Anglesey Mining plc
Half yearly report for the six months
to 30 September 2016
Chairman’s Statement and Management
Report
In 2016, year to date, to a large extent we have seen an
improvement in all the metals which are key to Anglesey Mining and
the immediate outlook for all these metals is very
positive.
Base metal prices move ahead
Zinc has continued to be one of the strongest performing metals
in 2016, rising from the US$0.70 per
pound level at the end of 2015 to US$1.15 per pound in recent days, an improvement
in the year to date of more than 50%. For the past five years the
zinc market has been in deficit and the fundamentals for zinc have
been steadily improving. The closing in 2015 of Australia’s Century
mine and the Lisheen mine in Ireland, combined with earlier closures of the
Glencore’s Brunswick and Perseverance mines in Canada has removed more than one million
tonnes of mine supply which represents almost 9.9% of world mine
production.
Lead has also performed well in 2016 rising from US$0.75 per pound at the end of 2015 to
US$0.95 per pound during the third
quarter, while uncertainty about the global economy and investor
anxiety continue to support the prices of gold and silver.
More recently, following the election of Donald Trump in the
United States, there has been a dramatic increase in the
prices of most metals, particularly copper and iron ore. Copper is
now selling at over $2.60 per pound,
a level not seen for several years. The likelihood of a major
infrastructure programme in the United Sates would be very
significant for both copper and iron ore and particularly for zinc,
the demand for which is closely linked to steel production and
hence to iron ore demand.
Iron ore showing some strength
Iron ore is now selling at US$74
per tonne on a 62% iron basis FIS China. This is a level not seen
for almost two years, while at the same time the price of
metallurgical coal, the other major ingredient in steel making, has
more than doubled in the past six months. It is clear that
Chinese consumption of iron ore continues to increase. On a
positive note particularly relevant to the company the premiums for
high grade fines and pellets, as would be produced by Grangesberg
in Sweden, are also
increasing.
In the longer term, per capita steel consumption in China must catch up with levels in the West
and that would see at least a doubling in iron ore and zinc
demand.
Operations
At Anglesey Mining we have continued to keep our corporate and
operating costs at the lowest level possible and indeed have
reduced general expenses by a further 38% compared to the same
period last year, which as noted at that time were 50% of the prior
year. The direct expenditure at all our projects has again
remained low throughout the period.
New studies on Parys Mountain
As announced in the Annual Report the company is updating the
earlier scoping and economic studies on its Parys Mountain
zinc/lead/copper/silver/gold property in Wales. This updated scoping study is being
prepared by Micon International Limited and by Fairport Engineering
Limited, both of which are acknowledged experts and leaders in the
resources sector.
The Parys Mountain property is a significant zinc, copper and
lead deposit with small amounts of silver and gold, with a reported
a resource of 2.1 million tonnes at 6.9% combined base metals in
the indicated category and 4.1 million tonnes at 5.0% combined base
metals in the inferred category. The site has a head frame, a 300m
deep production shaft and planning permission for operations and
there is also important exploration potential.
It is expected that the results of this updated study will form
a solid base from which to move the project towards production and
will be used to assist with future planning and potential financing
of the development of the Parys Mountain project. We expect that
capital costs of developing Parys Mountain will be lower in today’s
less competitive environment and, coupled with positive changes in
exchange rates, could make the project attractive at expected metal
prices. The Parys Mountain project will of course benefit from the
expected increase in zinc price which is the predominant metal to
be produced during in the early years of the mine life.
Labrador restructuring
In Canada, Labrador Iron Mines
has made significant progress. A Plan of Arrangement has been filed
with Ontario Court and a meeting
of creditors will be held in early December. This filing marks a
major milestone in the court-supervised process to complete a
restructuring of LIM’s business. The plan is intended to
restructure LIM’s business to preserve its mining assets and to
position LIM to refinance an orderly resumption of its iron ore
mining activities when economic conditions warrant. If the plan is
implemented as expected then Anglesey’s holding in LIM will be
diluted by an approximately 25%.
