ANGLESEY MINING PLC
Anglesey Mining plc
Annual report 2015
Strategic report - chairman's statement
The expected resurgence in the resources sector that we discussed this time
last year has generally not yet materialised and indeed there have been some
areas in which confidence has been badly eroded. These matters have made it
very difficult for all junior companies operating in the sector, including our
own. The general economic malaise in Europe has now spread somewhat to the US
and importantly to China. Whilst there are some areas in which blue sky is
appearing the lack of confidence of the investment sector in resources has made
raising funding quite difficult.
In order to reduce corporate costs all the directors have demonstrated their
commitment to the group by waiving salaries and fees since 1st July 2014 which
saved more than £80,000 in the financial year. This waiver is expected to
continue until the financial position of the group improves.
Grangesberg Iron
Our major effort during the year has been with the Grangesberg project where we
began managing operations in May 2014. A successful geotechnical investigation
programme followed the production of a compliant ore resource estimate. However
the ever more depressed iron ore market forced us to the conclusion that we
should not exercise the option over a 51% interest which has now been replaced
with a right of first refusal over that interest.
As part of the ongoing arrangements we continue to manage the project albeit
subject to certain restrictions. The Grangesberg board will need to keep the
future prospects for the iron ore market firmly in view as it looks to future
project funding and possible alternative investment strategies.
Labrador Iron
In Canada the operations of Labrador Iron Mines, in which the company continues
to hold a 15% interest, remained suspended during 2014 as iron ore prices
declined below a level at which an operating surplus could be made. LIM spent
the majority of the year seeking new financing particularly for the development
of its flagship Houston deposit.
However with iron ore prices continuing to fall these financing efforts proved
to be impossible and after the end of the financial year LIM initiated
proceedings for a financial restructuring under the Canadian Companies
Creditors Arrangement Act ("CCAA"). LIM has raised some funds through asset
sales and has sufficient cash available to continue to operate a limited
function until at least the end of the current financial year whilst it seeks
new funding and reviews its ongoing business strategy.
LIM owns extensive iron ore resources, processing plants and equipment and rail
infrastructure and facilities in its Schefferville Projects but is currently in
a challenging financial position. LIM believes that an orderly CCAA process
that enables the restructuring of the company's debts, the restructuring of
certain of its operating contracts and securing additional development
financing to proceed with the development of the Houston Project is in the best
interest of all of stakeholders.
Parys Mountain
Operations at Parys Mountain were maintained at a low level as a consequence of
limited available funding and no additional drilling took place while
management focused on studying the optimisation of mine development. We are
fortunate to hold freehold title to the majority of the known resource and thus
are not subject to onerous annual exploration costs as would be common in many
other jurisdictions. Site maintenance costs are also kept to a minimum.
The increase in the zinc price that was forecast this time last year and which
will be a key driver in the immediate future economics of Parys Mountain has
not yet materialised. However the fundamentals for zinc remain strong with
major mines such as Lisheen and Century planned to close during 2015. With
little new production coming on stream stocks of zinc metal have continued to
fall and it now seems only a matter of time before prices do eventually start
to move upwards. We will need to raise funds to update studies on Parys
Mountain particularly with regard to what may well now be lower than previous
capital costs, so that we will be properly placed when the zinc market begins
its long delayed move forward.
Outlook
The future for commodity prices continues at best to be uncertain. The group
has exposure to iron ore both at LIM and at Grangesberg and whilst neither
makes a cash draw on Anglesey any upward movement in the iron ore price would
significantly benefit both projects and hence the general tenor of the group.
Robust steel production and iron ore demand from China have underpinned the
iron ore price over the past ten years. Despite an economic slowdown, it would
seem that Chinese steel production continues to increase and China will need to
import more iron ore to replace the shutdown of domestic production, which
should help iron ore price stability.
The iron ore industry is re-consolidating as small, high cost miners are
closing. The larger lower cost miners such as Rio Tinto, BHP Billiton and Vale
should continue to take market share as a result. The top four producers are
re-asserting their status as an oligopoly in the market and currently control
54% of the supply. This dominant position is forecast to increase to 75% within
the next two years and will likely result in more disciplined supply growth and
less volatility in iron ore prices.
The group's Parys Mountain property will benefit from any improvement in the
price of zinc. Zinc will form a major part of the projected revenue stream from
Parys Mountain, especially in the early years of production, and would be
followed by increasing proportions of lead and copper as mine development
advances.
Over the past few years there has been a strong argument supporting higher
prices for zinc and lead over the long term, as a forecast imbalance between
demand and supply is widely expected to have a significant impact. Wood
Mackenzie, a global leader in commercial intelligence for the metals and mining
industries, has stated that as a result of the industrialisation and
urbanisation of China, they expect growth in demand for zinc to average 6% per
year until 2020. For the rest of the world, they forecast demand to rise at a
rate of 2.2% annually so that on a global basis, zinc demand is expected to
increase 4% annually until 2020. This view is also held by most market
commentators including CRU which in its 2014 Zinc Market Outlook was
forecasting that "enormous deficits are likely in 2017 and 2018" and that "some
very high prices are in prospect".
The demand for zinc and lead is expected to remain robust because of wide
spread industrial usage. On the supply side, there has been a lack of
investment in recent years in the exploration for, and development of, new zinc
and lead projects, which has led to limited new sources of supply. In addition,
a number of larger producers, notably the Brunswick mine in Canada, the Lisheen
mine in Ireland and the Century mine in Australia, either have closed or are
expected to shut down by the end of 2015, all of which should lead to reduced
current mine supply of zinc and lead concentrates.
While the US economy continues to show signs of improvement, the global
economic outlook remains weak and uncertain. China's growth continues to
decelerate and Europe risks slipping into recession. Near-term growth prospects
in both China and Europe now look dependent on further government intervention.
There is also concern that as prices rise, some Chinese zinc production will
come back on line. While it is possible that Chinese production could increase
to fill the gap, much higher prices are needed to sustain these operations.
However, on the supply side, the pipeline of large-scale, development-ready,
zinc-lead projects remains very thin and the long term outlook for the prices
of both zinc and lead remains very favourable.
John F. Kearney
Chairman
31 July 2015
Strategic report - operations
Principal activities and business review
The group is engaged in the business of exploring and evaluating the
wholly-owned Parys Mountain project in North Wales, although activities there
have been very limited during the year.
Under various agreements the group participates in the management of the
Grangesberg iron ore property in Sweden in which it has a 6% holding and a
right of first refusal to acquire a further 51% ownership interest.
Operations at the Labrador iron project in eastern Canada in which group has a
15% holding (2014 - 15%) are currently suspended. LIM is now operating under
the Canadian Companies' Creditors Arrangement Act to facilitate a restructuring
and refinancing of its business operations.
The group continues its search for other mineral exploration and development
opportunities.
The aim of the group is to create value in the Parys Mountain and Grangesberg
properties, including by co-operative arrangements where appropriate, and to
actively engage in other mineral ventures using the group's own resources
together with such external investment and finance as may be required.
Parys Mountain
The Parys Mountain property has a significant UK zinc, copper and lead deposit
with small amounts of silver and gold. A feasibility study in 1991 demonstrated
the technical and economic viability of bringing the property into production
at a rate of 350,000 tonnes per annum, producing zinc, copper and lead
concentrates. In 2012 the first JORC Code compliant resource estimate of the
property was published. It showed 2.1 million tonnes at 6.9% combined base
metals in the indicated category and 4.1 million tonnes at 5.0% combined in the
inferred category.
The site has a head frame, a 300m deep production shaft and planning permission
for operations; consequently the lead time to production is expected to be
relatively short. The group has freehold ownership of the minerals and surface
land and there is substantial exploration potential. Infrastructure is good,
political risk is low and the project has the support of local people and
government.
During the financial year activities have been limited to a minor amount of
follow-up geological work.
There are technical and other matters to be addressed to ensure that the
project moves towards production, however the directors are of the opinion that
this project is at an advanced state and the existence of the original
feasibility study, together with the valid planning permissions, will do much
to reduce both the volume of work required to move the project into production
and the risks associated with this work. After due consideration the directors
decided to undertake an impairment review this year, however this review did
not indicate any requirement for impairment against the value of the Parys
Mountain mineral asset on the balance sheet. Operation of the mine and the
receipt of cashflows from it are dependent on finance being available to fund
the development of the property.
Grangesberg Iron AB
In late May 2014 the group entered into agreements giving it the right to
acquire a majority interest in the Grangesberg iron ore mine 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 Grangesberg had mined in excess of 150 million tonnes of iron ore.
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 a series of agreements the group purchased for US$145,000 a direct 6%
interest in GIAB, a private Swedish company founded in 2007 which had recently
completed a financial and capital restructuring with assistance from the group.
