Anglesey Mining plc
Annual Report 2020
A UK mining company listed on the London Stock Exchange
Projects:
100% of the Parys Mountain underground
zinc-copper-lead-silver-gold deposit in North Wales, UK where an updated Scoping Study
was completed in 2017. The results of this Study are positive and
further optimisation studies are is currently underway.
12% of Labrador Iron Mines Holdings Limited which holds direct
shipping iron ore deposits in Labrador and Quebec.
A 10.0% interest in, and management rights to, the Grangesberg
Iron project in Sweden, together
with a right of first refusal to increase its interest to
60.2%.
Chairman’s Statement
To Anglesey Shareholders
The most critical issue facing Anglesey Mining, and indeed every
other company in the world today, is Covid-19 which has impacted
everyone from a health, daily living and financial
perspective. Since Covid-19 was declared a pandemic by the
World Health Organization in March, the world has shifted
dramatically, with everyone having to adjust to a “new normal”, and
as I write this letter there is great uncertainty over the extent
and duration of the impacts Covid-19 may have on economic growth
and global financial markets.
The economic impacts of the Covid-19 pandemic initially had a
significant negative effect on demand for metals and on metal
prices. Metal prices, and by extension the level of investor
interest in the mining industry, impact Anglesey’s ability to
finance the Company’s various projects. However, the downturn had
been significantly reversed by the end of August and we are
witnessing a growing strength in the financing markets for mineral
projects and for mineral companies.
Amidst the ongoing pandemic, we still believe that the medium to
long term demand for metals is growing, especially as the world
transitions to a low-carbon electric economy, and the fundamental
outlook for all base metals, particularly for the metals that would
be mined at Parys Mountain, remains positive. We expect this
will be manifested once the inevitable economic stimulus measures
and government infrastructure spending kick in.
New UK Corporate Governance Code
In recent years there has been an increasing investor focus on
environment, social and governance. This is not something new in
Anglesey as we have always placed high importance on these areas.
What is perhaps new is formalizing and reporting on these matters
in greater detail. This year, we are reporting under the new UK
Corporate Governance Code published by the Financial Reporting
Council in 2018. The new Code is applicable to all companies
with a Premium Listing on the London Stock Exchange and although
Anglesey Mining is not included in the FTSE 350, and is considered
a “smaller company”, the new Code applies to Anglesey Mining
because of its Premium Listing status. Shareholders are encouraged
to read the detailed Report on Corporate Governance included later
in this Annual Report.
The Board of Anglesey Mining although infused with
entrepreneurial and pioneering spirit is very small, currently only
four members and we are seeking at least one and preferably two new
directors. The Directors believe that throughout the year, Anglesey
has, in general, complied with the spirit of the Principles of the
Code, to the extent such Principles are applicable in Anglesey’s
particular circumstances. However, as a company with limited active
operations and no employees, some of the Principles and many of the
Provisions are not applicable to the individual circumstances of
the Company.
The purpose of Anglesey Mining is simple to describe, it is to
develop, build and operate a producing mine at Parys Mountain, on
the island of Anglesey in North
Wales, to create value for shareholders in an
environmentally, socially, and ethically responsible manner for the
benefit of all stakeholders.
Parys Mountain – Moving steadily forward
In 2017 a new Scoping Study on the Parys Mountain
copper-lead-zinc project demonstrates a viable mine development and
a healthy financial rate of return based on copper prices of
$US2.50 per pound, zinc of
$US1.25 per pound and lead of
$US1.00 per pound, generating an
overall net smelter return of $US270
million with an IRR of 26% and an NPV10 of $US27 million.
In late 2018 Anglesey entered into a Project Development and
Cooperation Agreement with QME Mining Technical Services to carry
out an agreed programme of engineering and optimisation studies
relating to the future development of Parys Mountain. This
has been a major exercise that expanded as it progressed, as
described and discussed in detail in the Strategic Report included
later in this Annual Report.
The primary objective was to determine the optimum production
plan for Parys Mountain, but importantly to look at the opportunity
of including some or all of the previously identified inferred
resources in a revised and larger development plan that would
increase the projected life of the Parys Mountain mine, with
potential positive outcomes on the project economics.
As previously reported, QME identified the potential for
improvements in the development plans contained in the 2017 Micon
Scoping Study which was based on mining only the 2.1 million tonnes
of indicated resources reported by Micon in 2012. The QME work
suggests that that the project can be further improved if the
potential mineable tonnage can be increased by using a lower
cut-off grade, and that at a production cut-off of $48 per tonne, approximately 5.25 million tonnes
in situ within the designed stoping blocks would be available in
the White Rock and Upper Engine
Zones for inclusion in a detailed life-of-mine schedule. This
approach allows the unlocking of mineralised areas within the
footprint that were not previously modelled due to not meeting the
higher cut-off grades used in the Micon Scoping Study. These
5.25 million tonnes are substantially higher than the mineable
tonnage of 2.1 million tonnes used in the 2017 Scoping Study.
QME then reviewed all the inferred resources originally reported
by Micon in deposits other than White
Rock and Upper Engine Zones. These other zones, the Lower
Engine, Garth Daniel and Northern
Copper Zones, are located within an area approximately 1.3 km
east-west and 370 metres north-south and lie immediately to the
northeast of the White Rock and
Engine zones. This phase of the QME work has identified 5.5 million
tonnes of modelled inferred resources that could be considered for
inclusion in detailed mine design.
The third phase, which started in late 2019 and continued into
2020, involved developing mine production models based on these
enhanced tonnage projections at a range of annual production
scenarios that would be consistent with maintaining an optimised
life of mine.
The QME work concluded that using the lower cut-off block
models, there is an opportunity to develop a new mineable model for
either the White Rock and Upper
Engine zones alone, as per the Micon plan, or extending this to the
entire known resource zones, by re-defining the mining shapes and
the stoping plan, followed by a new development plan and
schedule.
Mining these enhanced tonnages will require an expansion of the
planned annual treatment rate of 1,000 tonnes per day used in the
Micon Scoping Study, potentially to 1,500 tonnes per day. To
optimise the mine life, and dependent upon the extent of inclusion
of the more distant zones, this rate could be increased in the
further expanded case of all zones to perhaps 3,000 tonnes per
day.
The Directors have long believed that the potential for the
Parys Mountain project is far greater than that developed from the
indicated resources only. QME’s work confirms the overall
prospectivity of the Parys Mountain project and the potential for
demonstrating five deposits or zones with combined resources in the
range of 10 million tonnes and that the projected mine life
could be extended from the Micon Scoping Study base case of 8
years through to a range of 12 to 18 years.
The Cooperation Agreement with QME has enabled the completion of
a substantial amount of further work on mine planning design and
project optimisation on Parys Mountain at no immediate cost to
Anglesey and at no dilution to Anglesey’s current shareholders. The
QME work has been of great benefit in establishing the parameters
for determining the optimum mine production model and we are
extremely appreciative of the work that QME has completed.
This work will form the basis for commissioning a new Preliminary
Economic Assessment, and subject to financing being available,
leading on to a Preliminary Feasibility Study.
We have recently completed a private placing that raised
£200,000 gross together with warrants that could raise an
additional £225,000 gross during the next 12 months. This
will be used to bring the optimisation study into a compliant basis
by incorporating the QME work into an updated Scoping Study or
Preliminary Economic Assessment, as well as for general corporate
purposes. We are very pleased with this financing, which represents
significant support for Anglesey Mining.
Grangesberg Iron
Following, a small investment in late 2019, the Group now holds
a direct 10.0% interest in and management rights to the Grangesberg
Iron project in Sweden about 200
kilometres north-west of Stockholm, together with a right of first
refusal to increase its interest to 60.2%. Until its closure
in 1989 due to then prevailing market conditions, the Grangesberg
mine had produced more than 150 million tonnes of iron ore.
A Technical Report prepared by Roscoe Postle Associates Inc in
2014 estimated a resource of 115.2 million tonnes at 40.2% Fe
in the indicated category and 33.1 million tonnes at 45.2% Fe
in the inferred category and concluded that the Grangesberg deposit
hosts a significant iron resource that has excellent potential for
expansion at depth.
The +67% Fe high-quality product expected to be produced from
Grangesberg, coupled with the previously announced reduced mine
life and the increased level of seismic activity at LKAB’s flagship
Kiruna project in northern Sweden,
which is Sweden’s largest iron ore producer, continues to make the
interest in developing the Grangesberg project more likely and more
attractive than many other undeveloped iron ore projects in
Europe.
The price of iron ore increased almost 21% in 2020, and outpaced
gold to rank as the best-performing major commodity in the first
half of the year. Demand for high-quality iron ore remains strong,
mainly driven by solid demand from China's steel mills despite COVID-19
impacts.
Labrador Iron
The Group holds a 12% interest in Labrador Iron Mines Holdings
Limited (LIM) which owns extensive iron ore resources in its
Schefferville Projects in Labrador
and in Quebec, Canada. LIM has not
undertaken mining operations since 2013 but maintains its iron ore
assets on a stand-by care and maintenance basis. Subject to
securing financing, LIM plans to resume mining operations when
economic conditions warrant.
Outlook
The drive towards the sustainable development goals of greater
renewable energy (wind, hydro, solar) and carbon neutrality in the
world’s economies is expected to result in sustained demand for
metals and minerals over the coming decades because the
infrastructure necessary to deliver on these goals is very metal
intensive.
Development of a new mine at Parys Mountain can deliver economic
growth in the UK and regional jobs and business opportunities for
local service providers. The minerals that would be mined at Parys
Mountain are those that are necessary for the modern world, copper
in electronics, zinc in medicine, and even much maligned lead is
required for large electric battery storage. None of these
important and essential metals is currently produced in the UK,
making the country entirely dependent on imports. Equally important
is that with current precious metal prices, the value of gold and
silver to be produced at Parys Mountain would represent
approximately 25% of the total revenue stream.
We believe that following completion of the QME exercise, it
will be possible to positively report a total compliant resource
figure somewhere around 10 million tonnes at Parys Mountain.
On that basis the mine plan, including both the annual production
rates and life of mine, would be significantly enhanced.
Importantly we believe that financial results flowing from such a
revised plan would achieve our goal of significantly enhancing the
project economics indicated by the 2017 Scoping Study.
We plan to bring all of the QME work into a compliant basis by
incorporating its work into an updated Scoping Study or Preliminary
Economic Analysis as appropriate. We would expect this will be
followed, as soon as practicable and subject to funding, with a
Pre-Feasibility or full Feasibility study to enable production
financing to be achieved.
This work is very important to Anglesey and is likely to
transform the development prospects of Parys Mountain into a
project that should attract keen interest amongst financiers, metal
traders, smelters and particularly other and larger mining
companies.
We will continue to examine development opportunities for our
iron ore projects as the medium-term outlook for iron ore,
particularly for the higher quality concentrates, is positive. We
will also continue to seek out new properties suitable for
development that would be complementary to or provide synergies
with the Group’s existing projects within the financing capability
likely to be available to the Company. The Directors have
identified copper and other VMS projects, and gold or precious
metals, as the most potentially attractive and we continue to
evaluate a number of early stage opportunities.
Once again, I would like to record my appreciation of the
current directors for their continuing support in moving the Parys
Mountain mine project forward and also thank all our shareholders
for their continued interest in Anglesey Mining.
John F. Kearney
Chairman
25 September 2020
Strategic Report – operations
Principal activities and business review
Anglesey Mining is engaged primarily in exploring and developing
its wholly owned Parys Mountain zinc, lead, copper project in
North Wales. Anglesey’s purpose is
the development of a producing mine at Parys Mountain to create
value for shareholders in an environmentally, socially, and
ethically responsible manner for the benefit of all stakeholders.
In 2017 a new Scoping Study demonstrated a viable mine development
and a healthy financial rate of return. The purpose and objectives
of the Group are discussed in the Report on Corporate Governance
included as part of this Annual Report. The strategy of the Group
is to systematically and sequentially advance the development of a
mine at Parys Mountain by completing exploration to outline mineral
resources, completing technical and economic studies to assess
financial viability, completing feasibility studies to demonstrate
technical and financial viability and use those studies to attract
investment and raise the necessary capital to build and operate the
mine.
In late 2018 Anglesey entered into a Project Development and
Co-operation Agreement with QME Mining Technical Services, a
division of QME Limited, an Irish contracting and consulting group,
to carry out an agreed programme of engineering and optimisation
studies relating to the future development of Parys Mountain. As
discussed in more detail below this has been a major exercise that
expanded as it progressed and is now nearing completion. Site
activities at Parys Mountain during the year have continued to be
limited to care and maintenance.
In addition, under various agreements, the Group participates in
the management of the Grangesberg iron ore property in Sweden in which it increased its holding
during the year to 10%, and a right of first refusal to acquire a
further 50% ownership interest. The Group also has a 12% holding in
the Labrador Iron Mines in eastern Canada, currently operating in care and
maintenance, and from time to time continues to look at other
potential projects that may be beneficial or synergistic to its
development.
The Group’s business model remains to phase the development and
financing of the Parys Mountain project by undertaking various
studies, completing a prefeasibility or feasibility study and
progressing the Parys Mountain Mine towards production.
Parys Mountain copper zinc lead project
The Parys Mountain property hosts a significant polymetallic
zinc, copper, lead, silver and gold deposit. The site has a head
frame, a 300m deep production shaft
and planning permission for operations. The Group has freehold
ownership of the minerals and surface land. Infrastructure is good,
political risk is low and the project enjoys the support of local
people and government.
An independent JORC resource estimate completed in 2012 by Micon
International Limited reported a resource of 2.1 million tonnes in
the indicated category at 6.9% combined base metals and 4.1 million
tonnes at 5.0% combined base metals in the inferred category, with
substantial exploration potential. These resource estimates were
made at a cut-off of $80 per tonne
Gross Metal Product Value (“GMPV”).
In July 2017 a Scoping Study was
prepared by Micon International Limited and Fairport Engineering
Ltd. using the 2012 resource estimate. The Scoping Study
demonstrates a viable mine development mining 1,000 tonnes per day
to produce lead, zinc and copper concentrates and yielding a
healthy financial rate of return. The Scoping Study applied the
same GMPV cut-off of $80 per tonne,
used in the 2012 resource estimate.
Development Plan – 2017 Scoping Study
A new mining plan was prepared as part of the 2017 Scoping Study
based on a surface decline to access the White Rock zone on which Anglesey Mining
carried out a detailed drilling programme during the period
2006-2010. The White Rock zone
which extends to surface lies adjacent to the existing 300m Morris Shaft and largely overlies the deeper
Engine Zone deposits.
The Scoping Study proposed that a decline would be developed by
mining contractors and would be used as the initial means of access
to the resource for development and mining. During the initial
production phase from the White
Rock zone the decline would continue to be driven to reach
the current bottom of the Morris Shaft and beyond. The shaft would
then be dewatered and deepened by approximately 150 metres and
recommissioned as a hoisting shaft for the remnant White Rock ore and for the deeper and more
valuable Engine Zone ore. Mining would be carried out initially
from the main decline using rubber-tyred equipment including drill
jumbos, load-haul-dump machines and trucks to remove development
waste to surface and production ore to the planned adjacent
processing plant. The existing hoist and headframe would be
refurbished and used to bring ore to the surface for delivery to
the processing plant through the deepened shaft.
Scoping Study Results
The 2017 Scoping Study concluded that the selected development
option for Parys Mountain for the extraction of the 2.1 million
tonnes of indicated resource was a 1,000 tonnes per day mine and
that this would result in a mine life of approximately eight years,
based only on the indicated resources.
The processing plant proposed in the 2017 Scoping Study
consisted of the DMS component leading to crushing and grinding
followed by conventional three stage flotation to produce copper,
zinc and lead concentrates to be shipped to smelters in
Europe. Metallurgical performance
and recovery was based on the large volume of information available
from test work on Parys Mountain ores over the years.
The pre-production capital cost of the base case, including
mining, DMS, concentrator and infrastructure was estimated at
$56 million, including a $4 million contingency. Operating costs were
developed by Micon and Fairport based on knowledge and experience
which at the higher levels of production were forecast at around
$47 per tonne of ore treated.
This base case yields a pre-tax net present value of
$27 million, or £22 million, at a 10%
discount rate, using metal prices of $1.25 per pound for zinc, $1.00 per pound for lead, $2.50 per pound for copper, $17.50 per ounce for silver and $1,275 per ounce for gold and at an exchange rate
of £1.00 = $US1.25. The indicated
internal rate of return was 26%.
Anglesey Mining considers the 2017 study to be well founded and
shows a healthy financial return. Nevertheless, the Directors
recognised that alternative development scenarios may yield better
results and concluded that these should be investigated to enhance
future project economics and financing possibilities.
Project Development Agreement with QME
In late 2018 Anglesey entered into a Project Development and
Cooperation Agreement with QME Mining Technical Services, a
division of QME Limited, to carry out an agreed programme of
engineering and optimisation studies relating to the future
development of Parys Mountain. QME Limited is based in Navan, County Meath,
Ireland from which it operates several divisions and
provides a wide range of services in both mine development and mine
operations to the local and international mining community.
QME has carried out both large and small-scale underground mine
development contracts, providing all technical evaluation and
budgeting services, personnel, management, equipment and
maintenance. QME Mining Technical Services division undertakes
contract mining projects and employs an ‘in-house’ team of highly
experienced operations managers, underground supervisors, miners,
fitters and electricians.
Under the Development and Co-operation Agreement with QME, the
Group has agreed to grant QME various rights and options relating
to the future development of Parys Mountain on completion of the
optimisation study and delivery to the Company of the results
thereof. These are:
- Anglesey will award QME, on an exclusive basis, contracts for
the development of the decline and underground mine development,
including rehabilitation of the shaft. This will be done on terms
to be agreed following a decision by AYM to proceed with the
development of Parys Mountain.
- In the event Anglesey and QME are not able to agree terms
Anglesey may offer such contracts to third parties, subject to a
right of first refusal in favour of QME, and subject to a payment
by Anglesey to QME, upon the award of such contracts to a
third-party, of a break-fee; and
- In addition, Anglesey will grant to QME the right and option,
upon completion of a Prefeasibility Study (“PFS”), to undertake at
QME’s cost and investment, the mine development component of the
Parys Mountain project, including decline and related underground
development and shaft development, with a scope to be agreed, to
the point of commencement of production, in consideration of which
QME would earn a 30% undivided joint venture interest in the Parys
Mountain project.
