Anglesey Mining plc
Anglesey Mining plc today announces it final results for the year to
31 March 2014 condensed to exclude the Directors Remuneration and
Corporate Governance Reports available in the Annual Report. The remaining
information presented is extracted from the Annual Report.
Copies of the Annual Report 2014 will be posted to shareholders
together with the Notice of the 2014 Annual General Meeting (“AGM Notice”)
to be held at the offices of the company's lawyers, DLA Piper UK LLP,
1 London Wall, London, EC2Y 5EA on 30 September 2014 at 11.00 a.m.
In accordance with the Listing Rules, the Annual Report 2014, together with
the AGM Notice, has been submitted to the National Storage Mechanism and
will shortly be available for inspection at:
http://www.morningstar.co.uk/uk/NSM .
Shareholder documents can also be accessed on the company's website at:
www.angleseymining.co.uk
Annual Report 2014
* A UK mining company listed on the London Stock Exchange
* In May 2014 Anglesey entered into agreements giving it the right to acquire
a controlling interest in the Grangesberg Iron project in Sweden.
* Anglesey is carrying out exploration, evaluation and pre-feasibility work
at its 100% owned Parys Mountain underground zinc-copper-lead-silver-gold
deposit in North Wales, UK.
* Anglesey holds 15% of Toronto-listed Labrador Iron Mines Holdings Limited
(TSX:LIM) which has direct shipping iron ore deposits in western Labrador
and north-eastern Quebec.
Strategic report - Chairman's statement
In what has been a quiet year in the resources sector the company maintained
steady progress on a number of fronts whilst awaiting a general turnaround in
the underlying markets. Parys Mountain has seen limited activity during the
year while operations at Labrador Iron have been disappointing and continued
to suffer from low product prices.
After the year end we began participation in the Grangesberg Iron operation in
Sweden, which has been a major producer in the past and over the coming year
we plan to fully evaluate this opportunity and if justified increase our
interest to a majority position. We believe that Grangesberg should become a
very exciting project for the company in the future.
Whilst metal prices remained depressed during the financial year there are now
very positive signs of a marked upturn. The price of zinc is currently over
US$1.00 per pound, a figure last seen in 2011 and copper after some weakness
is now back trading at the US$3.25 per pound level. A continuation of this
improvement will allow us to take a far more positive view on the development
of Parys Mountain than we have been able to do for some years. Iron ore after
a very weak second quarter in 2014 is now slowly recovering and expectations
are for continuing improvement. This bodes well both for Labrador and for
Grangesberg.
We will continue to monitor these improvements in metal prices and we look
forward to an ensuing improvement in the financing and equities markets that
would then enable us to bring our two projects forward and to provide much
needed support for Labrador Iron.
Parys Mountain
Activity on site has been quiet during the year but Micon International
Limited has been engaged to review the mineral potential of the entire Parys
Mountain property in North Wales. This review will cover both those resources
on which Micon has previously provided JORC compliant indicated and inferred
resource estimates as well as studying a number of other zones within the
property that were not included in earlier estimates.
The price for zinc metal is now improving and is getting closer to a level
that will support the development of a production operation at Parys Mountain,
and at the same time demand for concentrates in European markets appears to be
growing.
Grangesberg
In May 2014 Anglesey completed the contractual arrangements to secure
management control, including the majority of board seats, over the
Grangesberg iron ore mine in Sweden. This mine was a significant producer of
iron ore until 1989 and current planning indicates a return to production at
around 2.0 to 2.5 mtpa later this decade. This could be a very important
investment for the company, sourcing iron ore in the European market
commencing when the current world-wide expansion of production begins to
abate.
A number of technical and commercial activities are in the final planning
stages and these will commence imminently. These activities are part of a
longer term plan to assess the optimum development and financing strategy for
the mine. The company expects to report further progress during the coming
months.
Labrador
Production activities in Labrador during the summer 2013 operating season
suffered from deteriorating grade and feed product quality. This caused
operational difficulties in the processing plant and resulted in lower grade
and quality product being sold than anticipated and this followed through to
significantly lower revenues than expected. Labrador Iron has decided to
suspend production activities for 2014 while it seeks to raise additional
finance to develop its flagship Houston deposit. Providing it is successful in
this fundraising then it is expected that production will re-commence in the
spring of next year. At that time it should be on a substantially firmer
commercial footing and better able to weather the vagaries of geology and the
markets.
