Anglesey Mining plc
Half yearly report for the six months
to 30 September 2017
Chairman’s Statement and Management
Report
We are pleased to report that the broad trend of improving base
metal prices is prevailing during 2017. The current price of zinc
is strong and the long-term price outlook remains very
positive.
The rally in base metals, which began in 2016 is continuing with
the London Metal Exchange zinc price hitting a new 10-year high of
US$1.52 per pound in late September.
Since the beginning of 2017, the zinc price is up almost 30% and
the year-over-year increase is approximately 40%.
We therefore believe that it is now opportune to move forward
with the development of the Parys Mountain base metal project in
North Wales and we are putting in
place a number of key elements to facilitate this.
Parys Mountain
During the half year the updated Scoping Study on Parys
Mountain, prepared by Micon International Limited and Fairport
Engineering Limited, was received. The positive results from that
Study, which were described in some detail in the annual report
issued in July, indicate a processing rate for the planned
Parys Mountain Mine of 1,000 tonnes
per day, generating average copper, lead and zinc concentrate
production of approximately 22,000 tonnes per annum in total.
The Scoping Study was based on copper prices of $US2.50 per pound, zinc of $US1.25 per pound and lead of $US1.00 per pound, generating an overall net
smelter return of $US270 million with
an IRR of 28% and an NPV10 of $US43
million.
Subsequent to preparation of the Study, metal prices have
continued to improve significantly with copper now selling at
around $US3.10 per pound, zinc at
$US1.45 per pound and lead at
$US1.10 per pound. If these current
market prices were used in the Study, the financial results
indicated would increase substantially.
We have previously described four key steps in the development
of the project. These are: the commencement of an Environmental
Impact Assessment; the conversion of the Scoping Study to a
Definitive Feasibility Study; the recruitment of key corporate
staff; and pursuing discussions with potential providers of project
finance.
Progress has been made on each of these areas and discussions
have been held with potential new executives with the expectation
that they will be recruited in time to have inputs into the other
key activities.
Of particular importance has been an external review of the
projects current Planning Permissions and associated ongoing
requirements for licences and permits. This external review has
confirmed that the Planning Permissions remain in good standing but
as expected will be reviewed during the feasibility study. The
external review also examined the particular requirements for
environmental compliance and how these will tie in with the
planning review. We now have determined the route forward to
progress each of these matters to achieve our target of initial
production during 2020.
Grangesberg Iron
Activities at Grangesberg have been kept at a low level whilst
the prospects for the price for iron ore remains somewhat subdued.
However, Grangesberg would be a producer of high quality saleable
product likely in the form of iron ore pellets. Demand for iron ore
worldwide driven particularly by China continues to increase, albeit not at the
same pace as that achieved several years ago and there is a growing
requirement for high grade product and in particular for
pellets.
The premium price for pellets is now forecast to range between
$US35 and $US50 per tonne in the
China market, primarily as a
result of demand for higher quality iron ore as China plans to shut down up to 1,000 low grade
domestic iron ore mines due to pollution concerns. Such a pellet
premium, if sustained, would indicate the potential for a viable
operation on the Grangesberg
project, under the evaluation studies carried out within the
last five years. Nevertheless, the capital cost to develop such an
operation will be significant and it will be necessary to be
confident that the current pellet premiums will be sustainable in
the longer term. Anglesey continues to support Grangesberg and
recognises that it is likely that further external partners will be
required to raise the capital required for full development.
Labrador
Labrador Iron Mines operations at Schefferville are being
maintained in stand-by care and maintenance following the
completion of LIM’s financial restructuring in late 2016.
Notwithstanding the challenging financial environment during the
past several years, LIM continued to conduct a variety of
operational activities with the objective of preserving its assets,
maintaining its mineral properties on a standby basis, fulfilling
environmental and regulatory obligations and controlling costs.
Anglesey, with a holding of 12% in LIM, maintains a watching but
passive interest.
Operations
As previously, we have continued to keep corporate and operating
cost at the lowest possible level, although these were a little
higher than the previous year because of increased activity. In
accordance with the company’s accounting policies and past
practice, the expenditures on the Parys Project related to the
Scoping Study have in general been capitalised in the accounts
rather than expensed.
