Anglesey Mining plc
Extracts from the Annual Report 2021
including the consolidated financial statements on which our
auditors have issued an unqualified opinion but with a material
uncertainty statement with respect to going concern
Projects:
100% ownership of the Parys Mountain underground
zinc-copper-lead-silver-gold deposit in North Wales, UK where an independent
Preliminary Economic Assessment announced in January 2021 showed -
- an estimate of 5.2 million tonnes of Indicated resources
together with 11.7 million tonnes of Inferred resources
- a financial model for an expanded case at 3,000 tpd with a
pre-tax NPV10% of $120 million, (£96
million), 26% IRR and 12-year mine life
A 12% shareholding in Labrador Iron Mines Holdings Limited which
holds direct shipping iron ore deposits in Canada where a Preliminary Economic Assessment
of its Houston project published
in March 2021 showed –
- NPV8% CAD109 million at
conservative base case iron ore price with a 39% IRR and a12 year
mine life
A 19.9% interest in the Grangesberg Iron project in Sweden, together with management rights and a
right of first refusal to increase the Group’s interest to 70%
where an independent study reported
- an estimate of 115 million tonnes of Indicated resources
together with 33 million tonnes of Inferred resource
Chairman’s statement
To Anglesey
Shareholders
Any review of the past year is dominated by the unprecedented
global coronavirus pandemic, which disrupted all our lives,
strained the healthcare systems and resulted in an economic
downturn that impacted people across the world.
Nevertheless, notwithstanding these challenges associated with
the COVID-19 pandemic, I am pleased to be able to report that
Anglesey Mining accomplished a great deal and achieved several key
operational milestones over the past year, including reporting
comprehensive income for the year of £3.7 million. Significant
progress was made on our Parys Mountain project, in our iron ore
projects in Sweden and
Canada and in raising new
financing of over £1,000,000.
Metal prices recorded impressive gains over the past twelve
months and I am very confident that the outlook for most minerals,
particularly for the copper, zinc and lead minerals at Parys
Mountain, and for iron ore where Anglesey holds significant
investments, is very encouraging.
The highlight of the past year was, far and away, the completion
in January 2021 of an independent
Preliminary Economic Assessment (PEA) on Parys Mountain which
demonstrates that a major copper-zinc-lead mine can be developed on
the island of Anglesey in North
Wales. This PEA demonstrates that the Parys Mountain
property is much more substantial than previously considered; that
it has a larger mineable resource base; can support a longer mine
life and can generate significantly enhanced financial returns.
Parys Mountain PEA
Projects Strong Financial Results
The PEA, completed by Micon International Limited, included a
new updated mineral resources estimate showing 5.2 million tonnes
of Indicated Resources at a combined base metal grade of 4.3%,
(equivalent to a copper equivalent grade of 2.4%), together with
11.7 million tonnes of Inferred Resources at a combined base metal
grade of 2.8% (copper equivalent grade of 2.0%). Importantly,
the new resource estimate of 5.2 million tonnes in the Indicated
category reflects a significant increase from the previous estimate
of 2.8 million tonnes in the same Indicated category used in the
earlier 2017 Scoping Study.
The updated resource estimate in the PEA indicates that Parys
Mountain, reputedly the largest copper mine in the world in the
18th century, contains 160,000 tonnes of copper in situ, with a
gross contained metal value in the ground of more than $1.4 billion.
Three separate development cases or scenarios were evaluated as
part of the PEA, utilising planned mine tonnages ranging from 5.5
million tonnes at 1,500 tpd in Case A, to 11.4 million tonnes at
3,000 tpd in Case C. The most attractive option, the expanded Case
C, indicates a total cash operating surplus of more than £408
million over a 12-year mine life, which translates to a pre-tax net
present value discounted at 10% of over £96 million with an IRR of
26%.
Completion of the PEA was the culmination of almost three years
of continuous optimisation work carried out principally by Quarry
and Mine Equipment Limited (“QME”), following upon an earlier
Scoping Study by Micon and Fairport Engineering Limited in 2017
which was in turn based on a JORC resource estimate by Micon in
2012. Shareholders are encouraged to read the more detailed
Strategic Report included later in this Annual Report.
Metal Prices
Surge
The COVID pandemic brought great volatility to financial and
commodity markets in 2020. The initial decline in metal prices and
demand caused by the pandemic was short lived as many mines were
closed or had their operations suspended, thus reducing supply,
while the very rapid and sustained recovery in China, driven in large part by government
stimulus measures, drove up metal prices higher in the second half
of 2020 and continued through the first half of 2021.
Metal prices impact the level of investor interest in the mining
industry. We continue to witness a growing strength in the
financing markets for mineral projects and for mineral companies,
which enabled Anglesey to raise over £1,000,000 in new financing
from new investors, a notable headline achievement.
The principal reason for the improvement in metal prices, and
the positive outlook, as discussed further below, is the growing
recognition that metals and minerals are essential for addressing
climate change and adapting to a green economy. Metals are
essential for electrification: copper for power generation,
transmission and energy storage; nickel and lead for energy
storage; and zinc for extending the lifespan of products.
The base case economic model in the PEA utilized three-year
trailing metal prices of $2.81/lb
copper, $1.20/lb zinc, $0.95/lb lead, $16.67/oz silver, and $1,459/oz gold, with an exchange rate of
£1.00/$1.25. Anglesey believes that
the base case three-year trailing metal prices used in the PEA are
conservative. Copper reached a decade long high in May 2021 of over $4.80/lb while zinc prices on the London Metals
Exchange rose to a high of $1.39/lb. End June
2021 prices were $4.26/lb
copper, $1.34/lb zinc, $1.05/lb lead, $26.06/oz silver and $1771/oz gold, with the exchange rate at
£1.00/$1.38. Using these
June 2021 parameters, the Case C
pre-tax NPV10 doubles from £96 to £193 million, with pre-tax IRR as
38.2%, which clearly demonstrate the sensitivity and leverage of a
Parys Mountain mine to higher metal prices.
At June 2021 metal prices, copper
production from a Parys Mountain mine would represent 50% of the
net smelter revenue under the expanded Case C, while zinc and lead
would represent 28% and 12% respectively. The PEA indicates
production of 103,500 tonnes of copper over the project’s 12-year
mine life, equivalent to an average production of 8,500 tonnes of
copper per year.
The need for
metals and minerals - Minerals are essential for a green
economy
It is expected that post-pandemic global stimulus plans and the
challenging targets of the Paris Agreement to achieve climate
neutrality by 2050, will provide long term demand and support for
critical and strategic minerals, and thus for metal prices,
including in particular copper, and indeed lead and zinc.
Amid resurging demand and as the world recovers from the
pandemic, trillions of dollars being invested to rebuild
infrastructure as well as transitioning to a green economy, the
outlook for copper is extremely bullish. Governments around the
world are launching huge stimulus programmes focused on job
creation and environmental stability, leading to the potential for
a multi-decade commodity cycle ahead driven by decarbonisation of
the global economy and a shift to cleaner energy.
The International Energy Agency (IEA), in its May 2021 report, The Role of Critical Minerals
in Clean Energy Transitions, states that the rapid deployment
of clean energy technologies as part of energy transitions implies
a significant increase in demand for minerals. The IEA report
suggests that an energy system powered by clean energy technologies
differs profoundly from one fuelled by traditional hydrocarbon
resources. It concludes that solar photovoltaic plants, wind farms,
and battery-electric vehicles (BEVs) generally require more
minerals to build than their fossil fuel-based counterparts.
According to the IEA, a typical electric car requires six times the
mineral inputs of a conventional car and an onshore wind plant
requires nine times more mineral resources than a gas-fired
plant.
Internal combustion engine vehicles (ICEVs) are the greatest
contributors to carbon emissions in the UK. As recognized by
the Committee on Climate Change, for transport to hit ‘net zero’,
the internal combustion engine needs to be eliminated from
cars.[1] To switch the UK’s fleet of 31.5 million ICEVs to
BEVs it would take an estimated 2,362,500 tonnes of copper, plus
other critical minerals. In addition, the energy revolution
towards renewables, that is, wind, solar, wave, tidal, hydro,
geothermal and nuclear, together with the newly built
infrastructure for delivery, are highly reliant on mineral-based
technologies.
A letter authored by Natural History Museum Head of Earth
Sciences, Prof. Richard Herrington,
delivered to the Committee on Climate Change1, explains
that to meet UK electric car targets for 2050 the UK would require
at least half of the world’s copper production, as well as other
minerals, and to replace all UK-based vehicles today with electric
vehicles would take 2.36 million tonnes of copper, representing
approximately half of the world’s annual copper production.
Strength in Iron
Ore
In 2020 the price of iron ore reached a nine-year high of
US$170 per tonne (62% Fe Fines CFR
China), driven largely by sustained demand in China and supply constraints in Brazil. In the first half of 2021, the price
of iron ore climbed another 40%, to an all-time record US$235 per tonne in May, before retreating to
US$215 per tonne by the end of June
and below US$200 per tonne to the
US$160 per tonne range in August. It
was to be expected that the price would see some contraction.
However iron ore demand in China
has proven to be extremely strong, as infrastructure stimulus
programs have been driving a robust economic recovery and continued
strength in Chinese steel production.
During the year Anglesey increased its interest in the
Grangesberg Iron project in Sweden
and now holds a direct 19.9 % interest, together with management
rights, and a right of first refusal to increase its interest to
70%. The former Grangesberg mine, located about 200
kilometres north-west of Stockholm, had produced more than 150 million
tonnes of iron ore prior to its closure in 1989 due to then
prevailing market conditions. The Grangesberg deposit hosts a
significant iron ore deposit of over 150 million tonnes, in all
categories, and has excellent potential for expansion at depth. The
+67% Fe high-quality product expected to be produced from
Grangesberg would command premium prices and makes Grangesberg more
attractive than many other undeveloped iron ore projects in
Europe. Anglesey in conjunction with its Swedish partners in
Grangesberg is planning to commission a PEA on the development of
the Grangesberg project based on updated forecasts for long term
iron prices and on a modified development programme to take
advantage of optimisations expected since previous studies.
Meanwhile, on the other side of the Atlantic, Labrador Iron
Mines, in which Anglesey Mining holds a 12% interest, published an
updated, independent, PEA on its Houston Project in February 2021 which supports LIM’s plan to resume
iron ore production and demonstrated an initial 12-year mine life
with production of 2 million dmt of per year, for total production
of 23.4 million dmt of product at 62.2% Fe over the life of the
Houston mine.
The PEA estimates the Houston Project will generate an
undiscounted net cash flow of CAD234
million and an after-tax net present value at an 8% discount
rate of CAD109 million, and an
after-tax internal rate of return of 39%, under the base case
$90/dmt benchmark pricing
model. The PEA notes that using a spot price of $160/dmt would increase the after-tax NPV8% to
CAD459 million and the after-tax IRR
to 209%.
LIM recorded an impairment reversal of CAD26 million to the carrying value of the
Houston Project, which was the main contributor to LIM reporting
consolidated net income of CAD25.7
million for the year ended 31 March
2021. Anglesey holds 19.29 million LIM shares which on
31 March 2021 were valued in total at
$5.5 million, or approximately £4
million, on the OTC Market in the United
States. The increase in the value of the Group’s holding in
LIM has been recorded as a gain of £4 million in the Group Income
Statement through Other Comprehensive Income.
Environmental and
Social Focus
The purpose and objective of Anglesey Mining is to develop,
build and operate a producing mine at Parys Mountain, on the island
of Anglesey in North Wales, to
create value for shareholders in an environmentally, socially, and
ethically responsible manner for the benefit of all stakeholders.
There has been an increasing investor focus on environmental,
social and governance (ESG) matters, and these are areas on which
we have always placed high importance, particularly as having a
social licence to operate, and operating in an environmentally
responsible manner, are critical for the successful operation of
any mining project. In Anglesey we place a high priority on
sustainability and we are committed to being a responsible mining
company, maintaining mutually beneficial long-term relationships
with key stakeholders and the local community.
On the governance side, this year, we are reporting for the
second time under the new UK Corporate Governance Code published by
the Financial Reporting Council applicable to all companies with a
Premium Listing on the London Stock Exchange. Although Anglesey is
not included in the FTSE 350, and is considered a “smaller
company”, the Code applies to Anglesey because of its Premium
Listing status on the LSE.
The Directors believe that throughout the year, Anglesey has in
general complied with the spirit of the Principles of the Code, to
the extent such Principles are applicable in Anglesey’s particular
circumstances. However, as a company with limited active operations
and no full-time employees, some of the Principles and many of the
Provisions are not relevant or applicable to our individual
circumstances and we are not fully compliant with the Code,
specifically with regard to the independence of the Board and the
grant of share options to non-executive Directors. Nevertheless, we
are committed to continuing to update policies and procedures to
strive for best practices in governance affairs. Shareholders are
encouraged to read the detailed Report on Corporate Governance
included later in this Annual Report.
A unique and
timely opportunity
Given the challenges associated with the global pandemic, I
believe Anglesey accomplished a great deal over the past year with
important milestone achievements at Parys Mountain, in our iron ore
investments and in financing the company. Our goal now is to move
the Parys Mountain Mine closer to production. We have outlined new
initiatives at Parys Mountain and at the Grangesberg and
Labrador iron ore projects that
will each be critical in moving all these projects thorough to
production. These are all exciting opportunities and need to
be moved forward with the greatest speed possible within the
constraints of the resources available.
Development of a new mine at Parys Mountain, producing copper,
zinc and lead with gold and silver credits, can deliver economic
growth in the UK, regional jobs for the community and business
opportunities for local service providers. Hardly any of these
critical and strategic metals, essential for reduction in our
carbon footprint and transition to a green economy, are currently
produced in the UK leaving the country entirely dependent on
imports. This creates a unique and timely opportunity, both for
Anglesey Mining and for the UK, to develop a new, modern, mine at
Parys Mountain in an environmentally sustainable manner.
“Mineral resources are the lifeblood
of our modern society and the key to a more sustainable future.
Today, we are in the middle of disruptive innovation in emerging
green energy, e-mobility and clean technology, triggered by
pressing societal challenges. The growing need for carbon-neutral
technology creates a strong demand for minerals, metals and
advanced materials.” [2]
New Chief
Executive appointment
I was pleased to announce the appointment of Jonathan (Jo) Battershill as the new Chief
Executive of Anglesey and as a Director with effect from
1st August 2021. Jo brings great
enthusiasm, vigour, relative youth and deep relevant technical and
finance knowledge to the Company. We were delighted to have been
able to attract someone with his strong operations background and
financing experience. Jo will initially be tasked with moving
the Parys Mountain project towards production and with fund-raising
to facilitate our plans for both Parys Mountain and
Grangesberg.
To facilitate a smooth transition Bill
Hooley has relinquished his position as Chief Executive and
taken on the role of non-executive Deputy Chairman. Bill
served as CEO since 2006 and, as well as being President of
Labrador Iron Mines, directed the completion of various resource
upgrades for Parys Mountain, the 2017 Scoping Study and the QME
optimisation work all of which led to the successful production of
the 2021 PEA. He will continue to provide his advice and experience
to Anglesey as Deputy Chairman.
I would like to thank our Directors for their enduring
dedication and commitment, and our team of consultants and
contractors for all their hard work that made fiscal 2021
successful. I welcome new shareholders who joined us during the
past year and thank all Anglesey shareholders for their continued
interest.
Although mineral exploration and development is always a
high-risk speculative endeavour, I remain very positive and
enthusiastic about the future outlook for Anglesey Mining plc.
John F.
Kearney
Chairman of the Board
2 September 2021
Strategic report - Operations
Principal activities and business review
Anglesey Mining is engaged primarily in exploring and developing
its wholly owned Parys Mountain zinc, lead, copper project in
North Wales. Anglesey’s purpose is
the development of a producing mine at Parys Mountain to create
value for shareholders in an environmentally, socially, and
ethically responsible manner for the benefit of all
stakeholders. The purpose and objectives of the Group are
discussed in the Report on Corporate Governance included as part of
this Annual Report.
