TIDMAYM
7 September 2022 AIM: AYM
Anglesey Mining plc
("Anglesey" or "the Company")
Anglesey Mining Financial Results and Corporate Update
Anglesey Mining plc, the UK minerals development company, is pleased to
announce the release of its full year financial results for the year ending 31
March 2022, and provide an update for investors on current activities at the
Company's Parys Mountain Cu-Zn-Pb-Ag-Au and Grängesberg iron ore projects.
Financial and Operating Results
* Comprehensive loss of £2.8m in the financial year ended 31 March 2022
compared to the prior year comprehensive profit of £3.7m, with the variance
primarily attributable to the mark-to-market valuation of the Company's 12%
holding in Labrador Iron Mine Holdings Limited
* Successful fund raising of £0.86m subsequent to the end of the financial
period
* Completion of key operating milestones during the period, including the
completion of the first drilling programme at Parys Mountain for 12-years
and the commencement of the Pre-Feasibility Study on the Grängesberg Iron
Ore Project in Sweden
* During the current financial year, the Company will continue to advance the
technical aspects of the Parys Mountain studies and permitting activities.
At the Grängesberg Iron Ore Project, the Company will be completing the
next round of technical work on the resource and reserve estimates to
enable the Bankable Feasibility Study to start
Jo Battershill, the CEO & Managing Director of Anglesey Mining, commented: "The
activities of the last 12 months continue to demonstrate that Anglesey Mining
has two potentially long life, highly cash generative mine developments. At
Parys Mountain, the first drilling in over a decade was successful in infill
drilling areas of White Rock that were previously in the Inferred category and
will provide a bulk sample to be used in the upcoming pre-concentration and
flotation testwork. The initial design work for the Tailings Management
Facility has also commenced along with many aspects of the environmental
baseline studies, which we will continue to advance over the coming months. The
Board continues to believe permitting of the project will help to close the
valuation gap between our share price and the potential NPV of Parys Mountain.
Recent work on evaluating the prospectivity of the large Northern Copper Zone
has confirmed the significant upside of that mineralised system. Based on the
current mine plan, the Northern Copper Zone doesn't come into the production
schedule until year 5, subsequently we believe there is an opportunity to
extend both the deeper high-grade zones and the shallower zones of wide
mineralisation - some of these zones are over 60m thick and represent genuine
bulk mining opportunities.
I am very confident about the prospects of a mine development opportunity at
Parys Mountain. The project would generate significant employment on Anglesey
and the greater region for a generation. We believe that the suite of
commodities at Parys Mountain are critical to the supply chain for the global
push of decarbonisation and electrification of the economy and will remain in
strong demand over the coming decades.
The release of the Grängesberg PFS Update results subsequent to the end of the
period were confirmation of just how significant that project could be, both
for Anglesey shareholders and the broader EU steel manufacturers after the
Russian invasion of Ukraine. Prior to the Ukraine invasion, the EU imported
almost 60%, or 40Mt, of its annual iron ore supply from these two countries.
Subsequently, a secure source of up to 2.5Mtpa of 70% Fe concentrate has a
highly strategic value. We will look to consolidate and advance the Grängesberg
project over the course of the current year.
Our unwavering commitment to the sustainable development of our resource
projects continues. Where possible, we will always use the appropriate
environmentally friendly solutions. We also continue to believe that the
development of our projects will benefit the environment via shortening of
global supply chains with the commensurate reductions in carbon emissions -
particularly the high-grade iron ore concentrate that will be produced from the
Grängesberg iron ore project in Sweden."
Annual Report 2022 and Notice of AGM
The Company is pleased to publish its annual financial report for the year
ended 31 March 2022, which has also been posted to shareholders. The annual
report is available to view at www.angleseymining.co.uk and extracts from the
report are presented below. The annual report also includes a Notice of AGM.
The AGM will be held at the offices of DLA Piper, 160 Aldersgate Street London
EC1A 4HT on 27 October 2022 at 11.00 am and the Notice of AGM contains details
of all resolutions to be proposed.
Extracts from the Annual Report 2022
Chairman's Statement
To Anglesey Shareholders
The past year has been a period of global uncertainty, volatility and
subsequent conflict. While the problems associated with the COVID-19 pandemic
reduced significantly, they were replaced with new challenges created by the
Ukraine conflict and the subsequent impacts on global security, rampant
inflation from energy scarcity and fears of global food shortages.
Nevertheless, despite these conditions, we saw significant progress at both our
Parys Mountain copper/zinc/lead project and our iron ore projects in Sweden and
Canada, while on the corporate side a new Chief Executive, Jo Battershill, was
appointed and the board of directors was strengthened. Additionally, during the
past year over £1.5 million was successfully raised in new financings in
October 2021 and May 2022 attracting new institutional investor support and
shortly after the year end we moved our listing from the Main Market of the
London Stock Exchange to AIM.
Review of activities
A very active year at Parys Mountain saw the first drilling programme since
2012, the commencement of environmental studies, the appointment of Knight
Piésold to undertake both the design stage for the tailings management system
together with the geotechnical assessment of the underground development, and
engagement with local planning and regulatory authorities and local councils.
Meanwhile in Sweden, a Pre-Feasibility Study Update for the Grängesberg Iron
Ore Project was completed with very encouraging results, while in Canada
Labrador Iron Mines continued to advance its Houston direct shipping iron ore
project toward production. Further details on these activities may be found in
the Strategic Report.
At Parys Mountain, the drilling programme had the aim of improving confidence
in the White Rock and Engine Zone resources and providing samples for both
confirmatory metallurgical test work and geotechnical domain modelling. The
infill programme confirmed an extensive mineralised system in the near surface
White Rock zone and provided very valuable information that will now feed into
the next stages of our development studies. Our confidence in the White Rock
and Engine Zones continues to increase.
Additionally at Parys Mountain, where Anglesey Mining holds planning
permissions for the development of the mine, processing plant and tailings
storage facility, first steps were taken to secure the required operating
permits to commence mining and processing of ore. We are engaged in the review
process including discussions with the North Wales Minerals and Waste Planning
Service and local councils. Initial environmental monitoring and ecological
surveys have also begun.
At Grängesberg, a very positive update of the PFS indicates production of 2.3 -
2.5Mtpa of iron ore concentrate grading 70% Fe that generates strong economic
returns, including a NPV8% of US$688 million post-tax, and confirming that the
Grängesberg iron ore mine has the potential to be restarted as one of Europe's
largest individual producers of high-grade iron ore concentrates.
The Ukraine conflict has highlighted the strategic positioning of Grängesberg.
Prior to the conflict, Russia and Ukraine supplied over 20Mt of iron ore into
the European steel market. With the future uncertainty around this supply, a
long-term source of iron ore could be highly sought after by European and
Middle Eastern steel producers. Grängesberg, with the high-grade nature of its
concentrate, existing infrastructure and favourable location in southern Sweden
in proximity to European steel mills, represents highly strategic positioning.
Board of directors strengthened
After an extensive search, two senior minerals industry executives, Andrew King
and Namrata Verma, were appointed to the board as independent directors to help
guide the management team in the development of the Parys Mountain and
Grangesberg Iron projects. They both join Anglesey with the highest of
reputations in their own particular sectors and their combined and extensive
experience in the financing sector of the worldwide minerals industry will be
critical in the successful funding of both projects. The company is already
benefiting from their input and advice.
Sudden passing of Bill Hooley,
Deputy Chairman
It was with deep sadness that we reported the sudden death of our esteemed
colleague, Bill Hooley, in early June 2022. Bill had served as CEO of Anglesey
Mining from 2006 to 2021 and directed the completion of various resource
upgrades for Parys Mountain, the 2017 Scoping Study and the QME optimisation
work, which lead to the successful production of the 2021 PEA. Bill was also a
Director and Deputy Chairman of Anglesey's associate company, Labrador Iron
Mines, serving as President and COO from 2007 to 2011, during which time he
directed the initial development and successful construction, into commercial
production, of LIM's James iron ore mine in Labrador, Canada. Bill was
appointed non-executive Deputy Chairman of Anglesey Mining in August 2021 and
was continuing to provide his advice and experience until his sudden death. We
will miss Bill's wise counsel, humour and friendship.
Corporate activity
In October 2021, £768,230 was successfully raised via the issuance of
22,595,000 shares at a price of 3.4p per share. On 8 April 2022, following
approval from shareholders at a General Meeting, Anglesey Mining moved from the
Main Market of the LSE to the Alternative Investment Market (AIM). The AIM
listing will offer greater flexibility regarding corporate transactions,
enabling the more rapid and cost-effective agreement and execution of
transactions and financings. It will also provide improved visibility for
Anglesey and enhanced liquidity for investors.
In May 2022, following the appointment of WH Ireland Limited and Canaccord
Genuity Limited as joint brokers, a Placing and Subscription was successfully
completed, raising gross proceeds of £864,416, with certain institutional and
other investors, including the Chairman and the Chief Executive, at a price of
3.4 pence per share.
As a further step to strengthen our financial position we entered into a new
Investor Agreement with Juno Limited, the company's largest shareholder. In the
new Investor Agreement, Juno agreed to participate in any future equity
financing, with the subscription price to be satisfied by the conversion of
debt, and the company agreed to pay Juno in cash ten percent of the net
proceeds of the financing in further reduction of debt. The net effect of the
new agreement with the May placing was that the debt due to Juno was reduced by
£305,499.
Metal prices
Metals are critical for climate transition and the clean energy technologies
needed to meet the world's climate action goals will require much more metal.
As a board, we remain very confident that the outlook for minerals,
particularly for the copper and zinc minerals at Parys Mountain, and for iron
ore where we hold significant investments, is very encouraging.
Environmental and social focus
The purpose and objective of Anglesey Mining is to create value for
shareholders in an environmentally, socially, and ethically responsible manner
which is also to the benefit of all stakeholders. Our principal current
activity is to achieve this by developing, building and operating a producing
mine at Parys Mountain. We place a high priority on environmental, social and
governance (ESG) matters, and we are committed to being a responsible mining
company, which maintains mutually beneficial long-term relationships with key
stakeholders and the local community. Readers are invited to refer to the
report on Corporate Governance.
Outlook
The results from the 2021 PEA demonstrate that a significant copper-zinc-lead
mine can be developed at Parys Mountain with very positive financial returns.
The current year is seeing momentum increased with respect to the required
elements of a project development. Permitting activities are ramping up,
including environmental and ecological studies, tailings management design work
is being undertaken, along with confirmatory metallurgical test work and
underground geotechnical domain modelling. Further infill drilling -
specifically within the Northern Copper Zone is planned.
These activities will enable us to move the project to a full committed
decision to proceed to production. As has been said before, these steps do take
some time to reach fruition and are key requirements to securing the necessary
finance to move the project towards production.
At Grängesberg, the Pre-Feasibility Study has provided a series of
recommendations to progress the project through to the commencement of a
Feasibility Study and at a general corporate level we will continue to review
other opportunities within the global metals and mining sector.
In closing I wish to recognise the dedication and enthusiasm of our small
management team, led by Jo Battershill, for the significant progress made over
the past year, and thank our expanded and reinvigorated board of directors for
their leadership, as well as consultants and advisors, for their contribution,
and, of course, our shareholders for their continued support.
John F. Kearney
Chairman of the Board
7 September 2022
Strategic report
Despite the global challenges highlighted in the Chairman's report, we are very
pleased to report that significant progress was made at both our Parys Mountain
project and our iron ore projects in Sweden and Canada during the reporting
period.
Parys Mountain moving steadily forward
The Parys Mountain Cu-Zn-Pb-Ag-Au Project on the Isle of Anglesey hosts a
significant polymetallic deposit with a resource estimate of 16.9Mt grading
1.7% Zn, 0.8% Pb, 1.0% Cu, 17g/t Ag and 0.2g/t Au. The site has a head frame, a
300m deep production shaft, is connected to grid power, located only 20 miles
from the port of Holyhead and is well advanced towards permitting for an
operation. We have freehold ownership of the minerals and much of the surface
land on the western portion of the property where all the current resources are
located. Access to infrastructure is good, political risk is low and the
project enjoys the support of local people and government.
An independent Preliminary Economic Assessment (PEA) was completed in January
2021, using the three-year trailing metal prices as of September 2020 - US$2.81
/lb Cu, US$1.20/lb Zn, US$0.95/lb Pb, US$16.67/oz Ag and US$1459/oz Au. Three
separate development cases or scenarios were evaluated as part of the PEA,
utilising planned mine tonnages ranging from 5.5Mt at 1,500tpd, to 11.4Mt at
3,000tpd in an expanded case.
The expanded case produced the most attractive financial returns, indicating a
total cash operating surplus of more than £408 million over a 12-year mine
life, which translated to a pre-tax net present value discounted at 10% of over
£96 million with an IRR of 26%.
However, with commodity prices having been consistently, and meaningfully,
higher than the three-year trailing averages of September 2020, the economic
results from the development scenarios assessed would now be substantially
higher.
First drilling programme since 2012
After securing additional funding in October 2021, we are now moving forward
with our plans to progress development. The first drilling programme since 2012
was commenced in late November 2021 and a site manager and geologist were
recruited.
The original 9-hole programme comprising 2,750m was designed to target the
areas of Inferred Resources, generally around the periphery of the mineralised
zones, with the aim of improving the confidence in the White Rock and Engine
Zone resources. Prior to the drilling programme, 78% of the White Rock and
Engine Zones were in the indicated category and we expect to be able to lift
this once all the assays have been returned.
Initial assay results have now been returned for eight of the ten drill holes
completed with multiple high-grade sections identified within a broader overall
mineralised zone, as reported subsequent to the end of the period. Best results
received to date include:
* 3.7m at 8.5% Zn, 6.3% Pb, 1.0% Cu, 38g/t Ag & 0.3g/t Au (from 142m)
* 2.8m at 7.2% Zn, 4.2% Pb, 0.6% Cu, 23g/t Ag & 0.3g/t Au (from 150m)
* 6.0m at 7.1% Zn, 3.7% Pb, 0.4% Cu, 37g/t Ag & 2.0g/t Au (from 172m)
* 3.7m at 5.8% Zn, 4.6% Pb, 0.6% Cu, 46g/t Ag & 0.2g/t Au (from 149m), and
* 6.0m at 6.3% Zn, 4.0% Pb, 0.2% Cu, 25g/t Ag & 0.3g/t Au (from 133.5m)
Importantly, the high-grade intersections reported above were generally
contained within much broader zones of lower grade mineralisation that could
potentially be mined and processed through a pre-concentration technique to
upgrade the metal content while rejecting the unmineralized material. Selected
lower grade zones include:
* 12.4m at 4.8% Zn, 3.3% Pb, 0.5% Cu, 20g/t Ag & 0.3g/t Au (from 140m)
* 21.5m at 4.0% Zn, 2.0% Pb, 0.3% Cu, 26g/t Ag & 1.0g/t Au (from 170.5m)
* 12.7m at 3.7% Zn, 1.9% Pb, 0.2% Cu, 22g/t Ag & 0.6g/t Au (from 204.5m), and
* 12.8m at 3.0% Zn, 1.3% Pb, 0.2% Cu, 51g/t Ag & 0.5g/t Au (from 167.9m)
Geotechnical modelling and new metallurgical testing
The drill holes were also designed to provide samples for both geotechnical
domain modelling within the White Rock and Engine zones and confirmatory
metallurgical test work.
Subsequent to the end of the reporting period, Knight Piésold, one of the
world's leading geotechnical consultants, commenced the geotechnical modelling
that will feed into the underground design and optimisation process.
The next round of metallurgical testwork will begin once the final assay
results have been returned. Testwork from 2007 had already demonstrated that
Dense Media Separation (DMS) would upgrade the feed into the comminution
circuit with a mass rejection of around 40% and 3-5% associated metal losses.
We also plan to complete a trade-off study between DMS and X-Ray based
ore-sorting technology which is now utilised across many mines around the
globe.
Environmental assessment and permitting
Additionally at Parys Mountain, first steps were taken to secure the required
operating permits for mining and processing of ore. Environmental consultants
were engaged in late 2021 to evaluate historical baseline studies that then fed
into a subsequent gap analysis to determine future permitting requirements.
The permitting process has changed significantly since the commencement of
mining activities in 1988. While we have a number of planning permissions that
relate to the proposed development of the mine, processing plant and tailings
storage facility, these need to be reviewed and updated to make sure they are
fit for purpose to meet today's more stringent requirements.
The review process with the North Wales Minerals and Waste Planning Service and
local Councils is now under way and demonstrating encouraging progress. Knowing
that the Environmental Impact Assessment (EIA) is likely to be the longest lead
item in this process, initial environmental monitoring and ecological surveys
were initiated during the period and will feed directly into the EIA.