QME Optimization Studies - Progress
The QME work initially reviewed capital and operating cost
forecasts but importantly looked at the opportunity of including
some or all of the inferred resources previously identified on the
site in a revised and larger development plan. As QME progressed
with this work programme, a number of alternative scenarios were
identified, and examination of these alternatives expanded the
scope of the QME work. This has extended the period of final
completion of their work, but this is now in the final stages.
QME conducted three major phases of work.
Phase 1 - Capital and Operating Cost Review
The first phase was a detailed review of mine capital and
operating costs as these would be applicable at Parys Mountain. QME
carried out this phase using their extensive experience in mine
development. The main conclusion, as previously reported, was that
an operating cost of approximately $48 per tonne treated was fair and reasonable.
This approach of using lower operating cost assumptions,
benchmarked against QME’s of other underground operations enabled
the application of lower cut-off grades for mine planning of and
this figure was then adopted as the on-going cut-off value for mine
planning purposes.
As a subset of this first phase, and as reported last year, QME
reviewed some alternative means of access to the initial orebodies
including early access via the Morris Shaft, rather than through
the new decline as planned by Micon. On balance that work indicated
that the decline remained the preferred means of initial access and
as such the basic Micon mine development plan continued to be
followed.
Phase 2 - Mine Planning
The second phase was to carry out detailed mine planning
incorporating all the mineralised material available, as identified
by Micon in its 2012 resource estimate, to determine an expanded
tonnage and grade estimate available for mining. This work was
carried out using the $48 per tonne
cut-off noted above. In this phase QME included not just the
indicated resources but also the inferred resources, and this
expanded resource included not just the White Rock and Upper Engine zones, on which
the 2017 Scoping study was based, but also additional zones,
including the Lower Engine Zone as well as the more distant
Garth Daniel and Northern Copper
zones. QME developed potential mineable tonnages for each of the
zones including all possible resource categories.
The QME work suggests that at a production cut-off of
$48 per tonne, approximately 5.25
million tonnes in situ within the designed stoping blocks would be
available within the White Rock
and Upper Engine Zones for consideration in a detailed life-of-mine
schedule. This 5.25 million tonnes is substantially higher than the
mineable tonnage of 2.1 million tonnes used in the 2017 Scoping
Study. It is important to note that QME made no changes to the
underlying resource estimates which were calculated by Micon in
2012.
QME then reviewed all of the inferred resources originally
reported by Micon in deposits other than White Rock and Upper Engine zones. These other
zones are the Lower Engine, Garth
Daniel and Northern Copper zones. These zones are located
within an area of approximately 1.3 km east-west and 370 metres
north-south and lie immediately to the northeast of the
White Rock and Engine zones, at
depths from 180 metres to 620 metres below surface, which is
roughly consistent with, although a little deeper than, the
indicated resources in the Upper Engine Zone.
The QME work identified 5.5 million tonnes of modelled inferred
resources that could be considered for inclusion in detailed mine
design. This is in addition to the 5.25 million tonnes within the
White Rock and Upper Engine Zones.
This 5.5 million tonnes of modelled inferred resources is defined
as the sum of the mining-scale units associated with the Lower
Engine Zone, the Garth Daniel Zone and the Northern Copper Zone,
above a cut-off of $48 per tonne,
with no mining factors applied. These zones represent 35% of the
global inferred resource, which had been previously estimated by
Micon at 15.6 million tonnes at $0
cut-off. It should be noted that the cut-off used of $48 per tonne has been derived from the
break-even point estimated for the White
Rock and Upper Engine zones and therefore is an iterative
estimate only at this stage which has to be confirmed as
applicable to these other zones.
Phase 3 - Production Planning and Scheduling
The third phase, which started in late 2019 and continued into
2020, involved developing mine production models based on these
enhanced tonnage projections at a range of annual production
scenarios that would be consistent with maintaining an optimised
life of mine for the increased total minable volumes.
The capital and operating cost estimates developed earlier were
then applied to these production models to measure their relative
financial outcomes compared to the original Micon Scoping Study
base model. These financial models included not just QME’s detailed
operating cost estimates, generated on a work unit by work unit
basis, but also included capital costs both pre-production and
ongoing through production. As these new cases were developed the
outputs were compared to the Scoping Study base case using various
metrics including capital cost, payback period, life of mine, NPV
and IRR. In reviewing the outcomes from these models, it is
apparent that some of the alternatives, particularly those
associated with an extended mine life at the same 1,000 tonnes per
day production rate, do not compare favourably with the Scoping
Study base case model. Nevertheless, the financial models suggested
that some of the options where annual throughput is increased, and
where the majority of the available resources across all zones are
included, could generate particularly encouraging results. This
third phase is nearing but not yet at final completion.
As an addition during the third phase, QME looked at the
potential of incorporating an initial small open pit operation on
the near surface upper sections of the White Rock zone ahead of underground mining.
The proposed open cut add-on would appear to be financially
beneficial and would provide some cushion to the underground
development programme. The adoption of an open pit into the final
development plan will have to be considered cognisant of current
infrastructure and the likely requirement to seek additional
planning permissions.
Results from QME programmes
The Group considers the QME work to be of great benefit in
establishing the parameters for determining the optimum mine
production model. The capital cost estimates have given support,
with a number of adjustments as necessary, to the estimates made by
Micon and Fairport previously. This ‘second set of eyes’ confirms
the previous view that Parys Mountain remains a relatively low
initial capital cost project. The operating cost review again
confirms, with some minor amendments, that the operating costs
generated in 2017 remain generally in line. The benefit of this is
that it permits a critical review of the cut-off grade to be
utilised in the production planning exercise. To the extent that
this suggests a lower cut-off would be justifiable, in significant
part, enables a greater tonnage to be made available for mining
than would otherwise not be included. The corollary to this is of
course, that the grade of material mined will be lower than with
the prior cut-off grade with the consequent reduction in Net
Smelter Return (NSR) per tonne of ore mined and treated. The
trade-off balance between lower grade and increased tonnage will
need to be evaluated as part of Pre-Feasibility or Full Feasibility
Study.
Increased tonnages available for mining
The Company has long believed that the potential for the Parys
Mountain project was far greater than that developed from the
indicated resources only. It is Anglesey’s opinion that the
potentially mineable mineralisation that has been identified by
QME’s work confirms the overall prospectively of the Parys Mountain
project and of the potential for demonstrating five deposits or
zones with combined resources in the range of 10 million
tonnes.
Whilst the inclusion of inferred material does not meet the
strict criteria for inclusion into reserve definitions under the
applicable codes, and as generally accepted for feasibility studies
by banks for loan evaluation purposes, it is believed that the QME
exercise does give good guidance for future development planning
purposes. It should be noted that the QME work has not been signed
off by a Competent Person, as defined, and as such, specific
financial forecasts arising from it must remain internal to the
Group for the time being.
The inferred resources are targets for future definition
drilling and there is no guarantee that future infill drilling will
result in the deposits being delineated as mineable resources. To
bring some if not all of this additional material to a compliant
level will require significant additional exploration, to be
followed by analysis and calculations by a certified Competent
Person. Some of that work can be carried out by surface diamond
drilling but would be more efficiently achieved by drilling from
underground locations sited closer to the target blocks.
Longer Mine Life
Using the lower cut-off QME block models, there is an
opportunity to develop a new mineable model for either the
White Rock and Upper Engine zones
alone as per the Micon plan, or extending this to the entire known
resource zones by re-defining the mining shapes and the stoping
plan, followed by a new development plan and schedule. These will
require an expansion of the planned annual treatment rate of 1,000
tonnes per day used in the Micon Scoping Study model, potentially
to 1,500 tonnes per day, particularly as the total available
tonnage increases. To optimise the mine life and dependent upon the
extent of inclusion of the more distant zones, this rate could be
increased in the further expanded case of all zones to perhaps
3,000 tonnes per day. The projected mine life could then extend
from the Scoping Study base case 8 years through to a range of 12
to 18 years.
Summary and Future Steps
The Directors believe that following completion of the QME
exercise, it will be possible to positively report a total
compliant resource figure somewhere around 10 million tonnes.
From this the mine plan including annual production rates and life
of mine would be significantly enhanced. Importantly we believe
that financial results flowing from such a plan would achieve our
goal of significantly enhancing the project economics indicated by
the Scoping Study Base Case.
As indicated, QME also reviewed all the capital costs associated
with the various alternative scenarios. This work was based on
their particular experience in mine construction together with some
estimates of additional infrastructure and processing capital cost
associated with increased annual production above the 2017
estimates. While these estimates will require more detailed review,
the Directors feel comfortable that even at the higher level
associated with largest tonnage mined, the forecast costs to put
Parys Mountain into production remain at a level that should be
able to be financed under normal commercial conditions.
We plan to bring all of the QME work into a compliant basis by
incorporating this into an updated Scoping Study or Preliminary
Economic Analysis as appropriate. This work will be carried out by
Competent Persons and we look forward to achieving this during the
current financial year. Once that work is complete, we will be able
to publicly report more fully on the financial and other metrics
that make up this exciting project. This will be followed as soon
as practicable, and subject to funding, with a Pre-Feasibility or
full Feasibility study to enable production financing to be
achieved.
All of this work, even though it has taken somewhat longer to
bring to conclusion than originally anticipated largely due to the
expanded scope that the ongoing encouraging results dictated, is
very important for Anglesey. The significantly higher
tonnages of material that would be available from mining beyond
that utilised in the Micon Scoping Study will bring a major change
to the way in which the project progresses and to the manner in
which the Company is viewed in the marketplace.
Grangesberg Iron AB
The Grangesberg iron ore project is situated in the mineral rich
Bergslagen district of central Sweden about 200 kilometres north-west of
Stockholm. Until its closure in
1989 due to prevailing market conditions, the Grangesberg mine had
produced in excess of 150 million tonnes of iron ore.
At 31 March 2020 following a small
investment in late 2019, the Group holds a direct 10.0% interest in
Grangesberg Iron AB (GIAB) and a right of first refusal over 50.1%
of the share capital of GIAB. This right has been granted in
exchange for the Group continuing to co-manage GIAB on a cost
recovery basis. The Group also has shareholder and cooperation
agreements such that it holds operatorship of GIAB subject to
certain conditions and appoints three out of five directors to the
board of GIAB.
GIAB is a private Swedish company founded in 2007 which in 2014
completed (with assistance from the Group) a financial and capital
restructuring. GIAB holds a 25-year exploitation permit covering
the previously mined Grangesberg underground mining operations
granted by the Swedish Mining Inspectorate in May 2013.
In September 2014 an NI 43-101
Technical Report was prepared by Roscoe Postle Associates Inc
showing a resource estimate for the Grangesberg Mine of 115.2
million tonnes at 40.2% Fe in the indicated category and 33.1
million tonnes at 45.2% Fe in the inferred category. RPA concluded
that the Grängesberg iron ore deposit hosts a significant iron
resource that has excellent potential for expansion at depth.
The average price for the Platts index for 65% Fe, CFR China
("65% Fe index") increased 16% to US$104 per tonne in 2019 compared to the average
price in 2018 of US$90 per tonne.
Demand for the high-quality iron ores remained strong in the first
half of 2020, mainly driven by a combination of seaborne iron ore
supply disruptions and solid demand from China's steel mills despite Covid-19 impacts.
The average price for the Platts index for 65% Fe index increased
9% to US$104 per tonne in the first
quarter of 2020 compared to the average price in the first quarter
of 2019 of US$95 per tonne. This rise
is continuing into the third quarter of 2020 and currently spot 65%
Fe is quoted at $US126 CFR Qingdao.
Beyond 2020, it is expected that prices may retreat as supplies are
restored, though a significant global economic recovery expected in
2021 should create a supportive price floor for iron ore.
The +67% Fe high-quality product expected to be produced from
Grangesberg, coupled with the previously announced reduced mine
life and the increased level of seismic activity at LKAB’s flagship
Kiruna project in northern Sweden,
which is Sweden’s largest iron ore producer, continues to make the
interest in developing the Grangesberg project, albeit at
significant capital cost, more likely and will make Grangesberg
more attractive than many other undeveloped iron ore projects.
Labrador Iron
The Group continues an investment holding of 12% (2019 -12%) in
Labrador Iron Mines Holdings Limited. LIM owns extensive iron ore
resources in its exploration properties in Labrador and in Quebec, Canada, one of the major iron ore
producing regions in the world.
LIM holds measured and indicated DSO mineral resources of
approximately 55 million tonnes at an average grade of 56.8% Fe and
inferred resources of 5.0 million tonnes at an average grade of
55.6% Fe on its Schefferville Projects. In addition, LIM holds the
Elizabeth Taconite Project, which has an inferred mineral resource
estimate (as at June 15, 2013) of 620
million tonnes at an average grade of 31.8% Fe.
In the three-year period of 2011 to 2013 LIM produced a total of
3.6 million dry metric tonnes of iron ore, all of which was sold in
23 cape-size shipments into the China spot market. LIM has not undertaken
mining operations since 2013, primarily due to the low iron ore
price environment, but maintains its properties on a stand-by care
and maintenance basis and, subject to securing financing, is
positioned to resume mining operations as soon as economic
conditions warrant.
Other activities
The Directors continue to seek out new properties suitable for
development that would be complementary to or provide synergies
with the Group’s existing projects within the financing capability
likely to be available to the Group. The Directors have identified
copper and other VMS projects, and gold or precious metals, as the
most potentially attractive and the Group continues to evaluate a
number of early stage opportunities.
Performance
The Group holds interests in exploration and evaluation
properties and, until economically recoverable reserves can be
identified, there are no standardised performance indicators which
can usefully be employed to gauge the performance of the Group,
other than the market price of the Company’s shares.
The chief external factors affecting the ability of the Group to
move forward are primarily the demand for metals and minerals,
levels of metal prices and exchange rates and the market sentiment
for investment in mining and mineral exploration companies. These
and other factors are dealt with in the risks and uncertainties
section below.
Section 172 Statement
The Directors, both individually and collectively, believe, in
good faith, that throughout the year 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 Directors, both individually and collectively, believe, in
good faith, that throughout the year at each and every meeting of
the Board, and management when making every key decision, they have
acted to promote the success of the Company for the benefit of its
members as a whole, as required by Section 172, having regard to
the interests of stakeholders and the other matters set out in
Section 172(1) of the Act.
The Board recognises the importance of open and transparent
communication with shareholders and with all stakeholders,
including landowners, communities, and regional and national
authorities. We seek to maximise the industry’s benefits to host
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. Further information is available on the
Company’s website.
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 the Strategic Report. The Board is committed to the
long-term goal of the development of the Parys Mountain Project and
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. The
Directors always consider the likely consequences of any decision
in the long-term that may affect the Group, including key
competitive trends, supply and demand of metals, potential impact
on the environment and climate change considerations.
Having regard to the need to foster the Company’s business
relationships with others
The Company operates as a mineral exploration and development
business, without any regular income and is entirely dependent upon
new investment from the financial markets for its continued
operation. The Board values the benefits of maintaining strong
relationships with key partners, contractors and consultants. This
is discussed in more detail elsewhere in this Strategic Report. As
a mine development company, the Board understands that a range of
third parties- regulators, contractors, suppliers, and potential
customers for the concentrates that would be produced from a mine
at Parys Mountain, are relevant to the sustainability of the
Company business. .
Having regard to the interests of the Company’s employees
The Group currently has no full-time employees and is managed by
its directors and a small number of associates and sub-contract
staff. The Board takes steps to ensure that the suggestions, views
and interests of the Company’s personnel are considered in
decision-making.
Having regard to the desirability of the Company maintaining a
reputation for high standards of business conduct
The Board is committed to high standards of corporate
governance, integrity, and social responsibility and to managing
the Company in an honest and ethical manner, as further discussed
in the Corporate Governance Report. The Directors strive to apply
ethical business practices and conduct themselves in a responsible
and transparent manner with the goal of ensuring that Anglesey
Mining plc maintains a reputation for high standards of business
conduct and good governance.
Having regard to the impact of the Company’s operations on the
community and the environment
The Board takes a broad range of stakeholder considerations into
account when making decisions and gives careful consideration any
potential impacts on the local community and the environment.
The Board strives to maintain good relations with the local
community, especially with local businesses in North Wales. For example, in reviewing various
alternative options of the possible expansion of planned mining
operations at Parys Mountain as part of the QME optimisation
studies, the Board considered the impact of such possible expansion
on the local footprint of the property, the potential environmental
impact, the number of employees and the impact on local communities
and businesses. The Corporate Governance Report discusses how the
Directors engage with and have had regard to the community in which
the Group operates. Further discussion of these activities
can be found in the 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 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 effectively manage issues of concern to
society.
Having regard to the need to act fairly as between members of
the Company
The Company has only one class of share in issue and all
shareholders benefit from the same rights, as set out in the
Articles of Association and as required by the Companies Act 2006.
Since 1996 a Controlling Shareholder Agreement has been in place
with Juno Limited, the largest shareholder, which provides that
Anglesey will maintain an independent board and any transactions
between Juno and Anglesey will be at an arm’s length basis.
The Board recognises its legal and regulatory duties and does
not take any decisions or actions, such as selectively disclosing
confidential or inside information, that would provide any
shareholder with any unfair advantage or position compared to the
shareholders as a whole.
Financial results and position
The Group has no revenues from the operation of its properties.
The loss for the year ended 31 March
2020 after tax was £304,510 compared to a loss of £234,621
in the 2019 fiscal year. The administrative and other costs
excluding investment income and finance charges were £134,796
compared to £75,538 in the previous year.
During the year there were no additions to fixed assets (2019 -
nil) and £49,835 (2019 - £54,747) was capitalised in respect of the
Parys Mountain property as mineral property exploration and
evaluation.
At 31 March 2020 the Group held
mineral property exploration and evaluation assets with a carrying
value of £15.2 million. These carrying values are supported by the
results of the 2017 Scoping Study and subsequent further work and
may not reflect the realizable value of the properties if they were
offered for sale at this time.
At the reporting date, the directors assessed 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
following matters among others: (i) that the Group has freehold
title to its mineral resources; (ii) is planning and carrying out
their development, which has recently resulted in favourable
indications of increased mineral tonnages being available; and
(iii) their confidence in the financial benefits of the Parys
Mountain project. They also considered that the effect of Covid-19
on these plans and estimations, if any, was likely to be short term
relative to the life of the project. Consequently the Directors
concluded that any facts and circumstances which might trigger an
impairment review have not materially changed during the year and
that there are no indicators of impairment.