The core strategic priority of the Group is to systematically
and sequentially advance the development of a mine at Parys
Mountain by completing exploration to outline mineral resources,
completing technical and economic studies to assess financial
viability, completing feasibility studies to demonstrate technical
and financial viability and then using those studies to attract
investment and raise the necessary capital to build and operate the
mine.
In addition to Parys Mountain, Anglesey also holds important
investments in iron ore. Under various agreements, the Group
participates in the management of the Grangesberg iron ore property
in Sweden in which it increased
its holding during the year to 19.9% and holds 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 and continues to look at
other potential projects that may be beneficial or synergistic to
the development of the Company.
Parys Mountain copper zinc lead project - Micon Preliminary
Economic Assessment
The highlight of the past year was the completion in
January 2021 of an independent PEA on
the Parys Mountain project by Micon International Limited (“Micon”)
which demonstrates that a major copper-zinc-lead mine can be
developed at 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.
Completion of the PEA was the culmination of almost three years
of continuous optimisation work carried out, principally by Quarry
and Mine Equipment Limited (“QME”) and following upon an earlier
Scoping Study by Micon and Fairport Engineering Limited
(“Fairport”) in 2017, and based on previous work by Micon in 2006,
and particularly a JORC resource estimate in 2012.
The PEA included a new updated mineral resources estimate
showing 5.2 million tonnes of Indicated Resources at a combined
base metal grade of 4.3% (or a copper equivalent grade of 2.4%),
together with 11.7 million tonnes of Inferred Resources at a
combined base metal grade of 2.8% (copper equivalent grade of
2.0%). The updated resource estimate in the PEA indicates
that Parys Mountain contains 160,000 tonnes of copper in situ.
The PEA is based on the mining of 103,500 tonnes of copper over
the project’s 12-year mine life together with 213,800 tonnes of
zinc, 113,300 tonnes of lead and including 2,830 kg of gold and
219,000kg of silver. Total payable metals in concentrates are
projected at 71,776t copper, 141,581t zinc, 75,818t lead, 1578kg
gold and 125,714kg silver.
The most attractive development option, the expanded Case C,
indicates a total cash operating surplus over a 12-year mine life
of more than $510 million (£408
million), which translates to a pre-tax Net Present Value
discounted at 10% pa of over $120
million (£96 million), with an IRR of 26%.
The base case economic model utilized three-year trailing metal
prices as of September 2020 of
$1.20/lb for zinc, $2.81/lb for copper, $0.95/lb for lead, $16.67/oz for silver and $1,459/oz for gold, and an exchange rate of
£1.00=$1.25. Since last year metal
prices have continued to move forward and applying end June 2021 prices and exchange rates would
increase this NPV10 to $267 million.
See discussion on the sensitivity of the project to higher metal
prices below.
Background to PEA
In July 2017 a Scoping Study was
prepared by Micon and Fairport using a JORC resource estimate
completed in 2012 by Micon which reported a resource of 2.1 million
tonnes in the indicated category at 6.9% combined base metals.
Anglesey concluded that utilising the Indicated Resources only did
not properly reflect the potential of the property. In late 2018
Anglesey entered into an agreement with Quarry and Mine Equipment
Limited (“QME”) an Irish based contracting and consulting company
which has been supplying complete solutions to the mining industry
since 1985, to carry out an Optimisation Study to review expected
mining capital and operating costs and potential mining tonnages
and to include the additional Inferred Resources previously
identified by Micon in 2012.
An important initial aspect of the QME work was an estimate of
overall costs based on its own experience and its derived mining
capital and operating costs from the ground up. Given QME’s current
hands-on operating experience, these cost estimates can be regarded
as the best estimates currently available. QME then utilised the
cost estimates for the non-mining, i.e., processing and
infrastructure, aspects of the project from the 2017 study which
had been largely produced by Fairport with additional input from
Micon. QME estimated that at a 1,000tpd operating level, total
operating costs would be approximately $48 per tonne of ore milled.
QME then carried out a detailed mine planning exercise utilising
this $48 per tonne as a cut-off cost.
They applied this to each of the mineralised zones as identified by
Micon in 2012 including both Indicated as well as Inferred material
to estimate tonnages into stoping blocks that would be available
for mining. Some of these cases were based only on the White Rock and Engine Zones that lie adjacent
to the existing infrastructure including the Morris Shaft, whilst
one particular case looked at the greater tonnages available in the
more distant Lower Engine, Garth
Daniel and Northern Copper zones.
Having identified these stoping blocks, QME produced detailed
mining schedules for a number of cases. These schedules include all
the necessary access and production development required, as well
as production by tonnage and grade for the relevant timing periods.
As a result, a number of differing production rates were selected
based on the overall tonnages to ensure that the optimum overall
mine life for each case. QME then applied its expected development
and production cost estimates to each work unit to generate overall
time and cost forecasts by period for each of the cases
developed.
Following completion of the QME Optimisation Study in 2020,
Anglesey appointed Micon to conduct a PEA utilising the results of
the QME Optimisation Study as it felt appropriate. This PEA builds
on Micon’s previous work, including its 2012 resource estimate, the
2017 Scoping Study, including Fairport’s processing and
infrastructure capital and operating costs, and QME’s 2020
Optimisation Study on current mining capital and operating costs
and mineable tonnages.
New Expanded Resource Estimate
As part of the development of the PEA, Micon reviewed the work
carried out by QME including the mine planning and the capital and
operating cost estimates. In general, Micon concurred with the QME
work but did make some amendments when necessary. Having accepted
the $48 per tonne cut-off level,
Micon produced a revised resource estimate at this value. This
estimate used the same parameters including metal prices utilised
in its 2012 estimate. While there has been some movement in the
prices in the intervening period Micon concluded that using current
prices would not significantly amend this estimate:
Parys Mountain
Mineral Resource Estimate
Zone |
Category |
Tonnes |
Cu
(%) |
Pb
(%) |
Zn
(%) |
Ag
(g/t) |
Au
(g/t) |
AV
(US$/t) |
Cu
(t) |
Pb
(t) |
Zn
(t) |
Ag
(oz) |
Au
(oz) |
Engine |
Indicated |
496,000 |
1.36 |
2.59 |
4.94 |
91.8 |
0.5 |
246 |
6,760 |
12,840 |
24,520 |
1,465,000 |
8,320 |
Inferred |
121,000 |
1.73 |
3.42 |
6.73 |
69.9 |
0.5 |
300 |
2,100 |
4,130 |
8,130 |
272,000 |
2,000 |
Deep
Engine |
Inferred |
620,000 |
1.95 |
1.90 |
4.21 |
22.6 |
0.2 |
206 |
12,070 |
11,760 |
26,110 |
450,000 |
3,850 |
White
Rock |
Indicated |
4,712,000 |
0.25 |
1.23 |
2.30 |
23.1 |
0.3 |
93 |
11,930 |
57,870 |
108,360 |
3,504,000 |
43,950 |
Inferred |
1,258,000 |
0.28 |
1.26 |
2.56 |
27.5 |
0.3 |
101 |
3,560 |
15,900 |
32,250 |
1,110,000 |
10,460 |
Garth
Daniel |
Inferred |
340,000 |
1.89 |
2.76 |
5.78 |
66.3 |
0.1 |
265 |
6,450 |
9,390 |
19,680 |
725,000 |
1,540 |
Northern
Copper |
Inferred |
9,375,000 |
1.27 |
0.24 |
0.38 |
5.0 |
0.1 |
68 |
118,970 |
22,470 |
35,590 |
1,504,000 |
38,780 |
Total |
Indicated |
5,208,000 |
0.36 |
1.36 |
2.55 |
29.7 |
0.3 |
108 |
18,690 |
70,700 |
132,880 |
4,969,000 |
52,270 |
Inferred |
11,714,000 |
1.22 |
0.54 |
1.04 |
10.8 |
0.2 |
87 |
143,150 |
63,650 |
121,760 |
4,060,000 |
56,640 |
- Dr Robin Bernau, employee of
Micon International Co Ltd, is a competent person for the Mineral
Resource Estimate. The effective date of the estimate is
15.12.2020.
- There are reasonable prospects for eventual economic extraction
under assumptions of a gold price $1,275/oz, a silver price of $17.50/oz, a zinc price of $1.25/lb, a copper price of $2.50/lb and a lead price of $1.00/lb employing underground mining
techniques.
- All in mining, processing, re-handling and general and
administration costs were estimated at $39.06/t mill feed. A payability factor of 72%
has been applied.
- An operating cut-off of $48/t has
been applied and no allowance has been made for dilution or
loss.
- Rounding as required by reporting guidelines may result in
apparent summation differences between tonnes, grade and contained
metal content.
The 2020 PEA increased the resource estimate to 5.2 million
tonnes at 4.3% combined metals in the indicated category together
with 11.7 million tonnes at 2.8% combined metals in the inferred
category. This estimate utilised the same geological
interpretation and model as the 2012 and 2017 studies but used a
modified cut-off cost of $48 per
tonne based on the QME work and extended the resource to include
other zones that were not previously considered.
Importantly, the new Resource Estimate of 5.2 million tonnes in
the Indicated category reflects a significant increase from the
previous estimate of 2.8 million tonnes in the Indicated category
used in the 2017 Scoping Study. This is as a result of using the
new estimated cut-off cost. Although this results in some reduction
in overall grades this does have a very significant beneficial
effect on the total project financial outcome as demonstrated in
the PEA.
Mine Development Cases
As part of the Optimisation Study, QME evaluated a number of
differing development scenarios. On review of the QME Study, Micon
selected three of these scenarios to best describe the potential
for the deposits. Each case utilised both Indicated as well as
Inferred resources and, on the basis of the increased tonnage
available for mining, selected higher planned production rates than
the 1,000tpd, used in the 2017 study.
These three cases selected by Micon are summarised as:
Case A – Utilising only the White
Rock and Upper Engine zones (as in the 2017 study) with
Inferred material included at a planned production rate of
1,500tpd.
Case B – As Case A but with some initial production coming from
a proposed small open cut, again at a production rate of
1,500tpd.
Case C – Utilising all the reported resources in the
White Rock and Upper Engine Zones
but also including the inferred resources in the Lower Engine Zone,
the Garth Daniel Zone and the Northern Copper Zone. In this Case C
with the increased mineable tonnage, the planned production rate
was increased to 3,000tpd.
Mine Planning
Micon reviewed and agreed with the mine layout and the stope
planning produced by QME. In Case B, Micon carried out its own
design, planning and costing for the suggested small open pit and
utilised these results rather than the estimates made by QME -
given Micon’s experience in open pits compared to the underground
speciality of QME.
Micon agreed with QME’s conclusions that the existing Morris
Shaft would be used only for ventilation in Cases A and B but would
be fully utilised as a hoisting shaft in Case C and agreed with the
QME cost estimates to put the shaft back into service.
Micon therefore accepted most of the detailed production timing
and cost estimates and timing produced by QME and adopted them into
the financial review. These tonnages include material derived from
both Indicated and Inferred resources as well as internal dilution
at zero grade of material outside of these resources necessarily
included within stoping blocks. They are shown in the table
below:
|
Tonnage
(Mt) |
Copper
(Cu%) |
Zinc
(Zn%) |
Lead
(Pb%) |
Silver
(g/t Ag) |
Gold
(g/t Au) |
Copper
Equivalent
% |
Case A |
5.87 |
0.34 |
2.42 |
1.27 |
27.27 |
0.28 |
2.25 |
Case B |
5.45 |
0.36 |
2.49 |
1.30 |
28.40 |
0.29 |
2.33 |
Case C |
11.42 |
0.84 |
1.82 |
0.97 |
18.63 |
0.24 |
2.29 |
There is a significant increase in the tonnage available for
mining and processing beyond the 2.23 million tonnes in the 2017
study. This is as a result of using the new estimated cut-off cost
and the inclusion of Inferred resources in the selection of mining
blocks. Although this results in some reduction in overall grades,
the PEA shows a very significant beneficial effect on the total
project financial outcome.
Processing and Infrastructure
The Micon 2017 Scoping Study included extensive work by Fairport
Engineering regarding the process plant design, efficiencies and
costs. This study recommended a Dense Media Separation (“DMS”)
facility ahead of the main processing plant and this continues to
be utilised for all three of the current cases. Similarly, FEL
reviewed and costed the site infrastructure requirements.
Micon incorporated all of Fairport’s recommendations from 2017
into the PEA but with some additions and modifications as now
deemed appropriate.
Project Costing and Financial
Results
Micon produced a detailed financial model incorporating its own
inputs as well as those from QME and Fairport. The model was
constructed on yearly periods using the QME mine production
forecasts and the Fairport processing characteristics. The model
assumed that the mine would produce three base metal concentrates
namely copper, zinc and lead. In addition, some gold will be
produced in concentrate from the free gold that has been identified
in the mineral resource. Relevant concentrate transport and
treatment and refining costs were applied individually to each
concentrate.
Costs within the model were defined as mid-2020 costs to match
the estimates produced by QME. Processing infrastructure costs
produced by Fairport in 2017 were escalated to a mid-2020
equivalent. Mining costs for each case were determined directly by
QME. Processing and Infrastructure capital and operating costs were
based on the 2017 production rate of 1,000tpd and these were
factored by Micon to reflect the higher 1,500tpd or 3,000tpd
production rates as appropriate. In addition to the mining costs
generated by QME, Micon included additional initial exploration
costs of $1.6 million for Cases A and
B and $7.5 million for Case C.
Within the financial model Micon incorporated all known and
relevant project charges including licences, fees and royalties.
All values were based on constant 2020 prices and no allowances
were made for any escalation in either costs or commodity prices.
No allowance was made for corporate costs or for any interest
charges of any project financing. The financial results derived are
therefore to be read at a project level basis. Micon calculated
financial results on both a pre-tax and a post-tax basis after
incorporating appropriate carry forward expenses and utilising
current UK tax rates.
Micon considered it appropriate to utilise three-year trailing
metal prices in the financial evaluation. These were determined to
the end of September 2020 and
amounted to $1.20 per pound for zinc,
$2.81 per pound for copper, S0.95 per
pound for lead, $16.67 per ounce for
silver and $1,459 per ounce for gold.
A fixed exchange rate of £1.00 = $1.25 was used.
Micon reviewed the appropriate discount rate to utilise and
after considering the Weighted Average Cost of Capital and applying
this through a Capital Asset Pricing Model elected to apply a
discount a rate of 10% per annum for all cases.
It was apparent from the financial analysis that Case C was the
most attractive option with a pre-tax NPV more than twice either of
the other cases as demonstrated in the table below which compares
Case C with Case A.
Parys Mountain Cases A and C - Operating and
Financial Summary
|
|
Case A |
Case C |
Life of mine |
Years |
12 |
12 |
Production |
TPD |
1500 |
3,000 |
Total tonnes produced |
Mt |
5.9 |
11.4 |
Net smelter returns |
$m |
478 |
1,015 |
Operating Costs |
$m |
252 |
503 |
EBITDA |
$m |
226 |
512 |
Pre-production capex |
$m |
70 |
99 |
Sustaining capes |
$m |
34 |
76 |
Net cash flow pre-tax |
$m |
122 |
336 |
Corporation tax |
$m |
24 |
67 |
Net cash-flow post tax |
$m |
98 |
269 |
Pre-tax NPV10 |
$m |
36 |
120 |
Post tax NPV10 |
$m |
26 |
92 |
Pre-tax IRR |
% |
20 |
26.0 |
Post-tax IRR |
% |
17 |
24 |
The PEA includes Inferred Resources and therefore the tonnages
indicated as available for mining cannot be extrapolated to Reserve
status, and consequently the financial results cannot be considered
as reaching Feasibility Study basis.
Sensitivity to metal prices
The financial evaluation in the PEA utilised average three-year
trailing metal prices to the end of September 2020 of $1.20 lb zinc, $2.81 lb copper, S0.95 lb lead, $16.67 oz silver and $1,459 oz gold and a fixed exchange rate of £1.00
= $1.25.
Anglesey believes that these metal prices used in the PEA are
conservative. Using actual metal prices and the exchange rate at
the time of publication of the PEA in January 2021 would increase the Case C pre-tax
NPV10% from $120 million to
$220 million.