Baseline studies for reptiles, insects and birds are being carried out along
with testing of water bodies around the site. Given the natural run-off from
the outcropping sulphides that make up the historically mined Parys Mountain
deposits, almost all the surface water is acidic and carries very little, if
any, natural wildlife. Ongoing studies will be continued over the course of the
next 12-months and expanded to include soil geochemistry, ground water and air
quality monitoring, noise vibration studies, traffic modelling and initial
design work for the tailings management facility.
Exploring Northern Copper Zone
We also plan to commence work on the large Northern Copper Zone, which
currently hosts a resource estimate of 9.4Mt at 1.7% CuEq - all in the Inferred
Resource category. Initial work on the Northern Copper Zone will include
reviewing the historical resource model and identifying areas that could be
brought into the mine plan earlier than currently envisaged, with a view to
infill drilling and potentially converting to the Indicated category.
The long section of the Northern Copper Zone in Figure 3 demonstrates the
potential scale of the opportunity and also highlights the limited amount of
historical drilling along strike to the east. A selection of the historical
assays include:
- 4.2m at 16.7% CuEq (3.97% Cu, 7.53% Pb, 14.1% Zn, 532g/t Ag and 0.3g/t
Au) from a depth of 563m
- 1.4m at 13.5% CuEq (13.26% Cu, Pb and Zn not assayed, 18g/t Ag and 0.1g/t
Au) from a depth of 432m
- 0.9m at 12.1% CuEq (11.7% Cu, 0.19% Pb, 1.00% Zn, 6/t Ag, gold not
assayed) from a depth of 497m
- 3.8m at 8.6% CuEq (8.29% Cu, 0.02% Pb, 0.06% Zn, 32g/t Ag, gold not
assayed) from a depth of 352m
- 11.4m at 5.5% CuEq (2.04% Cu, 3.03% Pb, 6.38% Zn, 50g/t Ag and 0.4g/t Au)
from a depth of 495m
- 4.8m at 5.4% CuEq (3.68% Cu, 0.95% Pb, 3.00% Zn, 28g/t Ag and 0.2g/t Au)
from a depth of 562m
- 7.6m at 4.0% CuEq (2.84% Cu, 0.19% Pb, 0.50% Zn, 7g/t Ag and 1.4g/t Au)
from a depth of 298m
- 6.0m at 3.8% CuEq (2.22% Cu, 0.08% Pb, 4.19% Zn, 15g/t Ag and 0.2g/t Au)
from a depth of 466m
- 50.9m at 1.2% CuEq (1.12% Cu, 0.02% Pb, 0.06% Zn, 2g/t Ag, gold not
assayed) from a depth of 399m
- 146.3m at 1.2% CuEq (0.98% Cu, 0.20% Pb, 0.30% Zn, 7g/t Ag, gold not
assayed) from a depth of 350m
- 25.9m at 1.14% Cu (no other elements assayed) from a depth of 557m
- 46.0m at 0.80% Cu (no other elements assayed) from a depth of 366m
The Northern Copper Zone covers an extensive area with the resource estimate
extending over 800m in length and 400m in depth. Subsequently, the review of
the potential will be divided into blocks, as shown in the figure above. Both
blocks B and D have potential to host high-grade extensions to the Garth Daniel
resource between depths of 400 - 600m. Blocks A and C have potential to host
thick lower grade intersections amenable to bulk mining methods between 200 -
400m depth, and blocks E and F are both essentially extensional targets.
Metal price environment remains supportive
Metals are critical for the climate transition and the clean energy
technologies needed to meet the world's climate action goals will require much
more metal. For example, every electric car requires up to four times more
copper than an ICE car and every megawatt of solar power generation capacity
requires 5 tonnes of copper. According to the International Energy Agency,
achieving the Paris Agreement targets will require almost twice the volume of
metals by 2050. As a Board, we remain very confident that the outlook for most
minerals, particularly for the copper and zinc minerals at Parys Mountain, is
very encouraging. Base metal prices generally held onto the impressive gains
from the previous year, or in the case of zinc, rallied strongly. During the
year, we saw a strong demand for metals with the prices for zinc, copper, and
lead rising in 2021 by 28.1%, 26.8%, and 14.8%, respectively. Copper reached a
decade long high in May 2021 of over $4.80/lb while the zinc price was the
highest since 2007. Copper prices on the London Metal Exchange (LME) averaged
US$4.23 per pound in 2021, up from an average of US$2.80 per pound in 2020.
Global demand for zinc grew strongly during the year. Zinc prices increased
significantly and especially in the fourth quarter, Zinc prices on the London
Metal Exchange (LME) averaged US$1.36 per pound during 2021, higher than
US$1.03 per pound in 2020, and the highest annual average since 2007.
First quarter 2022 LME copper prices reached record levels and averaged US$4.53
per pound, 17% higher than the first quarter 2021 average of US$3.86 per
pound. Zinc prices rose to US$1.70 per pound during the first quarter of 2022
compared with US$1.25 per pound in the same period in 2021.
In the second quarter of 2022 LME copper averaged US$4.31/lb (vs. US$4.53/lb in
Q1) and zinc prices rose to a high of $1.95/lb in April and averaged US$1.77/lb
(vs. US$1.70/lb in Q1), although subsequently metal prices have since retreated
due to uncertainties about the war in Europe, higher oil prices, gas shortages,
and inflation.
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. We continue to believe
that the base case three-year trailing metal prices used in the PEA are a very
conservative starting point. Prices at 23 August 2022, the last practicable
date before the publication of this report, were $3.70/lb copper, $1.58/lb
zinc, $0.89/lb lead, $18.99/oz silver and $1739/oz gold, with the exchange rate
at £1.00/$1.18. Using these commodity prices the expanded case pre-tax NPV10%
increases from US$120 million to US$221 million, with pre-tax IRR of 42%, which
clearly demonstrate the sensitivity and leverage of a mine at Parys Mountain to
higher metal prices.
At these August 2022 metal prices, copper production from a Parys Mountain mine
would represent 50% of the net smelter revenue under the expanded case while
zinc and lead would represent 28% and 12% respectively. The PEA indicates
production of 75,000 tonnes of copper, 166,000 tonnes of zinc, 80,000 tonnes of
lead, over 5 million ounces of silver and 30,000 ounces of gold over the
project's 12-year mine life, this equates to an average copper equivalent
production rate of 14,000 tonnes per year over the proposed life of the
operation.
Grängesberg iron ore - a unique strategic opportunity
Anglesey holds a 19.9% interest in the Grängesberg project, together with
management rights and a right of first refusal to increase its interest to
70.2%. The Grängesberg project, located about 200 kilometres north-west of
Stockholm, is a substantial iron ore asset located in a very favourable
jurisdiction. Prior to its closure in 1989, due to then prevailing market
conditions, the mine had produced around 180Mt of iron ore.
Anglesey, in conjunction with its Swedish partners in Grängesberg, commissioned
an updated PFS on the development of the Grängesberg project, based on updated
forecasts for long term iron prices and on a modified development programme to
take advantage of optimisations expected since the previous 2012
Pre-Feasibility Study. The update by leading mining consultant Micon
International Limited commenced in late 2021 and was finalised in July 2022.
We are very pleased to report that the updated PFS demonstrates a very robust
project with production of 2.3 - 2.5Mtpa of iron ore concentrate grading 70% Fe
over an initial 16-year life, generating strong economic returns, including a
NPV8% of US$688 million post-tax. The study assumed an iron ore price of US$120
/t (62% Fe benchmark, CFR China) with sensitivities indicating a long-term
price of US$80/t required to achieve a positive return at a discount rate of
8%.
Grängesberg PFS Study Highlights
The study confirmed the previous estimate of 82.4Mtpa of Probable Ore Reserves
which would support a 16-year mine life at a throughput of 5.3Mtpa. Production
of between 2.3 and 2.5Mtpa of iron ore was envisaged with concentrate grading
70% Fe that generates strong economic returns including:
* Post-tax NPV of US$688 million at an 8% discount rate
* IRR of 25.9% post-tax
* Operating costs of US$53.60/t FOB to the port of Oxelösund
* Net cashflow post-tax of US$2.08bn, for an average annual net cashflow of
US$130 million
* Pre-production capital of US$399 million
* 3.6 years payback
Micon concluded that the Grängesberg Project demonstrates an economically
viable project using the stated price assumptions, cost estimates and technical
parameters generated by the PFS, with the sensitivity analysis indicating
positive returns can be achieved even with using a 30% lower underlying iron
ore price.
Key financial metrics from the updated PFS
Key Metric Unit 2022 updated PFS
Ore to Mill Mt 82.3
Life of Mine Years 16.0
Contained Fe Mt 30.6
Recovery % 85
Recovered Fe Mt 26.0
Outgoing Concentrate Mt 37.2
Concentrate Grade % Fe 70
Average annual Concentrate Output Mt 2.3
Cash cost* US$/t Conc 53.60
All-in Sustaining Cost** US$/t Conc 57.80
Pre-production capital US$m 399
Post-tax NPV8% US$m 688
Post-tax Internal Rate of Return % 26
Project payback Years 3.6
Average annual Post-tax Operating US$m 130
Cashflow ***
* Cash costs are inclusive of mining costs, processing costs, site G&A,
transportation charges to port and royalties
** All-in Sustaining Cost includes cash costs plus sustaining capital and
closure cost
*** Post-tax Operating Cashflow based on iron ore price forecast of US$120/t
China CFR 62% Fe benchmark
The results from the PFS study represent another promising stage in development
of the project and provide a very solid foundation. Grängesberg has the
potential to be restarted as one of Europe's largest individual producers of
iron ore concentrates. When combined with the high-grade nature of the
concentrate and proximity to European steel mills, the asset clearly
demonstrates highly strategic positioning.
Strategic positioning in iron ore
The iron ore price demonstrated significant volatility over the course of the
calendar year 2021. In the first third of the year, the price rallied from
US$170/t (62% CFR China) to US$235/t. The second third of the year saw the
price collapse to US$87/t, mainly due to lower imports by China following its
move to control steel production to meet carbon emission norms and Covid-19
related shutdowns. The final third of the year saw the price regain value as it
closed the period at US$155/t.
The iron ore market experienced another period of extreme volatility in the
first half of 2022. While averaging US$140 per tonne for the full six months,
the price fluctuated between a high of US$159 in March to a low of US$112 in
June. Subsequently, the price declined to US$100 in July before recovering to
US$115 in early August.
Iron ore is a non-fungible commodity with many variables that determine
quality. There are number of key price-affecting chemical components of iron
ore including iron, silica, alumina and phosphorus. Iron ore also differs in
its physical form. Fines require sintering (agglomeration into crude pellets)
prior to use in the blast furnace, lump ore and pellets can bypass this process
and be charged directly into the furnace - with both commanding an associated
price premium. Most steel mills use a blend of different grades of ore, and a
mix of sinter, lumps and fines but the quality requirements depend on the
circumstances and availability.
A more recent element of the iron ore price formation process is the 'green'
aspect. China's 2016 update to its Environmental Protection law enforced
stricter caps on industrial pollution, and consequently increased the appetite
for higher purity ores, which has not diminished significantly although the
law's deadline has been postponed by five years.
As a relatively simple 'rule-of-thumb', lower-grade ores with higher fractions
of impurities such as silica and alumina require increased consumption of coke,
which can raise emissions of controlled gases and particulates. We are now very
much in an environment where 'grade-is-king'. The 70% Fe high-quality product
expected to be produced at Grängesberg would command premium prices and makes
Grängesberg more attractive than many of the undeveloped iron ore projects in
Europe.
The Ukraine conflict has demonstrated the strategic positioning of the
Grängesberg Iron Ore Project. Prior to the Ukrainian conflict, Russia and
Ukraine supplied over 20Mt of iron ore into the European steel market. With the
future uncertainty around this supply, a long-term supply of high-grade iron
ore concentrate is anticipated to see strong demand from both European and
Middle Eastern steel producers. Historical production from Grängesberg
demonstrated the ability to produce a 70% Fe concentrate, which would generate
strong premiums in the current, and forecast, steel industry dynamics. With
steel producers and their downstream customers looking to reduce the overall
carbon footprint of manufactured products, supplies of high-grade concentrate
feed to produce direct reduced iron (DRI) are becoming highly sought after.
Importantly, the production of steel from DRI in an electric arc furnace has a
significantly lower CO2 footprint than the traditional blast furnace route.
Inspecting a tailings facility at Grangesberg
The opportunity for Anglesey Mining is now to advance the Grängesberg project
through to a Financial Investment Decision. This could be completed along with
securing a strategic investor, offtake partner, separate listing, or a
combination of these options. However, we recognise that there is still a lot
of work to do at Grängesberg, including consolidation of the asset, as well as
updating both the resource and reserve models and undertaking environmental
assessment studies as preliminary steps to preparing a Feasibility Study.
Labrador Iron Mines
Meanwhile, on the other side of the Atlantic, Labrador Iron Mines (LIM), in
which we hold a 12% interest, continues to progress plans to develop its
Houston Project in the Labrador trough. LIM published a PEA on its Houston
Project in February 2021 which supports its 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 CAD$234 million and an after-tax net present value at an 8% discount
rate of CAD$109 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 CAD$459 million and the
after-tax IRR to 209%.
Anglesey holds 19.29 million LIM shares which on 31 March 2022 were valued in
total at $2.5 million, or approximately £2 million, on the OTC Market in the
United States.
Financial results and position
There are no revenues from the operation of the properties.
The loss before other comprehensive income for the year ended 31 March 2022
after tax was £693,242 compared to a loss of £328,518 in the 2021 fiscal year.
The administrative and other costs excluding investment income and finance
charges were £528,045 compared to £162,824 in the previous year. This increase
is due to the recommencement of the payment of executive director salaries, the
engagement of our new CEO, higher public relations and related costs, London
office rentals and generally higher levels of staffing and activity.
The value of the group's holding in LIM is reported in other comprehensive
income and effectively is based on its share price. Last year there was an
unusual gain of £4 million in this value, as it was held at a nominal value of
£1 in the previous year. This year there is a loss of £2 million as the shares
retreated. The outcome is a total comprehensive loss for the year of £
2,826,957, compared to a comprehensive gain for the prior year of £3,714,921.
During the year there were no additions to fixed assets (2021 - nil) and £
394,410 (2021 - £101,570) was capitalised in respect of the Parys Mountain
property as mineral property exploration and evaluation, significantly up as a
result of a far more extensive programme of geological and environmental work
as well the drilling programme described in the Strategic report.
At 31 March 2022 there were mineral property exploration and evaluation assets
with a carrying value of £15.7 million. These carrying values are supported by
the results of the 2021 Preliminary Economic Assessment of the Parys Mountain
project.
At the reporting date, 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 effect of Covid-19 on the group's activities has been minimal and is
expected to remain so.
Corporately, we raised £768,230 via the issuance of 22,595,000 shares at a
price of 3.4p in October 2021. The successful placement resulted in a cash
inflow of £725,105 after fees and expenses. The cash balance at 31 March 2022
was £922,177 , compared to £891,767 at 31 March 2021. In May 2022 a further
placement raised £865,000 at a price of 3.4 pence per share. These funds will
be used for ongoing work on the Parys Mountain project, as well as for general
corporate purposes.
In May 2022 a new Investor Agreement was concluded with Juno Limited to replace
the controlling shareholder and consolidated working capital agreements. In the
new Investor Agreement Juno agreed to participate in any future equity
financing, at the same price per share and on the same terms as other
arms-length participants, to maintain its percentage, with the subscription
price to be satisfied by the conversion and consequent reduction of debt, and
the company agreed to pay Juno in cash ten percent of the net proceeds of such
equity financing in further reduction of the debt. The interest rate on the
outstanding debt will be reduced from 10% to 5% p.a. from 1 April 2022. In
addition, Juno was granted certain nomination and reporting rights, including
the right to nominate two directors to the board, so long as Juno holds at
least 20% of the company's outstanding shares and one director so long as Juno
holds at least 10% of the company's outstanding shares. This renegotiation was
approved by an independent board committee responsible for reviewing and
approving any transactions and potential transactions with Juno. The family
interests of Danesh Varma have a significant shareholding in Juno.
The net effect of the new agreement with the May 2022 financing was that the
debt due to Juno was reduced by £305,499, of which £78,345 was paid in cash and
the balance by conversion of debt.
At 31 March 2022 there were 248,070,732 ordinary shares in issue (2021 -
225,475,732), the increase being due to the financing events referred to above.
At 7 September 2022 there were 280,675,732 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 US$120 million and a 26% IRR, demonstrated a significant improvement
on previous studies and steady progress.
Initial assay results for eight of the ten drill holes at Parys Mountain in the
first drilling programme since 2012 which was completed in April 2022, returned
multiple high-grade sections within a broader overall mineralised zone of lower
grade mineralisation that could potentially be mined and processed through a
pre-concentration technique to upgrade the metal content. This improved the
confidence in the White Rock and Engine Zone resources.