At the same time the group obtained an option to acquire 51% of the enlarged
share capital of GIAB for the issue of new ordinary shares of Anglesey to the
value of US$1.75 million priced at a minimum of 3.375 pence per share. The
group also entered into shareholder and cooperation agreements such that during
the term of the option Anglesey holds operatorship of GIAB subject to certain
conditions and appointed three out of five directors to the board of GIAB.
Given the continuing difficulties with the iron ore price this option was not
exercised however a right of first refusal in the case of another offer has
been secured, until June 2018. This right has been granted in exchange for the
group continuing to co-manage GIAB on a cost recovery basis.
In September 2014 an NI 43-101Technical Report was prepared by Roscoe Postle
Associates Inc ("RPA") showing a compliant 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.
A programme to look closely at geo-mechanical and hydro-geological aspects of
the site which will be critical components of the permitting regime required
for the dewatering and reopening of the mine has been completed and a final
report is in the course of preparation.
During the coming year, under Anglesey's direction, and subject to suitable
economic conditions prevailing, GIAB will review and update its previous
pre-feasibility study on the project incorporating inputs from the compliant
resource estimate and from the geo-technical investigations.
Labrador Iron
Labrador Iron Mines Holdings Limited (LIM) was formerly an associate company in
the group however following a dilution of the group's holding in November 2012
it became an investment in which Anglesey holds a 15% interest.
Labrador Iron Mines is engaged in the exploration, development and mining of
direct shipping iron ore projects near Schefferville in the central part of the
Labrador Trough region, one of the major iron ore producing regions in the
world. There is a direct railway to the Port of Sept-Îles on the Atlantic Ocean
and established infrastructure.
LIM did not undertake any mining operations during the 2014 operating season
due to a combination of the prevailing low price of iron ore in 2014, an
assessment of the current economics of its deposits and a strategic shift in
corporate focus towards establishing a lower cost operating framework.
In April 2015 LIM initiated a court-supervised process under the Canadian
Companies' Creditors Arrangement Act in order to facilitate a restructuring and
refinancing of its business operations. These proceedings should provide LIM
with the time and stability to restructure its business, negotiate a
restructuring plan with stakeholders, compromise creditor claims, restructure
key operating contracts, secure new financing, and otherwise consider
restructuring and refinancing options. In view of this situation the value of
the group's investment in LIM has been written down to £1 in the accounts to 31
March 2015.
Other activities
Management continues to search for new properties suitable for development
within a relatively short time frame and within the financing capability likely
to be available to the group.
Performance
The directors expect to be judged by results of project development and/or
exploration and by their success in creating long term value for shareholders.
The group holds shares in mineral companies and has 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; these and other factors are dealt with in the risks and
uncertainties section below.
Financial results and position
The group has no revenues from the operation of its properties. The loss for
the year after tax was £1,736,610 compared to a loss of £7,173,703 in 2014.
Each of these losses are due chiefly to falls in the value of the group's
investment in Labrador Iron. Although there were significant expense reductions
during the year (including the waiver by directors of salaries and fees) the
administrative and other costs excluding investment income and finance charges
were £355,071 compared to £353,455 in the previous year. Included in this
year's figure was £167,256 in respect of expenses in connection with the
acquisition of the Grangesberg investment (2014 - nil).
During the year there were no additions to fixed assets (2014 - nil) and £
75,145 (2014 - £48,482) was capitalised in respect of the Parys Mountain
property as mineral property exploration and evaluation.
The group's cash balance at 31 March 2015 was £96,873 (2014 - £289,097). The
foreign exchange loss of £4,574 (2014 -loss £3,741) shown in the income
statement arises on cash balances held in Canadian dollars and Swedish Krona.
At 31 March 2015 the company had 160,608,051 ordinary shares in issue,
unchanged from last year.
Employment, community, donations and environment
The group is an equal opportunity employer in all respects and aims for high
standards from and for its employees. It also aims to be a valued and
responsible member of the communities which it operates in or affects.
The group has no operations; consequently its effect on the environment is very
slight, being limited to the operation of two small offices, where recycling
and energy usage minimisation are taken seriously and encouraged. It is not
practical or useful to quantify the effects of these measures. There are no
social, community or human rights issues which require the provision of further
information in this report.
Risks and uncertainties
In conducting its business the group faces a number of risks and uncertainties
some of which have been described above in regard to particular projects.
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 and retention of
properties, mineral claims, leases and other mineral interests as well as for
the recruitment and retention of qualified employees and other personnel.
Development and liquidity risk
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.
Exploration and development
Exploration for minerals and development of mining operations involve risks,
many of which are outside the group's control. The group currently operates in
politically stable environments and hence is unlikely to be subject to
expropriation of its properties 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 Limited 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. The majority of the cash balance at the year-end was held
in sterling - see notes 17 and 24.
Permitting, environment and social
The group holds planning permission for the development of the Parys Mountain
property but further consents will be required to carry out proposed activities
and these may be subject to various reclamation and operational conditions.
Employees and personnel
The group is dependent on the services of a small number of key executives
including 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. At 31 March 2015 the
company had six male directors; there were no female directors or employees.
Financial instruments
The group's use of financial instruments is described in note 24.
Approved by the board of directors and signed on its behalf
Bill Hooley
Chief executive officer
31 July 2015
Directors' report
The directors are pleased to submit their report and the audited accounts for
the year ended 31 March 2015.
The corporate governance statement which follows forms part of this report. In
accordance with statutory requirements, the principal activities of the group
and other information is set out in the strategic report section preceding this
report.
Directors
The names of the directors are shown in the directors' remuneration report and
biographical details are shown at the end of this report. 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 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 36.1% of the
company's ordinary share capital. The company has a controlling shareholder
agreement and working capital agreement with Juno. Advances made under the
working capital agreement are shown in note 19. Apart from interest charges
there were no transactions between the group and Juno or its group during the
year. An independent committee reviews and approves any transactions and
potential transactions with Juno. Danesh Varma is a director and, through his
family interests, a significant shareholder of Juno.
John Kearney is chairman and chief executive of LIM, Bill Hooley is a director
and vice-chairman of LIM and Danesh Varma is a director of LIM. All three are
shareholders of LIM, are entitled when applicable to remuneration from LIM.
There are no transactions between LIM, the group and the company which are
required to be disclosed.
In May 2014 Bill Hooley and Danesh Varma were appointed as directors of
Grangesberg Iron AB and of the special purpose vehicle Eurmag AB; further
information concerning these appointments is included in the strategic report.
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 £226,857 at the year end (2014 - nil). See also note 25.
There are no other contracts of significance in which any director has or had
during the year a material interest.
Substantial shareholders
At 16 July 2015 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
36.1% 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 this year's annual
general meeting, the directors will seek a renewal and replacement of the
company's existing share allotment authorities.
The authority sought in resolution 12 of the notice of the AGM 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 £540,000 (54,000,000
ordinary shares) which is approximately one third of the total issued ordinary
share capital of the company as at 16 July 2015. 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 company'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 company's employee share and incentive plans.
The purpose of resolution 13 is to authorise the directors to allot new shares
pursuant to the general authority given by resolution 12 in connection with a
pre-emptive offer or offers to holders of other equity securities if required
by the rights of those securities or as the board otherwise considers
necessary, or otherwise up to an aggregate nominal amount of £401,500
(40,150,000 ordinary shares). This aggregate nominal amount represents
approximately 25% of the issued ordinary share capital of the company at 30
July 2015. 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. The
authority sought under resolution 13 will expire on 31 December 2015. The
directors intend to seek renewal of this authority at future annual general
meetings.
Rights and obligations attaching to shares
The rights and obligations attaching 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 22.
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 a general meeting or at a separate
meeting of the holders of any class of shares in the capital of the company,
either in person or by proxy, in respect of any share held by him unless all
monies presently payable by him in respect of that share have been paid.
Furthermore, no shareholder shall be entitled to attend or vote either
personally or by proxy at a general meeting or at a separate meeting of the
holders of that class of shares or on a poll if he has been served with a
notice after failing to provide the company with information concerning
interests in his shares required to be provided under the Companies Act 2006.
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
(2014 - nil).
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 Financial Reporting
Council's document "Going concern and liquidity risk: Guidance for directors of
UK companies 2009".
The ongoing operations of the group are dependent on its ability to raise
adequate financing. The group relies on equity financing and support from its
shareholders to fund its working capital requirements. The group will need to
generate additional financial resources in order to meet its planned business
objectives and continue as a going concern. Additional financing will be
required in the short term to continue the development of the group's
properties and in the longer term to put the Parys Mountain Mine into
production.