Since last year metal prices have continued to move higher and
June 30 prices were $1.34/lb zinc, $4.26/lb copper, $1.05/lb lead, $26.06/oz silver and $1771/oz gold, with the exchange rate at £1.00 =
$US1.38. Using these
June 2021 parameters, the pre- and
post-tax NPV10 increase to $267
million and $213 million
respectively, with pre- and post-tax IRRs showing as 38.2% and
35.3% respectively., which demonstrate the sensitivity and leverage
of the Parys Mountain project to the higher June 2021 metal prices.
The Way Forward - Future Steps
The PEA demonstrates that a major copper-zinc-lead mine can be
developed at Parys Mountain. The results show that once in
production, Parys Mountain should be able to make very positive
financial returns. Nevertheless, as always in the mining
industry, there are a number of sequential steps that need to be
taken to move any project from the PEA to a full committed decision
to proceed to production and these steps do take some time to reach
fruition.
The key to this development is now securing the necessary
finance to continue to move the project towards production. The PEA
indicated a pre-production capital expenditure of $99 million. This together with all other
pre-decision project costs as well as ongoing corporate costs needs
to be financed. The traditional method utilised by the industry
involved a mixture of equity and debt. Typically, a mix of
30% equity to 70% debt could have been arranged. In this
instance that would require Anglesey to source in the region of
$70 million in debt and as much as
$30 million of equity.
The Directors have been examining various possible financing
routes including the traditional debt: equity scenario, but also
indirectly through joint venture and other arrangements. As part of
this process, the detailed results from the PEA have been made
available on a limited and confidential basis to a number of
entities who have shown interest in Parys Mountain. These
entities are well aware of the potential upside from the ongoing
movement in commodity prices, and of the security offered by a
project based in the United
Kingdom with planning permissions in place. Under the
Development and Co-operation Agreement with QME, the Group has
agreed to grant QME various rights and options relating to the
future development of Parys Mountain. Anglesey has agreed to a
grant to QME the right and option, upon completion of a
Prefeasibility Study, 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.
From the feedback received It has become clear that financing
opportunities would be enhanced with some additional work to
further de-risk the project and it can be expected that a project
financing route will require the delivery of a feasibility study.
Micon made recommendations regarding further technical studies to
better quantify some aspects of the mining and processing
operations, and trade-off studies to determine the best overall
mining schedules, metallurgical flowsheet and infrastructure design
to further optimise the project, which should lead to improved
economics to be included in a feasibility study and improve the
overall financial capability of the project.
Following the Micon PEA recommendations, a step series of
activities have been identified that will form the necessary
preparatory work as a prelude to the commissioning of a feasibility
report. These include a surface diamond drilling programme to
increase the confidence in some parts of the White Rock zone ahead of first underground
development in some of those areas of the resource that are
currently classified as Inferred. Such increased data would
be aimed at converting parts of the resource to the Indicated
category and thereby increasing the bankability of those parts of
the resources. Simultaneously drill core samples would be collected
for metallurgical testing purposes and these samples would then be
subject to process testing to improve the flow-sheet design that
has currently been developed.
Whilst Anglesey holds the necessary planning permissions to
build a mine at the site, these must be supported by the grant of
various environmental operating licenses. This will require
collection of further environmental base-line data and a programme
of environmental base line data collection is planned, both for
inclusion in a formal feasibility report and as a pre-requisite
ahead of any formal decision to commence operations.
The Parys Mountain property has a high potential for the
discovery of additional mineral resources. There are drill
intercepts outside of the planned mining blocks indicating
mineralisation may extend into other areas of sparse drilling
immediately adjacent to the reported Mineral Resources. Micon
included additional exploration costs of $1.6 million for Cases A and B and $7.5 million for Case C. However, much of this
additional drilling recommended for Case C, to upgrade the category
of the resource in the second half of the project mine life from
Inferred to Indicated, should ideally be carried out from an
underground drill drive from the area around the bottom of the
shaft and would not necessarily be undertaken until some years into
the project.
At the end of March 2021, the
group had cash resources of £892,000. Following a careful
review of the financial resources currently available and
considering the normal on-going costs of corporate and site
operations, it has been decided that these three activities will be
commenced forthwith and as additional funding become available this
programme will be accelerated.
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.
At 31 March 2021 following
investments during the financial year, the Group holds a direct
19.9% interest in Grangesberg Iron AB (GIAB) and a right of first
refusal over 50% of the share capital of GIAB. This right has been
granted in exchange for Anglesey continuing to co-manage GIAB on a
cost recovery basis. Anglesey 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. 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 Grangesberg iron ore deposit hosts a significant iron
resource that has excellent potential for expansion at depth.
In 2020 the price of iron ore surged to a nine-year high of
US$170 per tonne (62% Fe Fines CFR
China), driven largely by sustained demand in China and supply constraints in Brazil. In the first half of 2021, the price
of iron ore climbed another 40%, to an all-time record US$235 per tonne in May, before retreating to
US$215 per tonne by the end of June
and below US$200 per tonne in August.
The premium for 65% Fe has increased to almost $50 per tonne with 65% Fe price of $258 per tonne. It was to be expected that the
price would see some contraction. However the stimulus programmes
in both China and the USA as well as continuing production delays in
Brazil are supporting the price.
Iron ore demand in China has
proven to be extremely strong, as infrastructure stimulus programs
have been driving a robust economic recovery and continued strength
in Chinese steel production It now looks unlikely that there will
be a retreat to 2018 prices in the medium term and with the major
economies beyond China and the
USA expecting to recover from the
Covid-19 situation in the near term, there is every expectation
that a supportive floor price at a level that would make
Grangesberg competitive will be maintained.
Grangesberg, when in production will produce a 67%+ product
which should command the premiums noted. As such, Grangesberg
situated in politically stable Sweden and relatively close to the major
European markets with consequent lower shipping costs, continues to
present an attractive proposition. Nevertheless, the high
capital cost expected to develop Grangesberg will in itself present
some challenges. We continue to look to some consolidation in
the iron ore industry in Scandinavia and believe that as this
evolves that Grangesberg as the largest non-producing iron ore
asset in the region will be well placed to take advantage and be
part of a greater financing package.
To take best advantage from these opportunities, in conjunction
with our Swedish partners in Grangesberg we expect to commission a
new PEA on the development of the project immediately. This
PEA will consider modified development scenarios from those
utilised by Grangesberg in its last major study that should result
in better utilisation of underground and surface resources, will
critically review capital expenditure requirements hopefully
resulting in some efficiencies from previous studies, and will
importantly consider the enhanced future price expectations for
both the base iron ore price and for the higher-grade
premium. The deliverables from the PEA will be used both as a
financing tool and in discussions with future partners.
Labrador Iron Mines
The Group has an investment holding of 12% (2020 -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.
LIM holds measured and indicated DSO mineral resources of
approximately 21 million tonnes at an average grade of 62.7% Fe and
inferred resources of 14 million tonnes at an average grade of
59.4% Fe on its Schefferville
projects. In addition, LIM holds the Elizabeth Taconite project,
which has an inferred mineral resource estimate (as at June 15, 2013) of 620 million tonnes at an
average grade of 31.8% Fe.
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.
In March 2021 LIM announced the
results of a new updated independent PEA regarding LIM’s direct
shipping Houston project located
approximately 20 kilometres south of its previously mined James
deposit. The projected financial results from the PEA were very
encouraging with an after-tax NPV8 of CAD109
million at the relatively low iron ore price for 62% Fe of
$90 per tonne. At an iron price
of $160 per tonne i.e. that set at
the end of March, this NPV8 would increase to CAD459 million.
The Houston PEA assessed a production rate of 2 million tonnes
of 62.2% Fe per annum, with an overall mine life of 12 years.
Production would be expected to be 30% lump ore and 70% sinter
fines.
Following the issuance of the independent PEA, and having regard
to the strong price of iron ore, LIM recorded an impairment
reversal of almost CAD26 million at
March 31, 2021, as a restatement of
the previous carrying value of the Houston Project, which was the
main contributor to LIM reporting consolidated net income ofCAD25.7
million for the year ended 31 March
2021. LIM’s shares are traded on the OTC Markets in
the United States and at
31 March 2021 were quoted at
$0.29 per share. Anglesey holds 19.29
million LIM shares which at that end of the year price were valued
in total at $5.5 million, or
approximately £4 million. Last year the shares were carried in
Anglesey’s accounts at a nominal value of £1. The increase in this
value of the Group’s holding in LIM since last year has been
recorded in the Statement of Financial Position as a gain of
£4,053,506 through Other Comprehensive Income.
Other activities
The Directors continue to seek out new properties suitable for
advanced exploration or development that would be complementary to
or provide synergies with the Company's existing projects and
within the financing capability likely to be available. The
Directors have identified a number of zinc and copper projects, as
the most potentially attractive and continue to evaluate a number
of early-stage opportunities.
Financial results and position
There are no revenues from the operation of the properties. As
described in the Labrador Iron Mines section above, the Company
recorded a gain of £4,053,506 in the value of the group’s holding
in LIM and this has been reported in other comprehensive income,
resulting in total comprehensive profit for the year of £3,714,921,
compared to a comprehensive loss for the prior year of
£327,860.
The loss before other comprehensive income for the year ended
31 March 2021 after tax was £328,518
compared to a loss of £304,510 in the 2020 fiscal year. The
administrative and other costs excluding investment income and
finance charges were £162,824 compared to £134,796 in the previous
year.
During the year there were no additions to fixed assets (2020 -
nil) and £101,570 (2020 - £49,835) was capitalised in respect of
the Parys Mountain property as mineral property exploration and
evaluation.
At 31 March 2021 the Group held
mineral property exploration and evaluation assets with a carrying
value of £15.3 million. These carrying values are supported by the
results of the 2021 Preliminary Economic Assessment of the Parys
Mountain project which estimated a pre-tax net present value,
discounted at 10%, of £96 million under Case C, but may not reflect
the realizable value of the properties if they were offered for
sale at this time.
The directors considered that the effect of Covid-19, if any,
was likely to be minimal and short-term relative to the life of the
project.
At the reporting date, and as detailed in Note 10 the Directors
considered the carrying value of the Parys Mountain exploration and
evaluation assets to determine whether specific facts and
circumstances suggest there is any indication of impairment. They
carefully considered the positive results of the recent independent
PEA and the plans for moving the project forward.
Consequently, the Directors concluded that there were no facts and
circumstances which materially changed during the year which might
trigger an impairment review and that there are no indicators of
impairment.
The successful placement of shares during the year resulted in a
cash inflow of £1,068,200, after fees and expenses. The cash
balance at 31 March 2021 was
£891,767, compared to £95,311 at 31
March 2020, the increase being due to (i) placements for
cash of new shares between August
2020 and January 2021, (ii)
the subsequent exercise of all the warrants granted at the same
time as the first of those share issues and (iii) the
exercise by directors and a former director of all outstanding
options granted under the Group’s share option scheme, which
options were set to expire in September.
These funds will be used for ongoing work on the Parys Mountain
project, as well as for general corporate purposes.
At 31 March 2021 there were
225,475,732 ordinary shares in issue (2020 – 186,975,732), the
increase being due to the financing events referred to above. At
2 September 2021 there were
225,475,732 ordinary shares in issue.
The use of financial instruments is described in note 23.
Performance
The Group holds interests in exploration and evaluation
properties and, until a mine is placed into production, there are
no standardised performance indicators which can usefully be
employed to gauge performance., The publication of the
independent PEA on the Parys Mountain project in January 2021, which built upon the optimisation
studies successfully completed over the previous two years, and
included a new expanded mineral resource estimate, with a financial
model for an expanded case at 3,000 tpd which indicated a pre-tax
NPV10% of £96 million and a 26% IRR, demonstrated a significant
improvement on previous studies and steady progress.
The chief external factors affecting the ability of the Company
to move its projects forward are primarily the demand for metals
and minerals, levels of metal prices 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.
Section 172 Statement
The Directors, both individually and collectively, believe, in
good faith, that throughout the year and at every meeting of the
Board and management when making every key decision, they have
acted to promote the success of the Group for the benefit of its
members as a whole, as required by Section 172 of the Companies Act
2006, having regard to the stakeholders and matters set out in
section 172(1) of the Companies Act 2006. The Directors Section 172
Statement follows.
Section 172 of the Companies Act is contained in the part of the
Act which defines the duties of a director and concerns the “duty
to promote the success of the Company”.
Section 172 adopts an ‘enlightened shareholder value’ approach
to the statutory duties of a company director, so that a director,
in fulfilling his duty to promote the success of the company must
act in the way he considers, in good faith, would be most likely to
promote the success of the Company for the benefit of its members
as a whole, and in doing so have regard to other specified factors
insofar as they promote the Company’s interests.
The Board of Anglesey Mining recognises its legal duty to act in
good faith and to promote the success of the Company for the
benefit of its shareholders and with regard to the interests of
stakeholders as a whole and having regard to other matters set out
in Section 172. These include the likely consequences in the long
term of any decisions made; the interest of any employees; the need
to foster relationships with all stakeholders; the impact future
operations may have on the environment and local communities; the
desire to maintain a reputation for high standards of business
conduct and the need to act fairly between members of the
Company.
The Board recognises the importance of open and transparent
communication with shareholders and with all stakeholders,
including landowners, communities, and regional and national
authorities. We seek to maximise the industry’s benefits to local
communities, while minimising negative impacts to effectively
manage issues of concern to society.
Shareholders have the opportunity to discuss issues and provide
feedback at any time.
The application of the Section 172 requirements can be
demonstrated in relation to the Group’s operations and activities
during the past year as follows.
Having regard to the likely consequences of any decision in the
long term
The Company’s purpose and vision are set out in the Chairman’s
Letter and in this Strategic Report. The Board oversees the
Company’s strategy and is committed to the long-term goal of the
development of the Parys Mountain Project. The activities towards
that goal are described and discussed in the Strategic Report. The
Board remains mindful that its strategic decisions have long-term
implications for the Parys Mountain project, and these implications
are carefully assessed. For example, in working with Micon
International on the preparation of the PEA, various scenarios were
valuated, including three separate development cases or scenarios,
utilising planned mine tonnages, ranging from 5.5 million tonnes at
1,500 tpd in Case A, to a larger operation of 11.4 million tonnes
at 3,000 tpd in Case C, over a 12-year mine life. In evaluating
alternatives or opportunities the Directors always consider the
likely consequences of any decision in the long-term that may
affect the Group, and the potential impact on long-term shareholder
value, including key competitive trends, supply and demand of
metals, potential impact on the environment and climate change
considerations, all of which were considered in the preparation of
the PEA.
Having regard to the need to foster the Company’s business
relationships with others
The Company operates as a mineral exploration and development
business, without any regular income and is entirely dependent upon
new investment from the financial markets for its continued
operation. The Board values the benefits of maintaining strong
relationships with key partners, contractors and consultants. This
is discussed in more detail elsewhere in this Strategic Report. As
a mine development company, the Board understands that a range of
third parties- regulators, contractors, suppliers, and potential
customers for the concentrates that would be produced from a mine
at Parys Mountain, are relevant to the sustainability of the
Company business.
Having regard to the interests of the Company’s employees
The Group currently has no full-time employees and is managed by
its directors and a small number of associates and sub-contract
staff. The Board takes steps to ensure that the suggestions, views
and interests of the Company’s personnel are considered in
decision-making.
Having regard to the desirability of the Company maintaining a
reputation for high standards of business conduct
The Board is committed to high standards of corporate
governance, integrity, and social responsibility and to managing
the Company in an honest and ethical manner, as further discussed
in the Corporate Governance Report. The Directors strive to apply
ethical business practices and conduct themselves in a responsible
and transparent manner with the goal of ensuring that Anglesey
Mining plc maintains a reputation for high standards of business
conduct and good governance.
Having regard to the impact of the Company’s operations on the
community and the environment
The Board takes a broad range of stakeholder considerations into
account when making decisions and gives careful consideration any
potential impacts on the local community and the environment.