The completion of the independent updated PFS on the Grängesberg project
subsequent to the year-end demonstrates a very robust project with production
of 2.3 - 2.5Mtpa of iron ore concentrate grading 70% Fe over an initial 16-year
life, generating strong economic returns, including a NPV8% of US$688 million
post-tax using the stated price assumptions, cost estimates and technical
parameters.
The chief external factors affecting the ability of the Group 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 are discussed above, and risks and uncertainties
are dealt with below.
Other activities
The Directors continue to review new properties suitable for advanced
exploration or development that would be complementary to or provide synergies
with the existing projects and would be within the financing capability likely
to be available. A number of base metals projects have been identified as
potentially attractive and further early-stage opportunities continue to be
evaluated.
Environmental and Social Focus
The purpose and objective of Anglesey Mining is to create value for
shareholders in an environmentally, socially, and ethically responsible manner
which is also to the benefit of all stakeholders. Our principal current
activity is to achieve this by developing, building and operating a producing
mine at Parys Mountain and to progress the Grangesberg Iron Ore project in
Sweden through to a decision to mine. We place a high priority on
environmental, social and governance (ESG) matters, and we are committed to
being a responsible mining company, maintaining mutually beneficial long-term
relationships with key stakeholders and the local community. Readers are
invited to refer to the report on Corporate Governance.
There has been an increasing investor focus on ESG matters. These are areas on
which we have always placed high importance, although we have not attempted
quantitative measurements, particularly as having the social licence to
operate, and operating in an environmentally responsible manner, are critical
for the successful operation of any mining project. In Anglesey Mining 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.
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 operation'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. During the year the Board recruited and appointed a new
Chief Executive, Jo Battershill, a mining geology graduate from Camborne School
of Mines with extensive experience both in operations and in finance in
Australia and in the UK. In connection with the move to AIM and the delisting
from trading on the Main Board, a general meeting of shareholders was called to
approve the proposal.
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 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 the annual 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 business.
Having regard to the interests of the employees
The Group currently has three full-time and one part-time employee 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 employees are considered in decision-making.
Having regard to the desirability of 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 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 to 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 connection with its plans for the advancement of Parys
Mountain, discussions and consultations have been held with the North Wales
Minerals and Waste Planning Service and with local Councils.
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 agreements have been in place with Juno
Limited, the largest shareholder, which provide that Anglesey will maintain an
independent board and that any transactions between Juno and Anglesey will be
at an arm's length basis. Effective 31 March 2022, as a further step to
strengthen its financial position, Anglesey entered into a new Investor
Agreement with Juno Limited, to amend and replace the Controlling Shareholder
Agreement and the Consolidated Working Capital Agreement. This renegotiation
was approved by an independent board committee responsible for reviewing and
approving any transactions and potential transactions with Juno.
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 members of the Board consider they
are 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 expected
geological or geotechnical structures, 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.
Financing and liquidity risk
The Group has relied on equity financing to fund its working capital
requirements and will need to generate additional financial resources to fund
all future planned exploration and development programmes. 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.
There can be no assurance that the Group will be successful in obtaining any
additional required funding necessary to conduct operations on its properties.
Failure to obtain additional financing on a timely basis could cause planned
activities and programs to be delayed.
If additional financing is raised through the issuance of equity or convertible
debt securities, the interests of shareholders in the net assets of the Group
may be diluted.
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 16 and 23.
Permitting, environment, climate change and social
The Group's operations are subject to environmental legislation and regulations
which are evolving in pursuit of national climate change objectives and in a
manner where standards are becoming more stringent. Mineral extraction and
processing can have significant environmental impacts. Mining operations
require approval of environmental impact assessments and obtaining planning
permissions. 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.
There can be no assurance that all permits, licences, permissions and approvals
that the Group may require for its activities will be obtainable on reasonable
terms or on a timely basis.
Employees 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.
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. The project is not currently in production, so
Covid-19 does not impact current operations.
Group Prospects
Recognition of potential opportunities
The recommencement of activities at Parys Mountain is the first stage of
bringing the asset back into the focus of mainstream investors, both retail and
institutional. The economics of the project under the current commodity pricing
environment make the progression of Parys Mountain through to a financial
investment decision an obvious milestone.
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.
Importantly, these critical and strategic metals, essential for the
decarbonisation of the economy, are primarily imported into the UK currently.
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.
A similar view can be held for the Grängesberg Iron Ore Project, where with the
Pre-Feasibility Study update now complete, we have a clear view on the
requirements to enable us to advance through to the Feasibility stage. When
combined with the Labrador Mines assets, Anglesey Mining has a very valuable
and strategic set of iron ore assets that should be progressed with the
greatest speed possible, but within the constraints of the resources available.
Outlook
As previously discussed, the results from the 2021 PEA demonstrate that a
significant copper-zinc-lead mine can be developed at Parys Mountain with very
positive financial returns. We expect to increase the level of activity at
Parys Mountain over the next twelve months with respect to a number of the
elements required for a project development. We plan to ramp up permitting
activities, including the completion of environmental and ecological studies
around site, initial design work of the tailings management facility, which has
already commenced, along with underground geotechnical domain modelling on the
White Rock and Engine Zones. Once the final assay results from the completed
drill programme are received, we will conduct additional metallurgical testwork
to identify the most optimal pre-concentration method.
We also plan to commence work on the large Northern Copper Zone, which
currently hosts a resource estimate of 9.4Mt at 1.7% copper equivalent - all in
the Inferred resource category. Initial work on the Northern Copper Zone will
include reviewing the historical resource model and identifying areas that
could be brought into the mine plan earlier than currently envisaged with a
view to infill drilling and potentially converting to the Indicated category.
All of these activities are required to enable the Parys Mountain copper/zinc/
lead project to move from the PEA to a full committed decision to proceed to
production. As has been said before, these steps do take some time to reach
fruition and are key requirements to securing the necessary finance to move the
project towards production.
At Grängesberg, the Pre-feasibility Study Update has provided a series of
recommendations to progress the project through to the commencement of a
Feasibility Study. The initial work programmes include updating the resource to
include domaining of the apatite zones that could produce a valuable by-product
stream and updating the reserve estimate to incorporate the proposed
alternative mining method (sub-level open stoping with back fill instead of
sublevel caving), which would reduce the risk of any potential movement on the
Export Fault zone.
At a general corporate level, the company will continue to review other
opportunities within the global metals and mining sector. At the end of March
2022, the group had cash resources of £922,177.
This report was approved by the board of Directors on 7 September 2022 and
signed on its behalf by:
Jo Battershill
Chief Executive
Directors' report
The Directors are pleased to submit their report and the audited accounts for
the year ended 31 March 2022.
The principal activities of the Group are set out in the Strategic Report which
also includes certain matters relating to financial performance, risk exposure
and management and future developments. The Corporate Governance statement
which follows forms part of this Directors' report.
Directors
* John F. Kearney - Chairman
* Jo Battershill - CEO from 1 August 2021
* Bill Hooley - CEO until 31 July 2021 then Deputy Chairman until 7 June
2022
* Danesh Varma - Finance director
* Howard Miller - Senior non-executive director
* Andrew King - appointed non-executive director from 20 December 2021
* Namrata Verma - appointed non-executive director from 20 December 2021
Biographical details of the directors are shown at the end of this annual
report. It is with great regret that the Directors note the death of Bill
Hooley on 7 June 2022 after 16 years of service as a director. All other
directors remain in office. The responsibilities of the directors are discussed
in the Corporate Governance Report.
The appointment and replacement of directors, is governed by the 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 or
her appointment and therefore Andrew King and Namrata Verma who were appointed
as directors on 20 December 2021 will offer themselves 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
has been the practice for some years to submit re-election resolutions for all
directors at each AGM.
Directors' interests in shares
23 August 2022 31 March 2022 31 March 2021
Director Number of Number of Number Number of Total Number Number of Total
options ordinary of ordinary of ordinary
shares options shares options shares
John Kearney 2,000,000 1,297,142 - - - - 500,000 500,000
Bill Hooley n/a n/a - 200,000 200,000 - 1,200,000 1,200,000
Jo 2,800,000 3,584,830 - 1,787,688 1,787,688 - - -
Battershill
Danesh Varma 1,500,000 - - - - - 1,000,000 1,000,000
Howard Miller 1,000,000 - - - - - 500,000 500,000
Namrata Verma 1,000,000 - - - -
Andrew King 1,000,000 - - - -
9,300,000 4,881,972 - 1,987,688 1,987,688 - 3,200,000 3,200,000
1. All of these interests are beneficial.
2. The family interests of Danesh Varma have a significant shareholding of
Juno Limited, a connected person, which has notified an interest in
64,605,248 ordinary shares.
3. Bill Hooley died on 7 June 2022.
Directors' share options
There were no outstanding share options during the year and at 31 March 2022
however options were granted on 4 August 2022 as set out in the Remuneration
section of this report.
Directors' interests in material contracts
Juno Limited
Juno Limited (Juno), which is registered in Bermuda, holds 21% of the ordinary
share capital. Until May 2022 there was 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.
In May 2022, a new Investor Agreement was concluded with Juno Limited to
replace the controlling shareholder and consolidated working capital
agreements. In the new Investor Agreement Juno agreed to participate in any
future equity financing, at the same price per share and on the same terms as
other arms-length participants, to maintain its percentage, with the
subscription price to be satisfied by the conversion and consequent reduction
of debt, and the company agreed to pay Juno in cash ten percent of the net
proceeds of such equity financing in further reduction of the debt. The
interest rate on the outstanding debt will be reduced from 10% to 5% p.a. from
1 April 2022. In addition, Juno was granted certain nomination and reporting
rights, including the right to nominate two directors to the board, so long as
Juno holds at least 20% of the company's outstanding shares and one director so
long as Juno holds at least 10% of the company's outstanding shares. This
renegotiation was approved by an independent board committee responsible for
reviewing and approving any transactions and potential transactions with Juno.
The family interests of Danesh Varma have a significant shareholding in Juno.
Grangesberg Iron
John Kearney and Danesh Varma, as nominees of the company, are directors of
Grangesberg Iron 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 Eurang Limited, amounting to £337,839 at the year-end (2021 - £
343,613). See also notes 18 and 24.
There are no other contracts of significance in which any director has or had
during the year a material interest.
There is a directors' and officers' liability insurance policy in force on
normal commercial terms which includes third party indemnity provisions.
Substantial shareholders
At 23 August 2022 Juno Limited had notified an interest in 64,605,248 shares
representing 23.0% 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 now the Group is on AIM it is appropriate to take
advantage of the associated freedoms and to have a larger amount available for
issue at their discretion without pre-emption than had been the case when the
group had a main board listing. At the annual general meeting the Directors
will therefore seek a renewal and enlargement of the share allotment
authorities.
The authority sought in resolution 12 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 £2,800,000 (280,000,000
ordinary shares) which is approximately 100% of the total issued ordinary share
capital at 23 August 2022. 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 13 is to authorise the Directors to allot new shares
pursuant to the general authority given by resolution 12 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 £2,800,000
(280,000,000 ordinary shares). This aggregate nominal amount represents
approximately 100% of the issued ordinary share capital at 23 August 2022. This
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 2023. 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. 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. 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
There are established policies and procedures to ensure that future operations
will be conducted in compliance with all relevant laws and regulations and that
will enable the group to meet its high standards for corporate sustainability
and environmental stewardship. Currently the projects are not in operation and
consequently any effect on the environment is slight, being limited to the
periodic operation of an exploratory drilling rig at Parys Mountain together
with its support operation as well as usage of two small offices, where
recycling and energy usage minimisation are encouraged. Activities or processes
which may lead to the production of greenhouse gases are minimal. The extent to
which these activities together with the Group's 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 (2021 -
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 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, there is sufficient finance available for
the continuing working capital requirements 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 there will be adequate
funds for planned activities and to continue as a going concern. Anglesey
Mining plc 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.
The Directors 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 in October 2021 and May 2022 over
£1.5 million was successfully raised 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 there are 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 resources currently available, there is a risk that there will not be
sufficient financial resources to fund all the planned programme requirements
[DEL:.:DEL]
Post balance sheet events
On 17 May 2022 a placing to institutional investors for cash of 22,829,705
shares raising £864,416 gross was completed. At the same time the terms of the
Juno loan were amended and the debt due to Juno was reduced by £305,499, of
which £78,345 was paid in cash and the balance by conversion of debt.
Statement of directors' responsibilities
The Directors are responsible for preparing the annual report and the financial
statements in accordance with applicable law and international accounting
standards in conformity with the Companies Act 2006. The group financial
statements are also prepared in accordance with international financial
reporting standards (IFRSs) as applied 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 are responsible for the maintenance and integrity of the Group
website.
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 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.
Further information on the change of auditor is contained in the Audit
Committee report.
This report was approved by the board of directors on 7 September 2022 and
signed on its behalf by:
Danesh Varma
Company Secretary
Remuneration Committee report
Following the move on 8 April 2022 from the main board to AIM the format and
content of remuneration reporting has changed from that in use last year.
The remuneration committee comprised Howard Miller until 18 January 2022 when
John Kearney and Namrata Verma were appointed, making three members from that
point forwards. No remuneration consultants have been engaged or are considered
appropriate at this stage of the group's development.
Directors' remuneration policy
The policy of the Remuneration Committee with regard to executive and
non-executive directors' remuneration, is to provide a compensation package
which will attract, retain and motivate directors of the calibre and with the
experience required, and be consistent with the company's ability to pay.
We aim to provide a competitive salary and benefits package to employees and
executive directors with an appropriate balance between fixed and
performance-related elements. The committee is implementing an annual review of
remuneration arrangements however this was not carried out in the during the
period under review.
Although the board intended the grant of share options to form part of overall
director remuneration, the implementation of this policy and grant of share
options was delayed and did not occur until 4 August 2022 when the options
shown in the table below were granted.
The committee recognises that under the Code share options should not be
granted to non-executive directors, however no revenue or income is generated
at present so the use of equity incentives in the form of share option grants
is one of the few economically effective ways available to provide remuneration
to the directors; further it is aligned to the long-term interests of
shareholders. The remuneration committee takes into account any views expressed
by shareholders when considering remuneration policy and practices.
Performance incentives
It is the Remuneration Committee's expectation that further share options will
be issued in the current year at the Board's discretion to the Chief Executive
under the terms of his employment and subject to achieving defined goals.
The use of traditional performance standards in other industries, such as
profitability, is not considered to be appropriate in the evaluation of
executive performance in a mineral exploration and development company with no
sales or revenue on which to generate income. When approving executive
compensation levels, the Committee and the Board consider the financial
situation of the Group in a wider context regarding the outlook for the
industry and the ongoing development of the Parys Mountain project. It is
expected that in future years that the use of equity grants, stock appreciation
rights, and or the deferred equity schemes may also form part of the incentive
portion of the remuneration of executive directors.
There is currently no formal incentive bonus plan in place other than under the
contract of employment with the CEO which provides that he will be eligible to
be awarded options and performance shares upon the attainment of various
defined targets. Any award of a bonus to executive directors is at the
discretion of the board based upon recommendation by the Remuneration
Committee. In considering the payment of a bonus to any executive directors,
the Committee would take into account the individual performance and efforts of
the executive, the progress made by the Group in furthering its business plans
and the overall financial position.
Board changes in year
Our Chief Executive Jo Battershill was appointed on 1 August 2021 and two new
non-executive directors: Namrata Verma and Andrew King were appointed on 20
December 2021.
Terms and conditions of service
For executive directors it is our policy to keep contract durations, notice
periods and termination payments to a minimum consistent with industry norms.
All non-executive directors have letters of appointment with a written contract
for service and are subject to annual reappointment at the AGM.
Annual report on remuneration
John Kearney, the Chairman, does not currently receive fees from the Company;
he is employed and remunerated by Labrador Iron Mines and has previously been
granted options over shares under the 2014 Unapproved Share Option Scheme. New
options granted since the year end are shown below.
Bill Hooley, the Chief Executive during the year until 31 July 2021, and
subsequently Deputy Chairman until his untimely death in June 2022, had written
terms of employment specifying a salary of £24,000 per annum together with two
bonus payments, firstly £60,000 paid in August 2021 and secondly £30,000
payable in April 2022, with no other entitlement to notice, termination or
bonuses.
Jo Battershill, who was appointed as Chief Executive and a director on 1 August
2021, has a written contract of employment which provides for a minimum notice
period of six months and under which he is eligible to be awarded options and
performance shares and an increased salary upon the attainment of various
defined targets. The contract provides for a base salary of £120,000 per annum,
together with a contribution of 10% of that figure into a pension scheme.
Danesh Varma, the Finance Director and Company Secretary, has written terms of
employment specifying a salary of £12,000 per annum together with two bonus
payments, firstly £24,000 paid in August 2021 and secondly £12,000 payable in
April 2022, with no other entitlement to notice, termination or bonuses.
During the year the group began making pension contributions in respect of the
chief executive at 10% of his salary and 7% in respect of other employee
salaries.