Outlook
There is certainly more confidence in the air this year than last and while
the capital markets for junior miners still remain quite depressed there is
some expectation that they will improve in the near term as the benefits of
increases in metal prices flows through. Given this expectation we look
forward to our projects moving forward positively during the current year.
John F. Kearney
Chairman
30 July 2014
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 and has a 15% holding (2013
- 15%) in the Labrador iron project in eastern Canada. In May 2014 the group
acquired an option to manage the Grangesberg iron ore property in Sweden.
At Parys Mountain there were limited activities during the year but since the
year end evaluation of the geological information revealed by the recent
drilling programmes is being carried out and a new and more comprehensive
geological model is under preparation.
Operations at Labrador Iron Mines' James deposit in Labrador are currently
suspended pending additional fund raising.
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 property,
including by co-operative arrangements where appropriate, to continue its
participation in the Labrador projects 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 is 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 some follow-up
geological work, however since the year end a programme of further geological
re-examination across the property has begun dealing particularly with areas
not covered by the JORC estimate. This remodelling project is being undertaken
by Micon Consulting, the company which prepared the JORC estimate, with input
from experienced geologists who have previously worked on Parys Mountain.
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, 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 May 2014 the group acquired an option to develop the Grangesberg iron ore
property in Sweden.
The Grangesberg iron ore mine is situated in the mineral-rich Bergslagen
district of central Sweden about 200 kilometres north-west of Stockholm. Until
its closure in 1989 due to prevailing market conditions, the Grangesberg mine
was the third largest iron ore mine in Sweden, next only to the Kiruna and
Malmberget mines in the north of Sweden, with in excess of 150 million tonnes
of iron ore mined down to around 500 metres deep.
Prior indications are that at least 115 million tonnes of iron ore containing
around 40% iron remain for exploitation at Grängesberg. The homogenous iron
ore body in Grängesberg is of significant size and of the Kiruna geological
type, making it well suited for cost-effective production of attractive iron
ore products.
The Grangesberg mine site benefits from excellent infrastructure and is
located adjacent to the Swedish national rail system which will permit easy
access to ice free port of Oxelosund on the Baltic Sea on the south-east coast
of Sweden, the location of SSAB Sweden's largest steel plant. Significant
underground and surface infrastructure remains intact at Grangesberg,
including a fully operational railway line from mine to port.
It is expected that following the normal environmental permitting processes
and engineering design and financing, a conventional underground bulk mining
operation followed by processing using standard technology can produce some
2.0 to 2.5 million tonnes per year of saleable iron ore concentrate for the
European, Middle East and Asian steel markets.
In a series of agreements the company has purchased for US$145,000 a direct 6%
interest in Grangesberg Iron AB ("GIAB"), a private Swedish company that was
founded in 2007 with the target of re-opening the historic iron ore mine in
Grangesberg and which, in conjunction with this investment and with assistance
from Anglesey, has recently completed a financial and capital restructuring.
GIAB holds a 25 year exploitation permit covering the previously mined
Grangesberg underground mining operations granted by the Swedish Mining
Inspectorate in May 2013.
At the same time the company has negotiated a 12 month evaluation option to
acquire 51% of the enlarged share capital of GIAB for the issue of new
ordinary shares of the company. Anglesey has also entered into shareholder and
cooperation agreements such that during the term of the option the company
holds management control and operatorship of GIAB and will appoint three out
of five directors to the board of GIAB including the chairman.
The remaining 43% of GIAB is held by Roslagen Resources AB, a Swedish private
company, which has led the re-development of the Grangesberg iron project
since 2007. Roslagen will appoint two directors to the board of GIAB and
provide experienced local executive management.
As part of the agreements and reorganisation an outstanding loan in GIAB in
the principal amount of US$3.5 million due to KII Holdings Limited, a Cypriot
company has been renegotiated and is now repayable by the end of 2016.
