
(5,393,367) |
|
|
|
|
|
|
|
|
|
|
Total
shareholders' funds |
|
11,773,796 |
12,023,512 |
|
|
|
|
|
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
30 July 2019 and signed on its behalf
by:
John F. Kearney, Chairman
Danesh Varma, Finance Director
Company statement of financial
position
|
|
|
31
March 2019 |
31
March 2018 |
|
|
|
Notes |
£ |
£ |
|
Assets |
|
|
|
|
|
Non-current
assets |
|
|
|
|
|
Investments |
13 |
14,389,142 |
14,325,116 |
|
|
|
|
|
|
|
|
|
|
14,389,142 |
14,325,116 |
|
|
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
Other
receivables |
16 |
6,705 |
5,772 |
|
|
Cash and cash
equivalents |
17 |
3,979 |
132,589 |
|
|
|
|
|
|
|
|
|
|
10,684 |
138,361 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
14,399,826 |
14,463,477 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
Trade and other
payables |
18 |
(66,477) |
(54,121) |
|
|
|
|
|
|
|
|
|
|
(66,477) |
(54,121) |
|
|
|
|
|
|
|
|
Net current
(liabilities)/assets |
|
(55,793) |
84,240 |
|
|
|
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
|
Loan |
19 |
(3,406,635) |
(3,262,401) |
|
|
|
|
|
|
|
|
|
|
(3,406,635) |
(3,262,401) |
|
|
|
|
|
|
|
|
Total
liabilities |
|
(3,473,112) |
(3,316,522) |
|
|
|
|
|
|
|
Net assets |
|
10,926,714 |
11,146,955 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
Share
capital |
21 |
7,286,914 |
7,286,914 |
|
|
Share
premium |
|
10,171,986 |
10,171,986 |
|
|
Retained
losses |
|
(6,532,186) |
(6,311,945) |
|
|
|
|
|
|
|
Shareholders' equity |
|
10,926,714 |
11,146,955 |
|
|
|
|
|
|
|
The company reported a loss for the year ended 31 March 2019 of £220,241 (2018 - £266,821). 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 30 July 2019 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 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 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 |
|
|
|
|
|
|
|
|
Total
comprehensive loss for the year: |
|
|
|
|
|
|
Loss for the
year |
- |
- |
- |
(234,621) |
(234,621) |
|
Exchange
difference on
translation of foreign holding |
- |
- |
(15,095) |
- |
(15,095) |
|
|
|
|
|
|
|
|
Total
comprehensive income/(loss) for the year |
- |
- |
(15,095) |
(234,621) |
(249,716) |
|
|
|
|
|
|
|
|
Equity at 31
March 2019 |
7,286,914 |
10,171,986 |
(57,116) |
(5,627,988) |
11,773,796 |
|
|
|
|
|
|
|
|
Company |
|
Share
capital |
Share
premium |
Retained
losses |
Total |
|
|
|
£ |
£ |
£ |
£ |
|
Equity at 1
April 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 |
|
|
|
|
|
|
|
|
Total
comprehensive loss for the year: |
|
|
|
|
|
|
Loss for the
year |
|
- |
- |
(220,241) |
(220,241) |
|
|
|
|
|
|
|
|
Total
comprehensive loss for the year |
|
- |
- |
(220,241) |
(220,241) |
|
|
|
|
|
|
|
|
Equity at 31
March 2019 |
|
7,286,914 |
10,171,986 |
(6,532,186) |
10,926,714 |
|
|
|
|
|
|
|
Group statement of cash flows
|
|
Notes |
Year
ended 31 March 2019 |
Year
ended 31 March 2018 |
|
|
|
£ |
£ |
Operating activities |
|
|
|
|
Loss for the
period |
|
(234,621) |
(278,189) |
|
Adjustments
for: |
|
|
|
|
Investment
income |
6 |
(233) |
(121) |
|
Finance
costs |
7 |
159,336 |
159,267 |
|
Equity-settled
employee benefits |
22 |
- |
9,324 |
|
Management fee
to associate |
|
(9,354) |
- |
|
Foreign exchange
movement |
|
(20) |
42 |
|
|
|
|
|
|
|
|
(84,892) |
(109,677) |
|
Movements in
working capital |
|
|
|
|
Decrease in
receivables |
|
374 |
3,813 |
|
Increase/(decrease) in payables |
|
15,345 |
(53,730) |
|
|
|
|
|
Net
cash used in operating activities |
|
(69,173) |
(159,594) |
|
|
|
|
|
Investing activities |
|
|
|
|
Investment
income |
|
- |
12 |
|
Mineral property
exploration and evaluation |
|
(49,476) |