Grangesberg well positioned
In Sweden, a number of
technical reviews have been continued to position the Grangesberg
iron ore project should the iron ore market continue to strengthen.
Anglesey holds a direct 6% interest in Grangesberg and a
right of first refusal over a further 51%. It has a shareholder and
cooperation agreements for operatorship of GIAB. The mining leases
can be maintained for a number of years with only minimum work
levels. The high grade of concentrate to be produced from
Grangesberg, together with the extensive existing infrastructure on
site and nationally, and the potential for sales within Sweden’s
domestic markets, negating the requirements for major port
facilities and expensive handling and shipping costs, will be key
drivers in this expectation. In the meantime, Grangesberg is also
actively looking at alternative resource projects in Sweden that could benefit from the local
knowledge and corporate support available, whilst awaiting a
sustainable upturn in the iron ore and financing markets.
Financial results
The group had no revenue for the period. The loss for the six
months to 30 September 2016 was
£124,576, a reduction of £11,373 in the loss from the comparative
period last year due to a reduction in administrative expenses. The
cash and net current liabilities positions also improved compared
with the last period as a result of cash advances of £125,000 from
Juno under the working capital agreement. Additional financing will
be required for working capital to maintain the group and carry out
planned progress at Parys Mountain.
Outlook
Anglesey is exposed to zinc, lead, copper and precious metals at
Parys Mountain and to iron ore at LIM and Grangesberg. With recent
political developments in the UK and the
United States, coupled with the likelihood of renewed
stimulus investment in China, we
feel that there is sound reason to believe that the future outlook
for the commodity prices which are important to Anglesey Mining is
very positive.
We thank shareholders for their continued patience and
support.
John F Kearney
Chairman
17 November 2016
Unaudited condensed consolidated
income statement
|
|
Notes |
Unaudited six months ended 30 September 2016 |
Unaudited six months ended 30 September 2015 |
All
operations are continuing |
|
£ |
£ |
|
Revenue |
|
- |
- |
|
Expenses |
|
(42,418) |
(68,337) |
|
Investment
income |
|
103 |
160 |
|
Finance
costs |
|
(82,392) |
(66,959) |
|
Foreign exchange
gain/(loss) |
|
131 |
(813) |
|
|
|
|
|
Loss before tax |
|
(124,576) |
(135,949) |
|
|
|
|
|
|
Taxation |
8 |
- |
- |
|
|
|
|
|
Loss for the period |
7 |
(124,576) |
(135,949) |
|
|
|
|
|
|
Loss per
share |
|
|
|
|
Basic - pence
per share |
|
(0.1)p |
(0.1)p |
|
Diluted - pence
per share |
|
(0.1)p |
(0.1)p |
|
|
|
|
|
Unaudited condensed consolidated
statement of comprehensive income
Loss for the period |
|
(124,576) |
(135,949) |
|
|
Other comprehensive
income |
|
|
|
|
|
Items
that may subsequently be reclassified to profit or loss: |
|
|
Exchange
difference on translation of foreign holding |
|
(18,135) |
33 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss
for
the period |
|
(142,711) |
(135,916) |
|
|
|
|
|
|
|
All attributable to equity holders of the company
Unaudited condensed consolidated
statement of financial position
|
|
Notes |
Unaudited 30 September 2016 |
Audited 31 March 2016 |
|
|
|
£ |
£ |
Assets |
|
|
|
|
Non-current
assets |
|
|
|
|
Mineral property
exploration and evaluation |
9 |
14,945,175 |
14,926,626 |
|
Property, plant
and equipment |
|
204,687 |
204,687 |
|
Investments |