The Group’s cash balance at 31 March
2020 was £95,311 (2019 - £6,012) the increase being due to a
loan of £100,000 received from Juno Limited in April 2019 and a placement for cash of new shares
in May 2019 resulting in an inflow
after fees of £180,000.
Subsequent to the period end, on 24
August 2020 the Company made a private placing of 12,500,000
new ordinary shares at 1.6 pence per
share, to raise a total of £200,000 gross, together with 12,500,000
warrants with a term of 12 months to subscribe for new ordinary
shares at an exercise price of 1.8p per share that if exercised
could raise an additional £225,000. This will be used for work on
the Parys Mountain project, as well as for general corporate
purposes.
At 31 March 2020 there were
186,975,732 ordinary shares in issue (2019 - 177,608,051), the
increase being due to the placing in April
2019. At 25 September 2020
there were 199,475,732 ordinary shares in issue following the
placing on 24 August 2020.
The Group’s use of financial instruments is described in note
23.
Employment, community and donations
The Group is an equal opportunity employer in all respects and
aims for high standards from and for its employees. At 31 March 2020 the Company had four male directors
who were the only employees; there were no female directors. It
also aims to be a valued and responsible member of the communities
that it operates in or affects. The Group’s policies on these
matters is further discussed in the Report on Corporate Governance.
There are no social, community or human rights issues which require
the provision of further information in this report.
Environment and greenhouse gas emissions
The Group currently has no operations and consequently its
effect on the environment is very slight, being limited to the
usage of two small offices, where recycling and energy usage
minimisation are encouraged. The Group does not itself undertake
any activities or processes which lead to the production of
greenhouse gases. The extent to which its administrative and
management functions result in greenhouse gas emissions is
impracticable to estimate and in any event less than the amount
reportable under the Energy and Carbon Regulations 2018.
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 facing the Group 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.
The global spread of the contagious coronavirus disease, causing
the outbreak of Covid-19 respiratory illness was declared a
pandemic by the World Health Organization on March 11, 2020. The Covid-19 pandemic has
adversely affected the economies and financial markets of many
countries, resulting in an economic and financial downturn that is
presenting unprecedented challenges to individual health,
communities, jobs, businesses and economies, and specifically to
public companies, shareholders and investors. Although the pandemic
has no direct impact on the Parys Mountain property and is not
expected to affect its ongoing exploration and development, the
Group relies on equity financing to generate additional financial
resources to fund its working capital requirements and to fund its
planned programmes. The pandemic has adversely affected financial
markets and investor interest in public companies that could affect
the Group’s ability to finance its operations. The Group cannot
predict the impact of Covid-19, including uncertainties relating to
the duration of the outbreak, and the length of travel and
quarantine restrictions imposed by governments.
In reviewing the risks facing the Group, the Board considers it
is sufficiently close to the Group’s operations and aware of its
activities to be able to adequately monitor risk without the
establishment of any formal process. The Group may become subject
to risks against which it cannot insure or against which it may
elect not to insure because of high premium costs or other reasons.
However, there are also risks and uncertainties of a nature common
to all mineral projects and these are summarised below.
General mining risks
Actual results relating to, amongst other things, mineral
reserves, mineral resources, results of exploration, capital costs,
mining production costs and reclamation and post closure costs,
could differ materially from those currently anticipated by reason
of factors such as changes in general economic conditions and
conditions in the financial markets, changes in demand and prices
for minerals that the Group expects to produce, legislative,
environmental and other judicial, regulatory, political and
competitive developments in areas in which the Group operates,
technological and operational difficulties encountered in
connection with the Group’s activities, labour relations, costs and
changing foreign exchange rates and other matters.
The mining industry is competitive in all of its phases. There
is competition within the mining industry for the discovery and
acquisition of properties considered to have commercial potential.
The Group faces competition from other mining companies in
connection with the acquisition 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.
Development and liquidity risk
The going concern risk is discussed in detail in the Directors
report. The Group has relied on equity financing to fund its
working capital requirements and will need to generate additional
financial resources to fund future planned exploration
programmes.
On previous occasions and during the year the Group has relied
upon its largest shareholder, Juno Limited, for financial support
and may be required to do so in the future to ensure the Group will
have adequate funds for its current activities. In the absence of
support from Juno Limited the Group would be dependent on the
proceeds of share issues or other sources of funding. Developing
the Parys project will be dependent on raising further funds from
various sources.
There is no assurance that the Group will continue to obtain
additional financial resources and/or achieve positive cash flows
or profitability.
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.
Metal prices
The prices of metals fluctuate widely and are affected by many
factors outside the Group’s control. The relative prices of metals
and future expectations for such prices have a significant impact
on the market sentiment for investment in mining and mineral
exploration companies. Metal price fluctuations may be either
exacerbated or mitigated by currency fluctuations which affect the
amount which might be received by the Group in sterling.
Foreign exchange
LIM is a Canadian company; Angmag AB and GIAB are Swedish
companies. Accordingly, the value of the Group’s holdings in these
companies is affected by exchange rate risks. Operations at Parys
Mountain are in the UK and exchange rate risks are minor. Most of
the cash balance at the year-end was held in sterling – see notes
17 and 24.
Permitting, environment, climate change and social
The Group holds planning permissions for the development of the
Parys Mountain property, but further environmental studies and
assessments and various approvals and consents will be required to
carry out proposed activities and these may be subject to various
operational conditions and reclamation requirements.
Employee and personnel
The Group is dependent on the services of a small number of key
executives specifically the chairman, chief executive and finance
director. The loss of these persons or the Group’s inability to
attract and retain additional highly skilled and experienced
employees for any areas in which the Group might engage may
adversely affect its business or future operations. A discussion on
the composition and assessment of the Board of Directors is
included in the Report on Corporate Governance.
Brexit
The Directors believe that the effect on the specific operations
of the Group of the UK leaving the European Union is unlikely to be
material and the resultant expected focus on domestic investment in
the UK may be beneficial to the Group’s Parys Mountain Project.
Covid-19
The Chairman’s statement refers to the effects of the widespread
global outbreak of respiratory illness caused by Covid-19. The
Company cannot accurately predict the impact Covid-19 will have on
its operations, including uncertainties relating to the severity of
the disease, the duration of the outbreak, and the length of travel
and quarantine restrictions imposed by governments. In addition,
Covid-19 has resulted in a widespread health crisis that has
adversely affect economies and financial markets that could further
affect the Company’s ability to finance its operations.
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 get any worse
and passes over in the next two to three years. The project is not
currently in production, so Covid-19 does not impact current
operations.
Although the pandemic has no direct impact on the Parys Mountain
property and is not expected to affect its ongoing exploration and
development, the Company relies on equity financing to generate
additional financial resources to fund its working capital
requirements and to fund the planned programmes.
Initially, the pandemic adversely affected financial markets and
investor interest and initially, the economic impacts of the
pandemic also had a significant negative effect on demand for
metals and on metal prices. Metal prices, and by extension the
level of investor interest in the mining industry, impact
Anglesey’s ability to finance its projects. Paradoxically, in the
face of Covid-19, the fundamental medium to long term outlook for
all base metals, particularly in the time frame and for the metals
that would be mined at Parys Mountain, is very positive.
Company Prospects
The Directors recognise that the company does not have any sales
or generate any revenue and that the continuing operations of the
Group are entirely dependent upon its ability to raise adequate
financing. The Company 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.
Looking to the period beyond the twelve months covered by
current cash resources, the Directors rely upon this experience and
particularly upon the potential of the mineral assets on which the
Company is 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 cost
of maintenance and operation of the Company will not change, that
the Company does not have any unrecognised liabilities that will
become due and their experience of being able to raise additional
investment as and when required over the last 30 years.
Nevertheless, there is a risk that 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.
Based on the optimisation work completed by QME as described
above, the Directors are confident that a revised mine plan,
to be confirmed by a Preliminary Economic Assessment, is likely to
transform the development prospects of Parys Mountain into a
project that should attract keen interest amongst financiers, metal
traders, smelters and particularly other and larger mining
companies.
The mining industry is characterised by cyclical metal prices
and is impacted every year by changing commodity prices. As has
been the case with all commodities, the Covid-19 pandemic caused a
dramatic drop in the price of zinc in 2020. During the first
quarter, LME zinc prices declined 12% over the previous quarter, a
reduction of 21% over the same quarter in 2019. The decline in LME
zinc prices combined with higher treatment charges for zinc
concentrates put global zinc mine production under pressure with
high cost mines struggling to maintain margins. However, this
downturn has been significantly reversed and by the end of August
the LME zinc price at US$2,513 per
tonne has recovered 44% from its March low of US$1,744/t.
All other metals have recorded similar recoveries and we
continue to witness a growing strength in the financing markets for
mineral projects and for mineral companies. Indeed, in late
August, the Company has been able to raise new equity funds in the
market.
In considering metal prices it is essential to look at the whole
suite of metals that comprise the cashflow that would be generated
at Parys Mountain. While at the present time lead and zinc prices
are somewhat below the levels used in the Scoping Study, copper,
gold, and silver are higher. As time progresses there will always
be variations in the composition of the suite and no one metal can
truly be considered in isolation from the suite as an entirety.
This is one of the attributes and advantages of a polymetallic
deposit such as Parys Mountain.
While it remains unclear how long the current Covid-19 induced
economic slowdown will last, most observers expect prices to
continue the rebound. Near-term support for prices is expected to
come from a gradual recovery in demand for zinc from the steel
sector as mills ramp up production. China accounts for about half the global
demand for zinc. Economic stimulus measures already announced in
China taken together with stimulus
packages elsewhere bode well for a boost in demand for steel from
key sectors such as construction and manufacturing which will in
turn boost demand for zinc and lead and result in higher prices. In
particular, the outlook for copper looks bright because of its use
in electric vehicles, clean power plants and transmission lines,
along with its antimicrobial properties that are attracting
attention during the pandemic. Lead is in demand for large battery
storage and electric bicycles, particularly in China.
Mines have a limited life span and the supply of metal will
decline unless new mines are put into production. Investment in new
mines will only take place if companies believe that future metal
prices will make investment profitable. The Directors, who all have
had very significant experience in the base metals markets through
many metal price cycles, believe that a significant upward
re-adjustment in metal prices is inevitable because the industry
has not been investing in any significant levels of exploration in
recent years while demand for metals continues to steadily grow.
Investment in new mines will only take place if companies believe
that future metal prices will make investment profitable.
This report was approved by the board of Directors on
25 September 2020 and signed on its
behalf by:
Bill Hooley
Chief Executive Officer
Directors’ Report
The Directors are pleased to submit their report and the audited
accounts for the year ended 31 March
2020.
The Corporate Governance statement which follows forms part of
this report. The principal activities of the Group and other
information are set out in the strategic report section preceding
this report. Certain matters relating to financial performance,
risk exposure and management, and future developments which are
required to be disclosed in the Directors report have instead been
included within the strategic report.
Directors
The names of the Directors are shown in the Directors’
remuneration report and biographical details are shown on the
inside rear cover. All Directors remain in office. It is the
Company’s procedure to submit re-election resolutions for all
Directors at the annual general meeting. The Company maintains a
directors’ and officers’ liability policy on normal commercial
terms which includes third party indemnity provisions. The powers
of the Directors are described in the Corporate Governance
Report.
With regard to the appointment and replacement of directors, the
Company is governed by its Articles, the Corporate Governance Code
(the 2018 revision is in effect for the first time this year), the
Companies Act and related legislation. The Articles themselves may
be amended by special resolution of the shareholders. Under the
Articles, any director appointed by the board during the year must
retire at the AGM following his appointment. In addition, the
Articles require that one-third of the remaining directors retire
by rotation at each general meeting and seek re-appointment.
However, it is now the Company’s practice to submit re-election
resolutions for all directors at each AGM.
Directors’ interests in material contracts
Juno Limited (Juno), which is registered in Bermuda, holds 31.0% of the Company’s ordinary
share capital. The Company has a controlling shareholder agreement
and working capital agreement with Juno and note 19 sets out
movements under this working capital agreement. £100,000 was
advanced on 2 April 2019. Apart from
any advances and interest charges there were no transactions
between the Group and Juno or its group during the year. An
independent committee reviews and approves any transactions and
potential transactions with Juno. Danesh
Varma is a director and, through his family interests, a
significant shareholder of Juno.
Bill Hooley and Danesh Varma are directors of Grangesberg Iron
AB and of the special purpose vehicle Eurmag AB. Danesh Varma has been associated with the
Grangesberg project since 2007 when he became a director of Mikula
Mining Limited, a company subsequently renamed Eurang Limited,
previously involved in the Grangesberg project. He did not take
part in the decision to enter into the Grangesberg project when
this was approved by the board. The Group has a liability to Eurmag
AB, a subsidiary of Eurang, amounting to £321,105 at the year-end
(2019 – £300,087). See also note 24.
There are no other contracts of significance in which any
Director has or had during the year a material interest.
Substantial shareholders
At 14 September 2020 the following
shareholder had advised the Company of an interest in the issued
ordinary share capital:
Juno Limited notified an interest in 57,924,248 shares representing
29% of the issued ordinary shares.
Shares
Allotment authorities and disapplication of pre-emption
rights
The Directors would usually wish to allot any new share capital
on a pre-emptive basis, however in the light of the Group’s
potential requirement to raise further funds for the acquisition of
new mineral ventures, other activities and working capital, they
believe that it is appropriate to have a larger amount available
for issue at their discretion without pre-emption than is normal or
recommended for larger listed companies. At a general meeting to be
held on 30 October 2020, the
Directors will seek a renewal and replacement of the Company's
existing share allotment authorities.
The authority sought in resolution 4 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 £660,000 (66,000,000 ordinary shares) which is approximately one
third of the total issued ordinary share capital at 14 September 2020. The Directors will consider
issuing shares if they believe it would be appropriate to do so in
respect of business opportunities that arise consistent with the
Group's strategic objectives. The Directors have no present
intention of exercising this general authority, other than in
connection with the potential issue of shares pursuant to the
employee share and incentive plans.
The purpose of resolution 5 is to authorise the Directors to
allot new shares pursuant to the general authority given by
resolution 4 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 £498,000 (49,800,000
ordinary shares). This aggregate nominal amount represents
approximately 25% of the issued ordinary share capital at
14 September 2020. Whilst such
authority is in excess of the 5% of existing issued ordinary share
capital which is commonly accepted and recommended for larger
listed companies, it will provide additional flexibility which the
Directors believe is in the best interests of the Group in its
present circumstances. This authority will expire on 31 December 2021. The Directors intend to seek
renewal of this authority at future annual general meetings.
Rights and obligations attached to shares
The rights and obligations attached to the ordinary and deferred
shares are set out in the Articles of Association. Details of the
issued share capital are shown in note 21. Details of employee
share schemes are set out in the Directors’ remuneration report and
in note 21.
Each ordinary share carries the right to one vote at general
meetings of the Company. Holders of deferred shares, which are of
negligible value, are not entitled to attend, speak or vote at any
general meeting of the Company, nor are they entitled to receive
notice of general meetings.
Subject to the provisions of the Companies Act 2006, the rights
attached to any class may be varied with the consent of the holders
of three-quarters in nominal value of the issued shares of the
class or with the sanction of an extraordinary resolution passed at
a separate general meeting of the holders of the shares of the
class. There are no restrictions on the transfer of the Company’s
shares.
Voting rights
Votes may be exercised at general meetings in relation to the
business being transacted either in person, by proxy or, in
relation to corporate members, by corporate representative. The
Articles provide that forms of proxy shall be submitted not less
than 48 hours (excluding any part of a day that is not a working
day) before the time appointed for holding the meeting or adjourned
meeting.
No member shall be entitled to vote at any meeting unless all
monies presently payable in respect of their shares have been paid.
Furthermore, no member shall be entitled to attend or vote at any
meeting if he has been served with a notice after failing to
provide the Company with information concerning interests in his
shares.
Significant agreements and change of control
There are no agreements between the Company and its directors or
employees that provide for compensation for loss of office or
employment that may occur because of a takeover bid. The Company’s
share plans contain provisions relating to a change of control.
Outstanding awards and options would normally vest and become
exercisable on a change of control, subject to the satisfaction of
any performance conditions.
Dividend
The Group has no revenues and the Directors are unable to
recommend a dividend (2019 – nil).
Going concern and Company prospects
The Directors have considered the business activities of the
Group as well as its principal risks and uncertainties as set out
in this report. When doing so they have carefully applied the
guidance given in the ‘Guidance on Risk Management, Internal
Control and Related Financial and Business Reporting’ issued in
September 2014.
The financial statements are prepared on a going concern basis.
The validity of the going concern basis is dependent on finance
being available for the continuing working capital requirements of
the Group for the foreseeable future, being a period of at least
twelve months from the date of approval of the accounts. Based on
the current cash reserves and the committed support of Juno, the
Group has sufficient finance available for the continuing working
capital requirements of the Group on a status quo basis for at
least twelve months from the date of the financial statements.
The Group will need to generate additional financial resources
to meet its planned business objectives, progress the ongoing
development of the Parys Mountain project and continue as a going
concern. The plans to phase the development of the project by
undertaking the various optimisation programmes and completing a
prefeasibility or feasibility study to progress the Parys Mountain
Mine towards production require interim funding to finance the
further studies and optimisation programmes and, in the longer
term, senior financing to fund the capital and development costs to
put the Parys Mountain Mine into production.
The Group has relied primarily on equity financings and its
largest shareholder Juno Limited to fund its working capital
requirements and may be required to do so in the future to ensure
the Group will have adequate funds for its current activities and
to continue as a going concern.
The Directors are actively pursuing various financing options
with certain shareholders and financial institutions regarding
proposals for financing and are in discussions with a range of
investors, including private equity funds. Whilst these discussions
continue the Directors have reasonable expectations that these
financing discussions will be successful and therefore the
financial statements have been prepared on the going concern
basis.
However, given the limited financial resources currently
available, and that there is no guarantee that such funding will be
available, there is a risk that the Group will not have sufficient
financial resources to fund its short-term project funding
requirements, and therefore there exists a material uncertainty
concerning the ability of the Group and the Company to continue as
a going concern or that the Group will be successful in raising the
necessary investment to advance the development of the project and
put a mine at the Parys Mountain property into production.