(95,556) |
|
Investment |
|
(12,472) |
- |
|
|
|
|
|
Net
cash used in investing activities |
(61,948) |
(95,544) |
|
|
|
|
|
|
|
|
|
|
Net
(decrease) in cash and cash equivalents |
(131,121) |
(255,138) |
Cash
and cash equivalents at start of period |
|
137,113 |
392,293 |
Foreign exchange movement |
|
20 |
(42) |
|
|
|
|
|
Cash and cash equivalents at end of period |
17 |
6,012 |
137,113 |
|
|
|
|
|
Company statement of cash flows
|
|
Notes |
Year
ended 31 March 2019 |
Year
ended 31 March 2018 |
|
|
|
£ |
£ |
Operating activities |
|
|
|
|
Loss for the
period |
23 |
(220,241) |
(266,821) |
|
Adjustments
for: |
|
|
|
|
Equity-settled
employee benefits |
|
- |
9,324 |
|
Finance
costs |
|
144,234 |
144,234 |
|
|
|
|
|
|
|
|
(76,007) |
(113,263) |
|
Movements in
working capital |
|
|
|
|
(Increase)/decrease in receivables |
|
(933) |
6,987 |
|
Increase/(decrease) in payables |
|
12,356 |
(53,451) |
|
|
|
|
|
Net
cash used in operating activities |
|
(64,584) |
(159,727) |
|
|
|
|
|
Investing activities |
|
|
|
|
Investments and
long term loans |
|
(64,026) |
(96,564) |
|
|
|
|
|
Net
cash used in investing activities |
|
(64,026) |
(96,564) |
|
|
|
|
|
|
|
|
|
|
Net
(decrease) in cash and cash equivalents |
|
(128,610) |
(256,291) |
Cash
and cash equivalents at start of period |
|
132,589 |
388,880 |
|
|
|
|
|
Cash
and cash equivalents at end of period |
17 |
3,979 |
132,589 |
|
|
|
|
|
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 and at 31 March 2019 had cash and cash equivalent
reserves of £6,012 and net assets of £11.8 million. Immediately
after the year end the group received £100,000 from Juno Limited
under a long-running working capital agreement. Further funds were
received as a result of a placing of new shares to an institution
in May 2019. Based on the current
cash reserves and the committed support of Juno, 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 and its
largest shareholder Juno Limited to fund its working capital
requirements 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 disposal 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 and 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 -
Policy applicable from 1 April
2018
Initial recognition
All financial assets and liabilities are initially recognised on
the trade date; this being the date that group becomes a party to
the contractual provisions of the instrument.
All financial instruments are initially recognised at fair value
plus, in the case of financial assets and financial liabilities not
held at fair value through profit or loss, directly attributable
transaction costs.
Classification and measurement
Financial assets
The classification of financial instruments depends on the
purpose and management’s intention for which the financial
instruments were acquired and their characteristics. The group
classifies its financial assets in one of the following
categories:
• Amortised cost
• Fair value through other comprehensive income (FVOCI)
Financial assets classified and
measured at amortised cost
Amortised cost financial instruments are non-derivative
financial assets held within a business model, whose objective is
to collect contractual cash flows, on specified dates that are
solely payments of principal and interest on the principal amount
outstanding.
Such financial instruments are those that are subsequently
measured at amortised cost using the effective interest rate
method, less any allowance for impairment based on Expected Credit
Loss (ECL). Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees and costs that are an
integral part of the financial asset.