Directors' remuneration summary - fiscal years ended March 31:
2022 2021
Name Salary Additional Pensions Total Salary Additional Pensions Total
and fees and and fees and
fees bonuses fees bonuses
£ £ £ £ £ £ £ £
Executive
John Kearney - - - - - - - -
Bill Hooley 84,000 - - 84,000 - - - -
Jo 40,000 - 1,867 41,867
Battershill
Danesh Varma 36,000 - - 36,000 - - - -
Non-executive - - - - - - -
Howard Miller - - - - - - - -
Andrew King - - - -
Namrata Verma - - - -
Totals 160,000 - 1,867 161,867 - - - -
Between 1 July 2014 and 31 March 2021 all the directors waived their
entitlement to remuneration. Following a Board review of non-executive
remuneration, it was decided to begin payments of fees to each non-executive
director at the rate of £1,000 per quarter from 1 July 2022.
Share schemes
There is currently one active share scheme: the 2014 Unapproved Share Option
Scheme. The committee has begun the establishment of an Enterprise Management
Incentive Scheme for employees and executive directors and this is expected to
be operational by the date of the AGM.
In respect of the Unapproved Share Option Scheme established in 2014 all
directors and employees are eligible to receive options. All share options are
subject to a performance criterion, namely 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. This index was selected as being an easily
available benchmark of general corporate performance. As described above, there
were no options outstanding at the beginning of the financial year and no
option grants were made during the year.
However, a total of 10,900,000 options were granted under the Unapproved Share
Option Scheme on 4 August 2022 as follows: the options have an exercise price
of £0.04, representing a premium of 38% to the closing share price of £0.029 on
3 August 2022. The options are subject to time-based vesting conditions with
25% of options vesting on 31 March 2023, 25% on 30 September 2023, 25% on 31
March 2024 and 25% on 30 September 2024. The options will lapse on 31 March
2030.
Director Number of Exercise Price
options granted per share option
John F Kearney 2,000,000 £0.04
Jo Battershill 2,800,000 £0.04
Danesh Varma 1,500,000 £0.04
Howard Miller 1,000,000 £0.04
Namrata Verma 1,000,000 £0.04
Andrew J King 1,000,000 £0.04
The award of the Options represents the first issuance of share options to
directors and employees since September 2016. The non-executive directors of
the Company had also previously waived the payment of cash fees since July
2014.
Other components of remuneration
There were no taxable benefits, incentive plans, bonuses, share scheme
interests, payments to past directors, payments for loss of office or other
remuneration or payments which are required to be disclosed made during the
year.
There is a table of directors' interests in shares and options in the
directors' report.
This report was approved by the board of directors on 7 September 2022 and
signed on its behalf by:
Danesh Varma
Company Secretary
Statement of Corporate Governance
Anglesey Mining believes that good corporate governance provides the framework
whereby the Board ensures that the Company's strategy is aligned to the
interest of its shareholders and takes into account the interest of all
stakeholders.
The Board of Anglesey Mining is committed to high standards of corporate
governance, integrity and social responsibility and to managing the Company in
an honest and ethical manner. The Chairman is responsible for the leadership of
the Board and for ensuring that the Company has appropriate governance
standards in place and that these requirements are communicated and applied.
The Group seeks to conduct its operations with honesty and fairness and expects
its contractors and suppliers to meet similar ethical standards. The Board
recognizes the importance of communicating with shareholders and all
stakeholders in an open and transparent fashion.
Board of Directors
The Board of Anglesey Mining was small at the beginning of the year with just
four members, subsequently increased to seven in December 2021. The Board
currently consists of six directors, three of whom are considered independent.
Profiles of the directors, summarizing their experience and backgrounds can be
found at the end of this Annual Report. Each director is subject to annual
re-election at every AGM,
The Board has overall responsibility for all aspects of the business and
affairs of the Company and has an active engaged role in all decision making.
The Board approves the Group's strategy and expenditure plans and regularly
reviews operational and financial performance, risk management, and health,
safety, environmental and community matters.
Members of the Board are directly involved in decisions and an extensive
committee or reporting structure is not particularly useful. Nevertheless, a
system of checks and balances is in place and all material decisions must be
approved by the Board. The definition of 'materiality' is low, almost all
decisions are material and require the approval of the Board.
The Board is assisted by an Audit Committee and has also established
Remuneration and Nomination committees. All Directors may attend meetings of a
committee at the committee's invitation. There are written terms of reference
for the Audit, Remuneration and Nomination committees, each of which deals with
specific aspects of the Group's affairs. These are made available to
shareholders at each general meeting and are available on the website. The
Board receives periodic reports from all committees where appropriate. All
committees have an independent non-executive director within their composition.
As well as chairing Board meetings, John Kearney chairs the Nomination
committee. Howard Miller is the lead independent director and chairs the Audit
and Remuneration Committees.
The number of meetings of the Board and of each committee held over the past
year is at the end of this report.
The Chairman
The Chairman, John Kearney, is responsible for the leadership of the Board and
for ensuring that appropriate governance standards are in place and that these
requirements are communicated and applied. The Chairman's primary role is to
create the cultural environment to enable each director and the Board as whole
to perform effectively for the benefit of the Group, its shareholders and its
wider stakeholders.
He has many years of experience as chairman or director of numerous public
mining or exploration companies. He is not a full-time executive of Anglesey
Mining and does not receive compensation (other than an entitlement to share
options). He is employed and remunerated by Labrador Iron Mines and divides his
time between several mineral companies and other activities. The Chairman's
primary functions include providing leadership and direction to the Board and
ensuring its effectiveness. The Chairman has overall responsibility for
corporate governance matters.
The Board has appointed Howard Miller as the lead independent non-executive
director to assist the Chairman and perform such other duties and
responsibilities as the Board may determine from time to time. Howard Miller
has served for more than twenty years as a non-executive director.
The roles of Chairman and Chief Executive are separate. Jonathan (Jo)
Battershill was appointed Chief Executive on 1 August 2021.
Audit committee
The Board has established an Audit Committee with formally delegated duties and
responsibilities. Until January 2022 the Audit Committee's sole member was
Howard Miller, who is considered an independent non-executive director, but is
not independent as defined by the Corporate Governance Code. From that date
Namrata Verma and Andrew King both of whom are independent non-executive
directors were appointed to the audit committee.
The Audit Committee assists the Board in meeting its responsibilities for
internal control and external financial reporting. The audit committee meets at
least twice a year and is responsible for ensuring that the financial
information of the Group is properly reported on and monitored, including by
conducting reviews of the annual and interim accounts, the internal control
systems and procedures and accounting policies. More information on the work
of the Audit Committee is provided in the Report of the Audit Committee below.
Remuneration committee
From January 2022 the Remuneration Committee comprised Howard Miller (Chairman)
and John Kearney and Namrata Verma. The committee is responsible for making
recommendations on remuneration policy. It determines any contract terms,
remuneration and other benefits, including share options, for each of the
executive directors. The remuneration of non-executive directors is a matter
for the Board. No director may be involved in any decisions as to their own
remuneration. The Remuneration Committee has responsibility for determining,
within agreed terms of reference, the policy on remuneration, including
incentive awards.
The Remuneration Committee is also responsible for recommending grants of
options under the Share Option Scheme. The use of equity incentives aligned to
the long-term interests of shareholders is an effective and efficient way to
compensate directors and accordingly option grants under the Unapproved share
option scheme are made to all directors.
The Directors' Report on Remuneration and the Report of the Remuneration
Committee is set out in other parts of the Annual Report.
Nomination committee
The Nomination Committee is comprised of John Kearney, Howard Miller and Andrew
King and assists the Board in discharging its responsibilities relating to the
composition and make-up of the Board and any committees of the Board. It is
also responsible for periodically reviewing the Board's structure and
identifying potential candidates to be appointed as directors.
The Nomination Committee is responsible for evaluating the balance of skills,
knowledge and experience and the size, structure and composition of the Board
and committees of the Board, retirements and appointments of additional and
replacement directors and committee members and will make appropriate
recommendations on such matters.
Internal control
The Board is responsible for the Group's systems of internal control, financial
and otherwise. The key feature of the financial control system is that the
Directors directly monitor all payments and transactions, as well as budgets
and annual accounts. Such system provides reasonable but not absolute assurance
of the safeguarding of assets, the maintenance of proper accounting records and
the reliability of financial information. The Board, advised by the audit
committee, has not considered it appropriate to establish an internal audit
function at present because of the Group's limited operations. The Board has
reviewed the effectiveness of the system of internal control as described
during the period.
There are no significant issues disclosed in the Strategic Report and Financial
Statements for the year to 31 March 2022 and up to the date of approval of the
Annual Report that have required the Board to deal with any related material
internal control issues.
Remuneration - non-executive directors
The non-executive directors did not receive cash compensation during the year
ended 31 March 2022 however following a Board review of non-executive
remuneration it was decided to (a) grant options over shares to non-executive
directors as incentives and partial compensation for their services on 4 August
2022 and (b) to begin payments of fees to each non-executive director at the
rate of £1,000 per quarter from 1 July 2022.
The Board is satisfied that the grant of incentive options to Directors in lieu
of cash compensation is appropriate given the Company's stage of development
and is aligned with shareholders' interests and expectations that a high
proportion of available funds are allocated to exploration.
Risks and uncertainties
Mineral exploration and mine development are 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 itself subject to numerous
significant risks.
The significant risks facing the Group are summarised and discussed in the
Strategic Report and the "Going-concern" risk is discussed in detail in the
Directors Report. Management of those risks is the responsibility of the Board
of Directors which considers it is sufficiently close to the Group's operations
and aware of its activities to be able to adequately monitor risks within its
control without the establishment of any further formal processes.
There is no assurance the Company can maintain the services of its directors or
recruit other qualified personnel to serve as directors. The loss of the
services of any of the current directors could have a material adverse effect
on the Group and its prospects.
Directors' appointment and attendance at Board and committee meetings
During the year ended 31 March 2022 a majority of Board and committee meetings
were held by telephone or video conference due to Covid restrictions and
attendance at meetings was as follows:
Meetings
Director Date appointed Board Audit Remuneration Nomination
Total number of meetings: 9 4 2 2
John Kearney 10 November 1994 8 2 2
Bill Hooley 10 January 2006 9
Jo 1 August 2021 8 of 8
Battershill
Danesh Varma 15 November 1994 9
Howard Miller 20 September 2001 9 4 2 2
Andrew King 20 December 2021 2 of 3
Namrata Verma 20 December 2021 3 of 3
All directors are invited to attend the meetings of the Audit Committee and
meet with the auditors
Bill Hooley was the Chief Executive until 31 July 2021. He was subsequently
appointed as Deputy Chairman and remained so until his death in June 2022.
Jonathan (Jo) Battershill was appointed as the Chief Executive and as a
director on 1 August 2021.
Danesh Varma is Finance Director and the Company Secretary.
Corporate Governance Compliance Review
Anglesey has been listed on the London Stock Exchange since 1988 and throughout
that time has been in compliance with all the listing rules and policies of the
LSE. As the company had a premium listing, for the past two years it applied
and reported on the 2018 UK Corporate Governance Code.
Anglesey believes that throughout the year, it generally complied with the
spirit of the principles of the 2018 UK Corporate Governance Code, to the
extent such principles are applicable in Anglesey's particular situation and
having regard to the size and resources of the Group. However, some of the
principles and many of the provisions are not applicable to the individual
circumstance of Anglesey Mining.
Specifically, for example, the company is not in compliance with the provisions
of the Code that require "at least half" of the Board to be independent
non-executive directors, as until December 2021 when two new independent
non-executive directors were appointed, the directors in office year had served
for more than nine years and the Chairman has held that role for 27 years. In
addition, the company has awarded share options to non-executive directors,
which again is not in compliance with the provisions of the Code, as one of the
few effective and economical ways available to the Company to provide some
compensation to the Directors
The Directors recognise the importance of sound corporate governance and, upon
the move to AIM adopted the QCA Corporate Governance Code published by the
Quoted Companies Alliance (the "QCA Code"), to the extent applicable, as they
consider it more appropriate than the 2018 UK Corporate Governance Code, having
regard to the company's size, resources and stage of development
The QCA Code sets out 10 principles listed below, and the following compliance
report explains broadly how Anglesey seeks to apply these principles:
Establish a strategy and business model which promote long-term value for
shareholders
Anglesey's purpose is the development of a modern mine at Parys Mountain, in an
environmentally, socially, and ethically responsible manner, producing copper,
zinc, lead, gold and silver to create value for shareholders and for the
benefit of all stakeholders. Parys Mountain was the largest copper mine in the
UK, and one of the largest copper mines in the world in the 18th century.
Today, amidst the growing recognition that metals and minerals are essential
for addressing climate change and adapting to a green economy, the Parys
Mountain property hosts the largest known deposits of copper, zinc and lead in
the UK. The Board believes that the Parys Mountain property provides an
opportunity to develop a sustainable long-term modern mining operation and
business, producing the very minerals that are essential for electrification,
energy storage and extending product lifespan, copper, lead and zinc.
In 2021 a new independent Preliminary Economic Assessment of the Parys Mountain
project was prepared by Micon International Limited which demonstrates the
potential for a viable mine development and a healthy financial rate of return.
Further details on the progress in the development of the Parys Mountain
Project during the year are provided in the Chairman's Statement and in the
Strategic Report.
The Group also has two other smaller investments, in Canada and in Sweden, both
in iron ore, and interestingly both seeking to breathe renewed life into former
world class projects. Iron ore produced from the Schefferville mines in
Labrador fuelled the US steel industry for 30 years after World War Two and
Grangesberg was once the largest iron mine in Sweden. As discussed in the
Strategic Report, notable progress was reported on these investments during the
past year.
Seek to understand and meet shareholder needs and expectations
The Board of Directors is committed to maintaining good communications and
having constructive dialogue with its shareholders. Shareholders have the
opportunity to discuss issues and provide feedback at any time. Shareholders
have access to current information on the Company through its website and
through direct contact with the directors by telephone or email. All
shareholders will be encouraged to attend the Annual General Meeting (subject
to COVID guidelines and/or restrictions).
Take into account wider stakeholder and social responsibilities and their
implications for long-term success
Anglesey Mining is committed to high standards of corporate social
responsibility. Health, safety, and environmental protection are core values.
Anglesey seeks to ensure open and transparent communication with all
stakeholders including landowners, neighbours, communities, and regional and
national authorities.
In considering strategy and in making decisions, the Board takes into account
its wider stakeholder and social responsibilities and the implications for the
long term and seeks to proactively engage key stakeholders on sustainable
development challenges and opportunities in an open and transparent manner.
Further details of the actions of the Directors to promote the success of the
Group are included in the Directors Section 172 Statement which is included as
part of the Strategic Report.
Development of a new mine at Parys Mountain can deliver economic growth in the
UK, regional jobs and business opportunities for local service providers. The
spin-off effects of mine development would be significant. The minerals that
would be mined at Parys Mountain are those that are necessary for the modern
world, copper in electronics, zinc in construction and medicine, and lead is
required for large electric battery storage. None of these important and
essential metals are currently produced in the UK.
Embed effective risk management, considering both opportunities and threats,
throughout the organisation
The Board is responsible for the ongoing review and management of risks that
could affect the enterprise. Mineral exploration and mine development are 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 itself subject to numerous significant risks. Management of those
risks is the responsibility of the Board and often requires the application of
judgement based on experience.
The significant risks facing the Company are summarised and discussed in the
Strategic Report and the "Going-concern" risk is discussed in detail in the
Directors Report. Management of those risks is the responsibility of the Board.
A system of checks and balances is in place and all material decisions must be
approved by the Board which considers it is sufficiently close to the Group's
operations and aware of its activities to be able to adequately monitor risks
within the Company's control without the establishment of any further formal
processes.
The major risks are outside the control of the Board. They include risks of
nature (the minerals, the orebody, the geological strata and operating
conditions), risks of the market (world-wide demand and supply of metals) and
risk of investor interest.
Maintain the board as a well-functioning, balanced team led by the chair
The Board believes that its current members reflect, among other attributes,
experience, knowledge, expertise, judgement, character diversity and integrity.
The directors have a broad diversity, including nationality, ethnicity, race,
national origin, gender and other elements of identity. One of the current
directors is a woman. The Board believes that having directors with diverse
backgrounds and experiences enable the Board to consider issues from different
perspectives and enhances effective strategic planning and decision making.
The Directors believe that there are appropriate divisions of responsibilities
within the Board and its committees and between the Board and the executive
directors. There is no mandatory retirement age for directors as the Directors
believe their extensive experience outweighs their long service and other
issues.
The Board supports a corporate culture focused on inclusion and gender
diversity, and this is an important consideration is recruitment of new
directors, but there are no formal policies in effect regarding these
provisions. The Board has not adopted a specific target for women on the Board
as it does not believe that any director should be chosen largely or solely
because of gender, rather it believes that the interests of shareholders are
best served by ensuring that directors are identified from the widest possible
group of potentially interested candidates.