Report on payments to governments
The Group is required to disclose payments made to governments
in countries where exploration or extraction activities are
undertaken and hereby reports that any such payments made in the
year were below the minimum disclosable level.
Post balance sheet events
Subsequent to the period end, on 24
August 2020 the Company made a private placing of 12,500,000
new ordinary shares at 1.6 pence per
share, to raise a total of £200,000 gross, together with 12,500,000
warrants with a term of 12 months to subscribe for new ordinary
shares at an exercise price of 1.8p per share that if exercised
could raise an additional £225,000.
Statement of directors’ responsibilities
The Directors are responsible for preparing the annual report
and the financial statements. The Directors are required to prepare
the financial statements for the Group in accordance with
International Financial Reporting Standards as adopted by the
European Union (“IFRS”) and have also elected to prepare financial
statements for the Company in accordance with IFRS. Company law
requires the directors to prepare group and parent company
financial statements for each financial year. Under that law they
are required to prepare the financial statements in accordance with
IFRS, the Companies Act 2006 and, in relation to the Group
financial statements, Article 4 of the IAS Regulation.
Under company law the directors must not approve the financial
statements unless they are satisfied that they give a true and fair
view of the state of affairs of the group and parent company
financial statements and of their profit and loss for that
period.
In preparing the financial statements the directors are required
to:
- select suitable accounting policies and then apply them
consistently;
- make judgements and estimates that are reasonable and
prudent;
- state that the financial statements comply with IFRSs as
adopted by the European Union; and
- prepare the financial statements on the going concern basis
unless it is inappropriate to presume that the Group and the parent
Company will continue in business.
The Directors confirm that they consider the annual report and
accounts, taken as a whole, are fair, balanced and understandable
and provide the information necessary for shareholders to assess
the Company and Group’s performance, business model and
strategy.
The Directors are responsible for keeping adequate accounting
records that are sufficient to show and explain the parent
Company’s transactions and disclose with reasonable accuracy at any
time the financial position of the parent Company and the Group and
enable them to ensure that the financial statements comply with the
Companies Act 2006. They are also responsible for safeguarding the
assets of the parent Company and the Group and hence for taking
reasonable steps for the prevention and detection of fraud and
other irregularities.
Under applicable law and regulations, the Directors are also
responsible for preparing a Strategic Report, Directors’ Report,
Section 172 Statement, Remuneration Report and Corporate Governance
Statement that comply with that law and those regulations.
The Directors Section 172 Statement which describes how the
Directors have had regard to the matters set out in section 172(1)
(a) to (f) when performing their duty under section 172 follows
this Directors’ Report below.
The Directors are responsible for the maintenance and integrity
of the Group website. Legislation in the United Kingdom governing the preparation and
dissemination of financial statements may differ from legislation
in other jurisdictions.
Each of the Directors, whose names and functions are listed on
the inside rear cover, confirm that, to the best of their
knowledge:
- the Group financial statements, which have been prepared in
accordance with IFRSs as adopted by the EU, give a true and fair
view of the assets, liabilities, financial position and loss of the
Group; and
- the Strategic and Directors’ Reports include a fair review of
the development and performance of the business and the position of
the Group, together with a description of the principal risks and
uncertainties that it faces.
Auditor
Each of the Directors in office at the date of approval of the
annual report confirms that so far as they are aware there is no
relevant audit information of which the Company’s auditor is
unaware. Each Director has taken all of the steps which they ought
to have taken as a director in order to make themselves aware of
that information and to establish that the Company’s auditor is
aware of that information. This confirmation is given and should be
interpreted in accordance with the provisions of s418 of the
Companies Act 2006.
This report was approved by the board of directors on
25 September 2020 and signed on its
behalf by:
Danesh Varma
Company Secretary
Audit Committee Report
The audit committee comprises Howard
Miller and, until 5 September
2019, David Lean. Both
members of the committee 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 the Group’s 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 set out at the end of note 2 to the
accounts and has nothing further to report in respect of them. The
committee is responsible for monitoring the controls which are in
force to ensure the information reported to the shareholders is
accurate and complete. It also discusses and considers internal
control and risk management issues and contributes to the board’s
review of the effectiveness of the Group’s internal control and
risk management systems and to the disclosure and explanation of
the risks faced by the Group. These are set out in the strategic
report.
The audit committee meets with the external auditors to review
the planning of their audit and, before approving the financial
statements, to discuss any issues which arise from the audit
The committee notes that the consolidation schedules have been
prepared under the direction of the finance director and is
satisfied that no further internal controls over this process are
required.
Internal and external audits
The committee considers the need for an internal audit function,
which it believes is not required at present due to the limited
staff and operations of the Group. The committee is available
should any personnel wish to make representations to the committee
about the conduct of the affairs of the Group.
The committee advises the board on the appointment of external
auditors and on their remuneration for both audit and non-audit
work and discusses the nature, scope and effectiveness of the audit
with the external auditor with whom it meets formally at least once
a year. The committee also reviews the effectiveness of the
external audit by enquiries and discussions with the Group staff
involved in the audit and with the finance director.
The audit committee also undertakes a formal assessment of the
auditor’s independence each year which includes: a review of any
non-audit services provided to the Group; discussion with the
auditor of all relationships with the Company and any other parties
that could affect independence or the perception of independence; a
review of the auditor’s own procedures for ensuring the
independence of the audit firm and partners and staff involved in
the audit, including the regular rotation of the audit partner; and
obtaining written confirmation from the auditor that, in his
professional judgement, he 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.
Mazars were originally appointed as auditors in 2008 after a
tendering process involving four firms. In 2018 a further tendering
process involved three firms including Mazars and the result of it
was that Mazars were reappointed.
Howard Miller
Audit committee chair
25 September 2020
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 2020 which
comprise the Group Income Statement, the Group Statement of
Comprehensive Income, the Group Statement of Financial Position,
the Company Statement of Financial Position, the Group and Company
Statements of Changes in Equity, the Group Statement of Cash Flows,
the Company Statement of Cash Flows and notes to the financial
statements, including a summary of significant accounting policies.
The financial reporting framework that has been applied in their
preparation is applicable law and International Financial Reporting
Standards (IFRSs) as adopted by the European Union and, as regards
the parent company financial statements, as applied in accordance
with the provisions of the Companies Act 2006.
In our opinion:
- the financial statements give a true and fair view of the state
of the group’s and of the parent company’s affairs as at
31 March 2020 and of the group’s loss
for the year then ended;
- the group financial statements have been properly prepared in
accordance with IFRSs as adopted by the European Union;
- the parent company financial statements have been properly
prepared in accordance with IFRSs as adopted by the European Union
and as applied in accordance with the provisions of the Companies
Act 2006; and
- the financial statements have been prepared in accordance with
the requirements of the Companies Act 2006 and, as regards the
group financial statements, Article 4 of the IAS regulation.
Basis for opinion
We conducted our audit in accordance with International
Standards on Auditing (UK) (ISAs (UK)) and applicable law. Our
responsibilities under those standards are further described in the
‘Auditor’s responsibilities for the audit of the financial
statements’ section of our report. We are independent of the
company in accordance with the ethical requirements that are
relevant to our audit of the financial statements in the UK,
including the FRC’s Ethical Standard as applied to public interest
entities and 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.
Material uncertainty related to going concern
We draw attention to Note 2 in the financial statements
concerning the applicability of the going concern basis of
preparation. As detailed in the financial statements and the
Strategic Report, the group and the parent company are not
generating revenue and are in the process of getting the Parys
Mountain mining project ready to move into development. Its
business model requires generation of additional financial
resources to progress the ongoing development of the Parys Mountain
project.
At 31 March 2020 the group and
parent company had net current assets of £29k and £47k respectively
and cash and cash equivalent reserves of £95k and £93k. Subsequent
to the year end, the group issued further shares with gross
proceeds of £200k. The group therefore has sufficient resources to
support its continuing working capital requirements on a status quo
basis for at least twelve months from the date of the financial
statements. In Note 2, the directors explain that the group needs
to generate additional financial resources to meet its planned
business objectives and to progress the development of the Parys
Mountain project. The directors are actively pursuing various
financing options and they are confident that the group will raise
the additional funding when required. Therefore, the financial
statements have been prepared on a going concern basis.
However, as described in Note 2, the directors recognise that
the continuing operations of the group are dependent upon its
ability to raise adequate financing and that there is a risk that
additional funding may not be available on a timely basis or on
acceptable terms. Given the limited financial resources currently
available, until the group secures sufficient investment for
short-term funds required for the additional studies and ultimately
for the production phase in the longer term, the current level of
resources may not be sufficient to finance short-term project
needs. Therefore, a material uncertainty exists that may cast a
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.
Conclusions relating to principal risks, going concern and
company prospects
Other than as above under ‘Material uncertainty related to going
concern’, we have nothing to report in respect of the following
information in the annual report, in relation to which the ISAs
(UK) require us to report to you whether we have anything material
to add or draw attention to:
- the disclosures in the annual report set out on pages 11 and 12
that describe the principal risks and explain how they are being
managed or mitigated;
- the directors’ confirmation set out on page 11 in the annual
report that they have carried out a robust assessment of the
principal risks facing the group, including those that would
threaten its business model, future performance, solvency or
liquidity;
- the directors’ statement set out on page 15 in the financial
statements about whether the directors considered it appropriate to
adopt the going concern basis of accounting in preparing the
financial statements and the directors’ identification of any
material uncertainties to the group and the parent company’s
ability to continue to do so over a period of at least twelve
months from the date of approval of the financial statements;
- whether the directors’ statement relating to going concern
required under the Listing Rules in accordance with Listing Rule
9.8.6R(3) is materially inconsistent with our knowledge obtained in
the audit; or
- the directors’ explanation set out on pages 12 and 13 in the
annual report as to how they have assessed the prospects of the
group, over what period they have done so and why they consider
that period to be appropriate, and their statement as to whether
they have a reasonable expectation that the group will be able to
continue in operation and meet its liabilities as they fall due
over the period of their assessment, including any related
disclosures drawing attention to any necessary qualifications or
assumptions.
Key audit matters
Key audit matters are those matters that, in our professional
judgement, were of most significance in our audit of the financial
statements of the current period and include the most significant
assessed risks of material misstatement (whether or not due to
fraud) we identified, including those which had the greatest effect
on: the overall audit strategy; the allocation of resources in the
audit; and directing the efforts of the engagement team. These
matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
In addition to the matter described in the ‘Material uncertainty
related to going concern’ section, we summarise below other key
audit matters in forming our audit opinion above, together with an
overview of the principal audit procedures performed to address
each matter and, where relevant, key observations arising from
those procedures.
These matters, together with our findings, were communicated to
those charged with governance through our Audit Completion
Report.
Key audit matter |
Our
response |
Impairment of
exploration and evaluation asset (group)
The group’s accounting policy in respect of its exploration and
evaluation asset is set out under “mineral property exploration and
evaluation costs” and its accounting policy in respect of
impairment is set out under “impairment of tangible and intangible
assets” in Note 2 to the financial statements.
The group has held rights to explore and mine the Parys Mountain
site for many years and has completed a number of geological and
technical studies, including a further scoping study in 2017
reaffirming the potential of the property. As indicated in that
study report, further studies were recommended to optimise and
enhance the project ahead of development, some of which are
currently underway.
There is a risk that accounting criteria associated with the
capitalisation of exploration and evaluation expenditure may no
longer be appropriate and that the carrying value may exceed the
recoverable amount.
An assessment of the recoverable amount is highly judgemental, and
is based on a combination of independent expert studies and the
directors’ assessment of the estimated mineral deposits and the
geological potential thereof, projected capital and operating costs
associated with mineral extraction and sale, long term commodity
metal prices, discount rates, exchange rate factors and the group’s
ability to raise finance. |
Our audit procedures
included, but were not limited to:
Key observations
Based on the work performed, no impairment indicators in relation
to the exploration and evaluation asset were noted. |
Impairment of
investment in subsidiary (parent company)
The group’s accounting policies in respect of investments and
impairment of investments are set out under “investments” and
“impairment of investments” in Note 2 to the financial
statements.
The cost of the investment and loan due from the subsidiary, Parys
Mountain Mines Limited, held in the company statement of financial
position, is supported by the recovery of the exploration and
evaluation asset following the development of the Parys Mountain
project held by Parys Mountain Mines Limited.
If there were impairment in the exploration and evaluation asset
included above, this would have a direct impact on the carrying
value of the investment and the loan due from the subsidiary.
Under the accounting policy, investments are held at cost less
accumulated impairments. Therefore, there is a risk that the
investment in subsidiary undertaking is impaired as a result of
indicators within the underlying assets of the subsidiary, namely
the exploration and evaluation asset discussed above. |
Given that the same
exploration and evaluation asset supports the intangible at group
level and the investment at parent company level, it’s reasonable
to conclude that the same impairment assessment documented in the
key audit matter above is also applicable to this key audit
matter.
In that context, our audit procedures included, but were not
limited to:
Key observations
Based on the work performed, no impairment indicators in relation
to the investment in subsidiary undertakings were noted. |
Our application of materiality
The scope of our audit was influenced by our application of
materiality. We set certain quantitative thresholds for
materiality. These, together with qualitative considerations,
helped us to determine the scope of our audit and the nature,
timing and extent of our audit procedures on the individual
financial statement line items and disclosures and in evaluating
the effect of misstatements, both individually and on the financial
statements as a whole. Based on our professional judgement, we
determined materiality for the financial statements as a whole as
follows:
Group
Overall materiality |
£349,000 |
How we determined it |
3% of group’s net assets |
Rationale
for benchmark applied |
Group’s net assets
represents shareholders’ funds and we have determined it to be the
principal benchmark within the financial statements relevant to
shareholders, as the group does not generate revenue and is in
pre-production phase |
Performance materiality & specific materiality |
Performance materiality is set as 75% of overall materiality, being
£262,000
Specific materiality of £105,000 is used for the audit of the group
income statement |
Reporting threshold |
3% of overall materiality being
£10,000 |
Parent company
Overall materiality |
£215,000 |
How we determined it |
2% of parent company’s net
assets |
Rationale for
benchmark applied |
Net assets is
considered most appropriate as the parent company is non-trading
and mainly holds investment in subsidiaries |
Performance materiality |
Performance materiality is set at
75% of overall materiality, being £161,000 |
Reporting threshold |
3% of overall materiality being
£6,000 |
The range of financial statement materiality across components,
audited to the lower of local statutory audit materiality and
materiality capped for group audit purposes, was between £215,000
and £307,000, being all below group financial statement
materiality.
An overview of the scope of our audit,
including extent to which the audit was considered capable of
detecting irregularities, including fraud
As part of designing our audit, we determined materiality and
assessed the risk of material misstatement in the financial
statements, whether due to fraud or error, and then designed and
performed audit procedures responsive 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 audit procedures were designed to respond to those
identified risks, including non-compliance with laws and
regulations (irregularities) and fraud that are material to 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 planning stage, we gained an understanding of the legal and
regulatory framework applicable to the group and the parent
company, the structure of the group, the industry in which they
operate and considered the risk of acts by the group and parent
company which were contrary to the applicable laws and
regulations;
- we discussed with the directors the policies and procedures in
place regarding compliance with laws and regulations;
- we discussed amongst the engagement team the identified laws
and regulations, and remained alert to any indications of
non-compliance; and
- during the audit, we focused 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 group’s and the
parent company’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 UK tax legislation.
Our procedures in relation to fraud included but were not
limited to:
- inquiries of management whether they have knowledge of any
actual, suspected or alleged fraud;
- gaining an understanding of the internal controls established
to mitigate risk related to fraud;
- discussion amongst the engagement team regarding risk 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,
management bias through judgements and assumptions in significant
accounting estimates, in particular in relation to impairment of
intangibles, and significant one-off or unusual transactions;
and
- addressing the risk 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.
As a result of our procedures, we did not identify any key audit
matters relating to irregularities. The risks of material
misstatement that had the greatest effect on our audit, including
fraud, are discussed under ‘Key audit matters’ within this
report.
Our group audit scope included an audit of the group and the
parent company financial statements of Anglesey Mining plc. Based
on our risk assessment, Anglesey Mining plc and Paris Mountain
Mines Limited within the group were subject to full scope audit
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.
In this context, we also have nothing to report in regard to our
responsibility to specifically address the following items in the
other information and to report as uncorrected material
misstatements of the other information where we conclude that those
items meet the following conditions:
- Fair, balanced and understandable set out on page 16 –
the statement given by the directors that they consider the annual
report and financial statements taken as a whole is fair, balanced
and understandable and provides the information necessary for
shareholders to assess the group’s performance, business model and
strategy, is materially inconsistent with our knowledge obtained in
the audit; or
- Audit committee reporting set out on page 28 – the
section describing the work of the audit committee does not
appropriately address matters communicated by us to the audit
committee; or
- Directors’ statement of compliance with the UK Corporate
Governance Code set out on pages 22-27 – the parts of the
directors’ statement required under the Listing Rules relating to
the parent company’s compliance with the UK Corporate Governance
Code containing provisions specified for review by the auditor in
accordance with Listing Rule 9.8.10R(2) do not properly disclose a
departure from a relevant provision of the UK Corporate Governance
Code.
Opinions on other matters prescribed by the Companies Act
2006
In our opinion, the part of the directors’ remuneration report
to be audited has been properly prepared in accordance with the
Companies Act 2006.
In our opinion, based on the work undertaken in the course of
the audit:
- the information given in the Strategic Report and the
Directors’ Report for the financial year for which the financial
statements are prepared is consistent with the financial statements
and those reports have been prepared in accordance with applicable
legal requirements;
- the information about internal control and risk management
systems in relation to financial reporting processes and about
share capital structures, given in compliance with rules 7.2.5 and
7.2.6 in the Disclosure Rules and Transparency Rules sourcebook
made by the Financial Conduct Authority (the FCA Rules), is
consistent with the financial statements and has been prepared in
accordance with applicable legal requirements; and
- information about the 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.
Responsibilities of Directors
As explained more fully in the directors’ responsibilities
statement set out on page 11, the directors are responsible for the
preparation of the financial statements and for being satisfied
that they give a true and fair view, and for such internal control
as the directors determine is necessary to enable the preparation
of financial statements that are free from material misstatement,
whether due to fraud or error.