Financial assets classified as amortised cost are other
receivables, deposits and cash and cash equivalent. Carrying value
of these financial assets at yearend are not material to the
group.
Financial assets classified and
measured at fair value through other comprehensive income
“FVOCI”
FVOCI financial assets are those non-derivative financial assets
held within a business model, whose objectives are both to sell the
financial assets and to collect contractual cash flows, on
specified dates, that are solely payments of principal and interest
on the principal amount outstanding.
Financial assets that are classified as FVOCI are measured at
fair value. The changes in fair value are recognised directly in
equity with three exceptions, which are recognised in profit and
loss:
• Interest, calculated using the effective interest method;
• Impairment losses; and
• Foreign exchange gains and losses on monetary financial
assets.
When the investment is disposed of, the cumulative gain or loss
previously recognised in equity is recognised in the statement of
comprehensive income.
Financial assets classified as FVOCI are unlisted shares held by
the group. The group has made the irrevocable election at
initial recognition to classify these investments at FVOCI.
Carrying value of these financial assets at yearend are not
material to the group
Financial liabilities
The group classifies all financial liabilities as other
financial liabilities measured at amortised cost. Financial
liabilities are initially recognised at fair value, net of directly
attributable transaction costs, and are subsequently measured at
amortised cost using the effective interest method.
Financial instruments -
Policy Applicable before 1 April
2018
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 financial year has not had a
material impact on the financial statements of the group or the
company. All financial assets which were classified as loans and
receivables and under IAS 39 are now classified as financial assets
at amortised cost under IFRS 9 with no changes in the measurement
of those financial assets. Financial assets which were classified
as available for sale under IAS 39 are now classified as financial
assets at FVOCI under IFRS9 and measured at fair value. The
directors’ assessment of fair value of these financial assets has
been disclosed in note 14. No separate transitional note is
presented because there are no adjustments as a result of the
transition to IFRS9.
IFRS 2 Share-based Payment: Amendment in relation to
classification and measurement of share-based payment
transactions
IFRS 9 Financial Instruments
IFRS 15 Revenue from Contracts with Customers, including the
subsequent clarifications
Annual Improvements to IFRSs (2014 -
2016)
IFRIC 22 Foreign Currency Transactions and Advance
Consideration
Standards, amendments and interpretations in issue but not yet
effective are tabulated below.
Standards, amendments and
interpretations in issue but not yet effective:
|
Effective date |
Amendments to IFRS 9 Financial
Instruments: Prepayment features with negative compensation |
1 January 2019 |
IFRS 16 Leases |
1 January 2019 |
Annual Improvements to IFRSs (2015 -
2017) |
1 January 2019 |
Amendment to IAS 19 Employee
Benefits: Plan amendment, curtailment or settlement |
1 January 2019 |
Amendment to IAS 28 Investments in
Associates and Joint Ventures: Amendment in relation to Long-term
interests in Associates and Joint Ventures. |
1 January 2019. |
IFRIC 23 Uncertainty over Income Tax
Treatments. |
1 January 2019. |
Amendments to IAS 1 and IAS 8:
Definition of Material |
Expected endorsement date to be 1
January 2020 |
Amendment to IFRS 3 Business
Combinations: Definition of a Business |
Expected endorsement date to be 1
January 2020 |
Conceptual Framework (Revised) and
amendments to related references in IFRS Standards |
Expected endorsement date to be 1
January 2020 |
IFRS 17 Insurance Contracts |
Expected endorsement date not
available |
The directors’ impact assessment indicates that the adoption of
the above pronouncements will have no material impact on the
financial statements in the period of initial application other
than disclosure. 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.
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 exploration and
evaluation assets and the company’s investment in and loan due from
the subsidiary Parys Mountain Mines Limited, 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.
(c) The directors applied assumptions and judgement in
determining the fair value of investments classified and measured
as financial assets at FVOCI. These financial assets disclosed in
note 14 are unquoted investments in companies holding mining
rights. The inputs in determining fair value are taken from
observable markets where possible, but where this is not feasible,
a degree of judgement has been applied in establishing fair values.