John Kearney is the Chairman, a role he has held since 1994. He was formerly
also Chief Executive, a role he relinquished in 2006. The Board has determined
that by continuing as Chairman, John Kearney has provided clear and consistent
leadership on critical strategic objectives and has provided consistent
oversight and direction. Mr Kearney's track record over 40 years in the
minerals industry in a variety of leadership positions, strongly supports the
Board's conclusion that the shareholders are well served with him leading
Anglesey Mining as its Chairman.
Howard Miller is the lead director and provides a sounding board to the
Chairman.
Ensure that between them the directors have the necessary up-to-date
experience, skills and capabilities
The Board currently consists of six directors, three of whom are considered
independent. The members come from a variety of professional backgrounds, and
collectively have a wide range of managerial, technical, financial, and legal
skills, based on both qualifications and experience, including mineral process
engineering, accounting, legal, financial and of capital markets. Collectively
they possess significant relevant management skills, as well as long experience
of having served as directors of numerous other public companies, in several
international jurisdictions.
The Board is responsible for establishing qualifications and skills necessary
for effective management, including factors such as professional experience,
particular areas of expertise, personal character, potential conflicts of
interest, diversity and other commitments.
The Chairman has many years of experience as chairman or director of numerous
public mining or exploration companies. The Directors are satisfied that there
is an appropriate balance of experience and qualifications to carry out the
Board's responsibilities effectively, given the current status and stage of
development.
Evaluate board performance based on clear and relevant objectives, seeking
continuous improvement
There are no formal policies in effect in respect of measurable objectives of
performance and there has been no formal annual evaluation of the performance
of the Board, its committees or the individual directors. The Board of
Directors reviews on an ongoing informal basis the effectiveness and
performance of the Board as a whole and the effectiveness and contribution of
individual directors. Each year when providing notice of the Annual Meeting,
the Board considers its appropriate size and composition to properly administer
the affairs of the Group. The Directors have not to date taken outside advice
in reviewing performance.
The Board is satisfied that each of the Directors commits sufficient time to
the business of the Group and contributes materially to the governance and
operations of the Group. The Board is satisfied that it is highly effective and
is comprised of a small but strong team with a breadth of skills, experiences
and perspectives.
Promote a corporate culture that is based on ethical values and behaviour
The Board is committed to high standards of corporate governance, integrity,
and social responsibility and to managing operations in an honest and ethical
manner.
Certain of the Directors do serve as directors and/or officers of, or have
significant shareholdings in, other companies involved in natural resource
exploration and development and consequently there exists the possibility for
such Directors to be in a position of conflict. Directors are expected to
adhere to all legal requirements in respect of any transaction or agreement in
which they may have a material interest. Directors who have an interest in a
transaction or agreement with the Company must promptly disclose that interest
at any meeting of the Board at which the transaction or agreement will be
discussed and abstain from discussions and voting so that the remaining
directors may properly exercise independent judgment. The Board values the
participation of directors on the boards of other companies in the mineral
industry as this provides exposure to developments and other opportunities
which are useful to enhance the experience of the Directors and are potentially
beneficial to the Group.
Maintain governance structures and processes that are fit for purpose and
support good decision-making
The Board has overall responsibility for all aspects of the business and
affairs of the enterprise and has an active engaged role in all decision
making. The Board approves strategy and expenditure plans and regularly reviews
operational and financial performance, risk management, and health, safety,
environmental and community matters. The Chairman has overall responsibility
for corporate governance matters.
Communicate how the company is governed and is performing by maintaining a
dialogue with shareholders and other relevant stakeholders
The Board recognises the importance of open and transparent communication with
the shareholders and with all stakeholders, including landowners, communities,
and regional and national authorities.
Shareholders have access to current information on our activities primarily
though the annual and half year Reports which are sent to shareholders. Further
information is available on the website, www.angleseymining.co.uk, which is
updated whenever announcements or press releases are made.
In addition, all shareholders are encouraged to attend the Annual General
Meeting where this is permitted. Presentations on our activities are made at
the AGM and at various industry and investor events and discussions are held
with shareholders at or after each of these occasions.
The Chairman, Chief Executive and Finance Director make themselves available to
substantial shareholders regularly to understand their views on important
topics. Shareholders have the opportunity to discuss issues and provide
feedback at any time through direct contact with the Directors by telephone or
email. Every effort is made to reply promptly and effectively to appropriate
questions and concerns from shareholders on matters relating to business
operations or their shareholdings.
All significant concerns and complaints regarding business performance or
governance matters are evaluated and reported to the Board of Directors, as
appropriate. Communications considered to be advertisements or sales material,
or other types of 'junk' messages, unrelated to the responsibilities of the
Board, are discarded without further action. As a matter of policy, the
Directors do not participate in internet or on-line chat rooms.
Audit Committee report
Howard Miller was the only member of the audit committee until 18 January 2022
when Namrata Verma and Andrew King who had recently joined the board as
non-executive directors were appointed. All of the committee members have
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 Group.
The Audit Committee also considers internal control and risk management issues
and contributes to the Board's review of the effectiveness of the 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 material
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 being
undertaken. 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 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; 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.
In the early part of 2022 as the planned move to AIM was being finalised the
audit committee agreed with Mazars, auditors between 2008 and 2021, that it
would be appropriate to undertake a formal auditor review and engagement
process. Four firms, including Mazars, were invited to submit proposals and
from these UHY Farrelly Dawe White in Dublin, Ireland were selected and
formally appointed on 13 May 2022.
Signed by Andrew King and Namrata Verma on behalf of Howard Miller who is
indisposed
Audit committee members
7 September 2022
Independent auditor's report to the members of Anglesey Mining plc
Opinion
We have audited the financial statements of Anglesey Mining plc (the 'parent
company') and its subsidiaries (the 'group') for the year ended 31 March 2022
which comprise the Group Income Statement, the Group Statement of Comprehensive
Income, the Group and Company Statements of Financial Position, the Group and
Company Statements of Changes in Equity, the Group and Company Statements of
Cash Flows and notes to the financial statements, including a summary of
significant accounting policies.
The financial reporting framework that has been applied in their preparation is
applicable law and UK adopted International Financial Reporting 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, UK adopted
International Financial Reporting Standards.
In our opinion, the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006 and:
* give a true and fair view of the state of the group's and of the parent
company's affairs as at 31 March 2022 and of the group's loss for the year
then ended;
* the group financial statements have been properly prepared in accordance
with UK adopted International Financial Reporting Standards in conformity
with the requirements of the Companies Act 2006; and
* the parent company financial statements have been properly prepared in
accordance with UK adopted International Financial Reporting Standards in
conformity with the requirements of the Companies Act 2006, as applied in
accordance with the provisions of the Companies Act 2006.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing
(UK) (ISAs (UK)) and applicable law. Our responsibilities under those standards
are further described in the "Auditor's responsibilities for the audit of the
financial statements" section of our report. We are independent of the group
and the parent company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK, including the
FRC's Ethical Standard as applied to listed entities, and we have fulfilled our
other ethical responsibilities in accordance with these requirements. We
believe that the audit evidence we have obtained is sufficient and appropriate
to provide a basis for our opinion[DEL:.:DEL]
Material uncertainty related to going concern
In auditing the financial statements, we have concluded that the directors' use
of the going concern basis of accounting in the preparation of the financial
statements is appropriate.
We draw attention to Note 2 of the financial statements, concerning the
applicability of the going concern basis of preparation. As detailed in the
financial statements and the Strategic Report, the group and the parent company
are not generating revenue and are in the process of advancing the Parys
Mountain mining project towards development. The business model requires
generation of additional financial resources to progress the ongoing
development of the Parys Mountain project.
At 31 March 2022 the group and parent company had net current assets of £613k
and £699k respectively and cash and cash equivalents of £922k and £921k
respectively. During the year, the parent company issued shares with net
proceeds of £738,230 and a further £864,416 gross cash was raised in May 2022
through a share placement. The directors consider that these cash reserves are
sufficient to support the group's and the parent company's on-going non-project
related expenditure on a status quo basis for the next 12 months.
In Note 2, the directors explain that:
* to date, the group and parent company have relied primarily on equity
financings 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 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 directors are actively pursuing various financing options and are in
discussions with a range of investors regarding proposals for financing.
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. 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.
As stated in Note 2, these events or conditions indicate that a material
uncertainty exists that may cast significant doubt on the group's and the
parent company's ability to continue as a going concern. Our opinion is not
modified in respect of this matter.
Our audit procedures to evaluate the directors' assessment of the group's and
the parent company's ability to continue to adopt the going concern basis of
accounting included but were not limited to:
* Undertaking an initial assessment at the planning stage of the audit to
identify events or conditions that may cast significant doubt on the
group's and the parent company's ability to continue as a going concern;
* Making enquiries of the directors to understand the period of assessment
considered by them, their plans for group and company going forward and
ensuring that these have been incorporated into their financial
projections, the assumptions they considered and the implication of those
assumptions when assessing the group's and the parent company's future
financial performance;
* Assessing the likelihood of management's ability to raise additional
finance by obtaining a letter of support from Juno Limited and by
considering the funding raised historically;
* Assessing the transparency, completeness, and accuracy of the matters
covered in the going concern disclosure by evaluation of management's cash
flow projections for the forecast period and the underlying assumptions;
* Considering the results of our audit of the valuation of the intangible
asset to determine whether limited headroom or impairment would have the
potential to deter future investment; and
* Evaluating the appropriateness of the directors' disclosures in the
financial statements relating to going concern.
In relation to the group's and the parent company's reporting on how it has
applied the UK Corporate Governance Code, we have nothing material to add or
draw attention to in relation to the directors':
* statement in the financial statements about whether the directors
considered it appropriate to adopt the going concern basis of accounting;
and
* identification in the financial statements of any material uncertainties
related to the group's and the parent company's ability to continue as a
going concern over a period of at least twelve months from the date of
approval of the financial statements.
Our responsibilities and the responsibilities of the directors with respect to
going concern are described in the relevant sections of this report.
Key audit matters
Key audit matters are those matters that, in our professional judgement, were
of most significance in our audit of the financial statements of the current
period and include the most significant assessed risks of material misstatement
(whether or not due to fraud) we identified, including those which had the
greatest effect on: the overall audit strategy; the allocation of resources in
the audit; and directing the efforts of the engagement team. These matters were
addressed in the context of our audit of the financial statements as a whole,
and in forming our opinion thereon, and we do not provide a separate opinion on
these matters.
We summarise below the key audit matters in forming our audit opinion above,
together with an overview of the principal audit procedures performed to
address each matter and key observations arising from those procedures. The
matters set out below are in addition to the "Material uncertainty related to
going concern" above which, by its nature, is also a key audit matter.
These matters, together with our findings, were communicated to those charged
with governance through our Audit Completion Report.
Key audit matter How our audit addressed key audit
matters
Carrying value of Parys Mountain Our audit procedures included, but were
exploration and evaluation asset (E&E) not limited to:
- (group) · Evaluating whether, under IFRS 6
The group's accounting policy in Exploration for and Evaluation of
respect of its exploration and Mineral Assets, the asset is
evaluation asset is set out under appropriately determined as an E&E
"mineral property exploration and asset;
evaluation costs" and its accounting · Reviewing and challenging
policy in respect of impairment is set management's assessment with respect to
out under "impairment of tangible and indicators of impairment under IFRS 6;
intangible assets" in Note 2 to the · Reviewing the PEA report prepared
financial statements. by Micon International Limited to
The Group holds rights to explore and assess whether it supports management's
mine the Parys Mountain site. At 31 assertions in their analysis;
March 2022 the balance sheet includes · Assessing Micon International
an E&E asset of £15.7m. In January Limited's independence, objectivity and
2021, the group received a Preliminary competency to act as management's
Economic Assessment report (PEA) expert; and
prepared by Micon International Limited · Evaluating whether the relevant
that built on earlier scoping and disclosures in the financial statements
optimisation studies. The Group has yet are reasonable.
to move to the development stage of the
Parys Mountain project and will need to Key observations
raise additional funding to move Based on the work performed, nothing
towards production. has come to our attention which
Management have assessed the E&E asset suggests that there were unidentified
for impairment indicators under IFRS6 indicators for impairment not
and concluded that no triggers existed considered by the management.
at the year-end. Determining whether
impairment indicators exist involves
significant judgement by management,
including considering specific
impairment indicators prescribed in
IFRS 6.
There is a risk that if unidentified
impairment indicators exist, the
carrying value of the E&E asset may not
be fully recoverable.
Valuation of investment in the Our audit procedures included, but were
subsidiary Parys Mountain Mines Limited not limited to:
(PMM) - (parent company only) · Considering the results of the
The group's accounting policies in assessment for impairment indicators on
respect of investments and impairment the E&E asset detailed above; and
of investments are set out under · Evaluating whether the relevant
"investments" and "impairment of disclosures in the financial statements
investments" in Note 2 to the financial are reasonable.
statements.
The primary asset within PMM is the E&E Key observations
asset discussed above. There is a risk Based on the work performed, nothing
that if there are any unidentified has come to our attention which
impairment indicators that would impact suggests that there were unidentified
the carrying value of the E&E asset indicators for impairment not
these may also impact the carrying considered by the management
value in the parent company of its
investment in PMM.
Valuation of investment in Labrador Our audit procedures included, but were
Iron Mines Holdings Limited (LIM) - not limited to:
(group) · Reviewing and challenging
The group's accounting policies in management's assessment of fair value,
respect of investments and impairment including:
of investments are set out under o Independent check of LIM's share
"investments" and "impairment of price at 31 March 2022;
investments" in Note 2 to the financial o Review of the latest financial
statements. statements of LIM; and
Under the accounting policy, financial o Check for any other internal or
assets classified and measured at fair external indicators of impairment to
value through other comprehensive the investment that contradicts the
income (FVOCI) comprise equity fair value at year-end.
securities which are not held for · Evaluation of the trading of LIM's
trading and which the group has shares on the OTC market to assess
irrevocably elected at initial whether it constitutes an active market
recognition to recognise in this sufficient to determine fair value
category. under IFRS 9.
The group has a 12% investment in LIM,
a Canadian company with shares traded Key observations
on the OTC market in the United States, Based on the work performed, nothing
which holds the Labrador iron ore has come to our attention that suggests
properties. that the fair value of LIM is not
The group's investment in LIM is appropriately stated.
carried FVOCI. In recent years, based
on the director's assessment, the
investment in LIM had been carried at a
value of £1, reflecting the directors'
view that the value of LIM was
uncertain.
At 31 March 2021 the directors assessed
the fair value of the investment in LIM
at £4m (being measured by the closing
share price on 31 March 2021) resulting
in a gain reported through other
comprehensive income, which had been
based on improved iron ore prices and
an optimistic PEA report which had
resulted in stronger market interest in
LIM with a significant increase in its
share price at that time. The
directors have assessed the fair value
of LIM as being measured by the closing
share price at 31 March 2022, which has
resulted in a loss in value through
other comprehensive income of £2.1m.
There is a risk that the fair value of
investment in LIM is not stated in line
with IFRS 9 requirements.
Our application of materiality and an overview of the scope of our audit
The scope and focus of our audit was influenced by our application of
materiality. We apply the concept of materiality both in planning and
performing our audit, and in evaluating the effect of misstatements on our
audit and on the financial statements. We define financial statement
materiality to be the magnitude by which misstatements, including omissions,
could reasonably be expected to influence the economic decisions taken on the
basis of the financial statements by reasonable users.
In order to reduce to an appropriately low level the probability that any
misstatements exceed materiality, we use a lower materiality level, performance
materiality, to determine the extent of testing needed. Importantly,
misstatements below these levels will not necessarily be evaluated as
immaterial as we also take account of the nature of identified misstatements,
and the particular circumstances of their occurrence, when evaluating their
effect on the financial statements as a whole.
Based on our professional judgement, we determined materiality for the
financial statements as a whole as follows:
Group
Overall materiality £286,407
How we determined it 2% of group's net assets
Rationale for benchmark The group's net assets represent shareholders'
applied funds and we have determined this measure to
be the principal benchmark within the
financial statements relevant to shareholders,
as the group does not generate revenue and is
in pre-production phase.
Performance materiality & Performance materiality is set as 60% of
specific materiality overall materiality, being £171,844.
Specific materiality of £57,281 is used for
the audit of the Group Income Statement.
Reporting threshold 5% of financial statement materiality, being £
14,320.
Parent company
Overall materiality £232,826
How we determined it 2% of the parent company's net assets
Rationale for benchmark We considered net assets to be the most
applied appropriate benchmark, as the parent company
is non-trading and holds mainly subsidiary
investments.
Performance materiality Performance materiality is set at 60% of
overall materiality, being £139,695.
Reporting threshold 5% of financial statement materiality, being £
11,641.