Financial results
The group had no revenue for the period. The loss for the six
months to 30 September 2017 was
£167,186 compared to £135,949 for the comparative period ended
30 September 2016. The net current
assets reduced from £301,339 to £157,560 over the six months due to
property expenditures capitalised of £65,943 together with the
current operating expenses. Additional financing will be required
for working capital to maintain the group and carry out planned
progress at Parys Mountain.
Outlook
After a number of years when the outlook seemed hopeful but
still uncertain, we can now look forward to a more positive future.
The outlook for the key commodities upon which we rely - copper,
zinc and lead, remains positive. The positive outlook is based
largely on straightforward supply/demand criteria with considerably
less influence from inventory adjustments and hedge trading that
appeared to unduly influence prices previously.
This coming year will be critical for the development of Parys
Mountain. We need to manage the transition to an expanded
management team which will be instrumental in raising funds in what
remains a demanding market, particularly for equity capital in the
smaller resource company sector.
We look forward to being able to further update shareholders on
these developments at appropriate times in the near future.
I would like to thank our limited management and our very
supportive board of directors for their continued valuable input
and advice and we again thank shareholders for their continued
patience and support.
John F Kearney
Chairman
29 November 2017
Unaudited condensed consolidated
income statement
|
|
Notes |
Unaudited six months ended 30 September 2017 |
Unaudited six months ended 30 September 2016 |
All
operations are continuing |
|
£ |
£ |
|
Revenue |
|
- |
- |
|
Expenses |
|
(78,100) |
(42,418) |
|
Equity-settled
employee benefits |
|
(9,324) |
- |
|
Investment
income |
|
56 |
103 |
|
Finance
costs |
|
(79,954) |
(82,392) |
|
Foreign exchange
gain |
|
136 |
131 |
|
|
|
|
|
Loss before tax |
|
(167,186) |
(124,576) |
|
|
|
|
|
|
Taxation |
8 |
- |
- |
|
|
|
|
|
Loss for the period |
7 |
(167,186) |
(124,576) |
|
|
|
|
|
|
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 |
|
(167,186) |
(124,576) |
|
|
Other comprehensive
income |
|
|
|
|
|
Items
that may subsequently be reclassified to profit or loss: |
|
|
|
Exchange
difference on
translation of foreign holding |
|
21,155 |
(18,135) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss for the period |
|
(146,031) |
(142,711) |
|
|
|
|
|
|
|
All attributable to equity holders of the company
Unaudited condensed consolidated
statement of financial position
|
|
Notes |
Unaudited 30 September 2017 |
Audited 31 March 2017 |
|
|
|
£ |
£ |
Assets |
|
|
|
|
Non-current
assets |
|
|
|
|
Mineral property
exploration and evaluation |
9 |
15,076,765 |
15,010,822 |
|
Property, plant
and equipment |
|
204,687 |
204,687 |
|
Investments |
10 |
86,660 |
86,660 |
|
Deposit |
|
123,168 |
123,118 |
|
|
|
|
|
|
|
|
15,491,280 |
15,425,287 |
|
|
|
|
|
|
Current
assets |
|
|
|
|
Other
receivables |
|
34,239 |
23,603 |
|
Cash and cash
equivalents |
|
226,088 |
392,293 |
|
|
|
|
|
|
|
|
260,327 |
415,896 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
15,751,607 |
15,841,183 |
|
|
|
|
|
Liabilities |
|
|
|
|
Current
liabilities |
|
|
|
|
Trade and other
payables |
|
(102,767) |
(114,557) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(102,767) |
(114,557) |
|
|
|
|
|
|
Net current
assets |
|
157,560 |
301,339 |
|
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
Loans |
|
(3,474,659) |
(3,415,738) |
|
Long term
provision |
|
(50,000) |
(50,000) |
|
|
|
|
|
|
|
|
(3,524,659) |
(3,465,738) |
|
|
|
|