Judgements include considerations of inputs such as exploration
potential, available market information relating to current demand,
prices, economic viability and future financing. See note 14 for
further details.
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 |
|
|
|
|
|
|
|
|
2019 |
2018 |
|
UK |
Sweden |
Canada |
Total |
UK |
Sweden |
Canada |
Total |
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
Expenses |
(75,538) |
- |
- |
(75,538) |
(109,677) |
- |
- |
(109,677) |
Equity-settled
employee benefits |
- |
- |
- |
- |
(9,324) |
- |
- |
(9,324) |
Investment income |
233 |
- |
- |
233 |
121 |
- |
- |
121 |
Finance costs |
(144,234) |
(15,102) |
- |
(159,336) |
(144,234) |
(15,033) |
- |
(159,267) |
Exchange rate
loss |
- |
20 |
- |
20 |
(16) |
(26) |
- |
(42) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the year |
(219,539) |
(15,082) |
- |
(234,621) |
(263,130) |
(15,059) |
- |
(278,189) |
|
|
|
|
|
|
|
|
|
Assets and
liabilities |
|
|
|
|
|
|
|
|
|
31 March 2019 |
31 March 2018 |
|
UK |
Sweden |
Canada |
Total |
UK |
Sweden |
Canada |
Total |
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
Non-current
assets |
15,494,035 |
97,794 |
1 |
15,591,830 |
15,439,055 |
86,659 |
1 |
15,525,715 |
Current assets |
24,149 |
1,078 |
- |
25,227 |
155,792 |
1,111 |
- |
156,903 |
Liabilities |
(3,543,174) |
(300,087) |
- |
(3,843,261) |
(3,378,271) |
(280,835) |
- |
(3,659,106) |
|
|
|
|
|
|
|
|
|
Net
assets/liabilities |
11,975,010 |
(201,215) |
1 |
11,773,796 |
12,216,576 |
(193,065) |
1 |
12,023,512 |
|
|
|
|
|
|
|
|
|
4 Loss before
taxation
The loss
before taxation for the year has been arrived at after
charging/(crediting): |
|
|
2019 |
|
2018 |
|
|
£ |
|
£ |
|
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 |
- |
|
- |
|
Directors'
remuneration |
- |
|
- |
|
Foreign exchange
movement |
(20) |
|
42 |
|
|
|
|
|
|
5 Staff costs
The
average monthly number of persons employed (including executive
directors) was: |
|
|
|
|
|
|
|
2019 |
|
2018 |
|
Administrative |
3 |
|
3 |
|
|
3 |
|
3 |
|
|
|
|
|
|
Their aggregate
remuneration was: |
£ |
|
£ |
|
Wages and
salaries |
11,175 |
|
16,425 |
|
Social security
costs |
431 |
|
1,422 |
|
Other pension
costs |
- |
|
- |
|
|
|
|
|
|
|
11,606 |
|
17,847 |
|
|
|
|
|
|
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
|
|
2019 |
|
2018 |
|
Loans and
receivables |
|
£ |
|
£ |
|
Interest on bank
deposits |
|
- |
|
12 |
|
Interest on site
re-instatement deposit |
|
233 |
|
109 |
|
|
|
|
|
|
|
|
|
233 |
|
121 |
|
|
|
|
|
|
|
7 Finance costs
|
|
2019 |
|
2018 |
|
Loans and
payables |
|
£ |
|
£ |
|
Loan interest to Juno
Limited |
|
144,234 |
|
144,234 |
|
Loan interest to
Eurmag AB |
|
15,102 |
|
15,033 |
|
|
|
|
|
|
|
|
|
159,336 |
|
159,267 |
|
|
|
|
|
|
|
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 2019 of £1.3 million (2018 -
£1.4 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 £12.7 million unclaimed and available at
31 March 2019 (2018 - £12.5 million).
No deferred tax asset is recognised in respect of these
allowances.