10 |
86,660 |
86,660 |
|
Deposit |
|
123,078 |
123,078 |
|
|
|
|
|
|
|
|
15,359,600 |
15,341,051 |
|
|
|
|
|
|
Current
assets |
|
|
|
|
Other
receivables |
|
30,411 |
32,759 |
|
Cash and cash
equivalents |
|
40,608 |
11,504 |
|
|
|
|
|
|
|
|
71,019 |
44,263 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
15,430,619 |
15,385,314 |
|
|
|
|
|
Liabilities |
|
|
|
|
Current
liabilities |
|
|
|
|
Trade and other
payables |
|
(98,500) |
(136,259) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(98,500) |
(136,259) |
|
|
|
|
|
|
Net current
liabilities |
|
(27,481) |
(91,996) |
|
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
Loans |
|
(3,323,437) |
(3,097,662) |
|
Long term
provision |
|
(50,000) |
(50,000) |
|
|
|
|
|
|
|
|
(3,373,437) |
(3,147,662) |
|
|
|
|
|
Total liabilities |
|
(3,471,937) |
(3,283,921) |
|
|
|
|
|
|
|
|
|
|
Net assets |
|
11,958,682 |
12,101,393 |
|
|
|
|
|
Equity |
|
|
|
|
Share
capital |
11 |
7,116,914 |
7,116,914 |
|
Share
premium |
|
9,848,949 |
9,848,949 |
|
Currency
translation reserve |
|
(56,592) |
(38,457) |
|
Retained
losses |
|
(4,950,589) |
(4,826,013) |
|
|
|
|
|
|
|
|
|
|
Total
shareholders' equity |
|
11,958,682 |
12,101,393 |
|
|
|
|
|
All attributable to equity holders of the company
Unaudited condensed consolidated
statement of cash flows
|
|
Notes |
Unaudited six months ended 30 September 2016 |
Unaudited six months ended 30 September 2015 |
|
|
|
£ |
£ |
Operating activities |
|
|
|
|
Loss for the
period |
|
(124,576) |
(135,949) |
|
Adjustments
for: |
|
|
|
|
Investment
income |
|
(103) |
(160) |
|
Finance
costs |
|
82,392 |
66,959 |
|
Foreign exchange
movement |
|
(131) |
813 |
|
|
|
|
|
|
|
|
(42,418) |
(68,337) |
|
Movements in
working capital |
|
|
|
|
Decrease in
receivables |
|
2,348 |
1,002 |
|
(Decrease)/increase in payables |
|
(25,672) |
8,329 |
|
|
|
|
|
Net
cash used in operating activities |
|
(65,742) |
(59,006) |
|
|
|
|
|
Investing activities |
|
|
|
|
Investment
income |
|
103 |
60 |
|
Mineral property
exploration and evaluation |
|
(30,388) |
(29,144) |
|
|
|
|
|
Net
cash used in investing activities |
(30,285) |
(29,084) |
|
|
|
|
|
Financing activities |
|
|
|
|
Loans |
|
125,000 |
- |
|
|
|
|
|
Net
cash generated from financing activities |
|
125,000 |
- |
|
|
|
|
|
Net
increase/(decrease) in cash
and cash
equivalents |
28,973 |
(88,090) |
Cash
and cash equivalents at start of period |
|
11,504 |
96,873 |
Foreign exchange movement |
|
131 |
(813) |
|
|
|
|
|
Cash and cash equivalents at end of period |
|
40,608 |
7,970 |
|
|
|
|
|
All attributable to equity holders of the company
Unaudited condensed consolidated
statement of changes in group equity
|
Share
capital
£ |
Share
premium
£ |
Currency translation reserve
£ |
Retained losses
£ |
Total
£ |
Equity at 1 April 2016
- audited |
7,116,914 |
9,848,949 |
(38,457) |
(4,826,013) |
12,101,393 |
Total
comprehensive income for the period: |
|
|
|
|
|
Exchange difference
on translation of foreign holding |
- |
- |
(18,135) |
- |
(18,135) |
Loss for the
period |
- |
- |
- |
(124,576) |
(124,576) |
Total
comprehensive income for the period: |
- |
- |
(18,135) |
(124,576) |
(142,711) |
|
|
|
|
|
|
|
|
|
|
|
|
Equity at
30 September 2016 - unaudited |
7,116,914 |
9,848,949 |
(56,592) |
(4,950,589) |
11,958,682 |
|
|
|
|
|
|
Comparative
period |
|
|
|
|
|
Equity at 1 April 2015
- audited |
7,116,914 |
9,848,949 |
(31,163) |
(4,569,563) |
12,365,137 |
|
|
|
|
|
|
Total
comprehensive income for the period: |
|
|
|
|
|
Exchange difference
on translation of foreign holding |
- |
- |
33 |
- |
33 |
Loss for the