At the same time, Eurang Limited, a UK private company, has agreed to invest
US$1.75 million, of which US$1.25 million has been invested in GIAB, for new
shares representing the 51% shareholding interest in GIAB. This has been
carried out through a new wholly owned special purpose Swedish company, Eurmag
AB over which, during the term of the option, the company will hold management
and control rights. The additional US$500,000 will be used to cover
transaction costs and expenses and certain outstanding liabilities.
Option to acquire 51% of Grangesberg
Upon the exercise of the option, which will be entirely at the company's
discretion, the company will acquire all of the shares of Eurang Limited by
the issue of new shares of the company to the value of US$1.75 million, to be
priced at the average of the the company share price at the date of option
(3.375p) and the 20 day average share price prior to date of exercise, (but at
no lower than 3.375p), and thereby acquire direct ownership and control of the
51% shareholding in GIAB, and thus increase the company's direct interest in
GIAB to 57%.
GIAB will have debt outstanding of about US$5 million, (about US$4 million
including accrued interest payable to KII and about US$1 million of
subordinated debt payable on a deferred basis to Roslagen), while Eurang
Limited will have debt of approximately US$4.5 million.
During the term of the option the company will hold management control over
Eurmag with the ability to exercise voting rights on the shares of GIAB. If
following its evaluation and assessment the company does not exercise its
option it will relinquish its board seats and management direction and control
of GIAB at the end of the 12 month option period but could continue to hold 6%
of the shares of GIAB.
Grangesberg development plan
The company intends to carry out an evaluation of the Grangesberg project
including a technical and economic assessment to determine the viability of
putting the Grangesberg iron ore mine back into commercial production under
the economic conditions to be expected during the proposed mine life.
Immediate planned work will include a programme of geo-mechanics and
monitoring at the mine site as a prelude to obtaining permission to dewater
the mine. In the same time-frame Grangesberg plans to produce a new compliant
ore resource estimate and to progress work on the pre-feasibility study on
reopening the Grangesberg mine.
In parallel with these activities the ongoing background environmental studies
and permit applications will be progressed. Anglesey will also carry out
detailed marketing studies on both the Swedish and the greater European
markets for Grangesberg iron ore products.
In the subsequent periods, following the exercise of the option and subject to
successful financing, it is expected that a definitive feasibility study will
be undertaken, including mine definition drilling, process test-work and
detailed engineering design and costing.
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 mining of iron ore and in the
exploration and development of direct shipping iron ore projects (the
"Schefferville Projects") in the central part of the prolific Labrador Trough
region, one of the major iron ore producing regions in the world, situated in
the Menihek area in the Province of Newfoundland and Labrador and in the
Province of Québec, centred near the town of Schefferville, Québec.
The Schefferville Projects consist of the James Mine and adjacent Stage 1
deposits and Silver Yards processing facility ("Silver Yards"), the Stage 2
Houston property ("Houston"), which includes the Malcolm deposit, the Stage 3
Howse property ("Howse"), now held in a joint venture with Tata Steel Minerals
Canada Limited ("TSMC") and, subject to further exploration and development,
other iron ore properties in the vicinity of Schefferville. LIM's
Schefferville Projects are connected by a direct railway to the Port of
Sept-Îles on the Atlantic Ocean and benefit from established infrastructure,
including the town of Schefferville, airport, roads, hydro power and rail
service.
LIM commenced production at its James Mine in June 2011 and completed its
third year of mining operations in November 2013. From 2011 to the end of
2013, LIM sold 23 cape-size shipments into the Chinese spot market totalling
approximately 3.6 million dry tonnes of iron ore, all sourced from the Stage 1
deposits and stockpiles.
LIM's mine operations are seasonal, from approximately the beginning of April
to the end of November each year, with a planned winter shut down from
approximately the beginning of December to the end of March each year.
LIM has not recommenced mine operating activities for the 2014 operating
season, due to a combination of the prevailing low price of iron ore in 2014
to date, an assessment of the current economics of the remaining resources of
the James Mine and other Stage 1 deposits and a strategic shift in corporate
focus towards establishing a lower cost operating framework and completing
development of its flagship Stage 2 Houston Mine, while concurrently
negotiating the commercial terms of major contracts and seeking additional
capital investment and working capital.