The Board strives to maintain good relations with the local
community, especially with local businesses in North Wales. For example, in reviewing various
alternative options of the possible expansion of planned mining
operations at Parys Mountain, as part of the QME optimisation
studies and as further reviewed as part of the preparation of the
PEA, the Board considered the impact of such possible expansion on
the local footprint of the property, the potential environmental
impact, the number of employees and the impact on local communities
and businesses.
The Corporate Governance Report discusses how the Directors
engage with and have had regard to the community in which the Group
operates. Further discussion of these activities can be found
in this Strategic Report. As a mine development company, the Board
understands that recognising and having regard to the potential
impact the Company’s operations may have on the community and the
environment is essential to underpinning the social licence
necessary to operate. In making decisions about the development of
a mine at Parys Mountain, the Board would seek to maximise the
benefits to the local community, while minimising negative impacts,
and to effectively manage issues of concern to society. By aligning
future operations to environmental, social and governance
performance the Company will seek to deliver on its purpose to
create value through responsible and sustainable mining.
Having regard to the need to act fairly as between members of
the Company
The Company has only one class of share in issue and all
shareholders benefit from the same rights, as set out in the
Articles of Association and as required by the Companies Act 2006.
Since 1996 a Controlling Shareholder Agreement has been in place
with Juno Limited, the largest shareholder, which provides that
Anglesey will maintain an independent board and any transactions
between Juno and Anglesey will be at an arm’s length basis.
The Board recognises its legal and regulatory duties and does
not take any decisions or actions, such as selectively disclosing
confidential or inside information, that would provide any
shareholder with any unfair advantage or position compared to the
shareholders as a whole.
Risks and uncertainties
The Directors have carried out an 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, the more significant of which are described below.
The board believes the principal risks are adequately disclosed in
this annual report and that there are no other risks of comparable
magnitude which need to be disclosed.
Mineral exploration and mine development is a high-risk
speculative business and the ultimate success of Anglesey Mining
will be dependent on the successful development of a mine at Parys
Mountain, which is subject to numerous significant risks most of
which are outside the control of the Board.
In reviewing the risks facing the Group, the Board considers it
is sufficiently close to operations and aware of activities to be
able to adequately monitor risk without the establishment of any
formal process. There may be 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, results of
exploration, mineral reserves, mineral resources, 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 of properties, mineral claims,
leases and other mineral interests, should it seek to pursue such
opportunities, as well as for the recruitment and retention of
qualified employees and other personnel and in attracting
investment and or potential joint venture partners to its
properties.
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 programmes 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.
Development and liquidity risk
The going concern risk is discussed in detail in the Directors
report. The Group has relied on equity financing to fund its
working capital requirements and will need to generate additional
financial resources to fund all future planned exploration
programmes.
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.
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 are usually expressed and traded
in US dollars and any fluctuations may be either exacerbated or
mitigated by currency fluctuations which affect the revenue 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
18 and 24.
Permitting, environment, climate change 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. A discussion on
the composition and assessment of the Board of Directors is
included in the Report on Corporate Governance.
Brexit
The Directors believe that the effect on the specific operations
of the UK having left the European Union is unlikely in and of
itself to be material and the resultant expected focus on domestic
investment in the UK may be beneficial to the Parys Mountain
Project.
Covid-19
The Directors have carefully considered the impact of the
Covid-19 pandemic on the Parys Mountain property and have concluded
that to date it has had no impact on the project and further it is
unlikely to have, assuming that the pandemic does not escalate and
passes over in the next two to three years. The project is not
currently in production, so Covid-19 does not impact current
operations.
In our Annual Report last year, we noted that we did not expect
the Covid-19 pandemic to have any material effect on operations or
to have any major long-term impact. In the year just completed that
has proved to be largely correct as the Group suspended all field
activities in compliance with Government guidelines to help limit
the spread of the virus, and continued to operate in a socially
responsible manner, ensuring the safety of all personnel and
community. Nevertheless, although the pandemic has no direct impact
on the Parys Mountain property and is not expected to affect its
ongoing exploration and development, equity financing is relied
upon to generate additional financial resources to fund working
capital requirements and to fund the planned programmes and
travel restrictions did hamper the ability to meet with
potential investors and conduct due diligence exercises and site
visits and these impediments may continue for the immediate
future.
The Group cannot accurately predict the impact the COVID-19
pandemic will have on its operations, including uncertainties
relating to the duration of the pandemic, the ultimate severity of
the disease, the duration of travel and quarantine restrictions
imposed by governmental authorities, and the impact on schedules
and timelines for planned operations or exploration programs. In
addition, this widespread health crisis has adversely affected the
economies and financial markets resulting in an economic and
financial downturn that could r affect the Company’s ability to
finance its operations.
As noted last year one of the impacts of the Covid-19 pandemic
has, paradoxically, been an improvement in the demand for
commodities as governments around the world launch huge stimulus
programmes focused on infrastructure and job creation leading to
the potential significant increase in demand for metals.
Group Prospects
The Parys Mountain mine is not yet in production and does not
generate any revenue. We have no sales at present and the
continuance of operations is entirely dependent upon our ability to
raise adequate financing.
The progress from the QME optimisation study as reported last
year through to the production of the Micon PEA earlier this year
has been very positive. The results show that once in production
Parys Mountain should be able to make very positive financial
returns. The key to this development is now securing the
necessary finance to continue to move the project towards
production.
The Company plans to phase the development of the Parys Mountain
project by undertaking the various optimisation programmes and
completing a prefeasibility or feasibility study to progress the
Parys Mountain Mine towards production.
Metal Price Outlook Positive
The strength of base and precious metal prices to date in 2021
is very encouraging. The two key metals for Parys Mountain
are copper and zinc, although it should be noted that at mid- 2021
precious metal prices the value of gold and silver to be produced
at Parys Mountain would represent about 10% of the total revenue
stream.
Over the past year, base metal prices have posted strong gains,
driven by resilience in the global economy, investment speculation,
supply disruptions and inventory depletion. The Covid-19 pandemic
led to a decrease in metal demand in China during the first quarter of 2020, but
demand rebounded strongly in the second half of 2020 as incentive
measures in the country kick-started industrial activity.
Copper moved significantly from around $2.80/lb per pound last year to a high of
$4.85/lb in May 2021. The rally in copper prices in 2020 was
due mainly to the recovery of Chinese copper demand which was
underpinned by Chinese government stimulus. In 2021, continued
fiscal and monetary policy support is providing additional momentum
to prices against a backdrop of multi-year low exchange stocks.
Notwithstanding a mid-summer slowdown, Chinese demand is expected
to remain strong in 2021, due to the real estate sector and an
increase in air conditioning, automotive, and consumer durable
production.
The use of copper in electrification is expected to continue to
create strong demand in the long term and looking at previous
cycles the copper price recovery could still be in early stages.
London Metals Exchange (“LME” 3 month prices hit 10-year highs of
~$10,700/t ($4.85/lb) in May, driven by expectations of a
global economic recovery, the green energy story and multi-year low
metal exchange inventories. CRU, the commodities research unit, has
forecast its 2021 LME 3 Month copper price average at $8,835/t ($4.00/lb), an increase of 43% on the 2020
average.
The demand for zinc metal increased from the end of the first
quarter of 2020 through the rest of the year and zinc prices
improved throughout the second half of the year and through the
first half of 2021. Zinc prices on the (LME) averaged
US$1.03 per pound for 2020 but ended
the year at US$1.24/lb and rose to a
high of US$1.39/lb in May 2021 and traded between US$1.30 to $1.40/lb
in June, July and August..
Zinc inventories on the LME followed a similar pattern falling
from 250,000 tonnes in April 2020 to
almost 50,000 tonnes in March of 2021 and then rising back to the
250,000 tonnes level. The increase in inventories came after
China, through the National Food
and Strategic Reserves Administration sold a total of 30,000 tonnes
of zinc and 20,000 tonnes of copper from China’s national
strategic reserves in June and 50,000 tonnes of zinc and
30,000 tonnes of copper in July . to curb rising commodity prices.
China’s will sell 30,000 tonnes of copper and 50,000 tonnes of zinc
in a third batch of sales via a public auction on September 1, The sales came as China sought to cool the surge in metal prices
fuelled by a post-pandemic economic recovery, and speculative
buying that has dented manufacturers' margins.
Lead prices on the LME averaged US$
0.82/lb in 2020, compared to US$0.93/lb in 2019 and ended the year at
US$0.80/lb. Since then, lead prices
have risen to over the US$1.00/lb
level. Lead inventories have remained flat through 2020 hovering
around 60,000 tonnes but spiked to more than 140,000 tonnes in
January 2021 before settling back to
100,000 tonnes.
Base metals are needed for electrification and adaptation to
climate change, copper for power generation, transmission and
energy storage; nickel and lead for energy storage, and zinc for
extending the lifespan of products. It is expected that the
post-pandemic global stimulus plans and the requirement for
increased production to achieve climate neutrality by 2050 will
provide long term support for metal prices, in particular for
copper.
Wood Mackenzie, the commodities research firm, has suggested in
its Energy Transition Outlook (ETO) that demand for primary copper
is set to grow by an average of ~2% p.a. over the next 20 years,
while its Accelerated Energy Transition (AET2) Scenario, which
limits the average global temperature increase to 2 degrees from
1990 levels, suggests the potential to boost copper demand growth
to 3.5% p.a. leading to a doubling of global primary demand by
2040. “The energy transition cannot happen without a sufficient,
timely and ESG compliant copper supply in place” states Wood
Mackenzie.
Because China accounts for more
than half of global base metal demand and a significant share of
global metal supply, economic developments in China will continue to be a major factor in
metal markets and prices over the long term.
In 2020 the price of iron ore surged to a nine-year high of
US$170 per tonne (62% Fe Fines CFR
China), driven largely by sustained demand in China and supply constraints in Brazil. In the first half of 2021, the price
of iron ore climbed another 40%, to an all-time record US$235 per tonne in May, before retreating to
US$215 per tonne by the end of June
and declining below US$200 to
US$160 per tonne range in August. It
was to be expected that the price would see some contraction.
Nevertheless, iron ore demand in China has proven to be extremely strong, as
infrastructure stimulus programmes have been driving a robust
economic recovery and strong Chinese steel production.
There are pundits who are suggesting that the next metals
super-cycle is in place and sustainable for many years to
come. Nevertheless, there are also doomsayers, particularly
amongst the analytical industry, who believe backwardation curves
represent the future but who find it difficult to look at the
realpolitik situation. Their negative views have prevailed over
many years but have generally proved incorrect.
As we did in last year’s report, we point out that mines have a
limited life span, and the supply of metal will decline unless new
mines are put into production. Investment in new mines will only
take place if companies believe that future metal prices will make
investment profitable. The Directors, who have long experience in
the base metals markets through many price cycles, believe that
continued strength in metal prices is very likely because the
industry has not been investing in any significant levels of
exploration in recent years while demand for metals continues to
steadily grow.
In Anglesey, we believe that the correct approach is to factor
in current and expected demand and to assume some but not all
forecast new production. Higher prices will eventually be
reflected in increased production, but the lead-time for such new
production can be significant, and it is likely that the demand for
metals will remain strong and the positive outlook for metal prices
will continue for many years to come.
We have outlined new initiatives at the Parys Mountain base
metal project and at the Grangesberg and Labrador iron ore projects. These
initiatives will each be critical in moving all these projects
thorough to production. These are all exciting opportunities
and need to be moved forward with the greatest speed possible
within the constraints of the financial resources
available.
This report was approved by the board of Directors on
2 September 2021 and signed on its
behalf by:
Bill Hooley
Jo Battershill
Deputy Chairman
Chief Executive
Directors’ report
The Directors are pleased to submit their report and the audited
accounts for the year ended 31 March
2021.
The Corporate Governance statement which follows forms part of
this report. The principal activities of the Group and other
information are set out in the Strategic Report section preceding
this report. Certain matters relating to financial performance,
risk exposure and management, and future developments have 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. The
responsibilities of the Directors are discussed in the Corporate
Governance Report.
With regard to the appointment and replacement of directors, the
Company is governed by its Articles, 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 and therefore Jo
Battershill who was appointed as a director on 1 August 2021 will offer himself for election at
the AGM. 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 shares
|
25 August 2021 |
31 March 2021 |
31 March 2020 |
Director |
Number of options |
Number of ordinary shares |
Number of options |
Number of ordinary shares |
Total |
Number of options |
Number of ordinary shares |
Total |
John Kearney |
- |
- |
- |
500,000 |
500,000 |
500,000 |
- |
500,000 |
Bill Hooley |
- |
200,000 |
- |
1,200,000 |
1,200,000 |
1,000,000 |
200,000 |
1,200,000 |
Jo Battershill |
- |
22,971 |
|
|
n/a |
|
|
n/a |
Danesh Varma |
- |
- |
- |
1,000,000 |
1,000,000 |
1,000,000 |
- |
1,000,000 |
Howard Miller |
- |
- |
- |
500,000 |
500,000 |
500,000 |
- |
500,000 |
|
|
|
|
|
|
|
|
|
|
- |
222,971 |
- |
3,200,000 |
3,200,000 |
3,000,000 |
200,000 |
3,200,000 |
|
|
|
|
|
|
|
|
|
- All of these interests are beneficial.
- The family interests of Danesh
Varma have a significant shareholding of Juno Limited, a
connected person, which has notified an interest in 57,924,248
ordinary shares.
Directors' share options
Details of each share option held over ordinary shares in the
Company (all of them beneficial) by all those who were directors
during the year are set out below. All options were over ordinary
shares of 1 pence each and were
subject to a performance condition that the Company’s share price
performance over the period from grant to exercise must exceed that
of the companies in the FTSE 100 index.
Name |
Options at 1 April 2020 |
Granted in year |
Exercised in year |
Lapsed in year |
Options at 31 March 2021 |
Exercise price |
Date
from which exercisable |
Expiry date |
John Kearney |
500,000 |
- |
500,000 |
- |
- |
2.000p |
30 Sep
17 |
30 Sep
21 |
Bill Hooley |
1,000,000 |
- |
1,000,000 |
- |
- |
2.000p |
30 Sep
17 |
30 Sep
21 |
Howard Miller |
500,000 |
- |
500,000 |
- |
- |
2.000p |
30 Sep
17 |
30 Sep
21 |
Danesh Varma |
1,000,000 |
- |
1,000,000 |
- |
- |
2.000p |
30 Sep
17 |
30 Sep
21 |
|
|
|
|
|
|
|
|
|
|
3,000,000 |
- |
3,000,000 |
- |
0 |
|
|
|
|
|
|
|
|
|
|
|
|
The market price of the ordinary shares at 31 March 2021 was 3.64
pence, the high for the year to 31
March 2021 was 8.9 pence and
the low for the year was 1.0 pence.
The mid-market price at 24 August
2021 was 3.8 pence.
On 16 March 2021, the Company
announced the exercise of all 3,500,000 options by the directors
and by David Lean, a past director,
being all of the options outstanding. These options had been
granted in 2016 under the Unapproved Share Option Scheme and had an
expiry date of 30 September 2021. The
Directors felt it would be appropriate to exercise the options
prior to the end of the financial year on 31 March 2021. All
of the shares resulting from the share option exercises were sold
in May 2021. The gains made by each
director at exercise are shown in the table below.
Name |
Gain
on option exercise |
|
£ |
John Kearney |
13,000 |
Bill Hooley |
26,000 |
Danesh Varma |
26,000 |
Howard Miller |
13,000 |
|
|
Total |
78,000 |
Directors’ interests in material contracts
Juno Limited (Juno), which is registered in Bermuda, holds 25.7% of the ordinary share
capital. There is a controlling shareholder agreement and working
capital agreement with Juno and note 18 sets out movements under
this working capital agreement. Apart from interest charges there
were no transactions between the Group and Juno or its group during
the year. An independent committee reviews and approves any
transactions and potential transactions with Juno. The family
interests of Danesh Varma, a
director of the Company, have a significant shareholding in
Juno.
John Kearney, Bill Hooley and Danesh
Varma, as nominees of the Company, are directors of
Grangesberg Iron AB. Similarly, Bill
Hooley and Danesh Varma are
directors of Angmag AB as nominees of the Company. 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 in 2014. The Group has a liability
to Eurmag AB, a subsidiary of Eurang, amounting to £332,272
at the year-end (2020 – £321,105). See also note 24.