period |
- |
- |
- |
(135,949) |
(135,949) |
Total
comprehensive income for the period: |
- |
- |
33 |
(135,949) |
(135,916) |
|
|
|
|
|
|
|
|
|
|
|
|
Equity at
30 September 2015 - unaudited |
7,116,914 |
9,848,949 |
(31,130) |
(4,705,512) |
12,229,221 |
All attributable to equity holders of the company
Notes to the accounts
1. Basis of preparation
This half-yearly financial report comprises the unaudited
condensed consolidated financial statements of the group for the
six months ended 30 September 2016.
It has been prepared in accordance with the Disclosure and
Transparency Rules of the UK Financial Services Authority, the
requirements of IAS 34 - Interim financial reporting (as adopted by
the European Union) and using the going concern basis and the
directors are not aware of any events or circumstances which would
make this inappropriate. It was approved by the board of directors
on 17 November 2016. It does not
constitute financial statements within the meaning of section 434
of the Companies Act 2006 and does not include all of the
information and disclosures required for annual financial
statements. It should be read in conjunction with the annual report
and financial statements for the year ended 31 March 2016 which is available on request from
the company or may be viewed at www.angleseymining.co.uk.
The financial information contained in this report in respect of
the year ended 31 March 2016 has been
extracted from the report and financial statements for that year
which have been filed with the Registrar of Companies. The report
of the auditors on those accounts did not contain a statement under
section 498(2) or (3) of the Companies Act 2006 and was not
qualified. The half-yearly results for the current and comparative
periods are unaudited.
2. Significant accounting
policies
The accounting policies applied in these unaudited condensed
consolidated financial statements are consistent with those set out
in the annual report and financial statements for the year ended
31 March 2016. The following
amendments to interpretations were effective in the current period
and have been adopted:
IAS 1 (amendment) ‘Presentation of Financial Statements’ -
Disclosure initiative - 1 January
2016
IAS 16 (amendment) ‘Property, Plant and Equipment’ and IAS 38
(amendment) ‘Intangible Assets’ - Clarification of acceptable
methods of depreciation and amortisation -
1 January 2016
IAS 27 (amendment) ‘Separate Financial Statements’ - Equity
method in separate financial statements - 1
January 2016
IFRS 11 (amendment) ‘Joint Arrangements’ - Accounting for
acquisitions of interests in joint operations - 1 January 2016
Annual Improvements to IFRS (2012 - 2014) - 1 January 2016
The adoption of the amendments and new interpretations has not
resulted in a change to the accounting policies nor had a material
effect on the financial performance and position of the group. In
preparing these financial statements any accounting assumptions and
estimates made by management were consistent with those applied to
the aforesaid annual report and financial statements.
3. Risks and uncertainties
The principal risks and uncertainties set out in the group's
annual report and financial statements for the year ended
31 March 2016 remain the same for
this half-yearly financial report and can be summarised as:
development risks in respect of mineral properties, especially in
respect of permitting and metal prices; liquidity risks during
development; and foreign exchange risks. More information is to be
found in the 2016 annual report – see note 1 above.