|
2019 |
|
2018 |
|
|
£ |
|
£ |
|
Current tax |
- |
|
- |
|
Deferred tax |
- |
|
- |
|
|
|
|
|
|
Total tax |
- |
|
- |
|
|
|
|
|
|
Domestic
income tax is calculated at 19% (2018 - 19%)of the estimated
assessed profit for the year. |
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 |
(234,621) |
|
(278,189) |
|
|
|
|
|
|
Tax at the domestic
income tax rate of 19% |
(44,578) |
|
(52,856) |
|
Tax effect
of: |
|
|
|
|
Expenses that are not
deductible
in
determining taxable result: |
- |
|
- |
|
Equity-settled employee benefits |
- |
|
1,772 |
|
Unrecognised deferred
tax on losses |
44,578 |
|
51,084 |
|
|
|
|
|
|
Total tax |
- |
|
- |
|
|
|
|
|
|
9 Earnings per
ordinary share
|
2019 |
|
2018 |
|
|
£ |
|
£ |
|
Earnings |
|
|
|
|
Loss for the year |
(234,621) |
|
(278,189) |
|
|
|
|
|
|
Number of
shares |
|
|
|
|
Weighted average
number of ordinary shares for the purposes of basic earnings per
share |
177,608,051 |
|
177,608,051 |
|
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 |
|
177,608,051 |
|
|
|
|
|
|
Basic earnings per
share |
(0.1)p |
|
(0.2)p |
|
|
|
|
|
|
Diluted earnings
per share |
(0.1)p |
|
(0.2)p |
|
|
|
|
|
|
As the group has a loss for the year ended 31 March 2019 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 2017 |
15,010,822 |
Additions - site |
64,856 |
Additions - rentals
& charges |
35,463 |
|
|
At 31 March 2018 |
15,111,141 |
Additions - site |
29,726 |
Additions - rentals
& charges |
25,021 |
|
|
At 31 March 2019 |
15,165,888 |
|
|
Carrying
amount |
|
Net book value
2019 |
15,165,888 |
Net book value
2018 |
15,111,141 |
|
|
Included in the additions are mining lease expenses of £16,626
(2018 - £11,208).
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 2019. 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 US$1.25/lb;
copper US$2.50/lb; lead US$0.9/lb; silver US$17.50 per ounce and gold US$1275 per ounce. The exchange rate used was
US$1.30/£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 2018 was US$1.35/£1.00 and the lead price was US$1.00/lb.
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 -27%, zinc price
-7%, lead price -18%, capital expenditure +10%, operating costs
+10%, the discount rate +18% (that is an 18% increase in the
discount rate applied, not an increase of that number of 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 2017, 2018
and 2019 |
204,687 |
17,434 |
5,487 |
227,608 |
Depreciation |
|
|
|
|
At 31 March 2017, 2018
and 2019 |
- |
17,434 |
5,487 |
22,921 |
Carrying
amount |
|
|
|
|
At 31 March 2017, 2018
and 2019 |
204,687 |
- |
- |
204,687 |
Company |
Freehold land & property |
Plant
& equipment |
Office
equipment |
Total |
Cost |
£ |
£ |
£ |
£ |
At 31 March 2017, 2018
and 2019 |
- |
17,434 |
5,487 |
22,921 |
Depreciation |
|
|
|
|
At 31 March 2017, 2018
and 2019 |
- |
17,434 |
5,487 |
22,921 |
Carrying
amount |
|
|
|
|
At 31 March 2017, 2018
and 2019 |
- |
- |
- |
- |
12 Subsidiaries - company
The subsidiaries of the company at 31
March 2019 and 2018 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 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 |
|
Advanced |
- |
|
64,026 |
|
64,026 |
|
|
|
|
|
|
|
|
At 31 March 2019 |
104,025 |
|
14,285,117 |
|
14,389,142 |
|
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 2018 and
31 March 2018 |
1 |
86,659 |
86,660 |
Change during the
period |
- |
11,135 |
11,135 |
At 31 March
2019 |
1 |
97,794 |
97,795 |
LIM
The directors consider the fair value of 12% investment in LIM
for the purposes of these accounts to be £1.