There are no other contracts of significance in which any
Director has or had during the year a material interest.
The Company takes out a directors’ and officers’ liability
insurance policy on normal commercial terms which includes third
party indemnity provisions.
Substantial shareholders
At 24 August 2021 Juno Limited had
notified an interest in 57,924,248 shares representing 25.7% of the
issued ordinary shares.
Shares
Allotment authorities and disapplication of pre-emption
rights
The Directors would ideally 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 its ongoing
exploration and development programs and working capital, or the
acquisition of new mineral ventures or other activities, they
believe that it is appropriate to have a larger amount available
for issue at their discretion without pre-emption than is
recommended for larger listed companies. At a general meeting to be
held on 30 September 2021, the
Directors will seek a renewal and replacement of the existing share
allotment authorities.
The authority sought in resolution 10 of the meeting 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 £750,000 (75,000,000 ordinary shares) which is
approximately one third of the total issued ordinary share capital
at 24 August 2021. The Directors will
consider issuing shares if they believe it would be appropriate to
do so in respect of potential financings or business opportunities
that may arise consistent with the Group's strategic objectives.
The Directors have no immediate intention of exercising this
general authority, other than in connection with the potential
issue of shares for interim financings to fund working capital or
pursuant to the employee share and incentive plans.
The purpose of resolution 11 is to authorise the Directors to
allot new shares pursuant to the general authority given by
resolution 10 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 £560,000 (56,000,000
ordinary shares). This aggregate nominal amount represents
approximately 25% of the issued ordinary share capital at
24 August 2021. Whilst such authority
is more than the 5% of existing issued ordinary share capital which
is 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. This authority
will expire on 31 December 2022. 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. The deferred
shares are non-voting, have no entitlement to dividends and have
negligible rights to return of capital on a winding up.
Details of the issued share capital are shown in note 20.
Details of employee share schemes are set out in the Directors’
remuneration report and in note 21.
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 shares.
Voting rights
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, nor are they entitled to receive notice of general
meetings.
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 those 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, if any, presently payable in respect of their shares have
been paid, but no such shares are in issue. 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 share plan
contains provisions relating to a change of control. Outstanding
awards and options would normally vest and become exercisable on a
change of control, subject to the satisfaction of any performance
conditions.
Employment, community 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 2021 there were four male directors and
no female directors. The Group also had two part-time employees and
two consultants. There were no full-time employees. The Group aims
to be a valued and responsible member of the communities that it
operates in or affects. The policies on these matters are further
discussed in the Report on Corporate Governance. There are no
social, community or human rights issues which require the
provision of further information in this report.
Environment and greenhouse gas emissions
The Company has established policies and procedures to ensure
that is future operations will be conducted in compliance with all
relevant laws and regulations and that will enable the Company to
meet its high standards for corporate sustainability and
environmental stewardship. Currently the Company’s projects are not
in operation and consequently any effect on the environment is very
slight, being limited to the usage of two small offices, where
recycling and energy usage minimisation are encouraged. No
activities or processes which lead to the production of greenhouse
gases are undertaken. The extent to which administrative and
management functions result in greenhouse gas emissions is
impracticable to estimate and, in any event, less than the amount
reportable under the Energy and Carbon Regulations 2018.
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 no such payments made in the
year.
Dividend
The Group has no revenues and the Directors do not recommend a
dividend (2020 – nil).
Going concern and viability
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 ‘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. Based on
the current cash reserves, 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.
Looking to the period beyond the twelve months covered by
current cash resources the Group will need to generate additional
financial resources to progress the ongoing development of the
Parys Mountain project and will require interim funding to finance
the further studies, optimisation and feasibility programmes and,
in the longer term, senior financing to fund the capital and
development costs to put the Parys Mountain Mine into production.
The Group has relied primarily on equity financings to fund its
working capital requirements and will be required to do so in the
future to ensure the Group will have adequate funds for its planned
activities and to continue as a going concern. The Group has
operated for more than 30 years, in what at times have been
challenging economic and investment climates and has continued to
attract the necessary investment to continue as a going
concern.
We rely upon this long experience and particularly upon the
potential of the mineral assets at Parys Mountain on which Anglesey
was founded. These mineral resources are held largely as
freehold and cannot be diminished by any act of nature. Given this
permanency, both legally and geologically, the Directors believe
that future funding will be found at least for the medium term of
two years from the balance sheet date to support the ongoing
maintenance and operation of the Parys Mountain property. In
making this assessment the Directors have substantially relied on
the key assumption that the underlying costs of maintenance and
operation will not change, that there are no unrecognised
liabilities that will become due and on their experience of being
able to raise additional investment as and when required over the
last 30 years. During the past year we successfully raised over
£1,000,000 in new financings
The Directors are actively pursuing various options regarding
proposals for financing and are in discussions with a range of
investors. Whilst these discussions continue the Directors have
reasonable expectations that these will be successful and therefore
the financial statements have been prepared on the going concern
basis. Nevertheless, there is a risk that adequate additional
funding may not be available on a timely basis or on acceptable
terms to move the Parys Mountain project through to its full
potential and there is no guarantee that such funding will be
available, or that the Group will be successful in raising the
necessary investment to advance the development of the project and
put a mine at the Parys Mountain property into production. Given
the limited financial resources currently available, there is a
risk that the Group will not have sufficient financial resources to
fund all its planned program requirements, and therefore there
exists a material uncertainty concerning the ability of the Group
and the Company to continue as a going concern.
Post balance sheet events
There are no post balance sheet events to report.
Statement of directors’ responsibilities
The Directors are responsible for preparing the annual report
and the financial statements which have been prepared in accordance
with applicable law and international accounting standards in
conformity with the Companies Act 2006 and, as regards the parent
company financial statements, as applied in accordance with the
provisions of the Companies Act 2006, and as regards the group
financial statements, international financial reporting standards
adopted pursuant to Regulation (EC) No. 1606/2002 as it applies in
the European Union..
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; 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 provide 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,
Section 172 Statement, Remuneration Report and Corporate Governance
Statement that comply with that law and those regulations.
The Directors Section 172 Statement which describes how the
Directors have had regard to the matters set out in section 172(1)
(a) to (f) when performing their duty under section 172 is included
in the Strategic Report elsewhere in this Annual Report.
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, 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. 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 auditor is aware of that
information. This confirmation is given and should be interpreted
in accordance with the provisions of section 418 of the Companies
Act 2006.
This report was approved by the board of directors on
2 September 2021 and signed on its
behalf by:
Danesh Varma
Company Secretary
Audit committee report
Howard Miller is, at present, the
only member of the audit committee. He has extensive mineral
industry experience and the necessary recent and relevant
experience required by the Code. The committee’s terms of reference
have been approved by the Board and follow published guidelines.
The audit committee’s primary responsibilities are to establish and
monitor the Group’s financial risk management systems with
particular reference to internal control systems and to ensure that
financial statements and other financial communications are
properly prepared.
Financial statements and internal control
The audit committee reviews the half-yearly and annual accounts
before they are presented to the board, focusing in particular on
accounting policies and areas of management judgement and
estimation. The committee ensures that the judgements made in
applying accounting policies and key sources of estimation
uncertainty are properly disclosed and discussed at the end of note
2 to the Accounts and has nothing further to report in respect of
them.
The Audit Committee is responsible for monitoring the controls
which are in place to ensure the information reported to the
shareholders, taken as a whole, is fair, balanced and
understandable and provides the information necessary to give a
true and fair view of the assets, liabilities and financial
position of the Company.
The Audit Committee also considers internal control and risk
management issues and contributes to the Board’s review of the
effectiveness of the Group’s systems and procedures for financial
reporting, internal control and risk management and to the
disclosure and explanation of the risks faced by the Group. These
are set out in the Strategic Report.
The Committee notes that the consolidation schedules have been
prepared under the direction of the Finance Director and is
satisfied that, given the stage of development of the business, and
the involvement of the Board in all decisions, no further internal
controls over this process are required.
Internal and external audits
The Audit Committee considered the need for an internal audit
function, which it believes is not required at present due to the
limited operations of the Group. The Committee is available should
any personnel wish to make representations to the committee about
the conduct of the affairs of the Group.
The Audit Committee oversees the relationship with the external
auditor and meets with the external auditors to review the planning
and scope of the audit and identify key audit matters, and again
before approving the financial statements, to review the nature,
scope and effectiveness of the audit, and the results of the audit
and discuss any issues which may arise from the audit.
The Committee monitors the performance of the external auditor
and advises the Board on the appointment of external auditors and
on their remuneration for both audit and non-audit work. The
Committee also reviews the effectiveness of the external auditor by
enquiries and discussions with the Group staff involved in the
audit and with the finance director.
The Audit Committee also undertakes a formal assessment of the
auditor’s independence each year which includes: a review of any
non-audit services provided to the Group; discussion with the
auditor of all relationships with the Company and any other parties
that could affect independence or the perception of independence; a
review of the auditor’s own procedures for ensuring the
independence of the audit firm and partners and staff involved in
the audit, including the regular rotation of the audit partner; and
obtaining confirmation from the audit partner that, in his/her
professional judgement, he/she is independent. An analysis of the
fee payable to the external audit firm in respect of both audit and
non-audit services during the year is set out in note 4 to the
financial statements.
The current audit partner, Robert
Neate, has already signed the audit report since 2016 that
is for 5 years, which is the normal term. The Audit Committee asked
that he remain as partner for this year on audit quality grounds
conscious of the pressure audit firms are under reflecting the
current audit challenges in respect of remote working and other
Covid related issues and the guidance to companies issued by the
FRC.
Mazars were originally appointed as auditors in 2008 after a
tendering process involving four firms. In 2018 a further tendering
process involved three firms including Mazars and, following an
assessment, Mazars were reappointed.
Howard Miller
Audit committee chair
2 September 2021
Group income statement
All attributable to equity holders of the company
|
|
Notes |
Year
ended 31 March 2021 |
Year
ended 31 March 2020 |
|
All
operations are continuing |
|
£ |
£ |
|
|
Revenue |
|
- |
- |
|
|
Expenses |
|
(162,824) |
(134,796) |
|
|
Investment
income |
6 |
39 |
287 |
|
|
Finance
costs |
7 |
(165,702) |
(170,029) |
|
|
Foreign exchange
movement |
|
(31) |
28 |
|
|
|
|
|
|
|
Loss before tax |
4 |
(328,518) |
(304,510) |
|
|
|
|
|
|
|
|
Taxation |
8 |
- |
- |
|
|
|
|
|
|
|
Loss for the period |
|
(328,518) |
(304,510) |
|
|
|
|
|
|
|
|
Loss per
share |
|
|
|
|
|
Basic - pence
per share |
9 |
(0.2)p |
(0.2)p |
|
|
Diluted - pence
per share |
9 |
(0.2)p |
(0.2)p |
|
|
|
|
|
|
|
Group statement of comprehensive
income
Loss for the period |
|
(328,518) |
(304,510) |
|
|
Other comprehensive
income |
|
|
|
|
|
Items
that may subsequently be reclassified to profit or loss: |
|
|
|
|
Change in fair value
of investment |
14 |
4,053,506 |
- |
|
|
Foreign currency
translation reserve |
|
(10,067) |
(23,350) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive profit/(loss) for the period |
3,714,921 |
(327,860) |
|
|
|
|
|
|
|
Group statement of financial
position
|
|
|
31
March 2021 |
31
March 2020 |
|
|
Notes |
£ |
£ |
Assets |
|
|
|
|
Non-current
assets |
|
|
|
|
Mineral property
exploration and evaluation |
10 |
15,317,293 |
15,215,723 |
|
Property, plant
and equipment |
11 |
204,687 |
204,687 |
|
Investments |
14 |
4,163,664 |
100,099 |
|
Deposit |
15 |
123,787 |
123,748 |
|
|
|
|
|
|
|
|
19,809,431 |
15,644,257 |
|
|
|
|
|
|
Current
assets |
|
|
|
|
Other
receivables |
|
31,381 |
16,505 |
|
Cash and cash
equivalents |
16 |
891,767 |
95,311 |
|
|
|
|
|
|
|
|
923,148 |
111,816 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
20,732,579 |
15,756,073 |
|
|
|
|
|
Liabilities |
|
|
|
|
Current
liabilities |
|
|
|
|
Trade and other
payables |
17 |
(126,228) |
(98,244) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(126,228) |
(98,244) |
|
|
|
|
|
|
Net current
assets |
|
796,920 |
13,572 |
|
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
Loans |
18 |
(4,147,294) |
(3,981,893) |
|
Long term
provision |
19 |
(50,000) |
(50,000) |
|
|
|
|
|
|
|
|
(4,197,294) |
(4,031,893) |
|
|
|
|
|
Total liabilities |
|
(4,323,522) |
(4,130,137) |
|
|
|
|
|
|
|
|
|
|
Net assets |
|
16,409,057 |
11,625,936 |
|
|
|
|
|
Equity |
|
|
|
|
Share
capital |
20 |
7,765,591 |
7,380,591 |
|
Share
premium |
|
10,941,509 |
10,258,309 |
|
Currency
translation reserve |
|
(90,533) |
(80,466) |
|
Retained
losses |
|
(2,207,510) |
(5,932,498) |
|
|
|
|
|
|
|
|
|
|
Total
shareholders' funds |
|
16,409,057 |
11,625,936 |
|
|
|
|
|
The financial statements of Anglesey Mining plc which include
the notes to the accounts were approved
by the board of directors, authorised for issue on 2 September 2021 and signed on its behalf by:
John F. Kearney, Chairman
Danesh Varma, Finance
Director
Company statement of financial
position
|
|
|
31
March 2021 |
31
March 2020 |
|
|
|
Notes |
£ |
£ |
|
Assets |
|
|
|
|
|
Non-current
assets |
|
|
|
|
|
Investments |
13 |
14,576,869 |
14,460,642 |
|
|
|
|
|
|
|
|
|
|
14,576,869 |
14,460,642 |
|
|
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
Other
receivables |
|
7,448 |
5,960 |
|
|
Cash and cash
equivalents |
16 |
883,463 |
92,885 |
|
|
|
|
|
|
|
|
|
|
890,911 |
98,845 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
15,467,780 |
14,559,487 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
Trade and other
payables |
17 |
(66,767) |
(67,191) |
|
|
|
|
|
|
|
|
|
|
(66,767) |
(67,191) |
|
|
|
|
|
|
|
|
Net current
assets |
|
824,144 |
31,654 |
|
|
|
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
|
Loan |
18 |
(3,815,022) |
(3,660,788) |
|
|
|
|
|
|
|
|
|
|
(3,815,022) |
(3,660,788) |
|
|
|
|
|
|
|
|
Total
liabilities |
|
(3,881,789) |
(3,727,979) |
|
|
|
|