We agreed with the Audit Committee that we would report to them all individual
misstatements in excess of £14,000 identified during the audit, as well as
differences below that threshold that in our view, warrant reporting on
qualitative grounds. We also report to the Audit Committee on disclosure
matters that we identified when assessing the overall presentation of the
financial statements.
As part of designing our audit, we assessed the risk of material misstatement
in the financial statements, whether due to fraud or error, and then designed
and performed audit procedures in response to those risks. In particular, we
looked at where the directors made subjective judgements such as making
assumptions on significant accounting estimates.
We tailored the scope of our audit to ensure that we performed sufficient work
to be able to give an opinion on the financial statements as a whole. We used
the outputs of a risk assessment, our understanding of the group and the parent
company, their environment, controls and critical business processes, to
consider qualitative factors in order to ensure that we obtained sufficient
coverage across all financial statement line items.
Our group audit scope included an audit of the group and parent company
financial statements of Anglesey Mining plc. Based on our risk assessment, all
entities within the group were subject to full scope audit and was performed by
the group audit team.
At the parent level we also tested the consolidation process and carried out
analytical procedures to confirm our conclusion that there were no significant
risks of material misstatement of the aggregated financial information.
Other information
The directors are responsible for the other information. The other information
comprises the information included in the annual report other than the
financial statements and our auditor's report thereon. Our opinion on the
financial statements does not cover the other information and, except to the
extent otherwise explicitly stated in our report, we do not express any form of
assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is
to read the other information and, in doing so, consider whether the other
information is materially inconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially
misstated. If we identify such material inconsistencies or apparent material
misstatements, we are required to determine whether there is a material
misstatement in the financial statements or a material misstatement of the
other information. If, based on the work we have performed, we conclude that
there is a material misstatement of this other information, we are required to
report that fact.
We have nothing to report in this regard.
Opinions on other matters prescribed by the Companies Act 2006
In our opinion, the part of the directors' remuneration report to be audited
has been properly prepared in accordance with the Companies Act 2006.
In our opinion, based on the work undertaken in the course of the audit:
* the information given in the Strategic Report and the Directors' Report for
the financial year for which the financial statements are prepared is
consistent with the financial statements and those reports have been
prepared in accordance with applicable legal requirements;
* the information about internal control and risk management systems in
relation to financial reporting processes and about share capital
structures, given in compliance with rules 7.2.5 and 7.2.6 in the
Disclosure Guidance and Transparency Rules sourcebook made by the Financial
Conduct Authority (the FCA Rules), is consistent with the financial
statements and has been prepared in accordance with applicable legal
requirements; and
* information about the parent company's corporate governance code and
practices and about its administrative, management and supervisory bodies
and their committees complies with rules 7.2.2, 7.2.3 and 7.2.7 of the FCA
Rules.
Matters on which we are required to report by exception
In light of the knowledge and understanding of the group and the parent company
and their environment obtained in the course of the audit, we have not
identified material misstatements in:
* the Strategic Report or the Directors' Report; or
* the information about internal control and risk management systems in
relation to financial reporting processes and about share capital
structures, given in compliance with rules 7.2.5 and 7.2.6 of the FCA
Rules.
We have nothing to report in respect of the following matters in relation to
which the Companies Act 2006 requires us to report to you if, in our opinion:
* adequate accounting records have not been kept by the parent company, or
returns adequate for our audit have not been received from branches not
visited by us; or
* the parent company financial statements and the part of the directors'
remuneration report to be audited are not in agreement with the accounting
records and returns; or
* certain disclosures of directors' remuneration specified by law are not
made; or
* we have not received all the information and explanations we require for
our audit; or
* a corporate governance statement has not been prepared by the parent
company.
Corporate governance statement
The Listing Rules require us to review the directors' statement in relation to
going concern, longer-term viability and that part of the Corporate Governance
Statement relating to Anglesey Mining plc's compliance with the provisions of
the UK Corporate Governance Code specified for our review.
Based on the work undertaken as part of our audit, we have concluded that each
of the following elements of the Corporate Governance Statement is materially
consistent with the financial statements or our knowledge obtained during the
audit:
* Directors' statement with regards the appropriateness of adopting the going
concern basis of accounting and any material uncertainties identified set
out on pages 21;
* Directors' explanation as to its assessment of the entity's prospects, the
period this assessment covers and why the period is appropriate set out on
page 16;
* Directors' statement on fair, balanced and understandable set out on page
22;
* Board's confirmation that it has carried out a robust assessment of the
emerging and principal risks set out on pages 15 and 16;
* The section of the annual report that describes the review of effectiveness
of risk management and internal control systems set out on page 27 and 29
to 31 and;
* The section describing the work of the audit committee set out on pages 26
and 32.
Responsibilities of Directors
As explained more fully in the directors' responsibilities statement set out on
page 19, the directors are responsible for the preparation of the financial
statements and for being satisfied that they give a true and fair view, and for
such internal control as the directors determine is necessary to enable the
preparation of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are responsible for
assessing the group's and the parent company's ability to continue as a going
concern, disclosing, as applicable, matters related to going concern and using
the going concern basis of accounting unless the directors either intend to
liquidate the group or the parent company or to cease operations, or have no
realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial
statements as a whole are free from material misstatement, whether due to fraud
or error, and to issue an auditor's report that includes our opinion.
Reasonable assurance is a high level of assurance but is not a guarantee that
an audit conducted in accordance with ISAs (UK) will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and
are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
Irregularities, including fraud, are instances of non-compliance with laws and
regulations. We design procedures in line with our responsibilities, outlined
above, to detect material misstatements in respect of irregularities, including
fraud. The extent to which our procedures are capable of detecting
irregularities, including fraud is detailed below.
Based on our understanding of the group and the parent company and their
industry, we identified that the principal risks of non-compliance with laws
and regulations related to employment law, general data protection regulation,
health and safety regulation, local legislation in places of operations,
extractive industries transparency initiative and anti-bribery, and we
considered the extent to which non-compliance might have a material effect on
the financial statements.
In identifying and assessing risks of material misstatement in respect to
irregularities including non-compliance with laws and regulations, our
procedures included but were not limited to:
* At the planning stage of our audit, gaining an understanding of the legal
and regulatory framework applicable to the group and parent company, the
structure of the group, the industry in which they operate and considered
the risk of acts by the group and the parent company which were contrary to
the applicable laws and regulations;
* Discussing with the directors and management the policies and procedures in
place regarding compliance with laws and regulations;
* Discussing amongst the engagement team the identified laws and regulations,
and remaining alert to any indications of non-compliance; and
* During the audit, focusing on areas of laws and regulations that could
reasonably be expected to have a material effect on the financial
statements from our general commercial and sector experience and through
discussions with the directors (as required by auditing standards), from
inspection of the parent company's and group's regulatory and legal
correspondence and review of minutes of directors' meetings in the year. We
also considered those other laws and regulations that have a direct impact
on the preparation of financial statements, such as the Companies Act 2006
and FCA rules.
Our procedures in relation to fraud included but were not limited to:
* Making enquiries of the directors and management on whether they had
knowledge of any actual, suspected or alleged fraud;
* Gaining an understanding of the internal controls established to mitigate
risks related to fraud;
* Discussing amongst the engagement team the risks of fraud such as
opportunities for fraudulent manipulation of financial statements, and
determined that the principal risks were related to posting manual journal
entries to manipulate financial performance, and management bias through
judgements and assumptions in significant accounting estimates, in
particular in relation to the identification of indicators of impairment to
the exploration and evaluation asset, assessment of the fair value of
investment in the subsidiary Parys Mountain Mines Limited and assessment of
the fair value of investment in entities that are not subsidiaries; and
* Addressing the risks of fraud through management override of controls by
performing journal entry testing.
The primary responsibility for the prevention and detection of irregularities
including fraud rests with both those charged with governance and management.
As with any audit, there remained a risk of non-detection of irregularities, as
these may involve collusion, forgery, intentional omissions, misrepresentations
or the override of internal controls.
The risks of material misstatement that had the greatest effect on our audit,
whether due to fraud or error, are discussed under "Key audit matters" within
this report.
A further description of our responsibilities is available on the Financial
Reporting Council's website at www.frc.org.uk/auditorsresponsibilities.
Other matters which we are required to address
Following the recommendation of the audit committee, we were appointed by the
Board of Directors on 13 May 2022 to audit the financial statements for the
year ended 31 March 2022.
The non-audit services prohibited by the FRC's Ethical Standard were not
provided to the group or the parent company and we remain independent of the
group and the parent company in conducting our audit.
Our audit opinion is consistent with the additional report to the audit
committee.
Use of the audit report
This report is made solely to the parent company's members as a body in
accordance with Chapter 3 of Part 16 of the Companies Act 2006. Our audit work
has been undertaken so that we might state to the parent company's members
those matters we are required to state to them in an auditor's report and for
no other purpose. To the fullest extent permitted by law, we do not accept or
assume responsibility to anyone other than the parent company and the parent
company's members as a body for our audit work, for this report, or for the
opinions we have formed.
Signed by
Michael Bellew (Senior Statutory Auditor)
for and on behalf of UHY Farrelly Dawe White Limited
Registered Auditors & Accountants
FDW House, Blackthorn Business Park,
Coe's Road, Dundalk,
Co. Louth,
Ireland.
A91 RW26
7 September 2022
Group income statement
All attributable to equity holders of the company
. Notes Year ended 31 March 2022 Year ended 31 March 2021
All operations are continuing
£ £
Revenue - -
Expenses (528,045) (162,824)
Investment income 6 24 39
Finance costs 7 (165,248) (165,702)
Foreign exchange movement 27 (31)
Loss before tax 4 (693,242) (328,518)
Taxation 8 - -
Loss for the period (693,242) (328,518)
Loss per share
Basic - pence per share 9 (0.3)p (0.2)p
Diluted - pence per share 9 (0.3)p (0.2)p
Group statement of comprehensive income
Loss for the period (693,242) (328,518)
Other comprehensive income
Items that may subsequently be
reclassified to profit or loss:
Change in fair value of 14 (2,139,322) 4,053,506
investment
Foreign currency translation 5,607 (10,067)
reserve
Total comprehensive (loss)/profit for (2,826,957) 3,714,921
the period
Group statement of financial position
Notes 31 March 2022 31 March 2021
£ £
Assets
Non-current assets
Mineral property exploration and 10 15,711,703 15,317,293
evaluation
Property, plant and equipment 11 204,687 204,687
Investments 14 2,024,342 4,163,664
Deposit 15 123,811 123,787
18,064,543 19,809,431
Current assets
Other receivables 57,123 31,381
Cash and cash equivalents 16 922,177 891,767
979,300 923,148
Total assets 19,043,843 20,732,579
Liabilities
Current liabilities
Trade and other payables 17 (366,418) (126,228)
(366,418) (126,228)
Net current assets 612,882 796,920
Non-current liabilities
Loans 18 (4,307,095) (4,147,294)
Long term provision 19 (50,000) (50,000)
(4,357,095) (4,197,294)
Total liabilities (4,723,513) (4,323,522)
Net assets 14,320,330 16,409,057
Equity
Share capital 20 7,991,541 7,765,591
Share premium 11,453,789 10,941,509
Currency translation reserve (84,926) (90,533)
Retained losses (5,040,074) (2,207,510)
Total shareholders' funds 14,320,330 16,409,057
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 7 September 2022 and signed
on its behalf by:
John F. Kearney, Chairman
Danesh Varma, Finance Director
Company statement of financial position
31 March 2022 31 March 2021
Notes £ £
Assets
Non-current assets
Investments 13 14,911,173 14,576,869
14,911,173 14,576,869
Current assets
Other receivables 10,920 7,448
Cash and cash equivalents 16 921,043 883,463
931,963 890,911
Total assets 15,843,136 15,467,780
Liabilities
Current liabilities
Trade and other payables 17 (232,596) (66,767)
(232,596) (66,767)
Net current assets 699,367 824,144
Non-current liabilities
Loan 18 (3,969,256) (3,815,022)
(3,969,256) (3,815,022)
Total liabilities (4,201,852) (3,881,789)
Net assets 11,641,284 11,585,991
Equity
Share capital 20 7,991,541 7,765,591
Share premium 11,453,789 10,941,509
Retained losses (7,804,046) (7,121,109)
Shareholders' equity 11,641,284 11,585,991
The company reported a loss for the year ended 31 March 2022 of £682,937 (2021
- £313,717). 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 7 September 2022 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 Share Currency Retained Total
capital premium translation losses
reserve
£ £ £ £ £
Equity at 1 April 2020 7,380,591 10,258,309 (80,466) 11,625,936
(5,932,498)
Total comprehensive loss for the
year:
Loss for the year - - - (328,518) (328,518)
- 4,053,506 4,053,506
Exchange difference on - - (10,067) - (10,067)
translation of foreign
holding
Total comprehensive loss for the - - (10,067) 3,724,988 3,714,921
year
Transactions with owners:
Shares issued 385,000 770,000 - - 1,155,000
Share isssue expenses - (86,800) - - (86,800)
Equity at 31 March 2021 7,765,591 10,941,509 (90,533) 16,409,057
(2,207,510)
Total comprehensive loss for the
year:
Loss for the year - - - (693,242) (693,242)
Change in fair value of - - -
investment (2,139,322) (2,139,322)
Exchange difference on - - 5,607 - 5,607
translation of foreign
holding
Total comprehensive loss for the - - 5,607
year (2,832,564) (2,826,957)
Transactions with owners:
Shares issued 225,950 542,280 - - 768,230
Share issue expenses - (30,000) - - (30,000)
Equity at 31 March 2022 7,991,541 11,453,789 (84,926) 14,320,330
(5,040,074)
Company Share Share Retained Total
capital premium losses
£ £ £ £
Equity at 1 April 2020 7,380,591 10,258,309 10,831,508
(6,807,392)
Total comprehensive loss for the
year:
Loss for the year - - (313,717) (313,717)
Total comprehensive loss for the - - (313,717) (313,717)
year
Transactions with owners:
Shares issued 385,000 770,000 - 1,155,000
Share isssue expenses - (86,800) - (86,800)
Equity at 31 March 2021 7,765,591 10,941,509 11,585,991
(7,121,109)
Total comprehensive loss for the
year:
Loss for the year - - (682,937) (682,937)
Total comprehensive loss for the - - (682,937) (682,937)
year
Transactions with owners:
Shares issued 225,950 542,280 - 768,230
Share issue expenses - (30,000) - (30,000)
Equity at 31 March 2022 7,991,541 11,453,789 11,641,284
(7,804,046)
Group statement of cash flows
Notes Year ended 31 March 2022 Year ended 31 March 2021
£ £
Operating activities
Loss for the period (693,242) (328,518)
Adjustments for:
Investment income 6 (24) (39)
Finance costs 7 165,248 165,702
Foreign exchange movement (27) 31
(528,045) (162,824)
Movements in working capital
(Increase) in receivables (25,742) (14,758)
Increase in payables 165,620 3,539
Net cash used in operating (388,167) (174,043)
activities
Investing activities
Mineral property exploration and (319,680) (77,618)
evaluation
Investment - (20,052)
Net cash used in investing activities (319,680) (97,670)
Financing activities
Issue of share capital 738,230 1,068,200
Net cash generated from financing 738,230 1,068,200
activities
Net increase in cash and cash equivalents 30,383 796,487
Cash and cash equivalents at start 891,767 95,311
of period
Foreign exchange movement 27 (31)
Cash and cash equivalents at end 16 922,177 891,767
of period
Company statement of cash flows
Notes Year ended 31 Year ended 31
March 2022 March 2021
£ £
Operating activities
Loss for the period 22 (682,937) (313,717)
Adjustments for:
Finance costs 154,234 154,234
(528,703) (159,483)
Movements in working capital
(Increase) in receivables (3,472) (1,488)
Increase/(decrease) in payables 165,829 (424)
Net cash used in operating (366,346) (161,395)
activities
Investing activities
Investments and long term loans (334,304) (116,227)
Net cash used in investing (334,304) (116,227)
activities
Financing activities
Share issues net of expenses 738,230 1,068,200
Net cash generated from financing 738,230 1,068,200
activities
Net increase in cash and cash 37,580 790,578
equivalents
Cash and cash equivalents at start 883,463 92,885
of period
Cash and cash equivalents at end 16 921,043 883,463
of period
Notes to the Financial Statements
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 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, there is sufficient finance available for
the continuing working capital requirements 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 there will be adequate
funds for planned activities and to continue as a going concern. Anglesey
Mining plc 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.
The Directors are actively pursuing various options regarding proposals for
financing and are in discussions with a range of investors. Whilst these
discussions continue there are 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 resources currently available, there is a risk that there will not be
sufficient financial resources to fund all the planned programme requirements.
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
Equity-settled benefits may be provided to certain directors and 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 capitalised 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 a loss allowance for a financial asset is recognised 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 a loss allowance for a financial
asset is always recognised 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 thehigher 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. Financial assets are classified 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
All financial liabilities are classified 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 standards and interpretations not yet adopted
Certain pronouncements were issued by the IASB or the IFRIC that are mandatory
for accounting periods commencing on or after 1 January 2021. Many are not
applicable or do not have a significant impact to the Group and have been
excluded. The following have not yet been adopted and are being evaluated to
determine their impact on the Group.