In preparing the financial statements, the directors are
responsible for assessing the group’s and the parent company’s
ability to continue as a going concern, disclosing, as applicable,
matters related to going concern and using the going concern basis
of accounting unless the directors either intend to liquidate the
group or the parent company or to cease operations, or have no
realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial
statements
Our objectives are to obtain reasonable assurance about whether
the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an
auditor’s report that includes our opinion. Reasonable assurance is
a high level of assurance, but is not a guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a
material misstatement when it exists. Misstatements can arise from
fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the
economic decisions of users taken on the basis of these financial
statements.
A further description of our responsibilities for the audit of
the financial statements is located on the Financial Reporting
Council’s website at www.frc.org.uk/auditorsresponsibilities. This
description forms part of our auditor’s report.
Other matters which we are required to address
Mazars was initially appointed as auditors by the Board of
Directors in 2008. On 21 February
2018, following the recommendation of the audit committee,
we were reappointed by the Board of Directors to audit the
financial statements for the year ended 31
March 2018 and subsequent financial periods. The period of
total uninterrupted engagement since reappointment is 13 years,
covering the years ended 31 March
2008 and 31 March 2020.
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.
Robert
Neate (Senior Statutory Auditor)
for and on behalf of Mazars LLP
Chartered Accountants and Statutory Auditor
Tower Bridge House,
St. Katharine’s Way,
London.
E1W 1DD
25 September 2020
Group income statement
All attributable to equity holders of the company
|
|
Notes |
Year
ended 31 March 2020 |
Year
ended 31 March 2019 |
|
All
operations are continuing |
|
£ |
£ |
|
|
Revenue |
|
- |
- |
|
|
Expenses |
|
(134,796) |
(75,538) |
|
|
Equity-settled
employee benefits |
21 |
- |
- |
|
|
Investment
income |
6 |
287 |
233 |
|
|
Finance
costs |
7 |
(170,029) |
(159,336) |
|
|
Foreign exchange
movement |
|
28 |
20 |
|
|
|
|
|
|
|
Loss before tax |
4 |
(304,510) |
(234,621) |
|
|
|
|
|
|
|
|
Taxation |
8 |
- |
- |
|
|
|
|
|
|
|
Loss for the period |
|
(304,510) |
(234,621) |
|
|
|
|
|
|
|
|
Loss per
share |
|
|
|
|
|
Basic - pence
per share |
9 |
(0.2)p |
(0.1)p |
|
|
Diluted - pence
per share |
9 |
(0.2)p |
(0.1)p |
|
|
|
|
|
|
|
Group statement of comprehensive
income
Loss for the period |
|
(304,510) |
(234,621) |
|
|
Other comprehensive
income |
|
|
|
|
|
Items
that may subsequently be reclassified to profit or loss: |
|
|
|
|
Exchange
difference on
translation of foreign holding |
|
(23,350) |
(15,095) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive loss for the period |
(327,860) |
(249,716) |
|
|
|
|
|
|
|
Group statement of financial
position
|
|
|
31
March 2020 |
31
March 2019 |
|
|
Notes |
£ |
£ |
Assets |
|
|
|
|
Non-current
assets |
|
|
|
|
Mineral property
exploration and evaluation |
10 |
15,215,723 |
15,165,888 |
|
Property, plant
and equipment |
11 |
204,687 |
204,687 |
|
Investments |
14 |
100,099 |
97,795 |
|
Deposit |
15 |
123,748 |
123,460 |
|
|
|
|
|
|
|
|
15,644,257 |
15,591,830 |
|
|
|
|
|
|
Current
assets |
|
|
|
|
Other
receivables |
|
16,505 |
19,215 |
|
Cash and cash
equivalents |
16 |
95,311 |
6,012 |
|
|
|
|
|
|
|
|
111,816 |
25,227 |
|
|
|
|
|
|
|
|
|
|
Total assets |
|
15,756,073 |
15,617,057 |
|
|
|
|
|
Liabilities |
|
|
|
|
Current
liabilities |
|
|
|
|
Trade and other
payables |
17 |
(98,244) |
(86,539) |
|
|
|
|
|
|
|
|
|
|
|
|
|
(98,244) |
(86,539) |
|
|
|
|
|
|
Net current
assets/(liabilities) |
|
13,572 |
(61,312) |
|
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
Loans |
18 |
(3,981,893) |
(3,706,722) |
|
Long term
provision |
19 |
(50,000) |
(50,000) |
|
|
|
|
|
|
|
|
(4,031,893) |
(3,756,722) |
|
|
|
|
|
Total liabilities |
|
(4,130,137) |
(3,843,261) |
|
|
|
|
|
|
|
|
|
|
Net assets |
|
11,625,936 |
11,773,796 |
|
|
|
|
|
Equity |
|
|
|
|
Share
capital |
20 |
7,380,591 |
7,286,914 |
|
Share
premium |
|
10,258,309 |
10,171,986 |
|
Currency
translation reserve |
|
(80,466) |
(57,116) |
|
Retained
losses |
|
(5,932,498) |
(5,627,988) |
|
|
|
|
|
|
|
|
|
|
Total
shareholders' funds |
|
11,625,936 |
11,773,796 |
|
|
|
|
|
The financial statements of Anglesey Mining plc which include
the notes to the accounts on pages 40 to 55
were approved by the board of directors, authorised for issue on
25 September 2020 and signed on its
behalf by:
John F. Kearney, Chairman
Danesh Varma, Finance Director
Company statement of financial
position
|
|
|
31
March 2020 |
31
March 2019 |
|
|
|
Notes |
£ |
£ |
|
Assets |
|
|
|
|
|
Non-current
assets |
|
|
|
|
|
Investments |
13 |
14,460,642 |
14,389,142 |
|
|
|
|
|
|
|
|
|
|
14,460,642 |
14,389,142 |
|
|
|
|
|
|
|
|
Current
assets |
|
|
|
|
|
Other
receivables |
|
5,960 |
6,705 |
|
|
Cash and cash
equivalents |
16 |
92,885 |
3,979 |
|
|
|
|
|
|
|
|
|
|
98,845 |
10,684 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total assets |
|
14,559,487 |
14,399,826 |
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
Current
liabilities |
|
|
|
|
|
Trade and other
payables |
17 |
(67,191) |
(66,477) |
|
|
|
|
|
|
|
|
|
|
(67,191) |
(66,477) |
|
|
|
|
|
|
|
|
Net current
(liabilities)/assets |
|
31,654 |
(55,793) |
|
|
|
|
|
|
|
|
Non-current
liabilities |
|
|
|
|
|
Loan |
18 |
(3,660,788) |
(3,406,635) |
|
|
|
|
|
|
|
|
|
|
(3,660,788) |
(3,406,635) |
|
|
|
|
|
|
|
|
Total
liabilities |
|
(3,727,979) |
(3,473,112) |
|
|
|
|
|
|
|
Net assets |
|
10,831,508 |
10,926,714 |
|
|
|
|
|
|
|
Equity |
|
|
|
|
|
Share
capital |
20 |
7,380,591 |
7,286,914 |
|
|
Share
premium |
|
10,258,309 |
10,171,986 |
|
|
Retained
losses |
|
(6,807,392) |
(6,532,186) |
|
|
|
|
|
|
|
Shareholders' equity |
|
10,831,508 |
10,926,714 |
|
|
|
|
|
|
|
The company reported a loss for the year ended 31 March 2020 of £275,206 (2019 - £220,241). 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 25 September 2020 and signed on its behalf
by:
John F. Kearney, Chairman
Danesh Varma, Finance Director
Statements of changes in equity
All attributable to equity holders of the company.
|
Group |
Share
capital |
Share
premium |
Currency translation reserve |
Retained losses |
Total |
|
|
£ |
£ |
£ |
£ |
£ |
|
Equity at 1
April 2018 |
7,286,914 |
10,171,986 |
(42,021) |
(5,393,367) |
12,023,512 |
|
|
|
|
|
|
|
|
Total
comprehensive loss for the year: |
|
|
|
|
|
|
Loss for the
year |
- |
- |
- |
(234,621) |
(234,621) |
|
Exchange
difference on
translation of foreign holding |
- |
- |
(15,095) |
- |
(15,095) |
|
Total
comprehensive loss for the year |
- |
- |
(15,095) |
(234,621) |
(249,716) |
|
|
|
|
|
|
|
|
Equity at 31
March 2019 |
7,286,914 |
10,171,986 |
(57,116) |
(5,627,988) |
11,773,796 |
|
|
|
|
|
|
|
|
Total
comprehensive loss for the year: |
|
|
|
|
|
|
Loss for the
year |
- |
-
|
- |
(304,510) |
(304,510) |
|
Exchange
difference on
translation of foreign holding |
- |
- |
(23,350) |
- |
(23,350) |
|
|
|
|
|
|
|
|
Total
comprehensive income/(loss) for the year |
- |
- |
(23,350) |
(304,510) |
(327,860) |
|
Transactions
with owners: |
|
|
|
|
|
|
Shares
issued |
93,677 |
106,323 |
- |
- |
200,000 |
|
Share issue
expenses |
- |
(20,000) |
- |
- |
(20,000) |
|
|
|
|
|
|
|
|
Equity at 31
March 2020 |
7,380,591 |
10,258,309 |
(80,466) |
(5,932,498) |
11,625,936 |
|
|
|
|
|
|
|
|
Company |
|
Share
capital |
Share
premium |
Retained
losses |
Total |
|
|
|
£ |
£ |
£ |
£ |
|
Equity at 1
April 2018 |
|
7,286,914 |
10,171,986 |
(6,311,945) |
11,146,955 |
|
|
|
|
|
|
|
|
Total
comprehensive loss for the year: |
|
|
|
|
|
|
Loss for the
year |
|
- |
- |
(220,241) |
(220,241) |
|
|
|
|
|
|
|
|
Total
comprehensive loss for the year |
|
- |
- |
(220,241) |
(220,241) |
|
|
|
|
|
|
|
|
Equity at 31
March 2019 |
|
7,286,914 |
10,171,986 |
(6,532,186) |
10,926,714 |
|
|
|
|
|
|
|
|
Total
comprehensive loss for the year: |
|
|
|
|
|
|
Loss for the
year |
|
- |
- |
(275,206) |
(275,206) |
|
|
|
|
|
|
|
|
Total
comprehensive loss for the year |
|
- |
- |
(275,206) |
(275,206) |
|
Transactions
with owners: |
|
|
|
|
|
|
Shares
issued |
|
93,677 |
106,323 |
- |
200,000 |
|
Share issue
expenses |
|
- |
(20,000) |
- |
(20,000) |
|
|
|
|
|
|
|
|
Equity at 31
March 2020 |
|
7,380,591 |
10,258,309 |
(6,807,392) |
10,831,508 |
|
|
|
|
|
|
|
Group statement of cash flows
|
|
Notes |
Year
ended 31 March 2020 |
Year
ended 31 March 2019 |
|
|
|
|
£ |
£ |
|
Operating activities |
|
|
|
|
|
Loss for the
period |
|
(304,510) |
(234,621) |
|
|
Adjustments
for: |
|
|
|
|
|
Investment
income |
6 |
(287) |
(233) |
|
|
Finance
costs |
7 |
170,029 |
159,336 |
|
|
Foreign exchange
movement |
|
(28) |
(20) |
|
|
|
|
|
|
|
|
|
|
(143,583) |
(84,892) |
|
|
Movements in
working capital |
|
|
|
|
|
(Increase)/decrease in receivables |
|
2,685 |
374 |
|
|
(Decrease)/increase in payables |
|
15,708 |
15,345 |
|
|
|
|
|
|
|
Net
cash used in operating activities |
|
(125,190) |
(69,173) |
|
|
|
|
|
|
|
Investing activities |
|
|
|
|
|
Mineral property
exploration and evaluation |
|
(53,826) |
(49,476) |
|
|
Investment |
|
(11,713) |
(12,472) |
|
|
|
|
|
|
|
Net
cash used in investing activities |
(65,539) |
(61,948) |
|
|
|
|
|
|
|
Financing activities |
|
|
|
|
|
Issue of share
capital |
|
180,000 |
- |
|
|
Loan
received |
|
100,000 |
- |
|
|
|
|
|
|
|
Net
cash generated from financing activities |
|
280,000 |
- |
|
|
|
|
|
|
|
Net
increase/(decrease) in cash and cash equivalents |
89,271 |
(131,121) |
|
Cash
and cash equivalents at start of period |
|
6,012 |
137,113 |
|
Foreign exchange movement |
|
28 |
20 |
|
|
|
|
|
|
|
Cash and cash equivalents at end of period |
16 |
95,311 |
6,012 |
|
|
|
|
|
|
|
Company statement of cash flows
|
|
Notes |
Year
ended 31 March 2020 |
Year
ended 31 March 2019 |
|
|
|
£ |
£ |
Operating activities |
|
|
|
|
Loss for the
period |
23 |
(275,206) |
(220,241) |
|
Adjustments
for: |
|
|
|
|
Equity-settled
employee benefits |
|
- |
- |
|
Finance
costs |
|
154,153 |
144,234 |
|
|
|
|
|
|
|
|
(121,053) |
(76,007) |
|
Movements in
working capital |
|
|
|
|
Decrease/(increase) in receivables |
|
745 |
(933) |
|
Increase in
payables |
|
714 |
12,356 |
|
|
|
|
|
Net
cash used in operating activities |
|
(119,594) |
(64,584) |
|
|
|
|
|
Investing activities |
|
|
|
|
Investments and
long term loans |
|
(71,500) |
(64,026) |
|
|
|
|
|
Net
cash used in investing activities |
|
(71,500) |
(64,026) |
|
|
|
|
|
|
|
|
|
|
Net
(decrease) in cash and cash equivalents |
|
88,906 |
(128,610) |
Cash
and cash equivalents at start of period |
|
3,979 |
132,589 |
|
|
|
|
|
Cash
and cash equivalents at end of period |
17 |
92,885 |
3,979 |
|
|
|
|
|
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 International Financial Reporting Standards (IFRS)
as adopted by the European Union and therefore the group financial
statements comply with Article 4 of the EU IAS Regulation.
The financial statements have been prepared on the historical
cost basis except for the fair valuation of certain financial
assets. The principal accounting policies adopted are set out
below.
Going concern
The Directors have considered the business activities of the
Group as well as its principal risks and uncertainties as set out
in this report. When doing so they have carefully applied the
guidance given in the ‘Guidance on Risk Management, Internal
Control and Related Financial and Business Reporting’ issued in
September 2014.
The financial statements are prepared on a going concern basis.
The validity of the going concern basis is dependent on finance
being available for the continuing working capital requirements of
the Group for the foreseeable future, being a period of at least
twelve months from the date of approval of the accounts. Based on
the current cash reserves and the committed support of Juno, the
Group has sufficient finance available for the continuing working
capital requirements of the Group on a status quo basis for at
least twelve months from the date of the financial statements.
The Group will need to generate additional financial resources
to meet its planned business objectives, progress the ongoing
development of the Parys Mountain project and continue as a going
concern. The plans to phase the development of the project by
undertaking the various optimisation programmes and completing a
prefeasibility or feasibility study to progress the Parys Mountain
Mine towards production require interim funding to finance the
further studies and optimisation programmes and, in the longer
term, senior financing to fund the capital and development costs to
put the Parys Mountain Mine into production.
The Group has relied primarily on equity financings and its
largest shareholder Juno Limited to fund its working capital
requirements and may be required to do so in the future to ensure
the Group will have adequate funds for its current activities and
to continue as a going concern.
The Directors are actively pursuing various financing options
with certain shareholders and financial institutions regarding
proposals for financing and are in discussions with a range of
investors, including private equity funds. Whilst these discussions
continue the Directors have reasonable expectations that these
financing discussions will be successful and therefore the
financial statements have been prepared on the going concern
basis.
However, given the limited financial resources currently
available, and that there is no guarantee that such funding will be
available, there is a risk that the Group will not have sufficient
financial resources to fund its short-term project funding
requirements, and therefore there exists a material uncertainty
concerning the ability of the Group and the Company to continue as
a going concern or that the Group will be successful in raising the
necessary investment to advance the development of the project and
put a mine at the Parys Mountain property into production.
Basis of consolidation
The consolidated financial statements incorporate the financial
statements of the company and entities controlled by the company
(its subsidiaries) made up to 31 March each year. Control is
achieved where the company has the power to govern the financial
and operating policies of an investee entity so as to obtain
benefits from its activities.
On acquisition, the assets and liabilities and contingent
liabilities of a subsidiary are measured at their fair values at
the date of acquisition. Any excess of the cost of acquisition over
the fair values of the identifiable net assets acquired is
recognised as goodwill. Any deficiency of the cost of acquisition
below the fair values of the identifiable net assets acquired (i.e.
discount on acquisition) is credited to the income statement in the
period of acquisition. The results of subsidiaries acquired or
disposed of during the year are included in the group income
statement from the effective date of acquisition or up to the
effective date of disposal, as appropriate.
Where necessary, adjustments are made to the financial
statements of subsidiaries to bring the accounting policies used
into line with those used by the group. All intra-group
transactions, balances, income and expenses are eliminated on
consolidation.
Revenue recognition
Interest income is accrued on a time basis, by reference to the
principal outstanding and at the effective interest rate
applicable, which is the rate that exactly discounts estimated
future cash receipts through the expected life of the financial
asset to that asset’s net carrying amount.
Foreign currencies
Transactions in currencies other than pounds sterling are
recorded at the rates of exchange prevailing on the dates of the
transactions. At the end of each reporting period, monetary assets
and liabilities that are denominated in foreign currencies are
retranslated at the rates prevailing on the period end date.
Non-monetary assets and liabilities carried at fair value that are
denominated in foreign currencies are translated at the rates
prevailing at the date when the fair value was determined. Gains
and losses arising on retranslation are included in net profit or
loss for the period.
On consolidation, the assets and liabilities of the group’s
overseas operations are translated at exchange rates prevailing on
the period end date. Exchange differences arising, if any, are
classified as items of other comprehensive income and transferred
to the group’s translation reserve within equity. Such translation
differences are reclassified to profit or loss, and recognised as
income or as expense, in the period in which there is a disposal of
the operation.
Segmental analysis
Operating segments are identified on the basis of internal
reports about components of the group that are regularly reviewed
by the chief operating decision-maker.
Retirement benefit costs
Payments to defined contribution retirement benefit schemes are
charged as an expense as they fall due. There are no defined
benefit retirement schemes.
Equity-settled employee benefits
The group provides equity-settled benefits to certain employees.
Equity-settled employee benefits are measured at fair value at the
date of grant. The fair value determined at the grant date is
expensed on a straight-line basis over the vesting period, based on
the group’s estimate of shares that will eventually vest and
adjusted for the effect of non-market based vesting conditions.