|
|
|
Net assets |
|
11,585,991 |
10,831,508 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
Share
capital |
20 |
7,765,591 |
7,380,591 |
|
|
Share
premium |
|
10,941,509 |
10,258,309 |
|
|
Retained
losses |
|
(7,121,109) |
(6,807,392) |
|
|
|
|
|
|
|
Shareholders' equity |
|
11,585,991 |
10,831,508 |
|
|
|
|
|
|
|
The company reported a loss for the year ended 31 March 2021 of £313,717 (2020 - £275,206). The
financial statements
of Anglesey Mining plc registered number 1849957 which include the
notes to the accounts were approved by the
board of directors, authorised for issue on 2 September 2021 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 2019 |
7,286,914 |
10,171,986 |
(57,116) |
(5,627,988) |
11,773,796 |
|
|
|
|
|
|
|
|
Total
comprehensive loss for the year: |
|
|
|
|
|
|
Loss for the
year |
- |
- |
- |
(304,510) |
(304,510) |
|
Exchange
difference on
translation of foreign holding |
- |
- |
(23,350) |
- |
(23,350) |
|
Total
comprehensive loss for the year |
- |
- |
(23,350) |
(304,510) |
(327,860) |
|
Transactions
with owners: |
|
|
|
|
|
|
Shares
issued |
93,677 |
106,323 |
- |
- |
200,000 |
|
Share isssue
expenses |
- |
(20,000) |
- |
- |
(20,000) |
|
|
|
|
|
|
|
|
Equity at 31
March 2020 |
7,380,591 |
10,258,309 |
(80,466) |
(5,932,498) |
11,625,936 |
|
|
|
|
|
|
|
|
Total
comprehensive loss for the year: |
|
|
|
|
|
|
Loss for the
year |
- |
- |
- |
(328,518) |
(328,518) |
|
Change in fair
value of investment |
- |
- |
- |
4,053,506 |
4,053,506 |
|
Exchange
difference on
translation of foreign holding |
- |
- |
(10,067) |
- |
(10,067) |
|
|
|
|
|
|
|
|
Total
comprehensive loss for the year |
- |
- |
(10,067) |
3,724,988 |
3,714,921 |
|
Transactions
with owners: |
|
|
|
|
|
|
Shares
issued |
385,000 |
770,000 |
- |
- |
1,155,000 |
|
Share issue
expenses |
- |
(86,800) |
- |
- |
(86,800) |
|
|
|
|
|
|
|
|
Equity at 31
March 2021 |
7,765,591 |
10,941,509 |
(90,533) |
(2,207,510) |
16,409,057 |
|
|
|
|
|
|
|
|
Company |
|
Share
capital |
Share
premium |
Retained
losses |
Total |
|
|
|
£ |
£ |
£ |
£ |
|
Equity at 1
April 2019 |
|
7,286,914 |
10,171,986 |
(6,532,186) |
10,926,714 |
|
|
|
|
|
|
|
|
Total
comprehensive loss for the year: |
|
|
|
|
|
|
Loss for the
year |
|
- |
- |
(275,206) |
(275,206) |
|
|
|
|
|
|
|
|
Total
comprehensive loss for the year |
|
- |
- |
(275,206) |
(275,206) |
|
Transactions
with owners: |
|
|
|
|
|
|
Shares
issued |
|
93,677 |
106,323 |
- |
200,000 |
|
Share isssue
expenses |
|
- |
(20,000) |
- |
(20,000) |
|
|
|
|
|
|
|
|
Equity at 31
March 2020 |
|
7,380,591 |
10,258,309 |
(6,807,392) |
10,831,508 |
|
|
|
|
|
|
|
|
Total
comprehensive loss for the year: |
|
|
|
|
|
|
Loss for the
year |
|
- |
- |
(313,717) |
(313,717) |
|
|
|
|
|
|
|
|
Total
comprehensive loss for the year |
|
- |
- |
(313,717) |
(313,717) |
|
Transactions
with owners: |
|
|
|
|
|
|
Shares
issued |
|
385,000 |
770,000 |
- |
1,155,000 |
|
Share issue
expenses |
|
- |
(86,800) |
- |
(86,800) |
|
|
|
|
|
|
|
|
Equity at 31
March 2021 |
|
7,765,591 |
10,941,509 |
(7,121,109) |
11,585,991 |
|
|
|
|
|
|
|
Group statement of cash flows
|
|
Notes |
Year
ended 31 March 2021 |
Year
ended 31 March 2020 |
|
|
|
|
£ |
£ |
|
Operating activities |
|
|
|
|
|
Loss for the
period |
|
(328,518) |
(304,510) |
|
|
Adjustments
for: |
|
|
|
|
|
Investment
income |
6 |
(39) |
(287) |
|
|
Finance
costs |
7 |
165,702 |
170,029 |
|
|
Equity-settled
employee benefits |
22 |
- |
- |
|
|
Management fee
to associate |
|
- |
(8,787) |
|
|
Foreign exchange
movement |
|
31 |
(28) |
|
|
|
|
|
|
|
|
|
|
(162,824) |
(143,583) |
|
|
Movements in
working capital |
|
|
|
|
|
(Increase)/decrease in receivables |
|
(14,758) |
2,685 |
|
|
Increase in
payables |
|
3,539 |
15,708 |
|
|
|
|
|
|
|
Net
cash used in operating activities |
|
(174,043) |
(125,190) |
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
Mineral property
exploration and evaluation |
|
(77,618) |
(53,826) |
|
|
Investment |
|
(20,052) |
(11,713) |
|
|
|
|
|
|
|
Net
cash used in investing activities |
(97,670) |
(65,539) |
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
Issue of share
capital |
|
1,068,200 |
180,000 |
|
|
Loan
received |
|
- |
100,000 |
|
|
|
|
|
|
|
Net
cash generated from financing activities |
|
1,068,200 |
280,000 |
|
|
|
|
|
|
|
Net
increase in cash and cash equivalents |
796,487 |
89,271 |
|
Cash
and cash equivalents at start of period |
|
95,311 |
6,012 |
|
Foreign exchange movement |
|
(31) |
28 |
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
16 |
891,767 |
95,311 |
|
|
|
|
|
|
|
Company statement of cash flows
|
|
Notes |
Year
ended 31 March 2021 |
Year
ended 31 March 2020 |
|
|
|
£ |
£ |
Operating activities |
|
|
|
|
Loss for the
period |
23 |
(313,717) |
(275,206) |
|
Adjustments
for: |
|
|
|
|
Finance
costs |
|
154,234 |
154,153 |
|
|
|
|
|
|
|
|
(159,483) |
(121,053) |
|
Movements in
working capital |
|
|
|
|
(Increase)/decrease in receivables |
|
(1,488) |
745 |
|
(Decrease)/increase in payables |
|
(424) |
714 |
|
|
|
|
|
Net
cash used in operating activities |
|
(161,395) |
(119,594) |
|
|
|
|
|
Investing activities |
|
|
|
|
Investments and
long term loans |
|
(116,227) |
(71,500) |
|
|
|
|
|
Net
cash used in investing activities |
|
(116,227) |
(71,500) |
|
|
|
|
|
Financing activities |
|
|
|
|
Share issues net of
expenses |
|
1,068,200 |
180,000 |
|
Loans |
|
- |
100,000 |
|
|
|
|
|
Net
cash generated from financing activities |
|
1,068,200 |
280,000 |
|
|
|
|
|
Net
increase in cash and cash equivalents |
|
790,578 |
88,906 |
Cash
and cash equivalents at start of period |
|
92,885 |
3,979 |
|
|
|
|
|
Cash
and cash equivalents at end of period |
16 |
883,463 |
92,885 |
|
|
|
|
|
Notes to the accounts
1 General
information
Anglesey Mining plc is domiciled and incorporated in
England and Wales under the Companies Act with
registration number 1849957. 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 shown at the end
of this report.
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 applicable law and international accounting
standards in conformity with the Companies Act 2006 and, as regards
the parent company financial statements, as applied in accordance
with the provisions of the Companies Act 2006, and as regards the
group financial statements, international financial reporting
standards adopted pursuant to Regulation (EC) No 1606/2002 as it
applies in the European Union.
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 ‘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. 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 are actively pursuing various financing options
with certain shareholders and financial institutions regarding
proposals for financing and are in discussions with a range of
investors, including private equity funds. Whilst these discussions
continue 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, 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 or that the Group will be successful in raising the
necessary investment to advance the development of the project and
put a mine at the Parys Mountain property into production.
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.
Mineral property exploration and evaluation
Exploration and evaluation assets under IFRS 6 include acquired
mineral use rights for mineral properties held by the Company. The
amount of consideration paid (in cash or share value) for mineral
use rights is capitalised. Mineral exploration and evaluation
expenditures are capitalised on a project-by-project basis pending
determination of the technical feasibility and the commercial
viability of the project. Capitalised costs include costs directly
related to exploration and evaluation activities in the area of
interest. General and administrative costs are only allocated to
the asset to the extent that those costs can be directly related to
operational activities.
Exploration and evaluation assets will be amortised to profit or
loss once commercial production has been achieved or written off if
the exploration and evaluation assets are abandoned or sold.
Depletion of costs capitalised on projects when put into commercial
production will be recorded using the unit-of-production method
based upon estimated proven and probable reserves. The ultimate
recoverability of the amounts capitalised for the exploration and
evaluation assets and expenditures is dependent upon the
delineation of economically recoverable ore reserves, obtaining the
necessary financing to complete their development, obtaining and
retaining the necessary permits to operate a mine, and realising
profitable production or proceeds from the disposition thereof.
The commercial viability of extracting a mineral resource is
considered to be determinable when resources are determined to
exist, the property rights are current and it is considered
probable that the costs will be recouped through successful
development and exploitation of the project, or alternatively by
sale of the property. Upon determination of resources, exploration
and evaluation assets attributable to those resources are first
tested for impairment and then reclassified from exploration and
evaluation assets to mineral property interests. Expenditures
deemed unsuccessful are recognised in operations in the Income
Statement.
Expenditures incurred in connection with the development of
mineral resources after such time as mineral reserves are proven or
probable; permits to operate the mineral resource property are
received; financing to complete development has been obtained; and
approval of the Board of Directors to commence mining development
and operations, are capitalized as deferred development
expenditures.
Impairment of tangible and intangible assets
The carrying values of capitalized exploration and evaluation
assets are assessed for impairment if fact and circumstances
indicate that the carrying amount exceeds the recoverable amount
and sufficient data exists to evaluate technical feasibility and
commercial viability. If any indication of impairment exists,
an estimate of the asset’s recoverable amount is estimated. The
recoverable amount is determined as the higher of the fair value
less costs of disposition and the asset’s value in use. If the
carrying amount of the asset exceeds its estimated recoverable
amount, the asset is impaired, and an impairment loss is charged to
the Income Statement so as to reduce the carrying amount to its
estimated recoverable amount.
Investments
Investments in subsidiaries are shown at historical 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 fair
value.
Associates are accounted for using the equity method.
Impairment of financial assets measured at amortised cost
At each reporting date the Group recognises a loss allowance for
expected credit losses on financial assets measured at amortised
cost. In establishing the appropriate amount of loss allowance to
be recognised, the Group applies either the general approach or the
simplified approach, depending on the nature of the underlying
group of financial assets.
The general approach is applied to the impairment assessment of
refundable deposits, restricted cash and cash and cash equivalents.
Under the general approach the Group recognises a loss allowance
for a financial asset at an amount equal to the 12-month expected
credit losses, unless the credit risk on the financial asset has
increased significantly since initial recognition, in which case a
loss allowance is recognised at an amount equal to the lifetime
expected credit losses. Under the simplified approach the Group
always recognises a loss allowance for a financial asset at an
amount equal to the lifetime expected credit losses.
Impairment of non-financial assets
Non-financial assets are tested for impairment whenever events
or changes in circumstances indicate that the carrying amount may
not be recoverable. Non-financial assets are impaired when
their carrying amount of the asset exceeds its recoverable amount.
The recoverable amount is measured as the higher of fair value less
cost of disposal and value in use.
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
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 at amortised cost are other
receivables, deposits and cash and cash equivalents.
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 in other
comprehensive income 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 at fair value through other comprehensive
income (FVOCI) comprise equity securities which are not held for
trading and which the group has irrevocably elected at initial
recognition to recognise in this category. These are strategic
investments and the group considers this classification to be more
relevant.
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.
Equity instruments
Equity instruments issued by the company are recorded at the
proceeds received, net of direct issue costs.
Leases
Mining lease payments relating to mineral property exploration
and evaluation are capitalised; there are no other leases, see note
25 for details. There are no IFRS 16 disclosures required in
respect of the mining leases.
New accounting standards
Standards, amendments and
interpretations adopted in the current financial year, effective
from 1 January 2020:
Amendments to IAS 1 and IAS 8: Definition of Material
Conceptual Framework (Revised) and amendments to related
references in IFRS Standards
New standards and amendments
effective from 1 January 2021
Amendments to IFRS 9 Financial Instruments, IAS 39 Financial
Instruments: (UK-adopted)
Recognition and Measurement, IFRS 7 Financial Instruments:
Disclosures, IFRS 4; Insurance Contracts and IFRS 16 Leases:
IFRS amendments effective from 1 April
2021 (not UK-adopted)
New standards and amendments in issue
from 1 January 2022 onwards, but not
yet effective
IFRS amendments effective from 1 January
2022 (not UK-adopted)
IFRS standards effective from
1 January 2023 (not UK-adopted)
IAS 1 Amendment: Classification of Liabilities as Current or
Non-current
IAS 1 Amendment: Disclosure of accounting policies
IAS 8 Amendment: Definition of accounting estimates
The adoption of the above standards and interpretations is not
expected to lead to any changes to the group’s accounting policies
or have any other material impact on the financial position or
performance of the group.
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. Significant
judgment must be exercised in determining when a project moves from
the exploration and evaluation category phase and into the
development category of mineral property interests. The existence
and extent of economic mineral resources, proven or probable
mineral reserves; regulatory permits and licences; the availability
of development financing; current and future metal prices; and
market sentiment are all factors to be considered.
(b) In connection with possible impairment of exploration and
evaluation assets and the investment of the company in 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 making these
assessments are similar to those set out above and are subject to
the same uncertainties.
(c) The directors applied assumptions and judgement in
determining the fair value of investments classified and measured
as financial assets at FVOCI. Some of the financial assets set out
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. 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 for this segment
are included in the UK total.
Income
statement analysis |
|
|
|
|
|
|
|
|
2021 |
2020 |
|
UK |
Sweden |
Canada |
Total |
UK |
Sweden |
Canada |
Total |
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
Expenses |
(162,824) |
- |
- |
(162,824) |
(134,796) |
- |
- |
(134,796) |
Investment income |
39 |
- |
- |
39 |
287 |
- |
- |
287 |
Finance costs |
(154,234) |
(11,468) |
- |
(165,702) |
(154,153) |
(15,876) |
- |
(170,029) |
Exchange rate
loss |
- |
(31) |
- |
(31) |
- |
28 |
- |
28 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the year |
(317,019) |
(11,499) |
- |
(328,518) |
(288,662) |
(15,848) |
- |
(304,510) |
|
|
|
|
|
|
|
|
|
Assets and
liabilities |
|
|
|
|
|
|
|
|
|
31 March 2021 |
31 March 2020 |
|
UK |
Sweden |
Canada |
Total |
UK |
Sweden |
Canada |
Total |
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
Non-current
assets |
15,645,767 |
110,157 |
4,053,507 |
19,809,431 |
15,544,158 |
100,098 |
1 |
15,644,257 |
Current assets |
922,056 |
1,092 |
- |
923,148 |
110,716 |
1,100 |
- |
111,816 |
Liabilities |
(3,991,250) |
(332,272) |
- |
(4,323,522) |
(3,809,032) |
(321,105) |
- |
(4,130,137) |
|
|
|
|
|
|
|
|
|
Net
assets/liabilities |
12,576,573 |
(221,023) |
4,053,507 |
16,409,057 |
11,845,842 |
(219,907) |
1 |
11,625,936 |
4 Loss
before taxation
The loss
before taxation for the year has been arrived at after
charging/(crediting): |
|
|
2021 |
|
2020 |
|
|
£ |
|
£ |
|
Fees payable to the
group's auditor: |
|
|
|
|
for the audit of the annual
accounts |
37,000 |
|
37,000 |
|
for the audit of subsidiaries'
accounts |
5,000 |
|
5,000 |
|
for other services |
- |
|
- |
|
Directors'
remuneration |
- |
|
- |
|
Foreign exchange
movement |
31 |
|
(28) |
|
|
|
|
|
|
5 Staff
costs
The
average monthly number of persons employed (including executive
directors) was: |
|
|
|
|
|
|
|
2021 |
|
2020 |
|
Administrative |
3 |
|
3 |
|
|
3 |
|
3 |
|
|
|
|
|
|
Their aggregate
remuneration was: |
£ |
|
£ |
|
Wages and
salaries |
23,660 |
|
11,000 |
|
Social security
costs |
6,803 |
|
390 |
|
|
|
|
|
|
|
30,463 |
|
11,390 |
|
|
|
|
|
|
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
|
|
2021 |
|
2020 |
|
Loans and
receivables |
|
£ |
|
£ |
|
Interest on site
re-instatement deposit |
|
39 |
|
287 |
|
|
|
|
|
|
|
|
|
39 |
|
287 |
|
|
|
|
|
|
|
7 Finance
costs
|
|
2021 |
|
2020 |
|
Loans and
payables |
|
£ |
|
£ |
|
Loan interest to Juno
Limited |
|
154,234 |
|
154,153 |
|
Loan interest to
Eurmag AB |
|
11,468 |
|
15,876 |
|
|
|
|
|
|
|
|
|
165,702 |
|
170,029 |
|
|
|
|
|
|
|
For both loans the interest shown is accrued and it is intended
that it will be repaid together with the loan principal. The loans
are repayable from any future financing undertaken by the
Company.