The directors recognise the continuing operations of the group are dependent
upon its ability to raise adequate financing and that this represents a
material uncertainty which may cast significant doubt about the group's ability
to continue as a going concern. The directors have a reasonable expectation
that the required financing will be raised and are actively pursuing various
financing options with certain shareholders and financial institutions
regarding proposals for financing. 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.
Greenhouse Gas emissions
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 slight and the
directors do not believe that any useful purpose would be served by attempting
to quantify the amounts of these emissions.
Post balance sheet events
See note 30.
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 the 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, is fair, balanced and understandable and provides 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, the directors are also responsible
for preparing a Strategic Report, Directors' Report, Remuneration Report and
Corporate Governance Statement that comply with that law and those regulations.
The directors are responsible for the maintenance and integrity of the group
website. 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 and that 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.
A resolution to reappoint Mazars LLP as auditor and to authorise the directors
to fix their remuneration will be proposed at the annual general meeting.
Approved by the board of directors and signed on its behalf
Danesh Varma
Company Secretary
31 July 2015
Independent auditor's report to the members of Anglesey Mining plc
We have audited the financial statements of Anglesey Mining plc for the year
ended 31 March 2015 which comprise the Group Income Statement, the Group
Consolidated Statement of Comprehensive Income, the Group and Company Statement
of Financial Position, the Group and Company Statement of Changes in Equity,
the Group and Company Statement of Cash Flows and the related notes. 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.
Respective responsibilities of directors and auditor
As explained more fully in the Directors' Responsibilities Statement on page 9,
the directors are responsible for the preparation of the financial statements
and for being satisfied that they give a true and fair view.
Our responsibility is to audit and express an opinion on the financial
statements in accordance with applicable law and International Standards on
Auditing (ISAs) (UK and Ireland). Those standards require us to comply with the
Auditing Practices Board's Ethical Standards for Auditors.
This report is made solely to the 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 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 company and the company's members as a body for our
audit work, for this report, or for the opinions we have formed.
Scope of the audit of the financial statements
An audit involves obtaining evidence about the amounts and disclosures in the
financial statements sufficient to give reasonable assurance that the financial
statements are free from material misstatement, whether caused by fraud or
error. This includes an assessment of: whether accounting policies are
appropriate to the group's and the parent company's circumstances and have been
consistently applied and adequately disclosed, the reasonableness of
significant accounting estimates made by the directors and the overall
presentation of the financial statements. In addition, we read all the
financial and non-financial information in the annual report in order to
identify material inconsistencies with the audited financial statements and to
identify any information that is apparently materially incorrect based on, or
materially inconsistent with, the knowledge acquired by us in the course of
performing the audit. If we become aware of any apparent material misstatements
or inconsistencies we consider the implications for our report.
There are 7 legal entities accounting for 100% of the group's operating loss,
100% of net assets and 100% of total assets all of which were subject to full
scope audits for the year ended 31 March 2015. The audit of all the entities
within the group was undertaken by the group audit team.
Our assessment and application of materiality
We apply the concept of materiality both in planning and performing our audit,
and in evaluating the effect of misstatements on the financial statements and
our audit. Materiality is used so we can plan and perform our audit to obtain
reasonable, rather than absolute, assurance about whether the financial
statements are free from material misstatement. The level of materiality we set
is based on our assessment of the magnitude of misstatements that, individually
or in aggregate, could reasonably be expected to have influence on the economic
decisions of the users of the financial statements.
Based on our professional judgement the level of overall materiality we set for
the group financial statements is outlined below:
Overall Group £380,000
materiality:
Benchmark applied: This has been calculated with reference to the group's
net assets, of which it represents approximately 3%.
Basis for chosen Net assets represents shareholders' funds and we have
benchmark: determined it to be the principal benchmark within the
financial statements relevant to shareholders, as the
group has no revenues and is still exploring and
evaluating mineral sites in which it retains an
interest.
We agreed with the Audit Committee that we would report to it all audit
differences in excess of £11,000, as well as differences below that threshold
that, in our view, warranted reporting on qualitative grounds. We also report
to the Audit Committee on disclosure matters that we identified during the
course of assessing the overall presentation of the financial statements.
Our assessment of the risks of material misstatement
The assessed risks of material misstatement described below are those that had
the greatest effect on our audit strategy, the allocation of resources in the
audit and directing the efforts of the engagement team.
The risk Our response
Going concern
The financial statements are prepared We evaluated the directors' assessment
on a going concern basis in accordance of the group's ability to continue as
with IAS1 'Presentation of Financial a going concern. In particular, we
Statements'. Given the cash position reviewed and challenged the cash flow
of the group at the year end, the net forecasts including key assumptions to
current assets of £6,293, the net cash assess the risk of the inability to
outflows since the year end, and the meet liabilities as they fall due. We
projected net cash outflows for the have considered the group's reliance
net 12 months there is a potential on ongoing support from its largest
material uncertainty that the group shareholder, Juno Limited, including
does not have sufficient cash or other its ability to provide adequate funds
financial resources to continue in for its current and future activities
operation for at least 12 months from and the availability of other sources
the date of authorising these of finance to the group to support the
financial statements. going concern assumption.
In the absence of support from Juno
Limited, the Directors consider that
the going concern status of the group
would be dependent on the raising of
funds from share issues or from
accessing alternative sources of
funding. These conditions indicate
the existence of a material
uncertainty which may cast significant
doubt about the group and company's
ability to continue as a going
concern. Accordingly, as outlined
below, without modifying our opinion
on the financial statements in respect
of this matter, we have included an
emphasis of matter.
Potential impairment of capitalised
costs associated with the exploration
and evaluation of the Parys Mountain
mine site
Our audit work included, but was not
The group has held rights to explore restricted to, a review of the
and mine the site for a number of directors' assessment of the criteria
years but has not completed for the capitalisation of exploration
exploration and evaluation activities and evaluation expenditure and whether
and feasibility assessments to an there are any indicators of impairment
extent where the site has been to capitalised costs. The directors
confirmed as being commercially viable concluded that there were indicators
and mining activities commenced. There of potential impairment, however their
is a risk that accounting criteria assessment did not indicate that an
associated with the capitalisation of impairment of the asset was required.
exploration and evaluation expenditure Our work included a review of the
may no longer be appropriate and that integrity of the discounted cash flow
capitalised costs exceed the value in model used by the directors to make an
use. Any assessment of the value in assessment as to whether impairment
use is highly judgemental and is based had occurred, as well as using our
on the directors' assessment of a professional scepticism to challenge
number of factors, including: long and test the key assumptions for
term metal commodity prices, the sensitivity to the model. These key
estimated mineral deposits from assumptions included: the expected
independent experts' studies, costs future revenue and costs associated
associated with mineral extraction and with the extraction and sale of the
sale, discount rates and exchange rate mineral deposits, future metal prices,
factors. currency exchange rates, demand for
the minerals and the discount rate
utilised in the financial model. Our
work did not indicate that impairment
to exploration and evaluation assets
was required.
Potential impairment of the investment
in the subsidiary, Parys Mountain
Mines Limited, in the company
financial statements
In conjunction with our work
The cost of the investment in and loan associated with the potential
due from the subsidiary, Parys impairment of the exploration and
Mountain Mines Limited, held in the evaluation assets held within Parys
balance sheet of the company, is Mountain Mine Limited, we considered
supported by the future cash flows whether there was an indication that
associated with the recovery of the the cost of the investment in and loan
exploration and evaluation assets due from the subsidiary required
following the development of the Parys writing down in the company. As there
Mountain site held by Parys Mountain was no impairment of the asset held by
Mines Limited. If there were Parys Mountain Mine Limited, there is
impairment in the exploration and no indication that the carrying value
evaluation assets, this would have a of the investment in and loan due from
direct impact on the carrying value of the company was not recoverable.
the investment in and loan due from
the subsidiary, which may need to be
written down in the company's
accounts.
Accounting treatment of Grangesberg
Iron AB ("GIAB"), Eurang Limited and
Eurmag AB
We have reviewed management's
During the year, Anglesey Mining Plc assessment of the contractual
acquired a 6% interest in Grangesberg agreements entered into, including the
Iron AB through a special purpose rights and restrictions within these
subsidiary vehicle Angmag AB. An agreements, and their conclusion,
Option and Control Agreement also gave under the requirements of IFRS10, that
the Company the right to acquire the Anglesey Mining Plc had the ability to
entire share capital of Eurang Limited exercise control, during the year,
which through its 100% subsidiary over Angmag AB. Management has
Eurmag AB, holds a 51% shareholding in concluded that Angmag AB should be
GIAB. There is a risk that the terms designated as a subsidiary and
of this Option and Control Agreement, included in the Consolidated Financial
together with a Restructuring Statements of Anglesey Mining Plc.