IAS 1 - Presentation of Financial Statements ("IAS 1") was amended in January
2020 to provide a more general approach to the classification of liabilities
under IAS 1 based on the contractual arrangements in place at the reporting
date. The amendments clarify that the classification of liabilities as current
or noncurrent is based solely on a group's right to defer settlement at the
reporting date. The right needs to be unconditional and must have substance.
The amendments also clarify that the transfer of a group's own equity
instruments is regarded as settlement of a liability, unless it results from
the exercise of a conversion option meeting the definition of an equity
instrument. The amendments are effective for annual periods beginning on 1
January 2023. The adoption of the above standard and interpretations is not
expected to lead to any changes to the accounting policies or have any other
material impact on the financial position or performance of the group.
IAS 37 - Provisions, Contingent Liabilities, and Contingent Assets ("IAS 37")
was amended. The amendments clarify that when assessing if a contract is
onerous, the cost of fulfilling the contract includes all costs that relate
directly to the contract - i.e. a full-cost approach. Such costs include both
the incremental costs of the contract (i.e. costs a group would avoid if it did
not have the contract) and an allocation of other direct costs incurred on
activities required to fulfil the contract - e.g. contract management and
supervision, or depreciation of equipment used in fulfilling the contract. The
amendments are effective for annual periods beginning on 1 January 2022.
IFRS 3 - Business Combinations ("IFRS 3") was amended. The amendments introduce
new exceptions to the recognition and measurement principles in IFRS 3 to
ensure that the update in references to the revised conceptual framework does
not change which assets and liabilities qualify for recognition in a business
combination. An acquirer should apply the definition of a liability in IAS 37 -
rather than the definition in the Conceptual Framework - to determine whether a
present obligation exists at the acquisition date as a result of past events.
For a levy in the scope of IFRIC 21, the acquirer should apply the criteria in
IFRIC 21 to determine whether the obligating event that gives rise to a
liability to pay the levy has occurred by the acquisition date. In addition,
the amendments clarify that the acquirer should not recognize a contingent
asset at the acquisition date. The amendments are effective for annual periods
beginning on 1 January 2022.
IAS 16 - Property, Plant and Equipment ("IAS 16") was amended. The amendments
introduce new guidance, such that the proceeds from selling items before the
related property, plant and equipment is available for its intended use can no
longer be deducted from the cost. Instead, such proceeds are to be recognized
in profit or loss, together with the costs of producing those items. The
amendments are effective for annual periods beginning on 1 January 2022.
IAS 8 - Accounting Estimates ("IAS 8") was amended. In February 2021, the IASB
issued amendments to IAS 8, in which it introduces a definition of 'accounting
estimates. The amendments clarify the distinction between changes in accounting
estimates and changes in accounting policies and the correction of errors. It
also explains how organizations use measurement methods and inputs to develop
accounting estimates. The amendments are effective for annual reporting periods
beginning on or after 1 January 2023 and apply to changes in accounting
policies and changes in accounting estimates that occur on or after the start
of that period. Early application is permitted and must be disclosed. The
adoption of the above standard and interpretations is not expected to lead to
any changes to the accounting policies or have any other material impact on the
financial position or performance of the group.
The adoption of the above standards and interpretations is not expected to lead
to any changes to the 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
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 in 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. These activities comprise one class of business which is mine
exploration, evaluation and development which are classified in geographical
segments; these are the basis on which information is reported to the board. As
yet there have been no site expenses directly incurred in respect of the
interest in Grangesberg and management expenses for this segment are included
in the UK total.
Income statement
analysis
2022 2021
UK Sweden Canada UK Sweden Canada Total
Total
£ £ £ £ £ £ £ £
Expenses - - - -
(528,045) (528,045) (162,824) (162,824)
Investment 24 - - 24 39 - - 39
income
Finance costs (11,014) - (11,468) -
(154,234) (165,248) (154,234) (165,702)
Exchange rate - 27 - 27 - (31) - (31)
loss
Loss for the (10,987) - (11,499) -
year (682,255) (693,242) (317,019) (328,518)
Assets and
liabilities
31 March 2022 31 March 2021
UK Sweden Canada UK Sweden Canada Total
Total
£ £ £ £
£ £ £ £
Non-current 16,040,201 110,157 1,914,185 18,064,543 15,645,767 110,157 4,053,507 19,809,431
assets
Current assets 978,199 1,101 - 979,300 922,056 1,092 - 923,148
Liabilities - -
(4,385,674) (337,839) (4,723,513) (3,991,250) (332,272) (4,323,522)
Net assets/ 12,632,726 1,914,185 14,320,330 12,576,573 4,053,507 16,409,057
liabilities (226,581) (221,023)
4 Loss before taxation
The loss before taxation for the year has been arrived at after
charging/(crediting):
2022 2021
£ £
Fees payable to the group's auditor:
for the audit of the annual 30,000 37,000
accounts
for the audit of subsidiaries' 5,000 5,000
accounts
for other services - -
Directors' remuneration 160,000 -
Foreign exchange movement (27) 31
5 Staff costs
The average monthly number of persons employed (including
executive directors) was:
2022 2021
Administrative 4 3
Other 1 -
5 3
Their aggregate remuneration was: £ £
Wages and salaries 216,351 23,660
Social security costs 24,264 6,803
240,615 30,463
The directors did not receive any remuneration during the year ended 31 March
2021. Further details are provided in the
directors' remuneration report together with information on share options.
6 Investment income
2022 2021
Loans and receivables
£ £
Interest on site re-instatement 24 39
deposit
24 39
7 Finance costs
2022 2021
Loans and payables
£ £
Loan interest to Juno Limited 154,234 154,234
Loan interest to Eurmag AB 11,014 11,468
165,248 165,702
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 financings undertaken by the group.
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 2022 of £1.4 million (2021 - £1.3 million)
which, in view of the 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 £13.2 million unclaimed and available at 31
March 2022 (2021 - £12.8 million). No deferred tax asset is recognised in
respect of these allowances.
2022 2021
£ £
Current tax - -
Deferred tax - -
Total tax - -
Domestic income tax is calculated at 19% (2021 - 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 (693,242) (328,518)
Tax at the domestic income tax rate of (131,716) (62,418)
19%
Tax effect of:
Unrecognised deferred tax on losses 131,716 62,418
Total tax - -
9 Earnings per ordinary share
2022 2021
£ £
Earnings
Loss for the year (693,242) (328,518)
Number of shares
Weighted average number of ordinary 236,185,143 201,073,814
shares for the purposes of basic
earnings per share
Shares deemed to be issued for no
consideration in respect of employee
options
Weighted average number of ordinary 236,185,143 201,073,814
shares
for the purposes of diluted earnings
per share
Basic earnings per share (0.3)p (0.2)p
Diluted earnings per share (0.3)p (0.2)p
As there is a loss for the year ended 31 March 2022 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 2020 15,215,723
Additions - site 73,983
Additions - rentals & charges 27,587
At 31 March 2021 15,317,293
Additions - site 367,474
Additions - rentals & charges 26,936
At 31 March 2022 15,711,703
Carrying amount
Net book value 2022 15,711,703
Net book value 2021 15,317,293
Included in the additions are mining lease expenses of £18,727 (2021 - £
19,170).
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.
At each reporting date an assessment of exploration and evaluation assets is
made 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 Income Statement to reduce the
carrying amount to its estimated recoverable amount.
In determining whether there is an impairment indicator, both internal factors
(e.g. adverse changes in performance) and external factors (e.g., adverse
changes in the business or regulatory environment) are considered. 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 2022. The
directors continued to rely on the publication in January 2021 of the
independent PEA, with an expanded resource base, which demonstrated 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 Plant & Office Total
land & equipment equipment
property
Cost £ £ £ £
At 31 March 2020, 2021 and 204,687 17,434 5,487 227,608
2022
Depreciation
At 31 March 2020, 2021 and - 17,434 5,487 22,921
2022
Carrying amount
At 31 March 2020, 2021 and 204,687 - - 204,687
2022
Company Freehold Plant & Office Total
land & equipment equipment
property
Cost £ £ £ £
At 31 March 2020, 2021 and - 17,434 5,487 22,921
2022
Depreciation
At 31 March 2020, 2021 and - 17,434 5,487 22,921
2022
Carrying amount
At 31 March 2020, 2021 and - - - -
2022
12 Subsidiaries - company
The subsidiaries of the company at 31 March 2022 and 2021 were as follows:
Name of company Country of Percentage Principal activity
incorporation owned
Parys Mountain Mines Limited1 England & 100% Development of the
Wales Parys Mountain
mining property
Parys Mountain Land Limited1 England & 100% Holder of part of
Wales the Parys Mountain
property
Parys Mountain Heritage England & 100% Holder of part of
Limited1 Wales 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 England & 100% Dormant
(Ace) Limited1 Wales
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 Capital Total
cost contributions
£ £ £
At 1 April 2020 104,025 14,460,642
14,356,617
Advanced - 116,227 116,227
At 31 March 2021 104,025 14,472,844 14,576,869
Advanced - 334,304 334,304
At 31 March 2022 104,025 14,807,148 14,911,173
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 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
Net change during the period (2,139,322) - (2,139,322)
At 31 March 2022 1,914,185 110,157 2,024,342
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 investment in LIM is carried at fair value through other comprehensive
income. 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 2022 was 13 US
cents per share (2021 - 29 US cents). At 23 August 2022 the shares traded at 11
US cents per share.
Grangesberg - Sweden
The group has, through its Swedish subsidiary Angmag AB, a 19.9% ownership
interest in GIAB (unchanged from 2021), a Swedish company which holds rights
over the Grangesberg iron ore deposits.
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 value of the group's
share in the net assets of GIAB at 31 March 2022 was approximately £216,000
(2021 - £316,000).
15 Deposit
Group
2022 2021
£ £
Site re-instatement deposit
123,811 123,787
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
2022 2021 2022 2021
£ £ £ £
Held in sterling 921,075 890,674 921,043 883,463
Held in Canadian dollars
1 1 - -
Held in US dollars 424
444 - -
Held in Swedish krona 668
657 - -
922,177 891,767 921,043 883,463
The carrying value of the cash approximates to its fair value.
17 Trade and other payables
Group Company
2022 2021 2022 2021
£ £ £ £
Trade payables
(106,236) (4,366) (74,619) (2,887)
Other accruals
(260,182) (121,862) (157,977) (63,880)
(366,418) (126,228) (232,596) (66,767)
The carrying value of the trade and other payables approximates to their fair
value.
18 Loans
Group Company
2022 2021 2022 2021
£ £ £ £
Loan from Juno Limited (3,969,256) (3,815,022)
(3,969,256) (3,815,022)
Loan from Eurang Limited
(337,839) (332,272) - -
(3,969,256) (3,815,022)
(4,307,095) (4,147,294)
Juno: The loan is provided under a working capital agreement, denominated in
sterling, unsecured and carried interest during the year 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.
In May 2022 a new Investor Agreement was concluded with Juno Limited to replace
the controlling shareholder and consolidated working capital agreements. In the
new Investor Agreement Juno agreed to participate in any future equity
financing, at the same price per share and on the same terms as other
arms-length participants, to maintain its percentage, with the subscription
price to be satisfied by the conversion and consequent reduction of debt, and
the company agreed to pay Juno in cash ten percent of the net proceeds of such
equity financing in further reduction of the debt. The interest rate on the
outstanding debt will be reduced from 10% to 5% p.a. from 1 April 2022. In
addition, Juno was granted certain nomination and reporting rights, including
the right to nominate two directors to the board, so long as Juno holds at
least 20% of the company's outstanding shares and one director so long as Juno
holds at least 10% of the company's outstanding shares. This renegotiation was
approved by an independent board committee responsible for reviewing and
approving any transactions and potential transactions with Juno. The family
interests of Danesh Varma have a significant shareholding in Juno. The net
effect of the new agreement with the May 2022 financing was that the debt due
to Juno was reduced by £305,499, of which £78,345 was paid in cash and the
balance by conversion of debt.
The carrying value of the loan approximates to its fair value.
Eurang Limited: 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 Eurang Totals
£ £ £
1 April 2020 (3,660,788) (321,105) (3,981,893)
Cash flows
- - -
Non cash movements (154,234) (11,167) (165,401)
1 April 2021 (3,815,022) (332,272) (4,147,294)
Cash flows
- - -
Non cash movements (154,234) (5,567) (159,801)
At 31 March 2022 (3,969,256) (337,839) (4,307,095)
The Juno loan relates to the group and company. The non-cash movement
represents accrued interest.
The Eurang loan relates to the group only and its non-cash movement comprises
accrued interest and foreign exchange changes. In 2021 there was also the value
of GIAB shares transferred to Eurang which reduced the loan amount.
19 Long term provision - group
2022 2021
£ £
Provision for site (50,000) (50,000)
reinstatement
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 Deferred shares Total
of 1p of 4p
Issued and Nominal Number Nominal Number Nominal
fully paid value £ value £ value £
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 - - -
At 1 April 2021 2,254,758 225,475,732 5,510,833 137,770,835 7,765,591
Issued in the period 225,950 22,595,000 - - 225,950
At 31 March 2022 2,480,708 248,070,732 5,510,833 137,770,835 7,991,541
The deferred shares are non-voting, have no entitlement to dividends and have
negligible rights to return of capital on a winding up.
On 9 October 2021 a placing for cash was made of 22.595 million ordinary shares
at 3.4 pence per share, raising £768,230 gross. Further share issues were made
on 20 May 2022 and 4 August 2022 - see note 29.
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 is one year. Options are forfeited if the employee leaves
employment with the group before the options vest. All options outstanding were
exercised in full last year. No options were granted, lapsed or forfeited
during the year. No options were outstanding at 31 March 2022.
2022 2021
Options Weighted Remaining Options Weighted Remaining
average contractual average contractual
exercise life in exercise life in
price in years price in years
pence pence
Outstanding at beginning - - - 3,500,000 2.00 1.5
of period
Granted during the - - - - -
period
Forfeited during the - - - - -
period
Exercised during the - - - 3,500,000 2.00
period
Expired during the - - - - -
period
Outstanding at the end of - - - - - -
the period
Exercisable at the end of - - - - - -
the period
There were no expenses in respect of equity-settled employee remuneration for
the year ended 31 March 2022 (2021 - nil).
Grants of options were made following the year end on 4 August 2022.
22 Results attributable to Anglesey Mining plc
The loss after taxation in the parent company amounted to £682,937 (2021 loss
£313,717). 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 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
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 £191,419 and if it
were to rise by a similar percentage there would be a gain of £191,419
Interest rate risk
The amounts advanced under the Juno loans are at a fixed rate of interest of
10% per annum (until 31 March 2022 after which the rate changed to 5%) and
those from Eurang Limited 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 £750,000 through the placement of shares and
since the year end has raised further funds.
Trade creditors are payable on normal credit terms which are usually 30 days.
The loans due to Juno and Eurang 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 7
September 2022 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 £ 30,713 (2021 - £30,207) and if
it were to move in favour of sterling by a similar amount there would be a loss
of £ 37,538 (2021 - £36,919). 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 £ 10,338 (2021 - £10,508) and if it were to
move in favour of sterling by a similar amount there would be a gain of £
12,635 (2021 - £12,843).
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 £174,017 (2021 - £368,501) and if it were to move in
favour of sterling by a similar amount there would be a gain of £212,687 (2021
- £450,390). 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 Financial assets
classified at fair measured at amortised
value through other cost
comprehensive income
31 March 31 March 31 March 31 March
2022 2021 2022 2021
£ £ £ £
Investments 2,024,342 4,163,664 - -
Deposit - - 123,811 123,787
Other receivables - - 57,123 31,381
Cash and cash - - 922,177 891,767
equivalents
- -
2,024,342 4,163,664 1,103,111 1,046,935
Financial liabilities
measured at amortised
cost
31 March 31 March
2022 2021
£ £
Trade payables (106,236) (4,366)
Other payables (260,182) (121,862)
Loans
(4,307,095) (4,147,294)
(4,673,513) (4,273,522)
Company
. Financial assets Financial liabilities
measured at amortised measured at amortised
cost cost
31 March 31 March 31 March 31 March
2022 2021 2022 2021
£ £ £ £
Other receivables 10,920 7,448 - -
Cash and cash 921,043 883,463 - -
equivalents
Trade payables - - (74,619) (2,887)
Other payables - - (157,977) (63,880)
Loan - -
(3,969,256) (3,815,022)
931,963 890,911
(4,201,852) (3,881,789)
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 held 23% of the company's
issued ordinary share capital at 31 March 2022. The group had the following
agreements with Juno: (a) a controlling shareholder agreement dated September
1996 and (b) a consolidated working capital agreement of 12 June 2002. In May
2022 a new Investor Agreement was concluded with Juno Limited to replace the
controlling shareholder and consolidated working capital agreements. In the new
Investor Agreement Juno agreed to participate in any future equity financing,
at the same price per share and on the same terms as other arms-length
participants, to maintain its percentage, with the subscription price to be
satisfied by the conversion and consequent reduction of debt, and the company
agreed to pay Juno in cash ten percent of the net proceeds of such equity
financing in further reduction of the debt. The interest rate on the
outstanding debt will be reduced from 10% to 5% p.a. from 1 April 2022. In
addition, Juno was granted certain nomination and reporting rights, including
the right to nominate two directors to the board, so long as Juno holds at
least 20% of the company's outstanding shares and one director so long as Juno
holds at least 10% of the company's outstanding shares. This renegotiation was
approved by an independent board committee responsible for reviewing and
approving any transactions and potential transactions with Juno. The family
interests of Danesh Varma have a significant shareholding in Juno.