Fair value is measured by use of a Black-Scholes model.
Taxation
Deferred tax is the tax expected to be payable or recoverable on
differences between the carrying amounts of assets and liabilities
in the financial statements and the corresponding tax bases used in
the computation of taxable profit, and is accounted for using the
period end liability method. Deferred tax liabilities are generally
recognised for all taxable temporary differences and deferred tax
assets are recognised to the extent that it is probable that
taxable profits will be available against which deductible
temporary differences can be utilised. Such assets and liabilities
are not recognised if the temporary difference arises from goodwill
or from the initial recognition (other than in a business
combination) of other assets and liabilities in a transaction that
affects neither the tax profit nor the accounting profit.
Deferred tax liabilities are recognised for taxable temporary
differences arising on investments in subsidiaries and associates,
and interests in joint ventures, except where the group is able to
control the reversal of the temporary difference and it is probable
that the temporary difference will not reverse in the foreseeable
future. The carrying amount of any deferred tax assets is reviewed
at each period end date and reduced to the extent that it is no
longer probable that sufficient taxable profits will be available
to allow all or part of the asset to be recovered.
Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled or the asset is
realised and is charged or credited in the income statement, except
when it relates to items charged or credited directly to equity, in
which case the deferred tax is also dealt with in equity.
The charge for current tax is based on the results for the year
as adjusted for items which are non-taxable or disallowed. It is
calculated using rates that have been enacted or substantively
enacted by the balance sheet date.
Property, plant and equipment
The group’s freehold land is stated in the statement of
financial position at cost. The directors consider that the
residual value of buildings, based on prices prevailing at the date
of acquisition and at each subsequent reporting date as if the
asset were already of the age and in the condition expected at the
end of its useful life, is such that any depreciation would not be
material.
Plant and office equipment are stated in the statement of
financial position at cost, less depreciation. Depreciation is
charged on a straight line basis at the annual rate of 25%.
Residual values and the useful lives of these assets are also
reviewed annually.
Mineral property exploration and evaluation
Exploration and evaluation assets include acquired mineral use
rights for mineral properties held by the Company. The amount of
consideration paid (in cash or share value) for mineral use rights
is capitalised. Mineral exploration and evaluation expenditures are
capitalised on a project-by-project basis pending determination of
the technical feasibility and the commercial viability of the
project. Capitalised costs include costs directly related to
exploration and evaluation activities in the area of interest.
General and administrative costs are only allocated to the asset to
the extent that those costs can be directly related to operational
activities.
Exploration and evaluation assets will be amortised to profit or
loss once commercial production has been achieved or written off if
the exploration and evaluation assets are abandoned or sold.
Depletion of costs capitalised on projects when put into commercial
production will be recorded using the unit-of-production method
based upon estimated proven and probable reserves. The ultimate
recoverability of the amounts capitalised for the exploration and
evaluation assets and expenditures is dependent upon the
delineation of economically recoverable ore reserves, obtaining the
necessary financing to complete their development, obtaining and
retaining the necessary permits to operate a mine, and realising
profitable production or proceeds from the disposition thereof.
The commercial viability of extracting a mineral resource is
considered to be determinable when resources are determined to
exist, the property rights are current and it is considered
probable that the costs will be recouped through successful
development and exploitation of the project, or alternatively by
sale of the property. Upon determination of resources, exploration
and evaluation assets attributable to those resources are first
tested for impairment and then reclassified from exploration and
evaluation assets to mineral property interests. Expenditures
deemed unsuccessful are recognised in operations in the Income
Statement.
Expenditures incurred in connection with the development of
mineral resources after such time as mineral reserves are proven or
probable; permits to operate the mineral resource property are
received; financing to complete development has been obtained; and
approval of the Board of Directors to commence mining development
and operations, are capitalized as deferred development
expenditures.
Impairment of tangible and intangible assets
The carrying values of capitalized exploration and evaluation
assets are assessed for impairment if fact and circumstances
indicate that the carrying amount exceeds the recoverable amount
and sufficient data exists to evaluate technical feasibility and
commercial viability. If any indication of impairment exists,
an estimate of the asset’s recoverable amount is estimated. The
recoverable amount is determined as the higher of the fair value
less costs of disposition and the asset’s value in use. If the
carrying amount of the asset exceeds its estimated recoverable
amount, the asset is impaired, and an impairment loss is charged to
the Income Statement so as to reduce the carrying amount to its
estimated recoverable amount.
Investments
Investments in subsidiaries are shown at cost less provisions
for impairment in value. Income from investments in subsidiaries
together with any related withholding tax is recognised in the
income statement in the period to which it relates.
Investments which are not subsidiaries are shown at cost unless
there is a practical method of determining a reliable fair value,
in which case that fair value is used.
Impairment of investment
Financial assets are assessed for indicators of impairment at
the end of each reporting period. Financial assets are considered
to be impaired when there is objective evidence that, as a result
of one or more events that occurred after the initial recognition
of the financial asset, the estimated future cash flows of the
investment have been affected.
For financial assets carried at amortised cost, the amount of
the impairment loss recognised is the difference between the
asset's carrying amount and the present value of estimated future
cash flows, discounted at the financial asset's original effective
interest rate.
For an equity instrument that does not have a quoted price in an
active market, and that is not carried at fair value because its
fair value cannot be reliably measured, the amount of the
impairment loss is measured as the difference between the carrying
amount of the financial asset and the present value of estimated
future cash flows discounted at the current market rate of return
for a similar financial asset.
Provisions
Provisions are recognised when the group has a present
obligation as a result of a past event and it is probable that the
group will be required to settle that obligation. Provisions are
measured at the directors’ best estimate of the expenditure
required to settle that obligation at the end of the reporting
period and are discounted to present value where the effect is
material.
Financial instruments
Initial recognition
All financial assets and liabilities are initially recognised on
the trade date; this being the date that group becomes a party to
the contractual provisions of the instrument.
All financial instruments are initially recognised at fair value
plus, in the case of financial assets and financial liabilities not
held at fair value through profit or loss, directly attributable
transaction costs.
Classification and measurement
Financial assets
The classification of financial instruments depends on the
purpose and management’s intention for which the financial
instruments were acquired and their characteristics. The group
classifies its financial assets in one of the following
categories:
• Amortised cost
• Fair value through other comprehensive income (FVOCI)
Financial assets classified and
measured at amortised cost
Amortised cost financial instruments are non-derivative
financial assets held within a business model, whose objective is
to collect contractual cash flows, on specified dates that are
solely payments of principal and interest on the principal amount
outstanding.
Such financial instruments are those that are subsequently
measured at amortised cost using the effective interest rate
method, less any allowance for impairment based on Expected Credit
Loss (ECL). Amortised cost is calculated by taking into account any
discount or premium on acquisition and fees and costs that are an
integral part of the financial asset.
Financial assets classified as amortised cost are other
receivables, deposits and cash and cash equivalent. Carrying value
of these financial assets at yearend are not material to the
group.
Financial assets classified and
measured at fair value through other comprehensive income
“FVOCI”
FVOCI financial assets are those non-derivative financial assets
held within a business model, whose objectives are both to sell the
financial assets and to collect contractual cash flows, on
specified dates, that are solely payments of principal and interest
on the principal amount outstanding.
Financial assets that are classified as FVOCI are measured at
fair value. The changes in fair value are recognised directly in
equity with three exceptions, which are recognised in profit and
loss:
• Interest, calculated using the effective interest method;
• Impairment losses; and
• Foreign exchange gains and losses on monetary financial
assets.
When the investment is disposed of, the cumulative gain or loss
previously recognised in equity is recognised in the statement of
comprehensive income.
Financial assets classified as FVOCI are unlisted shares held by
the group. The group has made the irrevocable election at
initial recognition to classify these investments at FVOCI.
Carrying value of these financial assets at yearend are not
material to the group
Financial liabilities
The group classifies all financial liabilities as other
financial liabilities measured at amortised cost. Financial
liabilities are initially recognised at fair value, net of directly
attributable transaction costs, and are subsequently measured at
amortised cost using the effective interest method.
Equity instruments
Equity instruments issued by the company are recorded at the
proceeds received, net of direct issue costs.
Leases
Mining lease payments relating to mineral property exploration
and evaluation are capitalised; there are no other leases, see note
25 for details. There are no IFRS 16 disclosures required in
respect of the mining leases.
New accounting standards
Standards, amendments and
interpretations adopted in the current financial year:
The adoption of the following standards, amendments and
interpretations in the current financial year has not had a
material impact on the financial statements of the group or the
company.
IFRS 9 Financial Instruments (Amendment)
IFRS 16 Leases
IFRIC 23 Uncertainty over Income Tax Treatments
IAS 19 Employee Benefits (Amendment) Plan Amendment
IAS 28 Investments in Associates and Joint Ventures
(Amendment)
Standards, amendments and
interpretations in issue but not yet effective:
|
Effective date |
Amendments to IAS 1 and IAS 8:
Definition of Material |
1 January 2020 |
Amendment to IFRS 3 Business
Combinations: Definition of a Business |
1 January 2020 |
Conceptual Framework (Revised) and
amendments to related references in IFRS Standards |
1 January 2020 |
IFRS 17 Insurance Contracts |
Expected date not available |
The adoption of the above standards and interpretations is not
expected to lead to any changes to the group’s accounting policies
or have any other material impact on the financial position or
performance of the group.
There have been no other new or revised International Financial
Reporting Standards, International Accounting Standards or
Interpretations that are in effect since that last annual report
that have a material impact on the financial statements.
Judgements made in applying accounting policies and key sources
of estimation uncertainty
The following critical judgements have been made in the process
of applying the group’s accounting policies:
(a) In determining the treatment of exploration and evaluation
expenditures the directors are required to make estimates and
assumptions as to future events and circumstances. Significant
judgment must be exercised in determining when a project moves from
the exploration and evaluation category phase and into the
development category of mineral property interests. The existence
and extent of economic mineral resources, proven or probable
mineral reserves; regulatory permits and licences; the availability
of development financing; current and future metal prices; and
market sentiment are all factors to be considered. Estimates of the
recoverable value of exploration and evaluation assets involves
certain inherent uncertainties, including geological, fluctuation
in metal prices, operating costs, and permitting risks. There are
uncertainties inherent in making such assumptions, especially with
regard to: mineral resources; recovery rates; production costs;
commodity prices and exchange rates. Estimates of the
recoverability of the Company’s investment in exploration and
evaluation assets have been based on current and expected
conditions. Assumptions that are valid at the time of estimation
may change significantly as new information becomes available and
changes in these assumptions may result in resources or reserves
being restated.
(b) In connection with possible impairment of exploration and
evaluation assets and the company’s investment in and loan due from
the subsidiary Parys Mountain Mines Limited, the directors assess
each potentially cash generating unit annually to determine whether
any indication of impairment exists. The judgements made when doing
so are similar to those set out above and are subject to the same
uncertainties.
(c) The directors applied assumptions and judgement in
determining the fair value of investments classified and measured
as financial assets at FVOCI. These financial assets disclosed in
note 14 are unquoted investments in companies holding mining
rights. The inputs in determining fair value are taken from
observable markets where possible, but where this is not feasible,
a degree of judgement has been applied in establishing fair values.
Judgements include considerations of inputs such as exploration
potential, available market information relating to current demand,
prices, economic viability and future financing. See note 14 for
further details.
Nature and purpose of equity reserves
The share premium reserve represents the consideration that has
been received in excess of the nominal value of shares on issue of
new ordinary share capital, less any direct costs of issue.
The currency translation reserve represents the variations on
revaluation of overseas foreign subsidiaries and associates.
The retained earnings reserve represents profits and losses
retained in previous and the current period.
3
Segmental information
The group is engaged in the business of exploring and evaluating
the wholly-owned Parys Mountain project in North Wales, managing its interest in the
Grangesberg properties and has an investment in the Labrador iron project in eastern Canada. In the opinion of the directors, the
group’s activities comprise one class of business which is mine
exploration, evaluation and development. The group reports
geographical segments; these are the basis on which information is
reported to the board. As yet there have been no site expenses
incurred in respect of the group’s interest in Grangesberg and
management expenses for this segment are included in the UK
total.
Income
statement analysis |
|
|
|
|
|
|
|
|
2020 |
2019 |
|
UK |
Sweden |
Canada |
Total |
UK |
Sweden |
Canada |
Total |
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
Expenses |
(134,796) |
- |
- |
(134,796) |
(75,538) |
- |
- |
(75,538) |
Investment income |
287 |
- |
- |
287 |
233 |
- |
- |
233 |
Finance costs |
(154,153) |
(15,876) |
- |
(170,029) |
(144,234) |
(15,102) |
- |
(159,336) |
Exchange rate
loss |
- |
28 |
- |
28 |
- |
20 |
- |
20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Loss for the year |
(288,662) |
(15,848) |
- |
(304,510) |
(219,539) |
(15,082) |
- |
(234,621) |
|
|
|
|
|
|
|
|
|
Assets and
liabilities |
|
|
|
|
|
|
|
|
|
31 March 2020 |
31 March 2019 |
|
UK |
Sweden |
Canada |
Total |
UK |
Sweden |
Canada |
Total |
|
£ |
£ |
£ |
£ |
£ |
£ |
£ |
£ |
Non-current
assets |
15,544,158 |
100,098 |
1 |
15,644,257 |
15,494,035 |
97,794 |
1 |
15,591,830 |
Current assets |
110,716 |
1,100 |
- |
111,816 |
24,149 |
1,078 |
- |
25,227 |
Liabilities |
(3,809,032) |
(321,105) |
- |
(4,130,137) |
(3,543,174) |
(300,087) |
- |
(3,843,261) |
|
|
|
|
|
|
|
|
|
Net
assets/liabilities |
11,845,842 |
(219,907) |
1 |
11,625,936 |
11,975,010 |
(201,215) |
1 |
11,773,796 |
|
|
|
|
|
|
|
|
|
4 Loss
before taxation
The loss
before taxation for the year has been arrived at after
charging/(crediting): |
|
|
2020 |
|
2019 |
|
|
£ |
|
£ |
|
Fees payable to the
group's auditor: |
|
|
|
|
for the audit of the annual
accounts |
37,000 |
|
22,000 |
|
for the audit of subsidiaries'
accounts |
5,000 |
|
3,000 |
|
for other services |
- |
|
- |
|
Directors'
remuneration |
- |
|
- |
|
Foreign exchange
movement |
(28) |
|
(20) |
|
|
|
|
|
|
5 Staff
costs
The
average monthly number of persons employed (including executive
directors) was: |
|
|
|
|
|
|
|
2020 |
|
2019 |
|
Administrative |
3 |
|
3 |
|
|
3 |
|
3 |
|
|
|
|
|
|
Their aggregate
remuneration was: |
£ |
|
£ |
|
Wages and
salaries |
11,000 |
|
11,175 |
|
Social security
costs |
390 |
|
431 |
|
Other pension
costs |
- |
|
- |
|
|
|
|
|
|
|
11,390 |
|
11,606 |
|
|
|
|
|
|
The directors did not receive any remuneration during the year.
Further details are provided in the
directors’ remuneration report together with information on share
options.
6 Investment
income
|
|
2020 |
|
2019 |
|
Loans and
receivables |
|
£ |
|
£ |
|
Interest on site
re-instatement deposit |
|
287 |
|
233 |
|
|
|
|
|
|
|
|
|
287 |
|
233 |
|
|
|
|
|
|
|
7 Finance
costs
|
|
2020 |
|
2019 |
|
Loans and
payables |
|
£ |
|
£ |
|
Loan interest to Juno
Limited |
|
154,153 |
|
144,234 |
|
Loan interest to
Eurmag AB |
|
15,876 |
|
15,102 |
|
|
|
|
|
|
|
|
|
170,029 |
|
159,336 |
|
|
|
|
|
|
|
For both loans the interest shown is accrued and will be repaid
together with the loan principal.
8
Taxation
Activity during the year has generated trading losses for
taxation purposes which may be offset against investment income and
other revenues. Accordingly no provision has been made for
Corporation Tax. There is an unrecognised deferred tax asset at
31 March 2020 of £1.3 million (2019 -
£1.3 million) which, in view of the group’s trading results, is not
considered by the directors to be recoverable in the short term.
There are also capital allowances, including mineral extraction
allowances, of £12.8 million unclaimed and available at
31 March 2020 (2019 - £12.7 million).
No deferred tax asset is recognised in respect of these
allowances.
|
2020 |
|
2019 |
|
|
£ |
|
£ |
|
Current tax |
- |
|
- |
|
Deferred tax |
- |
|
- |
|
|
|
|
|
|
Total tax |
- |
|
- |
|
|
|
|
|
|
Domestic
income tax is calculated at 19% (2019 - 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 |
(304,510) |
|
(234,621) |
|
|
|
|
|
|
Tax at the domestic
income tax rate of 19% |
(57,857) |
|
(44,578) |
|
Tax effect
of: |
|
|
` |
|
Unrecognised deferred
tax on losses |
57,857 |
|
44,578 |
|
|
|
|
|
|
Total tax |
- |
|
- |
|
|
|
|
|
|
9
Earnings per ordinary share
|
2020 |
|
2019 |
|
|
£ |
|
£ |
|
Earnings |
|
|
|
|
Loss for the year |
(304,510) |
|
(234,621) |
|
|
|
|
|
|
Number of
shares |
|
|
|
|
Weighted average
number of ordinary shares for the purposes of basic earnings per
share |
185,772,778 |
|
177,608,051 |
|
Shares deemed to be issued for no consideration in respect of
employee options |
|
|
|
|
Weighted average
number of ordinary shares
for the purposes of diluted earnings per share |
185,772,778 |
|
177,608,051 |
|
|
|
|
|
|
Basic earnings per
share |
(0.2)p |
|
(0.1)p |
|
|
|
|
|
|
Diluted earnings
per share |
(0.2)p |
|
(0.1)p |
|
|
|
|
|
|
As the group has a loss for the year ended 31 March 2020 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 2018 |
15,111,141 |
Additions - site |
29,726 |
Additions - rentals
& charges |
25,021 |
|
|
At 31 March 2019 |
15,165,888 |
Additions - site |
24,341 |
Additions - rentals
& charges |
25,494 |
|
|
At 31 March 2020 |
15,215,723 |
|
|
Carrying
amount |
|
Net book value
2020 |
15,215,723 |
Net book value
2019 |
15,165,888 |
|
|
Included in the additions are mining lease expenses of £16,858
(2019 - £16,626).