Agreement and Shareholder's Agreement, Management's assessment of the
relating to the 6% interest acquired, contractual agreements entered into,
are considered to result in the including the rights and restrictions
Company having the ability to within these agreements, concluded
exercise, directly or indirectly, that under the requirements of IFRS10
control of GIAB under the requirements they did not have control over GIAB,
of IFRS10. Eurang Limited or Eurmag AB.
However, management considered that
the ability to exert significant
influence over GIAB existed during the
Option and Control Agreement period,
thereby identifying GIAB as an
associate of the company. No
transactions of GIAB have been
accounted for as an associate in the
financial statements as management has
concluded that the impact is
immaterial. Whilst we consider that
under the requirements of IFRS during
the period of significant influence
the interest should have been
recognised as an associate, the
amounts and associated disclosures are
not material to the Group financial
statements.
The Audit Committee's consideration of these risks is set out on pages 15 and
16.
The audit procedures relating to the above mentioned matters were designed in
the context of our audit of the financial statements as a whole. Our opinion on
the financial statements is not modified with respect to any of these risks,
and we do not express an opinion on these individual risks.
Opinion on the financial statements
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 2015 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.
Emphasis of matter - Going concern
In forming our opinion on the financial statements, which is not modified in
this regard, we have considered the adequacy of the disclosure made in note 2
to the financial statements concerning the Group's ability to continue as a
going concern. The Group incurred a net cash outflow of £192,224 during the
year ended 31 March 2015 and, at that date it had net current assets of £6,293.
These conditions, along with the other matters explained in note 2 to the
financial statements, indicate the existence of a material uncertainty which
may cast significant doubt about the company's ability to continue as a going
concern. The financial statements do not include the adjustments that would
result if the company was unable to continue as a going concern.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion except for the effects of the matter described in the Basis for
Qualified Opinion paragraph:
* the part of the Directors' Remuneration Report to be audited has been
properly prepared in accordance with the Companies Act 2006;
* 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
* the information given in the Corporate Governance Statement with respect to
internal control and risk management systems in relation to financial
reporting processes and about share capital is consistent with the
financial statements and rules 7.2.5 and 7.2.6 of the Disclosure and
Transparency Rules.
Matters on which we are required to report by exception
We have nothing to report in respect of the following:
Under the International Standards on Auditing (ISAs) (UK and Ireland), we are
required to report to you if, in our opinion, information in the annual report
is:
* materially inconsistent with the information in the audited financial
statements; or
* apparently materially incorrect based on, or materially inconsistent with,
our knowledge of the company acquired in the course of performing our
audit; or
* otherwise misleading.
In particular we are required to consider whether we have identified any
inconsistencies between our knowledge acquired during the audit and the
directors' statement that they consider the annual report is fair, balanced and
understandable and whether the annual report discloses those matters that we
communicated to the audit committee which we consider should have been
disclosed.
Under the Companies Act 2006, we are required to report to you, if in our
opinion:
* adequate accounting records have not been kept, 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 company.
Under the Listing Rules we are required to review:
* the directors' statement, set out on page 8, in relation to going concern;
and
* the part of the Corporate Governance Statement relating to the company's
compliance with the provisions of the UK Corporate Governance Code
specified for our review.
Richard Metcalfe (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
Date: 31 July 2015
Group income statement
All attributable to equity holders of the company
Notes Year ended 31 Year ended 31
March 2015 March 2014
All operations are continuing
£ £
Revenue - -
Expenses (355,071) (353,455)
Impairment of investment 14 (1,231,218) (5,451,267)
Exchange difference on 14 (26,766) (1,255,280)
investment impairment
Investment income 6 882 2,630
Finance costs 7 (119,863) (112,590)
Foreign exchange loss (4,574) (3,741)
Loss before tax 4 (1,736,610) (7,173,703)
Tax 8 - -
Loss for the period (1,736,610) (7,173,703)
Loss per share
Basic - pence per share 9 (1.1)p (4.5)p
Diluted - pence per share 9 (1.1)p (4.5)p
Group consolidated statement of comprehensive income
Loss for the period (1,736,610) (7,173,703)
Other comprehensive income:
Exchange difference on (31,163) -
translation of foreign
holding
Total comprehensive loss (1,767,773) (7,173,703)
for the year
Statement of financial position of the group
31 March 2015 31 March 2014
Notes
£ £
Assets
Non-current assets
Mineral property exploration and 10 14,877,193 14,802,048
evaluation
Property, plant and equipment 11 204,687 204,687
Investments 14 86,660 1,257,985
Deposit 15 122,806 122,596
15,291,346 16,387,316
Current assets
Other receivables 16 30,977 17,017
Cash and cash equivalents 17 96,873 289,097
127,850 306,114
Total assets 15,419,196 16,693,430
Liabilities
Current liabilities
Trade and other payables 18 (121,557) (99,647)
17
(121,557) (99,647)
Net current assets 6,293 206,467
Non-current liabilities
Loans 19 (2,882,502) (2,418,873)
Long term provision 20 (50,000) (42,000)
(2,932,502) (2,460,873)
Total liabilities (3,054,059) (2,560,520)
Net assets 12,365,137 14,132,910
Equity
Share capital 21 7,116,914 7,116,914
Share premium 9,848,949 9,848,949
Currency translation reserve (31,163) -
Retained losses (4,569,563) (2,832,953)
Total shareholders' equity 12,365,137 14,132,910
The financial statements of Anglesey Mining plc were approved by the board of
directors, authorised
for issue on 31 July 2015 and signed on its behalf by:
John F. Kearney, Chairman
Danesh Varma, Finance Director
Statement of financial position of the company
31 March 31 March
2015 2014
Notes £ £
Assets
Non-current assets
Investments 13 14,117,026 13,977,564
14,117,026 13,977,564
Current assets
Other receivables 16 13,945 13,793
Cash and cash equivalents 17 72,088 267,045
86,033 280,838
Total Assets 14,203,059 14,258,402
Liabilities
Current liabilities
Trade and other payables 18 (102,660) (86,007)
(102,660) (86,007)
Net current (liabilities)/assets (16,627) 194,831
Non-current liabilities
Loan 19 (2,659,916) (2,418,873)
(2,659,916) (2,418,873)
Total liabilities (2,762,576) (2,504,880)
Net assets 11,440,483 11,753,522
Equity
Share capital 21 7,116,914 7,116,914
Share premium 9,848,949 9,848,949
Retained losses (5,525,380) (5,212,341)
Shareholders' equity 11,440,483 11,753,522
The financial statements of Anglesey Mining plc registered number 1849957 were
approved by the
board of directors and authorised for issue on 31 July 2015, and signed on its
behalf by:
John F. Kearney, Chairman
Danesh Varma, Finance Director
Statements of changes in equity
All attributable to equity holders of the company.