|
Total liabilities |
|
(3,627,426) |
(3,580,295) |
|
|
|
|
|
|
|
|
|
|
Net assets |
|
12,124,181 |
12,260,888 |
|
|
|
|
|
Equity |
|
|
|
|
Share
capital |
11 |
7,286,914 |
7,286,914 |
|
Share
premium |
|
10,171,986 |
10,171,986 |
|
Currency
translation reserve |
|
(52,355) |
(73,510) |
|
Retained
losses |
|
(5,282,364) |
(5,124,502) |
|
|
|
|
|
|
|
|
|
|
Total
shareholders' equity |
|
12,124,181 |
12,260,888 |
|
|
|
|
|
All attributable to equity holders of the company
Unaudited condensed consolidated
statement of cash flows
|
|
Notes |
Unaudited six months ended 30 September 2017 |
Unaudited six months ended 30 September 2016 |
|
|
|
£ |
£ |
Operating activities |
|
|
|
|
Loss for the
period |
|
(167,186) |
(124,576) |
|
Adjustments
for: |
|
|
|
|
Investment
income |
|
(56) |
(103) |
|
Finance
costs |
|
79,954 |
82,392 |
|
Equity-settled
employee benefits |
6 |
9,324 |
- |
|
Foreign exchange
movement |
|
(136) |
(131) |
|
|
|
|
|
|
|
|
(78,100) |
(42,418) |
|
Movements in
working capital |
|
|
|
|
(Increase)/decrease in receivables |
|
(10,636) |
2,348 |
|
Decrease in
payables |
|
(25,693) |
(25,672) |
|
|
|
|
|
Net
cash used in operating activities |
|
(114,429) |
(65,742) |
|
|
|
|
|
Investing activities |
|
|
|
|
Investment
income |
|
6 |
103 |
|
Mineral property
exploration and evaluation |
|
(51,918) |
(30,388) |
|
|
|
|
|
Net
cash used in investing activities |
(51,912) |
(30,285) |
|
|
|
|
|
Financing activities |
|
|
|
|
Loans |
|
- |
125,000 |
|
|
|
|
|
Net
cash generated from financing activities |
|
- |
125,000 |
|
|
|
|
|
Net
(decrease)/increase in cash and cash equivalents |
(166,341) |
28,973 |
Cash
and cash equivalents at start of period |
|
392,293 |
11,504 |
Foreign exchange movement |
|
136 |
131 |
|
|
|
|
|
Cash and cash equivalents at end of period |
|
226,088 |
40,608 |
|
|
|
|
|
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 2017
- audited |
7,286,914 |
10,171,986 |
(73,510) |
(5,124,502) |
12,260,888 |
Total
comprehensive
income for the period: |
|
|
|
|
|
Exchange difference
on
translation of foreign holding |
- |
- |
21,155 |
- |
21,155 |
Loss for the
period |
- |
- |
- |
(167,186) |
(167,186) |
Total
comprehensive
income for the period |
- |
- |
21,155 |
(167,186) |
(146,031) |
|
|
|
|
|
|
Equity-settled
employee benefits |
- |
- |
- |
9,324 |
9,324 |
|
|
|
|
|
|
Equity at
30 September 2017 - unaudited |
7,286,914 |
10,171,986 |
(52,355) |
(5,282,364) |
12,124,181 |
|
|
|
|
|
|
Comparative
period |
|
|
|
|
|
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 |
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 2017.
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 29 November 2017. 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 2017 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 2017 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 have not been audited or reviewed.
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 2017.
Early Annual Improvements to IFRSs
(2014 - 2016).
Effective 1
January 2017 and expected to be endorsed by the EU in Q3
2017.
-
IFRS 9 Financial Instruments. Effective 1
January 2018. Early application is permitted.
-
IFRS 15 Revenue from Contracts with Customers. Effective
1 January 2018. Early application is
permitted
-
Clarifications to IFRS 15 Revenue from Contracts with Customers.
Effective 1 January 2018 and expected
to be endorsed by the EU in Q2 2017. Early application is
permitted.
Annual Improvements to IFRSs (2014 -
2016).
Effective 1
January 2018 and expected to be endorsed by the EU in Q3
2017.
-
IFRS 16 Leases. Effective 1 January
2019 and expected to be endorsed by the EU in Q4 2017. Early
application is permitted with application of IFRS 15 Revenue from
Contracts with Customers.