Potential impairment of mineral property
Accumulated exploration and evaluation expenditure in respect of
the Parys Mountain property is carried in the financial statements
at cost less any impairment provision.
The directors assessed the carrying value of the Parys Mountain
exploration and evaluation assets at the reporting date to
determine whether specific facts and circumstances suggest there is
an indication of impairment and concluded as described in the
Strategic Report that those facts and circumstances have not
materially changed during the year and there are no
indicators of impairment
11 Property, plant and
equipment
Group |
Freehold land & property |
Plant
& equipment |
Office
equipment |
Total |
Cost |
£ |
£ |
£ |
£ |
At 31 March 2018, 2019
and 2020 |
204,687 |
17,434 |
5,487 |
227,608 |
Depreciation |
|
|
|
|
At 31 March 2018, 2019
and 2020 |
- |
17,434 |
5,487 |
22,921 |
Carrying
amount |
|
|
|
|
At 31 March 2018, 2019
and 2020 |
204,687 |
- |
- |
204,687 |
Company |
Freehold land & property |
Plant
& equipment |
Office
equipment |
Total |
Cost |
£ |
£ |
£ |
£ |
At 31 March 2018, 2019
and 2020 |
- |
17,434 |
5,487 |
22,921 |
Depreciation |
|
|
|
|
At 31 March 2018, 2019
and 2020 |
- |
17,434 |
5,487 |
22,921 |
Carrying
amount |
|
|
|
|
At 31 March 2018, 2019
and 2020 |
- |
- |
- |
- |
12 Subsidiaries -
company
The subsidiaries of the company at 31
March 2020 and 2019 were as follows:
Name of company |
Country of
incorporation |
Percentage owned |
Principal activity |
Parys Mountain Mines
Limited1 |
England & Wales |
100% |
Development of the Parys Mountain
mining property |
Parys Mountain Land
Limited1 |
England & Wales |
100% |
Holder of part of the Parys Mountain
property |
Parys Mountain Heritage
Limited1 |
England & Wales |
100% |
Holder of part of the Parys Mountain
property |
Labrador Iron plc2 |
Isle of Man |
100% |
Holder of the company’s investment
in Labrador Iron Mines Holdings Limited |
Angmag AB3 |
Sweden |
100% |
Holder of the company’s investment
in GIAB |
Anglo Canadian Exploration (Ace)
Limited1 |
England & Wales |
100% |
Dormant |
Registered office addresses:
1. - Parys Mountain, Amlwch, Anglesey, LL68 9RE
2. - Fort Anne, Douglas, Isle of
Man, IM1 5PD
3. - Box 1703, 111 87 Stockholm,
Sweden
13 Investments -
company
|
Shares at cost |
|
Capital contributions |
|
Total |
|
|
£ |
|
£ |
|
£ |
|
At 1 April 2018 |
104,025 |
|
14,221,091 |
|
14,325,116 |
|
Advanced |
- |
|
64,026 |
|
64,026 |
|
|
|
|
|
|
|
|
At 31 March 2019 |
104,025 |
|
14,285,117 |
|
14,389,142 |
|
Advanced |
- |
|
71,500 |
|
71,500 |
|
|
|
|
|
|
|
|
At 31 March 2020 |
104,025 |
|
14,356,617 |
|
14,460,642 |
|
The realisation of investments is dependent on finance being
available for development and on a number
of other factors. Interest is not charged on capital
contributions.
14 Investments - group
|
Labrador |
Grangesberg |
Total |
|
£ |
£ |
£ |
At 1 April
2018 |
1 |
86,659 |
86,660 |
Change during the
period |
- |
11,135 |
11,135 |
At 31 March
2019 |
1 |
97,794 |
97,795 |
Change during the
period |
- |
2,304 |
2,304 |
|
|
|
|
At 31 March
2020 |
1 |
100,098 |
100,099 |
|
|
|
|
LIM
The directors consider the fair value of 12% investment in LIM
for the purposes of these accounts to be £1.
Grangesberg
The group has, through its Swedish subsidiary Angmag AB, an
10.0% ownership interest in GIAB (2019 – 8.7%), a Swedish company
which holds rights over the Grangesberg iron ore deposits. The
directors assessed the fair value of its investment in Grangesberg
under IFRS 9 and consider the cost at the date of transition and at
the year-end to approximate its fair value at these dates. The
group has, until June 2021, a right
of first refusal over a further 50.1% of the equity of GIAB
together with management direction of the activities of GIAB,
subject to certain restrictions. The group has significant
influence over certain relevant activities of GIAB however equity
accounting has not been applied in respect of this influence as the
directors consider this would not have any material affect.
During the year the group subscribed £11,713 (2019 - £12,472)
for new shares in GIAB, obtained further shares in exchange for
services provided by it to Grangesberg and transferred shares to
Eurang AB as consideration for a reduction in the loan due to
Eurang.
15 Deposit
|
Group |
|
|
|
|
|
|
2020 |
|
2019 |
|
|
|
|
|
|
£ |
|
£ |
|
|
|
|
|
Site re-instatement
deposit |
123,748 |
|
123,460 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
£ |
|
£ |
|
£ |
|
£ |
|
Held in sterling |
94,210 |
|
4,933 |
|
92,885 |
|
3,979 |
|
Held in Canadian
dollars |
1 |
|
1 |
|
- |
|
- |
|
Held in US
dollars |
443 |
|
417 |
|
- |
|
- |
|
Held in Swedish
krona |
657 |
|
661 |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
95,311 |
|
6,012 |
|
92,885 |
|
3,979 |
|
|
|
|
|
|
|
|
|
|
The carrying value of the cash approximates to its fair
value.
17 Trade and other
payables
|
Group |
|
Company |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
£ |
|
£ |
|
£ |
|
£ |
|
Trade payables |
(13,537) |
|
(30,067) |
|
(11,939) |
|
(24,477) |
|
Other accruals |
(84,707) |
|
(56,472) |
|
(55,252) |
|
(42,000) |
|
|
|
|
|
|
|
|
|
|
|
(98,244) |
|
(86,539) |
|
(67,191) |
|
(66,477) |
|
|
|
|
|
|
|
|
|
|
The carrying value of the trade and other payables approximates
to their fair value.
18 Loans
|
Group |
|
Company |
|
|
2020 |
|
2019 |
|
2020 |
|
2019 |
|
|
£ |
|
£ |
|
£ |
|
£ |
|
Loan from Juno
Limited |
(3,660,788) |
|
(3,406,635) |
|
(3,660,788) |
|
(3,406,635) |
|
Loan from Eurmag
AB |
(321,105) |
|
(300,087) |
|
- |
|
- |
|
|
|
|
|
|
|
|
|
|
|
(3,981,893) |
|
(3,706,722) |
|
(3,660,788) |
|
(3,406,635) |
|
|
|
|
|
|
|
|
|
|
Juno: The loan is provided under a working capital
agreement, denominated in sterling, unsecured and carries interest
at 10% per annum on the principal only. It is repayable from any
future financing undertaken by the company, or on demand following
a notice period of 367 days. The terms of the facility were
approved by an independent committee of the board. The carrying
value of the loan approximates to its fair value.
Eurmag: The loan arose in connection with the acquisition
of the investment in Grangesberg. It is the subject of a letter
agreement, denominated in Swedish Krona, is unsecured and carries
interest at 6.5% per annum on the principal only. It is repayable
from any future financing undertaken by the company, or on demand
following a notice period of 367 days. The terms of the facility
were approved by an independent committee of the board. The
carrying value of the loan approximates to its fair value.
Changes in liabilities arising from financing activities
|
1 April 2019 |
Cash flows |
Non cash movements |
31 March 2020 |
|
£ |
£ |
£ |
£ |
Loan from Juno
Limited |
(3,406,635) |
(100,000) |
(154,153) |
(3,660,788) |
Loan from Eurmag
AB |
(300,087) |
- |
(21,018) |
(321,105) |
|
|
|
|
|
|
(3,706,722) |
(100,000) |
(175,171) |
(3,981,893) |
|
|
|
|
|
The Juno loan relates to the group and company. The cash flow is
in respect of a single loan drawdown of £100,000 and the non cash
movement represents accrued interest.
The Eurmag loan relates to the group only and its non-cash
movement comprises accrued interest, the value of GIAB shares
transferred to Eurang AB which reduced the loan amount and foreign
exchange changes.
19 Long term
provision
|
Group |
|
|
|
|
|
|
2020 |
|
2019 |
|
|
|
|
|
|
£ |
|
£ |
|
|
|
|
|
Provision for site
reinstatement |
(50,000) |
|
(50,000) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The provision for site reinstatement covers the estimated costs
of reinstatement at the Parys Mountain site of the work done and
changes made by the group up to the date of the accounts. These
costs would be payable on completion of mining activities (which is
estimated to be more than 20 years after mining commences) or on
earlier abandonment of the site. The provision has not been
discounted because the impact of doing so is not material to the
financial statements. There are significant uncertainties inherent
in the assumptions made in estimating the amount of this provision,
which include judgements of changes to the legal and regulatory
framework, magnitude of possible contamination and the timing,
extent and costs of required restoration and rehabilitation
activity.
20 Share capital
|
Ordinary shares of
1p |
Deferred shares of
4p |
Total |
|
Issued and
fully paid |
Nominal
value £ |
Number |
Nominal
value £ |
Number |
Nominal
value £ |
|
|
|
|
|
|
|
|
At 1 April 2019 |
1,776,081 |
177,608,051 |
5,510,833 |
137,770,835 |
7,286,914 |
|
Issued in the
period |
93,677 |
9,367,681 |
|
|
93,677 |
|
|
|
|
|
|
|
|
At 31 March 2020 |
1,869,758 |
186,975,732 |
5,510,833 |
137,770,835 |
7,380,591 |
|
|
|
|
|
|
|
|
The deferred shares are non-voting, have no entitlement to
dividends and have negligible rights to return of capital on a
winding up.
On 17 May 2019 a placing of 9,367,681 new ordinary shares
was made to an institution, representing approximately 5.3% of the
company’s current issued share capital, at 2.135 pence per share to raise a total of
£200,000 gross and £180,000 net.
On 24 August 2020 a private
placing of £200,000 gross together with warrants that could raise
an additional £225,000 gross during the following 12 months was
announced.
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 to date have carried a performance criterion,
namely that the company's share price performance from the date of
grant must exceed that of the companies in the top quartile of the
FTSE 100 index. The vesting period for any options granted since
2014 has been one year. Options are forfeited if the employee
leaves employment with the group before the options vest. No
options were granted, lapsed or forfeited in respect of the 2014
plan during the year.
|
|
2020 |
|
|
2019 |
|
|
Options |
Weighted average exercise price in pence |
Remaining contractual life in years |
Options |
Weighted average exercise price in pence |
Remaining contractual life in years |
Outstanding at
beginning of period |
3,500,000 |
2.50 |
2.5 |
4,200,000 |
2.50 |
3.1 |
Granted during
the period |
- |
- |
|
- |
- |
|
Forfeited during
the period |
- |
- |
|
- |
- |
|
Exercised during
the period |
- |
- |
|
- |
- |
|
Expired during
the period |
- |
- |
|
700,000 |
- |
|
Outstanding at
the end of the period |
3,500,000 |
2.00 |
1.5 |
3,500,000 |
2.50 |
2.5 |
Exercisable at
the end of the period |
3,500,000 |
2.00 |
1.5 |
3,500,000 |
2.50 |
2.5 |
There were no expenses in respect of equity-settled employee
remuneration for the year ended 31 March
2020 (2019 – nil).
A summary of options granted and outstanding, all of which are
over ordinary shares of 1 pence, is
as follows:
Scheme |
Number |
Nominal value £ |
Exercise price |
Exercisable from |
Exercisable until |
|
|
|
|
|
|
2014
Unapproved |
3,500,000 |
35,000 |
2.00p |
30
September 2017 |
30
September 2021 |
|
|
|
|
|
|
22 Results attributable to
Anglesey Mining plc
The loss after taxation in the parent company amounted to
£275,206 (2019 loss £220,241). 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
Capital risk management
There have been no changes during the year in the group’s
capital risk management policy.
The group manages its capital to ensure that entities in the
group will be able to continue as going concerns while optimising
the debt and equity balance. The capital structure of the group
consists of debt, which includes the borrowings disclosed in note
19, the cash and cash equivalents and equity comprising issued
capital, reserves and retained earnings.
The group does not enter into derivative or hedging transactions
and it is the group's policy that no trading in financial
instruments be undertaken. The main risks arising from the group's
financial instruments are currency risk and interest rate risk. The
board reviews and agrees policies for managing each of these risks
and these are summarised below.
Interest rate risk
The amounts advanced under the Juno loans are at a fixed rate of
interest of 10% per annum and those from Eurmag are at a fixed rate
of 6.5% per annum. As a result the group is not exposed to interest
rate fluctuations. Interest received on cash balances is not
material to the group’s operations or results.
The company (Anglesey Mining plc) is exposed to minimal interest
rate risks.
Liquidity risk
The group has ensured continuity of funding through a mixture of
issues of shares and the working capital agreement with Juno
Limited.
Trade creditors are payable on normal credit terms which are
usually 30 days. The loans due to Juno and Angmag carry a notice
period of 367 days. Juno, in keeping with its long-established
practice has indicated that it has no current intention of
demanding repayment. No such notice had been received by
25 September 2020 in respect of
either of the loans and they are classified as having a maturity
date between one and two years from the period end.
Currency risk
The presentational currency of the group and company is pounds
sterling. The loan from Juno Limited is denominated in pounds
sterling. As a result, the group has no currency exposure in
respect of this loan. Currency risk in respect of the book value of
the investment in LIM is not significant.
In respect of the investment in Grangesberg in Sweden, if the rate of exchange between the
Swedish Krona and sterling were to weaken against sterling by 10%
there would be a loss to the group of £9,374 (2019 - £8,925) and if
it were to move in favour of sterling by a similar amount there
would be a gain of £11,457 (2019 - £10,908). Regarding liabilities
denominated in Krona if the rate of exchange between the Swedish
Krona and sterling were to weaken against sterling by 10% there
would be a gain to the group of £29,191 (2019 - £27,281) and if it
were to move in favour of sterling by a similar amount there would
be a loss of £35,678 (2019 - £33,343). These gains or losses would
be recorded in other comprehensive income.
Potential exchange variations in respect of other foreign
currencies are not material.
Credit risk
The directors consider that the entity has limited exposure to
credit risk as the entity has immaterial receivable balances at the
year-end on which a third party may default on its contractual
obligations. The carrying amount of the group’s financial assets
represents its maximum exposure to credit risk. Cash is deposited
with BBB or better rated banks.
Group |
Financial assets classified at fair value through
other comprehensive income |
Financial assets measured at amortised
cost |
|
31 March 2020 |
31 March 2019 |
31 March 2020 |
31 March 2019 |
|
£ |
£ |
£ |
£ |
Investments |
100,099 |
97,795 |
- |
- |
Deposit |
- |
- |
123,748 |
123,460 |
Other
receivables |
- |
- |
16,505 |
19,215 |
Cash and cash
equivalents |
- |
- |
95,311 |
6,012 |
|
- |
- |
|
|
|
100,099 |
97,795 |
235,564 |
148,687 |
|
|
|
|
|
|
Financial liabilities measured at amortised
cost |
|
|
|
31 March 2020 |
31 March 2019 |
|
|
|
£ |
£ |
|
|
Trade
payables |
(13,537) |
(30,067) |
|
|
Other
payables |
(84,707) |
(56,472) |
|
|
Loans |
(3,981,893) |
(3,706,722) |
|
|
|
|
|
|
|
|
(4,080,137) |
(3,793,261) |
|
|
|
|
|
|
|
Company |
|
|
|
|
|
Financial assets measured at amortised
cost |
Financial liabilities measured at amortised
cost |
|
31 March 2020 |
31 March 2019 |
31 March 2020 |
31 March 2019 |
|
£ |
£ |
£ |
£ |
Other
receivables |
5,960 |
6,705 |
- |
- |
Cash and cash
equivalents |
92,885 |
3,979 |
- |
- |
|
|
|
|
|
Trade
payables |
- |
- |
(11,939) |
(24,477) |
Other
payables |
- |
- |
(55,252) |
(42,000) |
Loan |
- |
- |
(3,660,788) |
(3,406,635) |
|
|
|
|
|
|
98,845 |
10,684 |
(3,727,979) |
(3,473,112) |
|
|
|
|
|
24 Related party
transactions
Transactions between Anglesey Mining plc and its subsidiaries
are summarised in note 13.
Juno Limited
Juno Limited (Juno) which is registered in Bermuda holds 29% of the company’s issued
ordinary share capital. The group has the following agreements with
Juno: (a) a controlling shareholder agreement dated September 1996 and (b) a consolidated working
capital agreement of 12 June 2002.
Interest payable to Juno is shown in note 7 and the balance due to
Juno is shown in note 18. There were no transactions between the
group and Juno or its group during the year. Danesh Varma is a director and, through his
family interests, a significant shareholder of Juno.
Grangesberg
Bill Hooley and Danesh Varma are directors of Grangesberg Iron
AB and of the special purpose vehicle Eurmag AB; Danesh Varma has been associated with the
Grangesberg project since 2007 when he became a director of Mikula
Mining Limited, a company subsequently renamed Eurang Limited,
previously involved in the Grangesberg project. He did not take
part in the decision to enter into the Grangesberg project when
this was approved by the board. The group has a liability to Eurmag
AB a subsidiary of Eurang amounting to £321,105 at the year-end
(2019 – £300,087) – see note 18. During the year £11,713 (2019 -
£12,472) was subscribed for new shares in GIAB.
Key management personnel
All key management personnel are directors and appropriate
disclosure with respect to them is made in the directors’
remuneration report.
There are no other contracts of significance in which any
director has or had during the year a material interest.
25 Mineral holdings
Parys
(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 £11,858 is payable for the
year beginning 23 March 2019; the
base part of this rent increases to £20,000 when extraction of
minerals at Parys Mountain commences; this rental is index-linked.
A royalty of 1.8% of net smelter returns from mineral sales is also
payable. The lease may be terminated at 12 months’ notice and
otherwise expires in 2070.