Grangesberg
The group has, through its Swedish subsidiary Angmag AB, an 8.7%
ownership interest in GIAB (2018 – 6%), a Swedish company which
holds rights over the Grangesberg iron ore deposits. On transition
to IFRS 9, the directors assessed the fair value of its investment
in Grangesberg, and consider the cost at the date of transition and
at year end to approximate its fair value at these dates. The group
has until June 2021 a right of first
refusal over a further 50.1% 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 |
|
|
|
|
|
|
2019 |
|
2018 |
|
|
|
|
|
|
£ |
|
£ |
|
|
|
|
|
Site re-instatement
deposit |
123,460 |
|
123,227 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
£ |
|
£ |
|
£ |
|
£ |
|
Other |
19,215 |
|
19,790 |
|
6,705 |
|
5,772 |
|
|
|
|
|
|
|
|
|
|
The carrying value of the receivables approximates to their fair
value.
17 Cash and cash equivalents
|
Group |
|
Company |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
£ |
|
£ |
|
£ |
|
£ |
|
Held in sterling |
4,933 |
|
136,001 |
|
3,979 |
|
132,589 |
|
Held in Canadian
dollars |
1 |
|
1 |
|
- |
|
- |
|
Held in US
dollars |
417 |
|
417 |
|
- |
|
- |
|
Held in Swedish
krona |
661 |
|
694 |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
6,012 |
|
137,113 |
|
3,979 |
|
132,589 |
|
|
|
|
|
|
|
|
|
|
The carrying value of the cash approximates to its fair
value.
18 Trade and other payables
|
Group |
|
Company |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
£ |
|
£ |
|
£ |
|
£ |
|
Trade payables |
(30,067) |
|
(17,631) |
|
(24,477) |
|
(11,383) |
|
Other accruals |
(56,472) |
|
(48,239) |
|
(42,000) |
|
(42,738) |
|
|
|
|
|
|
|
|
|
|
|
(86,539) |
|
(65,870) |
|
(66,477) |
|
(54,121) |
|
|
|
|
|
|
|
|
|
|
The carrying value of the trade and other payables approximates
to their fair value.
19 Loans
|
Group |
|
Company |
|
|
2019 |
|
2018 |
|
2019 |
|
2018 |
|
|
£ |
|
£ |
|
£ |
|
£ |
|
Loan from Juno
Limited |
(3,406,635) |
|
(3,262,401) |
|
(3,406,635) |
|
(3,262,401) |
|
Loan from Eurmag
AB |
(300,087) |
|
(280,835) |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
(3,706,722) |
|
(3,543,236) |
|
(3,406,635) |
|
(3,262,401) |
|
|
|
|
|
|
|
|
|
|
Juno: The loan is provided under a working capital
agreement, denominated in sterling, unsecured and carries interest
at 10% per annum on the principal only. It is repayable from any
future financing undertaken by the company, or on demand following
a notice period of 367 days. The terms of the facility were
approved by an independent committee of the board. The carrying
value of the loan approximates to its fair value.
Eurmag: The loan arose in connection with the acquisition
of the investment in Grangesberg. It is the subject of a letter
agreement, denominated in Swedish Krona, is unsecured and carries
interest at 6.5% per annum on the principal only. It is repayable
from any future financing undertaken by the company, or on demand
following a notice period of 367 days. The terms of the facility
were approved by an independent committee of the board. The
carrying value of the loan approximates to its fair value.
Changes in liabilities arising from
financing activities
|
1 April 2018 |
Cash flows |
Non cash movements |
31 March 2019 |
|
£ |
£ |
£ |
£ |
Loan from Juno
Limited |
(3,262,401) |
- |
(144,234) |
(3,406,635) |
Loan from Eurmag
AB |
(280,835) |
- |
(19,252) |
(300,087) |
|
|
|
|
|
|
(3,543,236) |
- |
(163,486) |
(3,706,722) |
|
|
|
|
|
The Juno loan relates to the group and company and the non cash
movement represents accrued interest.
The Eurmag loan relates to the group only and its non-cash
movement includes accrued interest, a non-cash management fee and
foreign exchange changes.