Accordingly, LIM's plan for the balance of calendar 2014 is to focus on
developing the Houston Mine and, subject to completion of financing and
negotiation of major contracts, to be in a position to begin mining production
from Houston in 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 Labrador Iron Mines Holdings Limited 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 £7,173,703 compared to a loss of £31,451,398 in 2013
when substantial losses in connection with LIM's value and accounting
treatment were recorded. Most of the 2014 loss is also in respect of the LIM
investment which has declined in value during the year and has also been
negatively affected as a result of the strength of the pound sterling against
the Canadian dollar.
Administrative and other costs in the UK excluding investment income and
finance charges were £353,455 compared to £398,428 in the previous year.
During the year there were no additions to fixed assets (2013 - nil) and
£48,482 (2013 - £497,748) was capitalised in respect of the Parys Mountain
property. The reduction in the amounts capitalised was largely due to the
drilling programme at Parys Mountain being completed in 2013 and to the
additional costs of cancelling of a net profits royalty interest in 2013.
The group's cash balance at 31 March 2014 was £289,097 (2013 - £670,345).The
foreign exchange loss of £3,741 (2013 - gain £11,196) shown in the income
statement arises on the cash balances held in Canadian dollars.
At 31 March 2014 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 affects or operates in.
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 or community 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 aggressive
competition within the mining industry for the discovery and acquisition of
properties considered to have commercial potential. The group faces strong
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 occasions the group has relied upon 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. However 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 international currency fluctuations which
affect the actual amount which might be received by the group in sterling.
Foreign exchange
LIM is a Canadian company and the value of the group's holding in LIM is
affected by an exchange rate risk. 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 permits 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 the operations of LIM or any other areas
in which the group might engage may adversely affect its business or future
operations. At 31 March 2014 the company had six male directors and one male
employee; 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
30 July 2014
Diectors' report
The directors are pleased to submit their report and the audited accounts for
the year ended 31 March 2014.
The corporate governance statement which follows forms part of this report. In
accordance with statutory requirements introduced this year, the principal
activities of the group and certain other information are set out in the
strategic report section preceding this report.
Directors
The names of the directors with biographical details are shown on the inside
rear cover. It is the company's procedure to submit re-election resolutions
for all directors at each annual general meeting. Ian Cuthbertson retired on
31 July 2013 and Danesh Varma was appointed as finance director and company
secretary.
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 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; further details of these appointments are included in the
strategic report.
There are no other contracts of significance in which any director has or had
during the year a material interest.
Substantial shareholders
At 14 July 2014 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 13 of the notice of the AGM is for two
purposes and in aggregate is to enable the directors to allot shares up to a
nominal value of £840,000 (84,000,000 ordinary shares). The first purpose is
to allow 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 14 July 2014. 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 issue of shares
pursuant to the company's employee share and incentive plans.
The second part of the authority relates to the option agreement to acquire,
indirectly, 51% of the enlarged share capital of Grangesberg Iron AB which was
entered into in May 2014 and described in the strategic report on page 4. This
amount would cover the potential issue of shares in the event that the company
were to exercise its option and is in respect of shares with a nominal value
of £300,000 (30,000,000 ordinary shares). 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.
The purpose of resolution 14 is to authorise the directors to allot new shares
pursuant to the general authority given by resolution 13 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 2014. 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 14 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
(2013 - 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". Based on the group's cash flow forecasts and
projections to December 2015, and after making due enquiry in the light of
current and anticipated economic conditions, the directors consider that with
ongoing support from its largest shareholder, Juno Limited, they have a
reasonable expectation that the group has adequate resources to continue in
operational existence for the foreseeable future. Accordingly the going
concern basis continues to be adopted in the preparation of the financial
statements. In the absence of support from Juno Limited the group could be
dependent on the proceeds of share issues or other sources of funding.
Development at the Parys project will be dependent on raising further funds
from various sources.
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
30 July 2014
Report of the auditors
Opinion on the financial statements
We have audited the financial statements of Anglesey Mining plc for the year
ended 31 March 2014 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.
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 2014 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.