Group Share Share Currency Retained Total
capital premium translation (losses)/
reserve earnings
£ £ £ £ £
Equity at 1 April 2013 7,116,914 9,848,949 - 4,340,750 21,306,613
Total comprehensive loss for
the year:
Loss for the year - - -
(7,173,703) (7,173,703)
Total comprehensive loss for - - -
the year (7,173,703) (7,173,703)
Equity at 31 March 2014 7,116,914 9,848,949 - 14,132,910
(2,832,953)
Total comprehensive loss for
the year:
Loss for the year - - -
(1,736,610) (1,736,610)
Exchange difference on - - (31,163) - (31,163)
translation of foreign
holding
Total comprehensive loss for - - (31,163)
the year (1,736,610) (1,767,773)
Equity at 31 March 2015 7,116,914 9,848,949 (31,163) 12,365,137
(4,569,563)
Company Share Share Retained Total
capital £ premium £ losses £ £
Equity at 1 April 2013 7,116,914 9,848,949 12,229,198
(4,736,665)
Total comprehensive loss for
the year:
Loss for the year - - (475,676) (475,676)
Total comprehensive loss for - - (475,676) (475,676)
the year
Equity at 31 March 2014 7,116,914 9,848,949 11,753,522
(5,212,341)
Total comprehensive loss for
the year:
Loss for the year - - (313,039) (313,039)
Total comprehensive loss for - - (313,039) (313,039)
the year
Equity at 31 March 2015 7,116,914 9,848,949 11,440,483
(5,525,380)
Statement of cash flows of the group
Notes Year ended 31 Year ended 31
March 2015 March 2014
£ £
Operating activities
Loss for the period (1,736,610) (7,173,703)
Adjustments for:
Investment income 6 (882) (2,630)
Finance costs 7 119,863 112,590
Impairment of investment 14 1,231,218 5,451,267
Exchange difference on 14 26,766 1,255,280
investment impairment
Foreign exchange movement 4,574 3,741
(355,071) (353,455)
Movements in working capital
(Increase)/decrease in (15,867) 23,222
receivables
Increase in payables 4,934 15,491
Net cash used in operating (366,004) (314,742)
activities
Investing activities
Investment income 672 2,238
Mineral property exploration and (69,888) (65,003)
evaluation
Investment (74,940) -
Net cash used in investing activities (144,156) (62,765)
Financing activities
Loans 322,510 -
Loan received -
Net cash generated from financing 322,510 -
activities
Net decrease in cash (187,650) (377,507)
and cash equivalents
Cash and cash equivalents at start 289,097 670,345
of year
Foreign exchange movement (4,574) (3,741)
Cash and cash equivalents at end 17 96,873 289,097
of year
Statement of cash flows of the company
Notes Year ended Year ended
31 March 31 March
2015 2014
£ £
Operating activities
Loss for the period 23 (313,039) (475,676)
Adjustments for:
Investment income (477) (2,013)
Finance costs 116,043 112,590
(197,473) (365,099)
Movements in working capital
(Increase)/decrease in (152) 12,309
receivables
Increase in payables 16,653 15,491
Net cash used in operating (180,972) (337,299)
activities
Investing activities
Interest income 477 2,013
Investments and long term loans (139,462) (20,884)
Net cash used in investing (138,985) (18,871)
activities
Financing activities
Loan from Juno Limited 125,000 -
Net cash generated from financing 125,000 -
activities
Net decrease in cash and cash (194,957) (356,170)
equivalents
Cash and cash equivalents at start 267,045 623,215
of period
Cash and cash equivalents at end 17 72,088 267,045
of period
Notes to the accounts
1 General information
Anglesey Mining plc is domiciled and incorporated in England and Wales under
the Companies Act. 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 as shown on the rear cover.
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 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. The ongoing operations of the group are dependent on its ability
to raise adequate financing. The group relies on equity financing and support
from its shareholders to fund its working capital requirements. The group will
need to generate additional financial resources in order to meet its planned
business objectives and continue as a going concern. Additional financing will
be required in the short term to continue the development of the group's
properties and in the longer term to put the Parys Mountain Mine into
production.
The directors recognise the continuing operations of the group are dependent
upon its ability to raise adequate financing. The directors have a reasonable
expectation that the required financing will be raised and are actively
pursuing various financing options with certain shareholders and financial
institutions regarding proposals for financing. 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.
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 disposition 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. The expected life used
in the model has been adjusted from the longer historical average life, based
on directors' estimates of the effects of non-transferability, exercise
restrictions, market conditions, age of recipients and behavioural
considerations.
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. Deferred tax 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.
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. The carrying value is reviewed annually to consider whether it
exceeds the recoverable value in which case any impairment in value would be
charged immediately to the income statement.
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.
Intangible assets - mineral property exploration and evaluation costs
Intangible assets are stated in the statement of financial position at cost,
less accumulated amortisation and provisions for impairment.
Costs incurred prior to obtaining the legal rights to explore a mineral
property are expensed immediately to the income statement. Mineral property
exploration and evaluation costs are capitalised until the results of the
projects, which are usually based on geographical areas, are known; these
include an allocation of administrative and management costs as determined
appropriate to the project by management.
Where a project is successful, the related exploration costs are amortised over
the life of the estimated mineral reserve on a unit of production basis. Where
a project is terminated, the related exploration costs are expensed
immediately. Where no internally-generated intangible asset can be recognised,
development expenditure is recognised as an expense in the period in which it
is incurred.
Impairment of tangible and intangible assets
The values of mineral properties are reviewed annually for indications of
impairment and when these are present a review to determine whether there has
been any impairment is carried out. They are written down when any impairment
in their value has occurred and are written off when abandoned. Where a
provision is made or reversed it is dealt with in the income statement in the
period in which it arises.
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.
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
Financial assets and liabilities are initially recognised and subsequently
measured based on their classification as "loans and receivables", "available
for sale financial assets" or "other financial liabilities".
Loans and receivables are non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. They are
included in current assets, except where they mature more than 12 months after
the period end date: these are classified as non-current assets.
(a) Trade and other receivables. Trade and other receivables are measured at
initial recognition at fair value and are subsequently measured at amortised
cost using the effective interest rate method. Appropriate allowances for
estimated irrecoverable amounts are recognised in the income statement when
there is objective evidence that the asset is impaired.
(b) Cash and cash equivalents. The group considers all highly liquid
investments which are readily convertible into known amounts of cash and have a
maturity of three months or less when acquired to be cash equivalents. The
management believes that the carrying amount of cash equivalents approximates
fair value because of the short maturity of these financial instruments.
(c) Available for sale financial assets. Listed shares held by the group that
are traded in an active market are classified as being AFS and are stated at
fair value. Gains and losses arising from changes in fair value are recognised
in other comprehensive income and accumulated in the investments revaluation
reserve with the exception of impairment losses and foreign exchange gains and
losses on monetary assets, which are recognised directly in profit or loss.
Where the investment is disposed of or is determined to be impaired, the
cumulative gain or loss previously recognised in the investments revaluation
reserve is reclassified to profit or loss.
Unlisted shares held by the group that are classified as being AFS are stated
at cost on the basis that the shares are not quoted and a reliable fair value
is not able to be estimated.
Dividends on AFS equity instruments are recognised in profit or loss when the
group's right to receive the dividends is established.
The fair value of AFS monetary assets denominated in a foreign currency is
determined in that foreign currency and translated at the spot rate at the
balance sheet date. The foreign exchange gains and losses that are recognised
in profit or loss are determined based on amortised cost of the monetary asset.
Other foreign exchange gains and losses are recognised in other comprehensive
income.
(d) Trade and other payables. Trade payables are not interest bearing and are
initially recognised at fair value and subsequently measured at amortised cost
using the effective interest rate method.
(e) Deposits. Deposits are recognised at fair value on initial recognition and
are subsequently measured at amortised cost using the effective interest rate
method.
(f) Loans. Loans are recognised at fair value on initial recognition and are
subsequently measured at amortised cost using the effective interest rate
method.
Equity instruments
Equity instruments issued by the company are recorded at the proceeds received,
net of direct issue costs.
Leases
Leases are classified as finance leases whenever the terms of the lease
transfer substantially all the risks and rewards of ownership to the lessee.
All other leases are classified as operating leases.
Mining lease payments are recognised as an operating expense in the income
statement on a straight line basis over the lease term unless they relate to
mineral property exploration and evaluation in which case they are
capitalised. There are no finance leases or other operating leases.
New accounting standards
The group and company have adopted the following new accounting standards and
interpretations:
IFRS 10 Consolidated Financial Statements: Issued October 2012; Effective -
Annual periods beginning on or after 1 January 2014
IFRS 11 Joint Arrangements: Original issue; Issued - May 2011; Effective -
Annual periods beginning on or after 1 January 2014
IFRS 12 Disclosure of Interests in Other Entities: Original issue; Issued -
May 2011; Effective - Annual periods beginning on or after 1 January 2014
IAS 27 Separate Financial Statements and IAS 28 Investments in Associates and
Joint Ventures: Original issue; Issued - May 2011; Effective - Annual periods
beginning on or after 1 January 2014
There has been no impact of adopting the standards.
The group and company have adopted the amendments to the following
interpretation:
IFRS 10 Consolidated Financial Statements, IFRS 12 Disclosure of Interests in
Other Entities and IAS 27 Separate Financial Statements: Amendment relates to
investment entities; Effective - Annual periods beginning on or after 1 January
2014
IAS 32 Financial Instruments: Amendment relates to the offsetting of
financial assets and liabilities; Effective - Annual periods beginning on or
after 1 January 2014
IAS 36 Impairment of Assets: Amendment relates to the recoverable amount
disclosures for non-financial assets; Effective - Annual periods beginning on
or after 1 January 2014
IAS 39 Financial Instruments: Recognition and Measurement: Amendment relates
to the novation of derivatives and continuing of hedge accounting; Effective -
Annual periods beginning on or after 1 January 2014
There has been no impact of adopting the amendments.