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 2021 of £1.3 million (2020 -
£1.3 million) which, in view of the group’s trading results, is not
considered by the directors to be recoverable in the short term.
There are also capital allowances, including mineral extraction
allowances, of £12.8 million unclaimed and available at
31 March 2021 (2020 - £12.7 million).
No deferred tax asset is recognised in respect of these
allowances.
|
2021 |
|
2020 |
|
|
£ |
|
£ |
|
Current tax |
- |
|
- |
|
Deferred tax |
- |
|
- |
|
|
|
|
|
|
Total tax |
- |
|
- |
|
|
|
|
|
|
Domestic
income tax is calculated at 19% (2020 - 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 |
(328,518) |
|
(304,510) |
|
|
|
|
|
|
Tax at the domestic
income tax rate of 19% |
(62,418) |
|
(57,857) |
|
Tax effect
of: |
|
|
|
|
Unrecognised deferred
tax on losses |
62,418 |
|
57,857 |
|
|
|
|
|
|
Total tax |
- |
|
- |
|
|
|
|
|
|
9
Earnings per ordinary share
|
2021 |
|
2020 |
|
|
£ |
|
£ |
|
Earnings |
|
|
|
|
Loss for the year |
(328,518) |
|
(304,510) |
|
|
|
|
|
|
Number of
shares |
|
|
|
|
Weighted average
number of ordinary shares for the purposes of basic earnings per
share |
201,073,814 |
|
185,772,778 |
|
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 |
201,073,814 |
|
185,772,778 |
|
|
|
|
|
|
Basic earnings per
share |
(0.2)p |
|
(0.2)p |
|
|
|
|
|
|
Diluted earnings
per share |
(0.2)p |
|
(0.2)p |
|
|
|
|
|
|
As the group has a loss for the year ended 31 March 2021 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 2019 |
15,165,888 |
Additions - site |
24,341 |
Additions - rentals
& charges |
25,494 |
|
|
At 31 March 2020 |
15,215,723 |
Additions - site |
73,983 |
Additions - rentals
& charges |
27,587 |
|
|
At 31 March 2021 |
15,317,293 |
|
|
Carrying
amount |
|
Net book value
2021 |
15,317,293 |
Net book value
2020 |
15,215,723 |
|
|
Included in the additions are mining lease expenses of £19,170
(2020 - £16,858).
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 Group assesses at each reporting date its exploration and
evaluation assets to determine whether specific facts and
circumstances indicate there is an indication of impairment and
whether an impairment test is required. If such an indication
exists, the recoverable amount of the asset is estimated and if the
carrying amount of the asset exceeds its estimated recoverable
amount, the asset is impaired, and the impairment loss is
measured. If impairment testing is required, the impairment
testing of exploration and evaluation assets is carried out in
accordance with IAS 36 Impairment of Assets as modified by IFRS 6.
Any impairment loss is charged to the Statement of Income and Loss
to reduce the carrying amount to its estimated recoverable
amount.
In determining whether there is an impairment indicator, the
Group considers both internal factors (e.g. adverse changes in
performance) and external factors (e.g., adverse changes in the
business or regulatory environment). Significant judgment is
required when determining whether facts and circumstances suggest
that the carrying amount of exploration and evaluation assets may
exceed its recoverable amount. The existence and extent of proven
or probable mineral reserves; retention of regulatory permits and
licences; the availability of development financing; current and
future metal prices; and market sentiment are all factors to be
considered. There are several external factors that can have
a significant impact on the recoverable amount of a mineral
property, including the uncertainty of market conditions, the
volatility of commodity prices and foreign exchange rates.
Following review, the directors concluded that there are no
material adverse changes in facts and circumstances, or in market
conditions or regulations affecting, the Parys Mountain property
during the year ended 31 March 2021.
The directors noted the completion and publication in January 2021 of the new independent PEA, with an
expanded resource base, which demonstrates that a major mining
operation can be established at Parys Mountain, with robust
economics at reasonable capital and operating costs.
The property has the potential for the discovery of new or
additional resources and has ongoing exploration potential and
further work is recommended and planned. Metal prices have improved
and the outlook for most minerals, and particularly for the copper,
zinc and lead minerals at Parys Mountain, is very encouraging.
Accordingly, the directors concluded, as described in the Strategic
Report, that any specific facts and circumstances which might
suggest there is an indication of impairment have not materially
changed during the year and there are no facts or circumstances
that suggest there is an indication of impairment and therefore no
impairment test was required or completed.
11 Property, plant and
equipment
Group |
Freehold land & property |
Plant
& equipment |
Office
equipment |
Total |
Cost |
£ |
£ |
£ |
£ |
At 31 March 2019, 2020
and 2021 |
204,687 |
17,434 |
5,487 |
227,608 |
Depreciation |
|
|
|
|
At 31 March 2019, 2020
and 2021 |
- |
17,434 |
5,487 |
22,921 |
Carrying
amount |
|
|
|
|
At 31 March 2019, 2020
and 2021 |
204,687 |
- |
- |
204,687 |
Company |
Freehold land & property |
Plant
& equipment |
Office
equipment |
Total |
Cost |
£ |
£ |
£ |
£ |
At 31 March 2019, 2020
and 2021 |
- |
17,434 |
5,487 |
22,921 |
Depreciation |
|
|
|
|
At 31 March 2019, 2020
and 2021 |
- |
17,434 |
5,487 |
22,921 |
Carrying
amount |
|
|
|
|
At 31 March 2019, 2020
and 2021 |
- |
- |
- |
- |
12 Subsidiaries -
company
The subsidiaries of the company at 31
March 2021 and 2020 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 2019 |
104,025 |
|
14,285,117 |
|
14,389,142 |
|
Advanced |
- |
|
71,500 |
|
71,500 |
|
|
|
|
|
|
|
|
At 31 March 2020 |
104,025 |
|
14,356,617 |
|
14,460,642 |
|
Advanced |
- |
|
116,227 |
|
116,227 |
|
|
|
|
|
|
|
|
At 31 March 2021 |
104,025 |
|
14,472,844 |
|
14,576,869 |
|
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
2019 |
1 |
97,794 |
97,795 |
Net change during the
period |
- |
2,304 |
2,304 |
At 31 March
2020 |
1 |
100,098 |
100,099 |
Net change during the
period |
4,053,506 |
10,059 |
4,063,565 |
|
|
|
|
At 31 March
2021 |
4,053,507 |
110,157 |
4,163,664 |
|
|
|
|
LIM – Labrador, Canada
The group has an investment in Labrador Iron Mines Holdings
Limited, a Canadian company which holds the Labrador iron ore properties described in the
Strategic Report.
The group’s investment in LIM is carried at fair value through
other comprehensive income. Commencing in mid-2020 stock market
interest in North America in the
shares of LIM resulted in significant share price increases.
LIM reported net comprehensive income of CAD25,666,588 for the year ended 31 March 2021, which included an impairment
reversal of CAD25,963,413 in the
carrying value of its mineral property interests. The group’s
holding of 19,289,100 shares in LIM (12% of LIM’s total issued
shares) is valued at the closing price traded on the OTC Markets in
the United States and in the
directors’ assessment this market is sufficiently active to give
the best measure of fair value, which on 31
March 2021 was 29 US cents per share. Since that date the
share price has declined and at 24 August
2021 the shares traded at 20 US cents per share.
Grangesberg - Sweden
The group has, through its Swedish subsidiary Angmag AB, a 19.9%
ownership interest in GIAB (2020 – 10.0%), a Swedish company which
holds rights over the Grangesberg iron ore deposits. During the
year the group subscribed £20,052 (2020 - £11,713) for new shares
in GIAB and also transferred some of its shares at the same price
to Eurang AB as consideration for a reduction in the loan due to
Eurmag, a subsidiary of Eurang.
The directors assessed the fair value of the investment in
Grangesberg under IFRS 9 and consider the cost at the date of
transition and the investment’s value at the year-end to
approximate the fair value at these dates. Following negotiation
the group has, until June 2023, 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. Although the group has significant
influence over certain relevant activities of GIAB, equity
accounting has not been applied in respect of this influence as the
directors consider this would not have any material affect. The
group’s share in the net assets of GIAB at 31 March 2021 was approximately £316,000.
15 Deposit
|
Group |
|
|
|
|
|
|
2021 |
|
2020 |
|
|
|
|
|
|
£ |
|
£ |
|
|
|
|
|
Site re-instatement
deposit |
123,787 |
|
123,748 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 Cash and cash
equivalents
|
Group |
|
Company |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
£ |
|
£ |
|
£ |
|
£ |
|
Held in sterling |
890,674 |
|
94,210 |
|
883,463 |
|
92,885 |
|
Held in Canadian
dollars |
1 |
|
1 |
|
- |
|
- |
|
Held in US
dollars |
424 |
|
443 |
|
- |
|
- |
|
Held in Swedish
krona |
668 |
|
657 |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
891,767 |
|
95,311 |
|
883,463 |
|
92,885 |
|
The carrying value of the cash approximates to its fair
value.
17 Trade and other
payables
|
Group |
|
Company |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
£ |
|
£ |
|
£ |
|
£ |
|
Trade payables |
(4,366) |
|
(13,537) |
|
(2,887) |
|
(11,939) |
|
Other accruals |
(121,862) |
|
(84,707) |
|
(63,880) |
|
(55,252) |
|
|
|
|
|
|
|
|
|
|
|
(126,228) |
|
(98,244) |
|
(66,767) |
|
(67,191) |
|
The carrying value of the trade and other payables approximates
to their fair value.
18 Loans
|
Group |
|
Company |
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
|
|
£ |
|
£ |
|
£ |
|
£ |
|
Loan from Juno
Limited |
(3,815,022) |
|
(3,660,788) |
|
(3,815,022) |
|
(3,660,788) |
|
Loan from Eurmag
AB |
(332,272) |
|
(321,105) |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
(4,147,294) |
|
(3,981,893) |
|
(3,815,022) |
|
(3,660,788) |
|
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
|
Due
to Juno |
Due
to Eurmag |
Totals |
|
|
£ |
£ |
£ |
|
At 1 April
2019 |
(3,406,635) |
(300,087) |
(3,706,722) |
|
Cash flows |
(100,000) |
|
(100,000) |
|
Non cash
movements |
(154,153) |
(21,018) |
(175,171) |
|
|
|
|
|
|
1 April
2020 |
(3,660,788) |
(321,105) |
(3,981,893) |
|
Cash flows |
- |
- |
- |
|
Non cash
movements |
(154,234) |
(11,167) |
(165,401) |
|
|
|
|
|
|
At 31 March
2021 |
(3,815,022) |
(332,272) |
(4,147,294) |
|
The Juno loan relates to the group and company. The non-cash
movement represents accrued interest.
The Eurmag loan relates to the group only and its non-cash
movement comprises accrued interest, the value of GIAB shares
transferred to Eurang AB which reduced the loan amount (see note
14) and foreign exchange changes.
19 Long term provision -
group
|
|
|
|
|
|
|
|
|
|
2021 |
|
2020 |
|
|
|
|
|
|
£ |
|
£ |
|
|
|
|
|
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.
20 Share capital
|
Ordinary shares of
1p |
Deferred shares of
4p |
Total |
|
Issued and
fully paid |
Nominal
value £ |
Number |
Nominal
value £ |
Number |
Nominal
value £ |
|
|
|
|
|
|
|
|
At 1 April 2019 |
1,776,081 |
177,608,051 |
5,510,833 |
137,770,835 |
7,286,914 |
|
Issued in the
period |
93,677 |
9,367,681 |
|
|
|
|
|
|
|
|
|
|
|
At 1 April 2020 |
1,869,758 |
186,975,732 |
5,510,833 |
137,770,835 |
7,380,591 |
|
Issued in the
period |
385,000 |
38,500,000 |
|
|
385,000 |
|
|
|
|
|
|
|
|
At 31 March 2021 |
2,254,758 |
225,475,732 |
5,510,833 |
137,770,835 |
7,765,591 |
|
|
|
|
|
|
|
|
The deferred shares are non-voting, have no entitlement to
dividends and have negligible rights to return of capital on a
winding up.
On 24 August 2020 a placing for
cash was made of 12.5 million ordinary shares at 1.6 pence, raising £200,000 gross, together with
12.5 million warrants exercisable at 1.8
pence, all of which were subsequently exercised raising an
additional £225,000 gross.
On 21 January 2021 a placing for
cash was made of 10 million ordinary shares at 6.6 pence each raising £660,000 gross.
On 17 March 2021 3.5 million
shares were issued at 2 pence each in
respect of the exercise of share options raising £70,000.
21 Equity-settled employee
benefits
The 2014 Unapproved share option plan provides for a grant price
equal to or above the average quoted market price of the ordinary
shares for the three trading days prior to the date of grant. All
options granted 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 FTSE 100 index. The vesting
period for any options granted since 2014 was one year. Options are
forfeited if the employee leaves employment with the group before
the options vest. All options outstanding were exercised in full
during the year. No options were granted, lapsed or forfeited
during the year. No options were outstanding at 31 March 2021.
|
|
2021 |
|
|
2020 |
|
|
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 |
3,500,000 |
2.00 |
1.5 |
3,500,000 |
2.00 |
2.5 |
Granted during
the period |
- |
- |
|
- |
-
|
|
Forfeited during
the period |
- |
- |
|
- |
- |
|
Exercised during
the period |
3,500,000 |
2.00 |
|
- |
- |
|
Expired during
the period |
- |
- |
|
- |
- |
|
Outstanding at
the end of the period |
- |
- |
- |
3,500,000 |
2.00 |
1.5 |
Exercisable at
the end of the period |
- |
- |
- |
3,500,000 |
2.00 |
1.5 |
There were no expenses in respect of equity-settled employee
remuneration for the year ended 31 March
2021 (2020 – nil).
22 Results attributable to
Anglesey Mining plc
The loss after taxation in the parent company amounted to
£313,717 (2020 loss £275,206). 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.
23 Financial
instruments
The main risks arising from the group's financial instruments
are currency risk and share price risk. The board reviews and
agrees policies for managing each of these risks and these are
summarised below.
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
18, 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.
Share price risk
The shares of Labrador Iron Mines Holdings Limited in
Canada are traded on the OTC
Market in the United States and
the value of the group’s investment in LIM is subject to the market
variations applicable to any publicly traded investment. In respect
of the value of this investment, if the LIM share price were to
fall by 10% there would be a loss to the group of £405,351 and if
it were to rise by a similar percentage there would be a gain of
£405,351
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. During the year the group raised new financing of over
£1,000,000, through the placement of shares, and the exercise of
warrants and share options.
Trade creditors are payable on normal credit terms which are
usually 30 days. The loans due to Juno and Eurmag carry a notice
period of 367 days. Juno, in keeping with its long-established
practice has indicated that it has no current intention of
demanding repayment. No such notice had been received by
2 September 2021 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 and the group has no currency exposure in respect of this
loan. The currency risk in respect of the group’s only other loan
(denominated in Swedish krona) is as follows: if the rate of
exchange between the krona and sterling were to weaken against
sterling by 10% there would be a gain to the group of £30,207 (2020
- £29,191) and if it were to move in favour of sterling by a
similar amount there would be a loss of £36,919 (2020 - £35,678).
These gains or losses would be recorded in other comprehensive
income.
In respect of the investment in Grangesberg in Sweden, if the rate of exchange between the
Krona and sterling were to weaken against sterling by 10% there
would be a loss to the group of £10,508 (2020 - £9,374) and if it
were to move in favour of sterling by a similar amount there would
be a gain of £12,843 (2020 - £11,457).