(c) Under a mining lease from the Crown dated December 1991 there is an annual lease payment of
£5,000. A royalty of 4% of gross sales of gold and silver from the
lease area is also payable. The lease expired in early 2020 and
negotiations in respect of the renewal of this lease or the
granting of a new lease are continuing.
Lease payments
The group’s mining leases may be terminated by the Group with 12
months’ notice. If they are not so terminated, the minimum payments
due in respect of the leases and royalty agreement are analysed as
follows: within the year commencing 1 April
2020 - £19,095; between 1 April
2021 and 31 March 2026 -
£101,141. 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 non cash
transactions
There were no material non-cash transactions in the year. The
arrangements with QME Limited in respect of Parys Mountain
development which began in 2018 have a non-cash element and are
described in the Strategic Report on pages 5 to 8.
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 (2019 - nil).
28 Contingent
liabilities
There are no contingent liabilities (2019 - nil).
29 Events after the period
end
Subsequent to the period end, on 24
August 2020, the Company made a private placing of
12,500,000 new ordinary shares at 1.6
pence per share, to raise a total of £200,000 gross,
together with 12,500,000 warrants with a term of 12 months to
subscribe for new ordinary shares at an exercise price of 1.8p per
share that if exercised could raise an additional
£225,000.XXXXXXXXXX
Annual General
Meeting 2020
The 2020 Annual General Meeting of shareholders of Anglesey
Mining plc will be held on 30 September
2020 and a General Meeting of Shareholders will be held on
30 October 2020.
In light of current measures relating to Covid-19 and the UK
Government advice on physical distancing measures, no shareholder,
except those designated as attending for the purposes of making up
a quorum, will be admitted to the Annual General Meeting called for
30 September 2020 or to the General
Meeting called for 30 October 2020.
Shareholders should submit a proxy vote in advance of each meeting.
Please note that naming a proxy, other than the Chairman of the
meeting, will not enable such proxy to attend the meetings.
Shareholders who wish to ask any questions relating to the business
of either of the meetings are welcome to do so by means of an email
to mail@angleseymining.co.uk with AGM as its subject. .
Due to the Covid-19 situation, the company’s annual report and
accounts will not be available for publication and distribution at
the time of this notice and therefore the usual resolutions
relating to the reception of those accounts and the directors’
remuneration and remuneration policy reports will not be presented
to the Annual General Meeting.
In June 2020, the UK government
enacted legislation to give companies flexibility to hold their
annual general meetings where lockdowns due to the coronavirus
(COVID-19) pandemic would prevent such meetings in person. The
Corporate Insolvency and Governance Act 2020 introduced two
key measures to help those companies required to hold an annual
general meeting (AGM) during this time. Firstly, a company could
extend the period in which its AGM must be held, and secondly, the
Act allows companies to hold a closed AGM. However, the Act
includes provisions relating to the holding of meetings of
companies taking place between 26 March
2020 and 30 September 2020
(Relevant Period), that is primarily those companies with a
December financial year end, and although the Act provides that
further extensions will be granted to extend the Relevant Period in
increments of up to three months, not to extend beyond 5 April 2021, such extension, which would have
been relevant for those companies with a March, June or other
financial year end, has not been granted.
To deal with this unusual situation the board is calling a
General Meeting of shareholders to be held on 30 October 2020, the notice of which is also set
out below, to conduct the business and resolutions which will not
be considered at the Annual General Meeting on 30 September 2020.
Enclosed with these notices are proxy cards, one for each of the
meetings. It is re-iterated that (a) shareholders cannot attend the
meetings in person and (b) naming a proxy other than the Chairman
of the meeting will not enable such proxy to attend the meeting.
These arrangements appear to the board to be the best way to comply
with the legal requirement to hold an AGM within six months of the
end of the financial year; to provide shareholders with
adequate time to consider the contents of the annual report before
the accounts are presented at the meeting; and to give the required
notice of the resolutions to be considered.
Shareholders should visit the website www.angleseymining.co.uk for
any further information and announcements which might be relevant
to these general meetings.
Notice of Annual
General Meeting to be held on 30 September
2020
Notice is given that the 2020 Annual General Meeting of Anglesey
Mining plc will be held electronically in a physically distanced
manner on 30 September 2020,30 September
2020 at 11.00 a.m. to consider
and, if thought fit, to pass the resolutions set out below.
As ordinary business
- To reappoint John F. Kearney as
a director.
- To reappoint Bill Hooley as a
director.
- To reappoint Howard Miller as a
director.
- To reappoint Danesh Varma as a
director.
- To reappoint Mazars LLP as auditor.
- To authorise the directors to determine the remuneration of the
auditor.
By order of the board
Danesh Varma
Company secretary
10 September 2020
Notice of a
General Meeting to be held on 30 October
2020
Notice is given that a general meeting of shareholders of
Anglesey Mining plc will be held electronically in a physically
distanced manner on 30 October 2020
at 11.00 a.m. to consider and, if
thought fit, to pass the resolutions set out below.
Resolutions 1 to 3 will be proposed as ordinary resolutions and
resolutions 4 and 5 will be proposed as special resolutions:
As ordinary business
- To receive the annual accounts and directors' and auditor’s
reports for the year ended 31 March
2020.
- To approve the directors' remuneration report for the year
ended 31 March 2020.
- To approve the directors' remuneration policy in the directors’
remuneration report for the year ended 31
March 2020.
As special business
4. 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 £660,000, provided that (unless previously revoked,
varied or renewed) this authority shall expire on 31 December 2021, 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).
5. That pursuant to section 570 of the Act, the directors be and
are generally empowered to allot equity securities (within the
meaning of section 560 of the Act) for cash pursuant to the
authority granted under section 551 of the Act pursuant to
resolution 4 above as if section 561(1) of the Act did not apply to
any such allotment, provided that this power shall be limited to
the allotment of equity securities:
(a) in connection with an offer of equity securities (whether by
way of a rights issue, open offer or otherwise) (i) to holders of
ordinary shares in the capital of the company in proportion (as
nearly as practicable) to the respective numbers of ordinary shares
held by them; and (ii) to holders of other equity securities in the
capital of the company, as required by the rights of those
securities or, subject to such rights, as the directors otherwise
consider necessary but subject to such exclusions or other
arrangements as the directors may deem necessary or expedient in
relation to treasury shares, fractional entitlements, record dates
or any legal or practical problems under the laws of any territory
or the requirements of any regulatory body or stock exchange;
and
(b) otherwise than pursuant to paragraph 12(a) above, up to an
aggregate nominal amount of £498,000
and (unless previously revoked, varied or renewed) this power
shall expire on 31 December 2021,
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
10 September 2020
Notes to the notice of AGM and the
subsequent General Meeting
Entitlement to attend and vote
1. The right to vote at the
meeting is determined by reference to the register of members. Only
those shareholders registered in the register of members of the
Company as at the close of business on 28
September 2020 in respect of the AGM and 28 October 2020 in respect of the subsequent
General Meeting (or, if either meeting is adjourned, 48 hours
(excluding any part of a day that is not a working day) before the
date and time of the adjourned meeting) shall be entitled to attend
and vote at the meeting in respect of the number of shares
registered in their name at that time. Changes to entries in the
register of members after that time shall be disregarded in
determining the rights of any person to attend or vote (and the
number of votes they may cast) at the meeting.
Proxies
2. A shareholder is entitled to
appoint another person as his or her proxy to exercise all or any
of his or her rights to attend and to speak and vote at the
meeting. However any person appointed other than the Chairman will,
on this unusual occasion, not be able to attend and vote at the
meeting. Shareholders are therefore recommended to use their proxy
card to vote directly in the way they see fit. A proxy need not be
a member of the Company. A shareholder may appoint more than one
proxy in relation to the meeting, provided that each proxy is
appointed to exercise the rights attached to a different share or
shares held by that shareholder. Failure to specify the number of
shares each proxy appointment relates to or specifying a number
which when taken together with the numbers of shares set out in the
other proxy appointments is in excess of the number of shares held
by the shareholder may result in the proxy appointment being
invalid. A proxy may be appointed only in accordance with the
procedures set out in note 3 and the notes to the proxy form. The
appointment of a proxy will not preclude a shareholder from
attending and voting in person at the meeting.
3. A form of proxy for each
meeting is enclosed. When appointing more than one proxy, complete
a separate proxy form in relation to each appointment. Additional
proxy forms may be obtained by contacting the Company's registrar
Link Asset Services, Proxies, The Registry, 34 Beckenham Road, Kent
BR3 4TU or the proxy form may be photocopied. State clearly on each
proxy form the number of shares in relation to which the proxy is
appointed. To be valid, a proxy form must be received by post or
(during normal business hours only) by hand at the offices of the
Company's registrar, Link Asset Services, Proxies, The Registry, 34
Beckenham Road, Kent BR3 4TU, no later than 11.00 a.m. on 28 September
2020 in respect of the AGM and 28
October 2020 in respect of the subsequent General Meeting
(or, if either meeting is adjourned, no later than 48 hours
(excluding any part of a day that is not a working day) before the
time of any adjourned meeting).
Corporate representatives
4. A shareholder which is a
corporation may authorise one or more persons to act as its
representative(s) at either meeting. Each such representative may
exercise (on behalf of the corporation) the same powers as the
corporation could exercise if it were an individual shareholder,
provided that (where there is more than one representative and the
vote is otherwise than on a show of hands) they do not do so in
relation to the same shares.
Total voting rights
5. As at 14 September 2020 (being the last practicable
date before the publication of this notice), the issued share
capital consists of 199,475,732 ordinary shares of £0.01 each,
carrying one vote each and 21,529,451 Deferred A Shares and
116,241,384 Deferred B Shares which do not carry any rights to
vote. Therefore, the total voting rights as at 14 September 2020 are 199,475,732.
Nominated Persons
6. Where a copy of this notice is
being received by a person who has been nominated to enjoy
information rights under section 146 of the Companies Act 2006
("Act") ("Nominated Person"):
(a) the Nominated Person may have a right under an agreement
between him/her and the shareholder by whom he/she was nominated,
to be appointed, or to have someone else appointed, as a proxy for
the meeting; or
(b) if the Nominated Person has no such right or does not wish to
exercise such right, he/she may have a right under such an
agreement to give instructions to the shareholder as to the
exercise of voting rights. The statement of the rights of
shareholders in relation to the appointment of proxies in note 2
does not apply to a Nominated Person. The rights described in such
notes can only be exercised by shareholders of the Company.
Shareholders' right to require circulation of resolutions to be
proposed at the AGM only
7. A shareholder or
shareholders meeting the qualification criteria set out in note 10
below may require the Company to give shareholders notice of a
resolution which may properly be proposed and is intended to be
proposed at the meeting in accordance with section 338 of the Act.
A resolution may properly be proposed unless (i) it would, if
passed, be ineffective (whether by reason of inconsistency with any
enactment or the Company's constitution or otherwise), (ii) it is
defamatory of any person, or (iii) it is frivolous or vexatious.
The business which may be dealt with at the meeting includes a
resolution circulated pursuant to this right. Any such request must
(i) identify the resolution of which notice is to be given, by
either setting out the resolution in full or, if supporting a
resolution requested by another shareholder, clearly identifying
the resolution which is being supported (ii) comply with the
requirements set out in note 11 below, and (iii) be received by the
Company no later than six weeks before the meeting.
Shareholders' right to have a matter of business dealt with at
the AGM only
8. A shareholder or
shareholders meeting the qualification criteria set out in note 10
below may require the Company to include in the business to be
dealt with at the meeting any matter (other than a proposed
resolution) which may properly be included in the business in
accordance with section 338A of the Act. A matter may properly be
included unless (i) it is defamatory of any person, or (ii) it is
frivolous or vexatious. Any such request must (i) identify the
matter to be included in the business, by either setting out the
matter in full or, if supporting a matter requested by another
shareholder, clearly identifying the matter which is being
supported (ii) set out the grounds for the request (iii) comply
with the requirements set out in note 11 below and (iv) be received
by the Company no later than six weeks before the meeting.
Website publication of audit concerns
9. A shareholder or
shareholders who meet the qualification criteria set out in note 10
below may require the Company to publish on its website a statement
setting out any matter that such shareholders propose to raise at
the subsequent General Meeting relating to either the audit
of the Company's accounts (including the auditors' report and the
conduct of the audit) that are to be laid before the meeting or any
circumstances connected with an auditor of the Company ceasing to
hold office since the last annual general meeting of the Company in
accordance with section 527 of the Act. Any such request must (i)
identify the statement to which it relates, by either setting out
the statement in full or, if supporting a statement requested by
another shareholder, clearly identify the statement which is being
supported (ii) comply with the requirements set out in note 11
below and (iii) be received by the Company at least one week before
the meeting. Where the Company is required to publish such a
statement on its website (i) it may not require the shareholders
making the request to pay any expenses incurred by the Company in
complying with the request (ii) it must forward the statement to
the Company's auditors no later than the time when it makes the
statement available on the website and (iii) the statement may be
dealt with as part of the business of the meeting.
Notes 7, 8 and 9 above: qualification criteria and methods of
making requests
10. In order to require the Company (i)
to circulate a resolution to be proposed at the meeting as set out
in note 7, (ii) to include a matter in the business to be dealt
with at the meeting as set out in note 8, or (iii) to publish audit
concerns as set out in note 9, the relevant request must be made by
(i) a shareholder or shareholders having a right to vote at the
meeting and holding at least five per cent of the total voting
rights of the Company or (ii) at least 100 shareholders having a
right to vote at the meeting and holding, on average, at least £100
of paid up share capital. For information on voting rights,
including the total voting rights of the Company, see note 5 above
and the website referred to in note 15 below.
11. Any request by a shareholder or
shareholders to require the Company (i) to circulate a resolution
to be proposed at either of the meetings as set out in note 7 (ii)
to include a matter in the business to be dealt with at the meeting
as set out in note 8 or (iii) to publish audit concerns as set out
in note 9 may be made either (a) in hard copy, by sending it to
Anglesey Mining plc, Tower Bridge, St Katharine's Way, London E1W 1DD (marked for the attention of
the Company Secretary); or (b) in electronic form, by sending an
email to danesh@angleseymining.co.uk; and must state the full
name(s) and address(es) of the shareholder(s) and (where the
request is made in hard copy form) must be signed by the
shareholder(s).
Questions at the meeting
12. Shareholders have the right to ask
questions at the meetings relating to the business being dealt with
at the meetings in accordance with section 319A of the Act. The
Company must answer any such question unless: (a) to do so would
interfere unduly with the preparation for the meeting or would
involve the disclosure of confidential information; (b) the answer
has already been given on a website in the form of an answer to a
question; or (c) it is undesirable in the interests of the Company
or the good order of the meeting that the question be answered.
Shareholders who wish to ask any questions relating to the business
of either of the meetings are welcome to do so by means of an
email to AGM@angleseymining.co.uk.
Documents available for inspection
13. The following documents will be available
for inspection during normal business hours at the registered
office of the Company from the date of this notice until the time
of the meeting. They will also be available for inspection at the
place of the meeting from at least 15 minutes before the meeting
until it ends: (a) copies of the service contracts of the executive
directors, (b) copies of the letters of appointment of the
non-executive directors and (c) the Articles of Association of the
Company which are also available on the Company’s website.
Biographical details of directors
14. Biographical details of all those
directors who are offering themselves for reappointment at the
meeting are attached to this notice and will also be included in
the annual report and accounts.
Website providing information about the meeting
15. The information required by section 311A
of the Act to be published in advance of the meeting, which
includes the matters set out in this notice and information
relating to the voting rights of shareholders, is available at
www.angleseymining.co.uk.
Directors
John F.
Kearney |
Irish, aged 69, is
Chairman of Anglesey Mining plc and a number of other public
companies, including Labrador Iron Mines Holdings Limited, Buchans
Resources Limited, Minco Exploration plc and Xtierra Inc, and until
2019 was Chairman of Canadian Zinc Corporation.
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 Diploma 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. |
Bill
Hooley |
aged 73, Chief
Executive, is a mining engineering graduate from the Royal School
of Mines, London and has extensive experience in the minerals
industry including mine and processing operations, planning,
project management and corporate management in many countries
including Australia, Saudi Arabia, Canada and the UK.
He has also practised as a minerals industry consultant at a senior
level and has managed other businesses developing and selling
products and services to the minerals and related industries.
He is Vice-Chairman and a director of Labrador Iron Mines Holdings
Limited as well as Chairman and a director of Grangesberg Iron AB
and Eurmag AB. He has been a director of a number of other
companies involved in the minerals industry. He is a Fellow of the
Australasian Institute of Mining and Metallurgy. |
Danesh
Varma |
aged 70, Finance
Director and Company Secretary is a chartered accountant in England
and Wales, and Canada, with over 37 years of experience in
financial management. He is currently a director of Brookfield
Investment Corp., Canadian Manganese Corp., Labrador Iron Mines
Holdings Limited, Anglesey Mining plc, Grangesberg Iron AB, Eurmag
AB and Minco Exploration plc. He also serves as the Chief Financial
Officer of Conquest Resources Limited, Buchans Resources Limited
and Xtierra Inc.
Previously he was President of American Resource Corporation and
Westfield Minerals Limited and a director of Northgate Exploration
Limited., Minco plc and Connemara Mining plc |
Howard
Miller |
aged 76, non-executive director, a
lawyer with over 40 years’ experience in the legal and mining
finance sector in Africa, Canada and the UK. He has extensive
experience in the financing of resource companies. He is a member
of the remuneration, audit and nomination committees and the senior
independent director. |
Anglesey Mining plc
Parys Mountain
Amlwch, Anglesey, LL68 9RE
Phone 01407 831275
mail@angleseymining.co.uk
London
office
Painters’ Hall Chambers
8 Little Trinity Lane, London,
EC4V 2AN
Phone 020 7062 3782
Registrars
Link Asset Services
The Registry, 34 Beckenham Road,
Beckenham, Kent BR3 4TU
Share dealing phone 0371 664 0445
Helpline phone 0371 664 0300
Calls are charged at the standard geographic rate and will vary by
provider. If you are outside the United
Kingdom, please call +44 371 664 0300. Calls outside the
United Kingdom will be charged at
the applicable international rate. Lines are open between 9.00am and 5.30pm, Monday to Friday
excluding public holidays in England and Wales
Registered
office
Tower Bridge House,
St. Katharine’s Way, London, E1W
1DD
Web
site
www.angleseymining.co.uk
Company registered number
1849957
Shares
listed
The London Stock Exchange - LSE:AYM