The group and the company have not applied the following IFRS, IAS and IFRICs
that are applicable and have been issued but are not yet effective:
IFRIC 21 Levies; Effective - Annual periods beginning on or after 17 June 2014
IFRS 14 Regularity Deferral Accounts: Original issue; Issued - January 2014;
Effective - Annual periods beginning on or after 1 January 2016
IFRS 15 Revenue from contracts with customers: Original issue; Issued - May
2014; Effective - Annual periods beginning on or after 1 January 2017
IFRS 9 Financial Instruments; Original issue; Issued - November 2009;
Effective - Annual periods beginning on or after 1 January 2018
IAS 1 Presentation of Financial Information: Amendment relates to the
disclosure initiative; Effective - Annual periods beginning on or after 1
January 2016
IAS16 Property, plant and equipment and IAS 38 Intangible Assets: Amendments
regarding the clarification of acceptable methods of depreciation and
amortisation; Amended May 2014; Effective for Annual periods beginning on or
after 1 January 2016
IAS 19 Employee Benefits: Amendment relating to the accounting for
contributions from employees or third parties to defined benefit plans;
Effective - Annual periods beginning on or after 1 February 2015
IAS 27 Separate Financial Statements (as amended in 2011): Original issue;
Issued - May 2011; Effective - Annual periods beginning on or after 1 January
2016
IFRS 10 Consolidated Financial Statements and IAS 28 Investment in Associates
and Joint Ventures: Amendment relating to the sale or contribution of assets
between an investor and its associate or joint venture; Effective - Annual
periods beginning on or after 1 January 2016
IFRS 10 Consolidation Financial Statements, IFRS 12 Disclosure of Interests in
Other Entities and IAS 28 Investment in Associates and Joint Ventures:
Amendments relate to investment entities, applying the consolidation exemption;
Effective - Annual periods beginning on or after 1 January 2016
IFRS 11 Joint Arrangements: Amendment relating to the accounting for
acquisition of interests in joint operations; Effective - Annual periods
beginning on or after 1 January 2016
The directors expect that the adoption of the above pronouncements will have no
material impact to the financial statements in the period of initial
application other than disclosure.
The directors do not consider the adoption of the amendments resulting from the
Annual Improvements 2010 - 2012 cycle will result in a material impact on the
financial information of the group and company. These amendments to IFRS2,
IFRS3, IFRS8 IAS 16, IAS24 and IAS38 are effective for accounting periods
beginning on or after 1 February 2015.
The directors do not consider the adoption of the amendments resulting from the
Annual Improvements 2011 - 2013 cycle will result in a material impact on the
financial information of the group and company. These amendments to IFRS3,
IFRS13 and IAS40 are effective for accounting periods beginning on or after 1
July 2014.
The directors do not consider the adoption of the amendments resulting from the
Annual Improvements 2012 - 2014 cycle will result in a material impact on the
financial information of the group and company. These amendments to IFRS 5,
IFRS 7, IAS 19 and IAS 34 are effective for accounting periods beginning on or
after 1 January 2016.
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, evaluation and development
expenditures the directors are required to make estimates and assumptions as to
future events and circumstances. There are uncertainties inherent in making
such assumptions, especially with regard to: ore resources and the life of a
mine; recovery rates; production costs; commodity prices and exchange rates.
Assumptions that are valid at the time of estimation may change significantly
as new information becomes available and changes in these assumptions may alter
the economic status of a mining unit and result in resources or reserves being
restated. Operation of a mine and the receipt of cashflows from it are
dependent on finance being available to fund the development of the property.
(b) In connection with possible impairment of assets 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 accounting treatment adopted for the group's investment in GIAB and the
reasons for doing so are set out in note 14.
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.
Income statement
analysis
2015 2014
UK Sweden Canada UK Sweden Canada Total
Total
£ £ £ £
£ £ £ £
Expenses - (355,071) - - (353,455)
(187,815) (167,256) (353,455)
Impairment of - - - -
(1,231,218) (1,231,218) (5,451,267) (5,451,267)
investment
Exchange - - (26,766) (26,766) - -
difference (1,255,280) (1,255,280)
on above
Investment 882 - - 882 2,630 - - 2,630
income
Finance costs - - (119,863) - - (112,590)
(119,863) (112,590)
Exchange rate (4,574) - - (4,574) (3,741) - - (3,741)
(loss)
Loss for the -
year (311,370) (167,256) (1,257,984) (1,736,610) (467,156) (6,706,547) (7,173,703)
Assets and
liabilities
31 March 2015 31 March 2014
UK Sweden Canada UK Sweden Canada Total
Total
£ £ £ £
£ £ £ £
Non-current 15,204,686 86,659 1 15,291,346 15,129,331 - 1,257,985 16,387,316
assets
Current assets 123,364 4,486 - 127,850 306,114 - - 306,114
Liabilities - - -
(2,831,473) (222,586) (3,054,059) (2,560,520) (2,560,520)
Net assets/ 12,496,577 1 12,365,137 12,874,925 - 1,257,985 14,132,910
liabilities (131,441)
4 Operating result
The loss for the year has been arrived at
after charging:
2015 2014
£ £
Fees payable to the group's
auditor:
for the audit of the annual 22,000 22,000
accounts
for the audit of 3,000 3,000
subsidiaries' accounts
for other services - taxation 2,500 3,150
compliance
for other services 800 1,303
Directors' remuneration 24,750 112,333
Director's pension contributions - 6,667
Foreign exchange loss 4,574 3,741
5 Staff costs
The average monthly number of persons employed (including
executive directors) was:
2015 2014
Administrative 3 4
3 4
Their aggregate remuneration was: £ £
Wages and salaries 33,985 104,998
Social security costs 2,118 11,691
Other pension costs - 6,667
36,103 123,356
Details of directors' remuneration and share options are given in the
directors' remuneration report.
6 Investment income
2015 2014
£ £
Loans and receivables
Interest on bank deposits 672 2,238
Interest on site 15 210 392
re-instatement deposit
882 2,630
7 Finance costs
2015 2014
Loans and payables
£ £
Loan interest to Juno Limited 19 116,043 112,590
Loan interest to Eurmag AB 19 3,820 -
119,863 112,590
For both loans the interest shown is accrued and not required to be paid in
cash.
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 2015 of £1.3 million (2014 - £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 £12.4 million unclaimed
and available at 31 March 2015 (2014 - £12.3 million). No deferred tax asset is
recognised in respect of these allowances.
2015 2014
£ £
Current tax - -
Deferred tax - -
Total tax - -
Domestic income tax is calculated at 21% of the estimated
assessed profit for the year.
In 2014 the rate used was 23% and the change this year is due
to a change in Corporation Tax
rates. 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 (1,736,610) (7,173,703)
Tax at the domestic income tax (364,688) (1,649,952)
rate of 21% (2014 - 23%)
Tax effect of:
Expenses that are not deductible
in determining taxable
result
Losses on interest in investments 364,688 1,649,952
Total tax - -
9 Earnings per ordinary share
2015 2014
£ £
Earnings
Loss for the year (1,736,610) (7,173,703)
Number of shares
Weighted average number of 160,608,051 160,608,051
ordinary shares for the purposes
of basic earnings per share
Shares deemed to be issued for no
consideration in respect of
employee options
Weighted average number of 160,608,051 160,608,051
ordinary shares
for the purposes of diluted
earnings per share
Basic earnings per share (1.1)p (4.5)p
Diluted earnings per share (1.1)p (4.5)p
As the group has a loss for the year ended 31 March 2015 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 1 April 2013 14,753,566
Additions - site 32,661
Additions - rentals & 15,821
charges
At 31 March 2014 14,802,048
Additions - site 59,049
Additions - rentals & 16,096
charges
At 31 March 2015 14,877,193
Carrying amount
Net book value 2015 14,877,193
Net book value 2014 14,802,048
Included in the additions are mining lease expenses of £16,096 (2014 - £
15,500).
Potential impairment of mineral property
Accumulated exploration and evaluation expenditure in respect of the Parys
project is carried in the financial statements at cost, less an impairment
provision where there are grounds to believe that the discounted present value
of the future cash flows from the project is less than the carrying value or
there are other reasons to indicate that the carrying value is unsuitable.
This year the directors carried out an impairment review with an effective date
of 26 March 2015. This review was based on an estimate of discounted future
cash flows from the development and operation of the Parys Mountain project
over the initial projected mine life of 16 years. The directors have used past
experience and an assessment of future conditions, together with external
sources of information, to determine the assumptions which were adopted in the
preparation of a financial model used to estimate the cashflows.
The key assumptions utilised were:
* Capital costs were estimated at current costs when the expenditure is
planned to be incurred; neither revenues nor operating costs will take into
account any inflation.
* Metal prices (long-term estimates): zinc 1.15 US$/lb; copper 3.25 US$/lb;
lead 1.00 US$/lb; silver US$18.00 per ounce and gold US$1200 per ounce.
Exchange rate US$1.55/£.
* The discount rate of 10% applied to future cashflows is one which reflects
the directors' current market assessment of the time value of money and any
risk factors which have not been adjusted already in the preparation of the
forecast.