20 Long term provision
|
Group |
|
|
|
|
|
|
2019 |
|
2018 |
|
|
|
|
|
|
£ |
|
£ |
|
|
|
|
|
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 2018
and
31 March 2019 |
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
During the year all the options remaining under the 2004
Unapproved share option plan lapsed and the plan is now terminated.
The 2014 Unapproved share option plan is active and 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 2014 has been one year. Options are forfeited if the
employee leaves employment with the group before the options vest.
No options were granted, lapsed or forfeited in respect of the 2014
plan during the year.
|
|
2019 |
|
|
2018 |
|
|
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 |
4,200,000 |
2.50 |
3.1 |
8,000,000 |
11.72 |
|
Granted during
the period |
- |
- |
|
- |
- |
|
Forfeited during
the period |
- |
- |
|
- |
- |
|
Exercised during
the period |
- |
- |
|
- |
- |
|
Expired during
the period |
700,000 |
- |
|
3,800,000 |
- |
|
Outstanding at
the end of the period |
3,500,000 |
2.00 |
2.5 |
4,200,000 |
2.50 |
3.1 |
Exercisable at
the end of the period |
3,500,000 |
2.00 |
2.5 |
4,200,000 |
2.50 |
3.1 |
There were no expenses in respect of equity-settled employee
remuneration for the year ended 31 March
2019 (2018 – £9,324).
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 |
|
|
|
|
|
|
2014
Unapproved |
3,500,000 |
35,000 |
2.00p |
30
September 2017 |
30
September 2021 |
|
|
|
|
|
|
|
|
|
|
|
|
23 Results attributable to
Anglesey Mining plc
The loss after taxation in the parent company amounted to
£220,241 (2018 loss £266,821). The directors have taken
advantage of the exemptions available under section 408 of the
Companies Act 2006 and not presented an income statement for the
company alone.
24 Financial instruments
Capital risk management
There have been no changes during the year in the group’s
capital risk management policy.
The group manages its capital to ensure that entities in the
group will be able to continue as going concerns while optimising
the debt and equity balance. The capital structure of the group
consists of debt, which includes the borrowings disclosed in note
19, the cash and cash equivalents and equity comprising issued
capital, reserves and retained earnings.
The group does not enter into derivative or hedging transactions
and it is the group's policy that no trading in financial
instruments be undertaken. The main risks arising from the group's
financial instruments are currency risk and interest rate risk. The
board reviews and agrees policies for managing each of these risks
and these are summarised below.
Interest rate risk
The amounts advanced under the Juno loans are at a fixed rate of
interest of 10% per annum and those from Eurmag are at a fixed rate
of 6.5% per annum. As a result the group is not exposed to interest
rate fluctuations. Interest received on cash balances is not
material to the group’s operations or results.
The company (Anglesey Mining plc) is exposed to minimal interest
rate risks.
Liquidity risk
The group has ensured continuity of funding through a mixture of
issues of shares and the working capital agreement with Juno
Limited.