4. Statement of directors'
responsibilities
The directors confirm to the best of their knowledge that: (a)
the unaudited condensed consolidated financial statements have been
prepared in accordance with the requirements of IAS 34 Interim
financial reporting (as adopted by the European Union); and (b) the
interim management report includes a fair review of the information
required by the FSA's Disclosure and Transparency Rules (4.2.7 R
and 4.2.8 R). This report and financial statements were approved by
the board on 17 November 2016 and
authorised for issue on behalf of the board by Bill Hooley, chief executive officer and
Danesh Varma, finance director.
5. Activities
The group is engaged in mineral property development and
currently has no turnover. There are no minority interests or
exceptional items.
6. Earnings per share
The loss per share is computed by dividing the loss attributable
to ordinary shareholders of £0.1 million (loss to 30 September 2015 £0.1m), by 160,608,051 (2015 -
unchanged) - the weighted average number of ordinary shares in
issue during the period. Where there are losses the effect of
outstanding share options is not dilutive.
7. Business and geographical
segments
There are no revenues. The cost of all activities charged in the
income statement relates to exploration and development of mining
properties. The group's income statement and assets and liabilities
are analysed as follows by geographical segments, which is the
basis on which information is reported to the board.
Income statement analysis
|
|
|
|
|
|
|
Unaudited six months ended 30 September 2016 |
|
|
UK |
Sweden
- investment |
Canada
- investment |
Total |
|
|
£ |
£ |
£ |
£ |
|
Expenses |
(42,409) |
(9) |
- |
(42,418) |
|
Investment income |
103 |
- |
- |
103 |
|
Finance costs |
(82,392) |
- |
- |
(82,392) |
|
Exchange rate
movements |
105 |
26 |
- |
131 |
|
|
|
|
|
|
|
Loss for the
period |
(124,593) |
17 |
- |
(124,576) |
|
|
|
|
|
|
|
Unaudited six months ended 30 September 2015 |
|
UK |
Sweden
- investment |
Canada
- investment |
Total |
|
£ |
£ |
£ |
£ |
Expenses |
(68,337) |
- |
- |
(68,337) |
Investment income |
160 |
- |
- |
160 |
Finance costs |
(66,959) |
- |
- |
(66,959) |
Exchange rate
movements |
- |
(57) |
(756) |
(813) |
|
|
|
|
|
Loss for the
period |
(135,136) |
(57) |
(756) |
(135,949) |
Assets and liabilities
` |
Unaudited 30 September 2016 |
|
UK |
Sweden
investment |
Canada
investment |
Total |
|
£ |
£ |
£ |
£ |
Non current
assets |
15,272,940 |
86,659 |
1 |
15,359,600 |
Current
assets |
69,755 |
1,264 |
- |
71,019 |
Liabilities |
(3,191,748) |
(280,189) |
- |
(3,471,937) |
|
|
|
|
|
Net
assets/(liabilities) |
12,150,947 |
(192,266) |
1 |
11,958,682 |
|
|
|
|
|
|
Audited 31 March 2016 |
|
UK |
Sweden
investment |
Canada
investment |
Total |
|
£ |
£ |
£ |
£ |
Non current
assets |
15,254,391 |
86,659 |
1 |
15,341,051 |
Current assets |
43,069 |
1,194 |
- |
44,263 |
Liabilities |
(3,038,460) |
(245,461) |
- |
(3,283,921) |
|
|
|
|
|
Net
assets/(liabilities) |
12,259,000 |
(157,608) |
1 |
12,101,393 |
8. Deferred tax
There is an unrecognised deferred tax asset of £1.3 million
(31 March 2016 - £1.2m) which, in
view of the group's results, is not considered to be recoverable in
the short term. There are also capital allowances, including
mineral extraction allowances, exceeding £12.5 million (unchanged
from 31 March 2016) unclaimed and
available. No deferred tax asset is recognised in the condensed
financial statements.