The net effect of the new agreement with the May 2022 financing was that the
debt due to Juno was reduced by £305,499, of which £78,345 was paid in cash and
the balance by conversion of debt.
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
John Kearney and Danesh Varma, as nominees of the company, are directors of
Grangesberg Iron 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 Eurang Limited, amounting to £337,839 at the year-end (2021 - £
343,613). See also note 18.
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 £18,727 is payable for the
year beginning 23 March 2021; 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. This 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 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 2022 - £20,114 and for the five years between 1 April 2023 and 31 March
2026 - £106,713 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 which began in 2018, it was agreed to grant
QME various rights and options relating to the future development of Parys
Mountain comprising contracts for the construction of the decline and the
underground mine, including rehabilitation of the shaft. This will be done on
terms to be agreed following a decision to proceed with the development of
Parys Mountain. In the absence of agreement such contracts may be offered to
third parties, subject to a right of first refusal in favour of QME, and
subject to a payment 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 however such liability is not at this time
crystallised.
In addition, QME would be granted the right and option, upon completion of a
Prefeasibility Study, to undertake at its cost and investment, the mine
construction component of the Parys Mountain project, including the decline and
related underground and shaft works, 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 (2021 -
nil).
28 Contingent liabilities
There are no contingent liabilities (2021 - nil).
29 Events after the period end
On 17 May 2022 a placing to institutional investors for cash of 22,829,705
shares raising £864,416 gross was completed. In connection with the financing,
1,250,000 broker warrants were issued to WH Ireland and Canaccord, with each
warrant exercisable at a price of 3.4 pence per share for a period of three
years.
At the same time, the terms of the Juno loan were amended, 6,681,000 shares
were issued to Juno and a cash repayment of £78,345 was made, together reducing
the amount of the outstanding loan by £305,499. See Notes 18 and 24.
On 4 August 2022, 500,000 shares were issued to the chief executive, Jo
Battershill, .as share based compensation upon the achievement of certain
performance targets.
Notice of the Annual General Meeting
Notice is given that the 2022 Annual General Meeting of Anglesey Mining plc
will be held at the offices of DLA Piper, 160 Aldersgate Street London EC1A 4HT
on 27 October 2022 at 11.00 am to consider and, if thought fit, to pass the
resolutions set out below.
As ordinary business
1. To receive the annual accounts and directors' and auditor's reports for the
year ended 31 March 2022
2. To approve the directors' remuneration report for the year ended 31 March
2022
3. To approve the directors' remuneration policy in the directors'
remuneration report for
the year ended 31 March 2022
4. To reappoint John F. Kearney as a director
5. To reappoint Jonathan (Jo) Battershill as a director
6. To reappoint Howard Miller as a director
7. To reappoint Danesh Varma as a director
8. To confirm the appointment of Namrata Verma as a director
9. To confirm the appointment of Andrew King as a director
10. To appoint UHY Farrelly Dawe White as auditor
11. To authorise the directors to determine the remuneration of the auditor.
As special business
12. 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 £2,800,000, provided that (unless previously
revoked, varied or renewed) this authority shall expire on 31 December 2023,
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).
13. 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 £2,800,000
and (unless previously revoked, varied or renewed) this power shall expire on
31 December 2023, 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
7 September 2022
Notes to the notice of the AGM
Entitlement to attend and vote
If you wish to attend the Annual General Meeting (Meeting) in person, you must
send an email to mail@angleseymining.co.uk by 11.00 a.m. on 25 October 2022 to
make an advance booking for your attendance. You must also attach a Letter of
Corporate Representation from the custodian of your shares if the shares are
not registered in your name. Please note that your name must be pre-registered
with the venue in advance of the day.
To be entitled to attend and vote at the Meeting (and for the purpose of the
determination by the Company of the votes they may cast), shareholders must be
registered in the Register of Members at close of business on 25 October 2022
(or, in the event of any adjournment, at the close of business on the date
which is two business days before the date of the adjourned meeting). Changes
to the Register of Members after the relevant deadline shall be disregarded in
determining the rights of any person to attend and vote at the Meeting.
Appointment of proxies
Members who are entitled to attend and vote at the Meeting are entitled to
appoint a proxy to exercise all or any of their rights in relation to the
meeting on their behalf at the meeting. 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. A proxy need not be a shareholder of the Company. The appointment
of a proxy shall be subject to any special arrangements that the board of
directors determines is necessary in light of the coronavirus pandemic.
You can appoint a proxy by:
* logging onto www.signalshares.com and submitting your proxy appointment and
votes online by following the instructions. If you have not previously done
so, you will first need to register to use this service. To do this you
will need your investor code detailed on your share certificate; or
* if you are a CREST member, submitting a proxy appointment electronically by
using the CREST voting service (in accordance with the notes below).
If you would prefer a paper proxy form, you may request one from the registrar,
Link Group, by calling 0371 664 0300 (Calls are charged at the standard
geographic rate and will vary by provider). If you are calling from overseas,
the number is +44 (0)371 664 0300 and calls will be charged at the applicable
international rate.
Proxy appointments must be received by no later than 11.00 a.m. on 25 October
2022 for them to be valid (or in the event of an adjournment, no later than 48
hours (excluding any part of a day that is not a working day) before the time
of the adjourned meeting). Beneficial owners of Ordinary Shares should consult
with their custodian or nominee in case they have any queries on how to
complete and submit a proxy appointment on their behalf.
The return of a completed proxy form or the submission of an electronic proxy
appointment will not prevent a shareholder attending the Meeting and voting in
person if he/she wishes to do so, subject to any legislation in force
temporarily limiting such rights.
In the case of joint holders, where more than one of the joint holders purports
to appoint a proxy, only the appointment submitted by the most senior holder
will be accepted. Seniority is determined by the order in which the names of
the joint holders appear in the Register of Members in respect of the joint
holding (the first-named being the most senior).
To change proxy instructions, please submit a new proxy appointment using the
methods set out above. If you submit more than one valid proxy appointment, the
appointment received last before the latest time for the receipt of proxies
will take precedence.
Appointment of proxies through CREST
CREST members who wish to appoint a proxy or proxies through the CREST
electronic proxy appointment service may do so by using the procedures
described in the CREST Manual. CREST Personal Members or other CREST sponsored
members, and those CREST members who have appointed (a) service provider(s),
should refer to their CREST sponsor or voting service provider(s), who will be
able to take the appropriate action.
In order for a proxy appointment or instruction made using the CREST service to
be valid, the appropriate CREST message (a CREST Proxy Instruction) must be
properly authenticated in accordance with Euroclear UK & Ireland Limited's
specifications, and must contain the information required for such instruction,
as described in the CREST Manual (available via www.euroclear.com). In order to
be valid, the message, regardless of whether it constitutes the appointment of
a proxy or is an amendment to the instruction given to a previously appointed
proxy, must be transmitted so as to be received by the issuer's agent (ID RA10)
by no later than 11.00 a.m. on 25 October 2022. For this purpose, the time of
receipt will be taken to be the time (as determined by the time stamp applied
to the message by the CREST Application Host) from which the issuer's agent is
able to retrieve the message by enquiry to CREST in the manner prescribed by
CREST. After this time any change of instructions to proxies appointed through
CREST should be communicated to the appointee through other means.
CREST members and, where applicable, their CREST sponsors, or voting service
providers should note that Euroclear UK & Ireland Limited does not make
available special procedures in CREST for any particular message. Normal system
timings and limitations will, therefore, apply in relation to the input of
CREST Proxy Instructions.
It is the responsibility of the CREST member concerned to take (or, if the
CREST member is a CREST personal member, or sponsored member, or has appointed
a voting service provider, to procure that his CREST sponsor or voting service
provider(s) take(s)) such action as shall be necessary to ensure that a message
is transmitted by means of the CREST system by any particular time. In this
connection, CREST members and, where applicable, their CREST sponsors or voting
system providers are referred, in particular, to those sections of the CREST
Manual concerning practical limitations of the CREST system and timings.
The Company may treat as invalid a CREST Proxy Instruction in the circumstances
set out in Regulation 35(5)(a) of the Uncertificated Securities Regulations
2001.
Nominated persons
Any person to whom this Notice is sent who is a person nominated under section
146 of the Act to enjoy information rights (a Nominated Person) may, under an
agreement between him/her and the shareholder by whom he/she was nominated,
have a right to be appointed (or to have someone else appointed) as a proxy for
the Meeting. If a Nominated Person has no such proxy appointment right or does
not wish to exercise it, he/she may, under any such agreement, have a right to
give instructions to the shareholder as to the exercise of voting rights.
The statement in these notes concerning the rights of shareholders in relation
to the appointment of proxies in the note on page 16 of this document does not
apply to Nominated Persons. Such rights described in that note can only be
exercised by shareholders of the Company.
Corporate representatives
Any corporation which is a member can appoint one or more corporate
representatives who may exercise on its behalf all of its powers as a member
provided that they do not do so in relation to the same shares. The attendance
in person of the meeting of any corporate representative shall be subject to
any special arrangements that the board of directors determines necessary in
light of the coronavirus pandemic.
Publication of audit concerns on website
Under section 527 of the Act, shareholders have the right to request
publication of any concerns that they propose to raise at the Meeting relating
to the audit of the Company's accounts, subject to meeting the threshold
requirements set out in that section. Where a statement is published the
Company will forward the statement to the auditor not later than the time when
it makes the statement available on the website. The business which may be
dealt with at the Meeting includes any statement that the Company has been
required, under section 527 of the Act, to publish on its website. The Company
cannot require the members concerned to pay its expenses in complying with
either section 527 or 528 of the Act.
Entitlement to ask questions
Any shareholder attending the meeting has the right to ask questions relating
to the business of the meeting and for these to be answered, unless the answer:
would interfere unduly with the preparation for the meeting or involve the
disclosure of confidential information; has already been published on the
website; or it is not in the interests of the Company or the good order of the
meeting that the question be answered.
Details of communications
The electronic address given in this Notice for the appointment of proxies for
the meeting is given for that purpose only and may not be used for any other
purposes including general communication with the Company in relation to the
meeting or otherwise. Except as provided above, members who have general
queries about the Meeting should use the following means of communication (no
other method of communication will be accepted):
* calling the shareholder helpline, 0371 664 0300 or from overseas +44 371
664 0300;
* by email to shareholderenquiries@linkgroup.co.uk; or
* by writing to the registrar, Link Group, 10th Floor, Central Square, 29
Wellington Road, Leeds, LS1 4DL.
Documents on Display
Copies of this document and of the Articles of Association will be available
for inspection at the registered office of the Company during usual business
hours on any weekday (Saturdays, Sundays and public holidays excluded) from the
date of this document and at the place of the Meeting from at least 15 minutes
prior to, and until the conclusion of, the Meeting. A copy of this document,
and other information required by section 311A of the Act, can be found on the
investors section of the website at www.angleseymining.co.uk.
Issued shares and total voting rights
As at 7 September 2022 (being the latest practicable date prior to the
publication of this Notice) the issued share capital consisted of 280,675,721
ordinary shares with a nominal value 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 7 September
2022 are 280,675,721.
Irish, aged 71, is Chairman of Anglesey Mining plc, and
John F. several other public companies, including Labrador Iron Mines
Kearney 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 nomination and remuneration committees.
Jonathan (Jo) aged 52, Chief Executive, is a mining geology graduate from
Battershill Camborne School of Mines and has over 25 years of experience
from 21 August both in mining operations and in the finance sector,
2022 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. He subsequently worked in the mining
finance sector for 17 years until July 2021, primarily as an
Executive Director for UBS in Sydney/London and as Managing
Director for Canaccord in London. He has extensive knowledge
and connections within the mining finance industry, having
been part of globally top ranked mining ECM/Sales between 2008
and 2021. 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.
Mr Battershill is also non-executive director of AIM listed
Alien Metals Limited and ASX listed companies Silver Mines
Limited and Errawarra Resources Limited.
Bill Bill Hooley was a director until his untimely death on 7 June
Hooley 2022.
until 7 June aged 75, Deputy Chairman and previously Chief Executive until
2022 31 July 2021, was a mining engineering graduate from the Royal
School of Mines, London and had 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 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 was 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 had been a director
of a number of other companies involved in the minerals
industry and was a Fellow of the Australasian Institute of
Mining and Metallurgy.
Danesh aged 72, Finance Director and Company Secretary is a chartered
Varma 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.
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 aged 78, non-executive director, a lawyer with over 45 years'
Miller 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.
Andrew King aged 57, non-executive director appointed 20 December 2021.
From 20 December Andrew is a proven business leader with more than 30 years'
2022 experience in the mining, metals and banking sectors where his
management experience has encompassed strategic, financial and
operational oversight. He is currently Managing Director of
Scanmetals A/S, a specialist metal recycling business with
operations in Denmark, the UK and Germany. Prior thereto he
was Group Business Development Director at Amalgamated Metal
Corporation Plc. and for thirteen years Andrew held various
positions with Standard Bank including Head of Resource
Banking, Global Co-Head Investment Banking, and Chief
Executive Standard Bank Asia.
Earlier in his career he worked with BMO Nesbitt Burns and
Warrior International. Other directorships have included Avnel
Gold Mining Limited and Rame Energy plc. Andrew has a BSc in
Metallurgical Engineering from the University of the
Witwatersrand, South Africa and an MBA from the London
Business School.
He is a member of the audit and nomination committees.
Namrata Verma aged 42, non-executive director appointed 20 December 2021.
From 20 December Namrata Verma is an experienced corporate finance executive
2022 with strong credentials in advising metals and mining
companies with assets at the pre-feasibility and feasibility
stages on project bankability, growth strategies, funding
options, and financing execution.
She is the founder of Terrafranca Advisory, which was set up
in 2015 to provide independent debt financing advice to
early-stage and small and mid-cap mining companies and
investors. She has advised on bankability considerations, debt
structuring and arranging on numerous mining projects in
Europe and Africa.
Namrata previously had more than a decade of experience at
Standard Chartered Bank, in Asia and the UK, where she was a
director in the mining finance team focused on advising and
arranging project and structured debt financing, acquisition
financing and working capital funding for mining and metals
clients. Namrata holds a Bachelor of Engineering from Nanyang
Technological University, Singapore and an MBA from the London
Business School.
She is a member of the audit and remuneration committees.
About Anglesey Mining plc
Anglesey Mining is traded on the AIM market of the London Stock Exchange and
currently has 280,675,721 ordinary shares on issue.
Anglesey is developing its 100% owned Parys Mountain Cu-Zn-Pb-Ag-Au deposit in
North Wales, UK with a 2020 reported resource of 5.2 million tonnes at 4.3%
combined base metals in the Indicated category and 11.7 million tonnes at 2.8%
combined base metals in the Inferred category.
Anglesey holds an almost 20% interest in the Grangesberg Iron project in
Sweden, together with management rights and a right of first refusal to
increase its interest to 70%. Anglesey also holds 11% of Labrador Iron Mines
Holdings Limited, which through its 52% owned subsidiaries, is engaged in the
exploration and development of direct shipping iron ore deposits in Labrador
and Quebec.
For further information, please contact:
Anglesey Mining plc
Jo Battershill, Chief Executive - Tel: +44 (0)7540 366000
John Kearney, Chairman - Tel: +1 647 728 4106
Davy
Nominated Adviser & Joint Company Broker
Brian Garrahy / Lauren O'Sullivan - Tel: +353 1 679 6363
WH Ireland
Joint Corporate Broker
Katy Mitchell / Harry Ansell - Tel: +44 (0) 207 220 1666
Canaccord Genuity Limited
Joint Company Broker
James Asensio / Harry Rees - Tel: +44 (0) 20 7523 8000
Scout Advisory Limited
Investor Relations Consultant
Sean Wade - Tel: +44 (0) 7464 609025
LEI: 213800X8BO8EK2B4HQ71
END
(END) Dow Jones Newswires
September 08, 2022 02:00 ET (06:00 GMT)
Anglesey Mining (AQSE:AYM.GB)
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