The directors expect that the adoption of the above
pronouncements (with the possible exceptions of IFRS9 and IFRS16)
will have no material impact to the financial statements in the
period of initial application other than disclosure. IFRS 9 is
still ongoing and yet to be adopted by the EU. The group is not yet
generating any revenue consequently the implementation of IFRS15
will have no impact at present. The directors have not yet assessed
the full impact IFRS16 on these financial statements.
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.
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 2017 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 2017 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 29 November 2017 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 £0.167 million (loss to 30 September 2016 £0.125m), by 177,608,051 (2016
– 160,608,051) - 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 2017 |
|
|
UK |
Sweden
- investment |
Canada
- investment |
Total |
|
|
£ |
£ |
£ |
£ |
|
Expenses |
(78,100) |
- |
- |
(78,100) |
|
Equity settled
employee benefits |
(9,324) |
- |
- |
(9,324) |
|
Investment income |
56 |
- |
- |
56 |
|
Finance costs |
(72,116) |
(7,838) |
- |
(79,954) |
|
Exchange rate
movements |
136 |
- |
- |
136 |
|
|
|
|
|
|
|
Loss for the
period |
(159,348) |
(7,838) |
- |
(167,186) |
|
|
|
|
|
|
|
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) |
Assets and liabilities
` |
Unaudited 30 September 2017 |
|
UK |
Sweden
investment |
Canada
investment |
Total |
|
£ |
£ |
£ |
£ |
Non current
assets |
15,404,620 |
86,659 |
1 |
15,491,280 |
Current assets |
259,059 |
1,268 |
- |
260,327 |
Liabilities |
(3,343,051) |
(284,375) |
- |
(3,627,426) |
|
|
|
|
|
Net
assets/(liabilities) |
12,320,628 |
(196,448) |
1 |
12,124,181 |
|
|
|
|
|
|
Audited 31 March 2017 |
|
UK |
Sweden
investment |
Canada
investment |
Total |
|
£ |
£ |
£ |
£ |
Non current
assets |
15,338,627 |
86,659 |
1 |
15,425,287 |
Current assets |
414,655 |
1,241 |
- |
415,896 |
Liabilities |
(3,282,725) |
(297,570) |
- |
(3,580,295) |
|
|
|
|
|
Net
assets/(liabilities) |
12,470,557 |
(209,670) |
1 |
12,260,888 |
8. Deferred tax
There is an unrecognised deferred tax asset of £1.3 million
(31 March 2017 - £1.3m) 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 2017) 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 £65,943 was incurred
(six months to 30 September 2016 -
£18,549). There have been no indicators of impairment during the
period.
10. Investments
|
Labrador |
Grangesberg |
Total |
|
£ |
£ |
£ |
At 1 April
2016 |
1 |
86,659 |
86,660 |
Addition during
period |
- |
|
- |
At 31 March
2017 |
1 |
86,659 |
86,660 |
Addition during
period |
- |
- |
- |
|
|
|
|
At 30 September
2017 |
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 2016 |
1,606,081 |
160,608,051 |
5,510,833 |
137,770,835 |
7,116,914 |
|
Shares issued for
cash |
170,000 |
17,000,000 |
- |
- |
170,000 |
|
At 31 March 2017
and
30 September 2017 |
1,776,081 |
177,608,051 |
5,510,833 |
137,770,835 |
7,286,914 |
|
12. Financial instruments
Group |
Available for sale assets |
Loans & receivables |
|
Unaudited 30 September 2017 |
31 March 2017 |
Unaudited 30 September 2017 |
31 March 2017 |
|
£ |
£ |
£ |
£ |
Financial
assets |
|
|
|
|
Investments |
1 |
1 |
- |
- |
Deposit |
- |
- |
123,168 |
123,118 |
Other
receivables |
- |
- |
34,239 |
23,603 |
Cash and cash
equivalents |
- |
- |
226,088 |
392,293 |
|
- |
- |
|
|
|
1 |
1 |
383,495 |
539,014 |
|
|
|
|
|
13. Events after the reporting
period
None.
14. Related party
transactions
None.