9. Mineral property exploration
and evaluation costs
Mineral property exploration and evaluation costs incurred by
the group are carried in the unaudited condensed consolidated
financial statements at cost, less an impairment provision if
appropriate. The recovery of these costs is dependent upon the
successful development and operation of the Parys Mountain project
which is itself conditional on finance being available to fund such
development. During the period expenditure of £18,549 was incurred
(six months to 30 September 2015 -
£24,127). There have been no indicators of impairment during the
period.
10. Investments
|
Labrador |
Grangesberg |
Total |
|
£ |
£
|
£ |
At 1 April
2015 |
1 |
86,659.00 |
86,660 |
Addition during
period |
- |
|
- |
At 31 March
2016 |
1 |
86,659 |
86,660 |
Addition during
period |
- |
- |
- |
|
|
|
|
At Unaudited 30
September 2016 |
1 |
86,659 |
86,660 |
Labrador: The
group’s investment is classified as ‘unquoted’ and is held at a
nominal value of £1.
Grangesberg: The group has a 6% holding in Grangesberg
Iron AB (an unquoted Swedish company) and a right of first refusal
over shares amounting to a further 51% of that company. This
investment has been initially recognised and subsequently measured
at cost, on the basis that the shares are not quoted and a reliable
fair value is not able to be estimated.
11. Share capital
|
Ordinary shares of
1p |
Deferred shares of
4p |
Total |
|
Issued and
fully paid |
Nominal
value £ |
Number |
Nominal
value £ |
Number |
Nominal
value £ |
|
|
|
|
|
|
|
|
|
|
|
|
|
- |
|
|
|
|
|
|
|
|
At 31 March 2015,
2016 and 30 September 2016 |
1,606,081 |
160,608,051 |
5,510,833 |
137,770,835 |
7,116,914 |
|
|
|
|
|
|
|
|
12. Financial instruments
Group |
Available for sale assets |
Loans & receivables |
|
Unaudited 30 September 2016 |
31 March 2016 |
Unaudited 30 September 2016 |
31 March 2016 |
|
£ |
£ |
£ |
£ |
Financial
assets |
|
|
|
|
Investments |
1 |
1 |
- |
- |
Deposit |
- |
- |
123,078 |
123,078 |
Other
debtors |
- |
- |
30,411 |
32,759 |
Cash and
cash
equivalents |
- |
- |
40,608 |
11,504 |
|
- |
- |
|
|
|
1 |
1 |
194,097 |
167,341 |
|
|
|
|
|
|
Unaudited 30 September 2016 |
31 March 2016 |
|
|
|
£ |
£ |
|
|
Financial
liabilities |
|
|
|
|
Trade
payables |
(44,206) |
(77,465) |
|
|
Other
payables |
(54,294) |
(58,794) |
|
|
Loans |
(3,323,437) |
(3,097,662) |
|
|
|
|
|
|
|
|
(3,421,937) |
(3,233,921) |
|
|
|
|
|
|
|
13. Events after the reporting
period
None.
14. Related party
transactions
None.
Corporate information
Directors:
John
Kearney
Chairman
Bill
Hooley
Chief executive
Danesh
Varma
Finance director
David
Lean
Non executive
Howard
Miller
Non executive
Parys Mountain site: Parys Mountain, Amlwch, Anglesey, LL68
9RE
Phone 01407 831275
London office: Painter's
Hall, 9 Little Trinity Lane, London, EC4V 2AD
Phone 020 7653 9881
Registered office: Tower Bridge House,
St. Katharine's Way, London, E1W
1DD
Share registrars: Capita
Registrars www.capitaregistrars.com
Phone: 0871 664 0300 - for all
change of address and shareholder
administration matters (calls cost 10p per minute plus network
extras,
lines open 0830 to 1730 Mon-Fri)
Web site: www.angleseymining.co.uk
E-mail: mail@angleseymining.co.uk
Shares listed on the London Stock
Exchange - LSE:AYM
Company registration number
1849957