The directors estimated the sensitivity of the assumptions used in the cashflow
model which would significantly affect the discounted net present value of the
projected Parys cashflows. The figures which follow are the variation expressed
in percent of each specific assumption which would, on its own, reduce the
calculated net present value to the carrying value of the intangible asset in
the accounts: copper price -24%, zinc price -10%, lead price -21%, capital
expenditure +13%, mining costs +19%, all operating costs including mining +10%
and the discount rate +16%.
Based on the above parameters the directors believe that no impairment
provision is necessary or appropriate. However estimates of the net present
value of any project, and particularly one like Parys Mountain, are always
subject to many factors and wide margins of error. The directors believe that
the estimates and calculations supporting their conclusions have been carefully
considered and are a fair representation of the projected financial performance
of the project.
Based on the review set out above the directors have determined that no
impairment provision is required in the financial statements in respect of the
carrying value of the Parys property.
11 Property, plant and equipment
Company Freehold Plant & Office Total
land and equipment equipment
property
Cost £ £ £ £
At 1 April 2013 - 17,434 5,487 22,921
At 31 March 2014 and - 17,434 5,487 22,921
2015
Depreciation
At 1 April 2013 - 17,434 5,487 22,921
At 31 March 2014 and - 17,434 5,487 22,921
2015
Carrying amount
At 31 March 2014 and - - - -
2015
12 Subsidiaries - company
The subsidiaries of the company at 31 March 2015 and 2014 were as follows:
Name of company Country of Percentage Principal activity
incorporation owned
Labrador Iron plc Isle of Man 100% Holder of the
company's investment
in Labrador Iron
Mines Holdings
Limited
Anglo Canadian Exploration England & 100% Dormant
(Ace) Limited Wales
Parys Mountain Mines Limited England & 100% Development of the
Wales Parys Mountain
mining property
Parys Mountain Land Limited England & 100% Holder of part of
Wales the Parys Mountain
property
Parys Mountain Heritage England & 100% Holder of part of
Limited Wales the Parys Mountain
property
The following subsidiary was set up on 29 April 2014:
Angmag Limited Sweden 100% Holder of the
company's investment
in GIAB
13 Investments - company
Shares at Loans Total
cost
£ £ £
At 1 April 2013 100,103 13,856,577 13,956,680
Advanced - 20,884 20,884
At 31 March 2014 100,103 13,877,461 13,977,564
Advanced 3,922 135,540 139,462
Repaid - - -
At 31 March 2015 104,025 14,013,001 14,117,026
The realisation of investments is dependent on finance being available for
development and on a number
of other factors. No interest was charged in the year on inter-company loans.
14 Investments - group
Labrador Grangesberg Total
£ £ £
At 31 March 2013 7,964,532 - 7,964,532
Impairment resulting from adjustment to (5,451,267) - (5,451,267)
fair value
Exchange difference arising on (1,255,280) - (1,255,280)
adjustment above
At 31 March 2014 1,257,985 - 1,257,985
Addition during period - 86,659 86,659
Impairment resulting from adjustment to (1,231,218) - (1,231,218)
nominal value
Exchange difference arising on (26,766) - (26,766)
adjustment above
At 31 March 2015 1 86,659 86,660
LIM
On 2 April 2015, LIM instituted proceedings in the Ontario Superior Court of
Justice for a financial restructuring by means of a plan of compromise or
arrangement under the Canadian Companies' Creditors Arrangement Act in order to
facilitate a restructuring and refinancing of its business operations. In
February 2015, to save the substantial costs associated with a stock exchange
listing and to maintain restructuring flexibility, LIM voluntarily delisted its
common shares and warrants from the Toronto Stock Exchange, effective 23
February 2015, and the group's investment in LIM is now classified as
'unquoted'. Based on these factors and the difficulty of determining a fair
market value the directors have decided to write down the value of the LIM
shares at 31 March 2015 to a nominal value of £1. Consequent upon these changes
this investment is reclassified as Level 3 rather than Level 1 under the IFRS
fair value hierarchy. The company's policy is to recognise these transfers on
the effective date of the event or change in circumstances that caused the
transfer.
At 31 March 2014 LIM was treated as an investment in listed equity securities
that present the group with opportunity for return through dividend income and
trading gains. These shares were not held for trading and accordingly were
classified as 'available for sale' which was deemed to be the most appropriate
classification under IFRS. The LIM investment was measured subsequent to
initial recognition at fair value as 'Level 1' AFS based on the degree to which
the fair value is observable. Level 1 fair value measurements are those derived
from quoted priced (unadjusted) in active markets. At 31 March 2014 the value
of the LIM investment was deemed to be impaired given the decline in the share
price.
Grangesberg
As explained in more detail in the strategic report, the group has, through its
Swedish subsidiary Angmag AB, acquired a 6% ownership interest in GIAB, a
Swedish company which holds rights over the Grangesberg iron ore deposits. This
investment has been initially recognised and subsequently measured at cost, on
the basis that the shares are not quoted and a reliable fair value is not able
to be estimated. However the group also had, between May 2014 and 30 March
2015, an option over a further 51% of GIAB together with management direction
of the activities of GIAB subject to certain restrictions during the term of
the option. The option has been replaced by a right of first refusal expiring
on 30 June 2018, while operational management continues largely unaltered.
The board determined that it did not have the relevant control over GIAB
within the meaning of the provisions of IFRS 10 during the term of the option,
which would have required consolidation of GIAB into the group's financial
statements with a 6% shareholding and a 94% minority interest.
Although the group did not have control during the option period it did have
significant influence over certain relevant activities of GIAB. The group has
not applied equity accounting for the period during the year when it had
significant influence as the directors consider this would not have any
material affect.
The income statement and statement of financial position of Grangesberg Iron at
31 December 2014, the latest date on which such accounts have been prepared,
converted into sterling at the rate in effect at the applicable year end have
been included below as an aid to disclosure. There are no material adjustments
in respect of significant transactions or events in the period from 31 December
2014 and 31 March 2015 which affect these statements. These statements are
filed at the Bolagsverket: Swedish Companies Registration Office and have been
externally audited by a firm other than Mazars.
Grangesberg Iron AB
Profit and loss statement Amounts in SEK Amounts in sterling
1 Jan 2014- 1 Jan 2013- 1 Jan 1 Jan
2014- 2013-
31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13
Net turnover - 18,000 - 1,684
Other operating income 7,042,520 - 579,631 -
7,042,520 18,000 579,631 1,684
Operating expenses
Other external expenses (99,745)
(1,211,902) (1,447,574) (135,414)
Personnel costs - -
(2,079,389) (194,517)
Amortisation/depreciation - (3,098) - (290)
or write-down of tangible
and intangible fixed
assets
Other operating expenses (241,837) (48,609) (19,904) (4,547)
Operating profit or 5,588,781 459,982
(loss) (3,560,670) (333,084)
Profit/(loss) from
financial items
Profit from other - 8,127 - 760
securities and
receivables which are
fixed assets
Interest and similar 19,367 1,812
expenses (5,239,969) (431,273)
Profit/(loss) after 348,812 28,709
financial items (3,533,176) (330,512)
Profit/(loss) before tax 348,812 28,709
(3,533,176) (330,512)
Net profit/(loss) for the 348,812 28,709
year (3,533,176) (330,512)
Grangesberg Iron AB
Balance sheet Amounts in SEK Amounts in sterling
31-Dec-14 31-Dec-13 31-Dec-14 31-Dec-13
ASSETS
Fixed assets
Intangible fixed assets
Exploration and 57,985,731 53,151,181 4,772,488 4,972,047
evaluation assets
57,985,731 53,151,181 4,772,488 4,972,047
Total fixed assets 57,985,731 53,151,181 4,772,488 4,972,047
Current assets
Current receivables
Trade debtors 22,500 22,500 1,852 2,105
Other receivables 140,666 9,117 11,577 853
Deferred charges and 9,201 18,218 757 1,704
accrued income
172,367 49,835 14,187 4,662
Cash and bank 4,295,807 145,977 353,564 13,655
Total current assets 4,468,174 195,812 367,751 18,317
TOTAL ASSETS 62,453,905 53,346,993 5,140,239 4,990,364
EQUITY AND LIABILITIES
Equity
Restricted equity
Share capital (0 shares) 204,000 100,000 16,790 9,355
204,000 100,000 16,790 9,355
Non-restricted equity
Share premium reserve 8,176,750 - 672,984 -
Profit brought forward 10,647,348 14,180,524 876,325 1,326,522
Net profit/(loss) for the 348,812 28,709
year (3,533,176) (330,512)
19,172,910 10,647,348 1,578,017 996,010
Total equity 19,376,910 10,747,348 1,594,807 1,005,365
Long-term liabilities
Liabilities to associated 6,235,742 5,753,565 513,230 538,219
companies
Other long-term 35,962,910 25,502,318 2,959,910 2,385,624
liabilities
42,198,652 31,255,883 3,473,140 2,923,843
Current liabilities
Trade creditors 415,321 3,281,493 34,183 306,968
Liabilities to group - 72,107 - 6,745
companies
Other current liabilities 21,364 6,158 1,758 576
Accrued expenses and 441,658 7,984,004 36,350 746,867
deferred income
878,343 11,343,762 72,292 1,061,156
TOTAL EQUITY AND 62,453,905 53,346,993 5,140,239 4,990,364
LIABILITIES
15 Deposit
Group Company
2015 2014 2015 2014
£ £ £ £
Site re-instatement deposit
122,806 122,596 - -
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 Other receivables
Group Company
2015 2014 2015 2014
£ £ £ £
Other 30,977 17,017 13,945 13,793
The carrying value of the receivables approximates to their fair value.