In respect of the investment in Labrador Iron Mines in
Canada, if the rate of exchange
between the US dollar (the currency of the market on which the
shares are quoted) and sterling were to weaken against sterling by
10% there would be a loss to the group of £368,501 and if it were
to move in favour of sterling by a similar amount there would be a
gain of £450,390 There are no comparative figures for last year
when the investment was held at a value of £1.
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 2021 |
31 March 2020 |
31 March 2021 |
31 March 2020 |
|
£ |
£ |
£ |
£ |
Investments |
4,163,664 |
100,099 |
- |
- |
Deposit |
- |
- |
123,787 |
123,748 |
Other
receivables |
- |
- |
31,381 |
16,505 |
Cash and cash
equivalents |
- |
- |
891,767 |
95,311 |
|
- |
- |
|
|
|
4,163,664 |
100,099 |
1,046,935 |
235,564 |
|
|
|
|
|
|
Financial liabilities measured at amortised
cost |
|
|
|
31 March 2021 |
31 March 2020 |
|
|
|
£ |
£ |
|
|
Trade
payables |
(4,366) |
(13,537) |
|
|
Other
payables |
(121,862) |
(84,707) |
|
|
Loans |
(4,147,294) |
(3,981,893) |
|
|
|
|
|
|
|
|
(4,273,522) |
(4,080,137) |
|
|
|
|
|
|
|
Company |
|
|
|
|
. |
Financial assets measured at amortised
cost |
Financial liabilities measured at amortised
cost |
|
31 March 2021 |
31 March 2020 |
31 March 2021 |
31 March 2020 |
|
£ |
£ |
£ |
£ |
Other
receivables |
7,448 |
5,960 |
- |
- |
Cash and cash
equivalents |
883,463 |
92,885 |
- |
- |
|
|
|
|
|
Trade
payables |
- |
- |
(2,887) |
(11,939) |
Other
payables |
- |
- |
(63,880) |
(55,252) |
Loan |
- |
- |
(3,815,022) |
(3,660,788) |
|
|
|
|
|
|
890,911 |
98,845 |
(3,881,789) |
(3,727,979) |
|
|
|
|
|
24 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 26% 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 18. There were no further transactions
between the group and Juno or its group during the year. The family
interests of Danesh Varma have a
significant shareholding in Juno, a connected person.
Grangesberg
As nominees of the Company, Bill
Hooley and Danesh Varma are
directors of Grangesberg Iron AB and of the special purpose vehicle
Angmag 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 in 2014. The group has
a liability to Eurmag AB a subsidiary of Eurang amounting to
£332,272 at the year-end (2020 – £321,105) – see note 18. During
the year £20,052 (2020 - £11,713) was subscribed for new shares in
GIAB.
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.
25 Mineral holdings
Parys Mountain
(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 mining 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 £19,170 is payable for the
year beginning 23 March 2020; 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 renewable 30 year mining lease from the Crown dated
December 1991 there was an annual
lease payment of £5,000 and a royalty of 4% of gross sales of gold
and silver from the lease area was payable. The Crown lease expired
in April 2020 and negotiations in
respect of the renewal of this lease or the granting of a new lease
are continuing. It is expected that a new or renewed lease, if
taken up and accepted, would be subject to annual lease payments
and a royalty on gold and silver sales.
Lease payments
The group’s mining leases may be terminated by the Group 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
2021 - £19,170 and for the five years between 1 April 2021 and 31 March
2026 - £101,551. 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.
26 Material noncash
transactions
There were no material non-cash transactions in the year.
Under the Development and Co-operation Agreement with QME
Limited in respect of Parys Mountain optimisation studies
development which began in 2018, described in the Strategic Report,
the Group has agreed to grant QME various rights and options
relating to the future development of Parys Mountain.
Anglesey has agreed award to 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. In the event
Anglesey and QME are not able to agree terms Anglesey may offer
such contracts to third parties, subject to a right of first
refusal in favour of QME, and subject to a payment by Anglesey to
QME, upon the award of such contracts to a third-party, of a
break-fee of £500,000. Under such circumstances, the award of such
contracts to a third party could potentially create a
contingent liability for the payment of the break fee but
such liability is not at this time crystallised.
In addition, Anglesey would grant to QME the right and option,
upon completion of a Prefeasibility Study, 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.
27 Commitments
Other than commitments under leases (note 25) there is no
capital expenditure authorised or contracted which is not provided
for in these accounts (2020 - nil).
28 Contingent
liabilities
There are no contingent liabilities (2020 - nil).
29 Events after the period
end
There are no post balance sheet events to report.
Glossary
$ - United States dollar unless
otherwise stated
CAD – Canadian dollar
AGM - the annual general meeting to be held on 30 September 2021
CFR - cost and freight, applied to iron ore prices,
an Incoterm
DFS - Definitive Feasibility Study
DMS - dense media separation, a process for the elimination of
low-density waste from crushed ore
dmt - dry metric tonne (used in iron ore
measurement)
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
OTC – The OTC Markets Group trading stocks in the US off the
exchanges
PEA - Preliminary Economic Assessment
PFS - Preliminary Feasibility Study
tonne - metric tonne of 1,000 kilogrammes
SEK - Swedish Krona
t - metric tonne
tpd - tonnes per day
Notice of the Annual General
Meeting
Notice is given that the 2021 Annual General Meeting of Anglesey
Mining plc will be held at the offices of DLA Piper, 160 Aldersgate
Street London EC1A 4HT on 30 September
2021 at 11.00 a.m. to consider
and, if thought fit, to pass the resolutions set out below.
As ordinary business
- To receive the annual accounts and directors' and auditor’s
reports for the year ended 31 March
2021.
- To approve the directors' remuneration report for the year
ended 31 March 2021.
- To approve the directors' remuneration policy in the directors’
remuneration report for
the year ended 31 March 2021.
- To reappoint John F. Kearney as
a director.
- To reappoint Bill Hooley as a
director.
- To reappoint Howard Miller as a
director.
- To reappoint Danesh Varma as a
director.
- To confirm the appointment of Jonathan
(Jo) Battershill 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 £750,000, provided that (unless
previously revoked, varied or renewed) this authority shall expire
on 31 December 2022, 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 the
preceding resolution 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 £560,000
and (unless previously revoked, varied or renewed) this power
shall expire on 31 December 2022,
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
2 September 2021
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 28
September 2021 (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. The
appointment of a proxy will not preclude a shareholder from
attending and voting in person at the meeting.
3. Members may appoint a proxy
online at www.signalshares.com by logging into their Signal Shares
account or registering if they have not previously done so. To
register, members will need to identify themselves with their
Investor Code, which is detailed on their share certificate or
available from the Company’s registrar on 0371 664 0300. CREST
members can utilise the CREST electronic proxy appointment
service.
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 Link Group, FREEPOST
Proxies, 10th Floor, Central Square, 29 Wellington Street,
Leeds, LS1 4DL 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 electronically, or by
post or (during normal business hours only) by hand at the offices
of the Company's registrar no later than 11.00 a.m. on 28 September
2021 (or, if the meeting is adjourned, no later than 48
hours (excluding any part of a day that is not a working day)
before the time of any adjourned meeting).
Corporate representatives
4. A shareholder which is a
corporation may authorise one or more persons to act as its
representative(s) at the meeting. Each such representative may
exercise (on behalf of the corporation) the same powers as the
corporation could exercise if it were an individual shareholder,
provided that (where there is more than one representative and the
vote is otherwise than on a show of hands) they do not do so in
relation to the same shares.
Total voting rights
5. As at 20 August 2021 (being the last practicable date
before the publication of this notice), the issued share capital
consists of 225,475,732 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 20 August
2021 are 225,475,732.
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.
8. A shareholder or
shareholders meeting the qualification criteria set out in note 10
below may require the Company to include in the business to be
dealt with at the meeting any matter (other than a proposed
resolution) which may properly be included in the business in
accordance with section 338A of the Act. A matter may properly be
included unless (i) it is defamatory of any person, or (ii) it is
frivolous or vexatious. Any such request must (i) identify the
matter to be included in the business, by either setting out the
matter in full or, if supporting a matter requested by another
shareholder, clearly identifying the matter which is being
supported (ii) set out the grounds for the request (iii) comply
with the requirements set out in note 11 below and (iv) be received
by the Company no later than six weeks before the meeting.
Website publication of audit concerns
9. A shareholder or
shareholders who meet the qualification criteria set out in note 10
below may require the Company to publish on its website a statement
setting out any matter that such shareholders propose to raise at
the meeting relating to either the audit of the Company's accounts
(including the auditors' report and the conduct of the audit) that
are to be laid before the meeting or any circumstances connected
with an auditor of the Company ceasing to hold office since the
last annual general meeting of the Company in accordance with
section 527 of the Act. Any such request must (i) identify the
statement to which it relates, by either setting out the statement
in full or, if supporting a statement requested by another
shareholder, clearly identify the statement which is being
supported (ii) comply with the requirements set out in note 11
below and (iii) be received by the Company at least one week before
the meeting. Where the Company is required to publish such a
statement on its website (i) it may not require the shareholders
making the request to pay any expenses incurred by the Company in
complying with the request (ii) it must forward the statement to
the Company's auditors no later than the time when it makes the
statement available on the website and (iii) the statement may be
dealt with as part of the business of the meeting.
Notes 7, 8 and 9 above: qualification criteria and methods of
making requests
10. In order to require the Company (i)
to circulate a resolution to be proposed at the meeting as set out
in note 7, (ii) to include a matter in the business to be dealt
with at the meeting as set out in note 8, or (iii) to publish audit
concerns as set out in note 9, the relevant request must be made by
(i) a shareholder or shareholders having a right to vote at the
meeting and holding at least five per cent of the total voting
rights of the Company or (ii) at least 100 shareholders having a
right to vote at the meeting and holding, on average, at least £100
of paid up share capital. For information on voting rights,
including the total voting rights of the Company, see note 5 above
and the website referred to in note 15 below.
11. Any request by a shareholder or
shareholders to require the Company (i) to circulate a resolution
to be proposed at the meeting as set out in note 7 (ii) to include
a matter in the business to be dealt with at the meeting as set out
in note 8 or (iii) to publish audit concerns as set out in note 9
may be made either (a) in hard copy, by sending it to Anglesey
Mining plc, Tower Bridge, St Katharine's Way, London E1W 1DD (marked for the attention of
the Company Secretary); or (b) in electronic form, by sending an
email to danesh@angleseymining.co.uk; and must state the full
name(s) and address(es) of the shareholder(s) and (where the
request is made in hard copy form) must be signed by the
shareholder(s).
Questions at the meeting
12. Shareholders have the right to ask
questions at the meeting relating to the business being dealt with
at the meeting in accordance with section 319A of the Act. The
Company must answer any such question unless: (a) to do so would
interfere unduly with the preparation for the meeting or would
involve the disclosure of confidential information; (b) the answer
has already been given on a website in the form of an answer to a
question; or (c) it is undesirable in the interests of the Company
or the good order of the meeting that the question be answered.
Documents available for inspection
13. The following documents will be available
for inspection during normal business hours at the registered
office of the Company from the date of this notice until the time
of the meeting. They will also be available for inspection at the
place of the meeting from at least 15 minutes before the meeting
until it ends: (a) copies of the service contracts of the executive
directors, (b) copies of the letters of appointment of the
non-executive directors and (c) the Articles of Association of the
Company.
Biographical details of directors
14. Biographical details of all those
directors who are offering themselves for reappointment at the
meeting are set out in the annual report and accounts.
Website providing information about the meeting
15. The information required by section 311A
of the Act to be published in advance of the meeting, which
includes the matters set out in this notice and information
relating to the voting rights of shareholders, is available at
www.angleseymining.co.uk.
Directors
John F.
Kearney |
Irish, aged
70, is Chairman of Anglesey Mining plc, and several other public
companies, including Labrador Iron Mines Holdings Limited, Buchans
Resources Limited and Minco Exploration plc, and until 2019 was
chairman of Canadian Zinc Corporation. He is a director of
Grangesberg Iron AB.
Over the course of his career, he has served as a senior officer
(usually Chairman and/or Chief Executive) of more than thirty
public companies incorporated in Canada; Ireland; United Kingdom;
United States; Australia and elsewhere, the shares of which were
listed on various stock exchanges (including London Stock Exchange;
AIM Market; Toronto Stock Exchange; New York Stock Exchange;
American Stock Exchange; NASDAQ; Australian Stock
Exchange).
Mr. Kearney also served as a director and member of the Executive
Committee of the Mining Association of Canada and as a director and
two term President of the Northwest Territories and Nunavut Chamber
of Mines.
Mr. Kearney is a member of the Prospectors and Developers
Association of Canada, the Canadian Institute of Mining and
Metallurgy and the Law Society of Ireland. He holds degrees in law
and economics from University College Dublin, an M.B.A. degree from
Trinity College Dublin, and a Certificate in Mining Law from
Osgoode Hall Law School, York University, Toronto. He qualified as
a solicitor in Ireland and as a chartered secretary with the
Institute of Chartered Secretaries and Administrators in London. He
is a member of the remuneration and nomination committees. |
|
Jonathan (Jo)
Battershill |
aged 51,
Chief Executive, is a mining geology graduate from Camborne School
of Mines and has many years of experience both in mining operations
and in the finance sector, particularly in Australia and in the
United Kingdom.
After almost a decade working in mining operations and business
development with Western Mining Corporation in Australia, in 2004
he joined a boutique broking house in Perth, Western Australia.
Subsequent to that move, he worked in the mining finance sector for
17 years until July 2021, primarily for UBS in Sydney/London and
Canaccord in London. He has extensive knowledge and
connections, having been part of Canaccord’s globally top ranked
mining ECM/Sales team since January 2020. Early in his mining
career he worked as an underground miner at the South Crofty Tin
Mine in Cornwall, while attending the School of
Mines. |
|
Bill
Hooley |
aged 74,
Deputy Chairman, and previously Chief Executive until 31 July 2021,
is a mining engineering graduate from the Royal School of Mines,
London and has extensive experience in the minerals industry
including mine and processing operations, planning, project
management and corporate management in many countries including
Australia, Saudi Arabia, Canada and the UK.
He has also practised as a minerals industry consultant at a senior
level and has managed other businesses developing and selling
products and services to the minerals and related industries.
He is Vice-Chairman and a director of Labrador Iron Mines Holdings
Limited as well as Chairman and a director of Grangesberg Iron AB
and Angmag 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 |
aged 71,
Finance Director and Company Secretary is a chartered accountant in
England and Wales, and Canada, with many years of experience in
financial management. He is currently a director of Brookfield
Investment Corp., Canadian Manganese Corp., Labrador Iron Mines
Holdings Limited, Grangesberg Iron AB, Angmag AB and Minco
Exploration plc. He also serves as the Chief Financial Officer of
Buchans Resources Limited and Xtierra Inc.
Previously he was President of American Resource Corporation and
Westfield Minerals Limited and a director of Northgate Exploration
Limited., Minco plc and Connemara Mining plc |
|
Howard
Miller |
aged 77, non-executive
director, a lawyer with over 45 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 was
chairman and chief executive of Avnel Gold Mining Limited, which
operated the Kalana gold mine in Mali and was acquired by Endeavour
Mining in 2018. He is a member of the remuneration, audit and
nomination committees and the lead independent director. |
|
Solicitors
DLA Piper UK LLP
1 St Peters Square
Manchester
M2 3DE |
Auditor
Mazars LLP
Tower Bridge House,
St. Katharine’s Way, London
E1W 1DD |
|
|
|
|
Anglesey Mining plc
Parys Mountain
Amlwch, Anglesey, LL68 9RE
Phone 01407 831275
mail@angleseymining.co.uk
London
office
Level 2, 39 Cheval Place,
South Kensington,
London,
SW7 1EW
Phone 020 7036 0225
Registrars
Link Group
29 Wellington Street, Leeds, LS1
4DL
Share dealing phone 0371 664 0445
Helpline phone 0371 664 0300
Registered
office
Tower Bridge House,
St. Katharine’s Way, London, E1W
1DD
Web site www.angleseymining.co.uk
Company registered number 1849957
Shares listed The London Stock Exchange - LSE:AYM