Trade creditors are payable on normal credit terms which are
usually 30 days. The loans due to Juno and Angmag carry a notice
period of 367 days. Juno, in keeping with its practice since
drawdown commenced more than 10 years ago, has
indicated that it has no current intention of demanding
repayment. No such notice had been received by 18 July 2019 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 £8,925 (2018 - £8,686) and if
it were to move in favour of sterling by a similar amount there
would be a gain of £10,908 (2018 - £10,616). 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 £27,281 (2018 - £25,530) and if it
were to move in favour of sterling by a similar amount there would
be a loss of £33,343 (2018 - £31,204). 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 |
Financial assets classified at fair value through
other comprehensive income |
Financial assets measured at amortised
cost |
|
31 March 2019 |
31 March 2018 |
31 March 2019 |
31 March 2018 |
|
£ |
£ |
£ |
£ |
Investments |
97,795 |
86,660 |
- |
- |
Deposit |
- |
- |
123,460 |
123,227 |
Other
receivables |
- |
- |
19,215 |
19,790 |
Cash and cash
equivalents |
- |
- |
6,012 |
137,113 |
|
- |
- |
|
|
|
97,795 |
86,660 |
148,687 |
280,130 |
|
|
|
|
|
|
Financial liabilities measured at amortised
cost |
|
|
|
31 March 2019 |
31 March 2018 |
|
|
|
£ |
£ |
|
|
Trade
payables |
(30,067) |
(17,631) |
|
|
Other
payables |
(56,472) |
(48,239) |
|
|
Loans |
(3,706,722) |
(3,543,236) |
|
|
|
|
|
|
|
|
(3,793,261) |
(3,609,106) |
|
|
|
|
|
|
|
Company |
|
|
|
|
|
Financial assets measured at amortised
cost |
Financial liabilities measured at amortised
cost |
|
31 March 2019 |
31 March 2018 |
31 March 2019 |
31 March 2018 |
|
£ |
£ |
£ |
£ |
Other
receivables |
6,705 |
5,772 |
- |
- |
Cash and cash
equivalents |
3,979 |
132,589 |
- |
- |
|
|
|
|
|
Trade
payables |
- |
- |
(24,477) |
(11,383) |
Other
payables |
- |
- |
(42,000) |
(42,738) |
Loan |
- |
- |
(3,406,635) |
(3,262,401) |
|
|
|
|
|
|
10,684 |
138,361 |
(3,473,112) |
(3,316,522) |
|
|
|
|
|
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 31% 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 £300,087 at the year end
(2018 – £280,835) – see note 19. During the year the group
subscribed £12,472 for new shares in GIAB; other GIAB shareholders
also participated in the share issue consequently the group’s
shareholding percentage was unchanged.
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 £16,626 is payable for the
year beginning 23 March 2018; 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. Negotiations in
respect of the renewal of this lease have been initiated.
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 2019 -
£17,358 between 1 April 2020 and
31 March 2025 - £92,344. 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 (2018 - nil).
29 Contingent liabilities
There are no contingent liabilities (2018 - nil).
30 Events after the period
end
A loan of £100,000 was received from Juno Limited on
2 April 2019 under the terms of a
working capital agreement – see notes 19 and 25.
On 17 May 2019, 9,367,681 new
ordinary shares, representing approximately 5.3% of the company’s
current issued share capital, were placed with an institution at a
price of 2.135 pence per share to
raise a total of £200,000 gross and £180,000 net.
Otherwise there are no events after the period end to
report.
Notice of annual general meeting
Notice is given that the 2019 annual general meeting of Anglesey
Mining plc will be held at the offices of the company's lawyers,
DLA Piper UK LLP, 160 Aldersgate Street, London, EC1A 4HT on 5
September 2019 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
2019.
- To approve the directors' remuneration report for the year
ended 31 March 2019.
- To approve the directors' remuneration policy in the directors’
remuneration report for the year ended 31
March 2019.
- 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 £620,000, provided that (unless previously revoked,
varied or renewed) this authority shall expire on 31 December 2020, 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 £460,000
and (unless previously revoked, varied or renewed) this power
shall expire on 31 December 2020,
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
30 July 2019
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 2
September 2019 (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 2 September
2019 (or, if the meeting is adjourned, no later than 48
hours (excluding any part of a day that is not a working day)
before the time of any adjourned meeting).
Corporate representatives
4. A shareholder which is a
corporation may authorise one or more persons to act as its
representative(s) at the meeting. Each such representative may
exercise (on behalf of the corporation) the same powers as the
corporation could exercise if it were an individual shareholder,
provided that (where there is more than one representative and the
vote is otherwise than on a show of hands) they do not do so in
relation to the same shares.
Total voting rights
5. As at 18 July 2019 (being the last practicable date
before the publication of this notice), the issued share capital
consists of 186,975,732 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 18 July
2019 are 186,975,732.
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 biographies
John F.
Kearney |
Irish, aged 68, 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 Buchans Resources Limited, Xtierra
Inc. 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 72, 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 69, 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 72, 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 75, 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 5 September 2019
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 020 7062 3782
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 1849957
Shares listed at the London Stock Exchange - LSE:AYM