17 Cash
Group Company
2015 2014 2015 2014
£ £ £ £
Held in sterling 72,571 269,044 72,088 267,045
Held in Canadian dollars 19,816 20,053 - -
Held in US dollars 2,167 - - -
Held in Swedish Krona 2,319 - - -
96,873 289,097 72,088 267,045
The carrying value of the cash approximates to its fair value.
18 Trade and other payables
Group Company
2015 2014 2015 2014
£ £ £ £
Trade creditors (71,538) (34,863)
(58,142) (28,224)
Taxes (1,848) (11,029) (1,848) (11,029)
Other accruals (48,171) (53,755) (42,670)
(46,754)
(99,647) (102,660) (86,007)
(121,557)
The carrying value of the trade and other payables approximates to their fair
value.
19 Loan
Group Company
2015 2014 2015 2014
£ £ £ £
Loan from Juno (2,659,916)
Limited (2,659,916) (2,418,873) (2,418,873)
Loan from Eurmag AB (222,586) -
- -
(2,882,502) (2,659,916)
(2,418,873) (2,418,873)
Juno: Apart from an advance of £125,000 made in December 2014 there has been no
change in the loan principal during the year. 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 during the year 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.
20 Provision
Group Company
2015 2014 2015 2014
£ £ £ £
Provision for site (50,000) (42,000) - -
reinstatement
The provision for site reinstatement covers the estimated costs of
reinstatement at the Parys Mountain site of the work done and changes made by
the group up to the date of the accounts. These costs would be payable on
completion of mining activities (which is estimated to be more than 20 years'
after mining commences) or on earlier abandonment of the site. 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. The
provision has been increased by £8,000 during the year.
21 Share capital
Ordinary shares Deferred shares Total
of 1p of 4p
Issued and fully paid Nominal Number Nominal Number Nominal
value £ value £ value £
At 31 March 2013, 2014 1,606,081 160,608,051 5,510,833 137,770,835 7,116,914
and 31 March 2015
The deferred shares are non-voting, have no entitlement to dividends and have
negligible rights to return of capital on a winding up.
22 Equity-settled employee benefits
2004 Unapproved share option plan
This group 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 2004 has been one year.
If the options remain unexercised after a period of 10 years from the date of
grant, they expire. Options are forfeited if the employee leaves employment
with the group before the options vest.
2015 2014
Options Weighted Options Weighted
average average
exercise exercise
price in price in
pence pence
Outstanding at beginning 11,550,000 10.90 11,550,000 10.90
of period
Granted during the - - - -
period
Forfeited during the - - - -
period
Exercised during the - - - -
period
Expired during the 5,500,000 4.13 - -
period
Outstanding at the end 6,050,000 17.06 11,550,000 10.90
of the period
Exercisable at the end 6,050,000 17.06 11,550,000 10.90
of the period
The plan has now closed and no options were granted or forfeited in the year.
Options over 5,500,000 shares expired during the year. The options outstanding
at 12H31 March 2015 had a weighted average exercise price of 17.06 pence (2014
- 10.90 pence), and a weighted average remaining contractual life of 2 years
(2014 - 2 years). As all options had vested by 31 March 2010, the group
recognised no expenses in respect of equity-settled employee remuneration in
respect of the years ended 31 March 2014 and 2015.
2014 Unapproved share option plan
This group plan, approved on 30 September 2014, has very similar terms and
conditions to the 2004 plan. No option grants have yet been made under this
plan.
A summary of options granted and outstanding, all of which are over ordinary
shares of 1 pence, is as follows:
Scheme Number Nominal Exercise Exercisable Exercisable
value £ price from until
2004 Unapproved 1,550,000 15,500 10.625p 15 January 14 January
2007 2016
2004 Unapproved 3,800,000 38,000 21.90p 26 November 26 November
2008 2017
2004 Unapproved 700,000 7,000 5.00p 27 March 2010 27 March 2019
Total 6,050,000 60,500
23 Results attributable to Anglesey Mining plc
The loss after taxation in the parent company amounted to £313,039 (2014 loss £
475,676). 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.
24 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 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 practice since drawdown commenced more than 10 years ago, has
indicated that it has no current intention of demanding repayment. No such
notice had been received by 16 July 2015 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 functional 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
investment in LIM is no longer 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 £8,300 and if it were to move in favour
of sterling by a similar amount there would be a gain of £10,100. 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 £20,600 and if it were to move in favour of sterling by a
similar amount there would be a loss of £25,200.
In respect of the group's Canadian dollar holding, if the rate of exchange
between the Canadian dollar and sterling were to weaken against sterling by 10%
there would be a loss to the group of £1,800 and if it were to move in favour
of sterling by a similar amount there would be a gain of £2,200.
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 Available for sale Loans &
assets receivables
31 March 31 March 31 March 31 March
2015 2014 2015 2014
£ £ £ £
Financial
assets
Investments 1 1,257,985 - -
Deposit - - 122,806 122,596
Other debtors - - 30,977 17,017
Cash and cash - - 96,873 289,097
equivalents
- -
1 1,257,985 250,656 428,710
31 March 31 March
2015 2014
£ £
Financial
liabilities
Trade (71,538) (34,863)
creditors
Other (100,019) -
creditors
Loans
(2,882,502) (2,418,873)
(3,054,059) (2,453,736)
Company
Loans & Financial liabilities
receivables
31 March 31 March 31 March 31 March
2015 2014 2015 2014
£ £ £ £
Financial
assets
Other debtors 13,945 13,793 - -
Cash and cash 72,088 267,045 - -
equivalents
Financial
liabilities
Trade - - (102,660) (28,224)
creditors
Loan - -
(2,659,916) (2,418,873)
86,033 280,838
(2,762,576) (2,447,097)
25 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 36.1% 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 19. Except
as set out in note 19, 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
In May 2014 Bill Hooley and Danesh Varma were appointed as directors of
Grangesberg Iron AB and of the special purpose vehicle Eurmag AB; further
information concerning these appointments is included in the strategic report.
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 £226,857 at the year end (2014 - nil) - see note 19.
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.
26 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 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 £10,350 is payable for the year
beginning 23 March 2015; 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 may be terminated at 12 months'
notice and otherwise expires in 2020.
Lease payments
All the group's leases may be terminated 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
2015 - £16,131; between 1 April 2016 and 31 March 2021 - £85,635. Thereafter
the payments will continue at proportionate annual rates, in some cases with
increases for inflation, so long as the leases are retained or extended.
27 Material non cash transactions
There were no material non-cash transactions in the year.
28 Commitments
Other than commitments under leases (note 26) there is no capital expenditure
authorised or contracted which is not provided for in these accounts (2014 -
nil).
29 Contingent liabilities
There are no contingent liabilities (2014 - nil).
30 Events after the period end
On 2 April 2015 LIM instituted proceedings in the Ontario Superior Court of
Justice for a financial restructuring by means of a plan of compromise or
arrangement under the Canadian Companies' Creditors Arrangement Act in order to
facilitate a restructuring and refinancing of its business operations.
Otherwise there are no events after the period end to report.
Anglesey Mining plc
Parys Mountain, Amlwch, Anglesey, LL68 9RE
Phone 01407 831275
mail@angleseymining.co.uk
London office
Painters' Hall
9 Little Trinity Lane, London, EC4V 2AD
Phone 020 7653 9881
Registered office
Tower Bridge House,
St. Katharine's Way,
London,
E1W 1DD
www.angleseymining.co.uk
Company registered number 1849957
- end -
ANGLESEY MINING : Final Results and annual report
July 31, 2015 at 10:44 am EDT
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