Our assessment of the risks of material misstatement
In arriving at our audit opinion, the risks of material misstatement which had
the greatest effect on our overall audit strategy, the allocation of our
resources in the audit and directing the efforts of the engagement team, were
as follows:
Potential impairment of capitalised costs associated with the
exploration and evaluation of the Parys Mountain mine site
The risk: The group has held rights to explore and mine the site for a number
of years but has not completed exploration and evaluation activities and
feasibility assessments to an extent where the site has been confirmed as
being commercial viable and mining activities commenced. There is a risk that
accounting criteria associated with the capitalisation of exploration and
evaluation expenditure may no longer be appropriate and that capitalised costs
exceed the value in use i.e. there is an indication of potential impairment.
Any assessment of the value in use is highly judgemental based on the
directors' assessment of long term metal commodity prices, the estimated
mineral deposits from independent experts' studies, costs associated with
mineral extraction and sale, discount rates and exchange rate factors.
Our response: Our audit work included, but was not restricted to, a review of
the directors' assessment of the criteria for the capitalisation of
exploration and evaluation expenditure and whether there are any indicators of
impairment to capitalised costs. The directors concluded that there were
indicators of potential impairment and our work included a review of the
integrity of the discounted cash flow model used by the directors to make an
assessment as to whether actual impairment had occurred, as well as using our
professional scepticism to challenge and test the key assumptions for
sensitivity to the model. These key assumptions included the expected future
revenue and costs associated with the extraction and sale of the mineral
deposits, future market prices, currency exchange rates, demand for the
minerals and the discount rate utilised in the financial model.
Potential impairment of the investment in the subsidiary, Parys Mountain Mines
Limited, in the company financial statements
The risk: The cost of the investment in and loan due from the subsidiary,
Parys Mountain Mines Limited, held in the balance sheet of the company, is
supported by the future cash flows associated with the recovery of the
exploration and evaluation assets following the development of the Parys
Mountain site held by Parys Mountain Mines Limited. If there were impairment
in the exploration and evaluation assets, this would have a direct impact on
the carrying value of the investment in and loan due from the subsidiary,
which may need to be written down in the company's accounts.
Our response: In conjunction with our work associated with the potential
impairment of the exploration and evaluation assets held within Parys Mountain
Mine Limited, we considered whether there was an indication that the cost of
the investment in and loan due from the subsidiary required writing down in
the company. As there was no impairment of the asset held by Parys Mountain
Mine Limited, there is no indication that the carrying value of the investment
in and loan due from the company was not recoverable.
Going concern
The risk: The accounts are prepared on a going concern basis in accordance
with IAS1 `Presentation of Financial Statements'. Given the cash position of
the group at the year end, and net cash outflows since the year end, we
identified that there is a potential material uncertainty that the group does
not have sufficient cash resources to continue in operation for at least 12
months from the dates of authorising these financial statements.
Our response: We evaluated the directors' assessment of the group's ability to
continue as a going concern. In particular, we reviewed the cash flow
forecasts including key assumptions to assess the risk of the inability to
meet liabilities as they fall due. We have considered the group's reliance on
ongoing support from its largest shareholder, Juno Limited and the availability
of other sources of finance to the group to support the going concern
assumption.
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.
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. The overall materiality level we set for the group's financial
statements was £424,000. This has been calculated with reference to the
group's net assets, of which it represents approximately 3%. Net assets
represents shareholders' funds and we have determined it to be one of the
principal benchmarks 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 £13,000, as well as differences below that threshold
that, in our view, warranted reporting on qualitative grounds
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 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 6 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 2014. The audit of all the entities
within the group was undertaken by the group audit team.
Opinion on other matters prescribed by the Companies Act 2006
In our opinion:
the part of the Directors' Remuneration Report to be audited has been properly
prepared in accordance with the Companies Act 2006;
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 no exceptions to report arising from the following responsibilities:
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 nine provisions of the UK Corporate Governance Code
specified for our review.
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.
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 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.
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: 30 July 2014
Group income statement
All attributable to equity holders of the company
Year ended 31 Year ended 31
Notes March 2014 March 2013
All operations are continuing £ £
Revenue - -
Expenses (353,455) (398,428)
Share of loss of associate - (4,572,320)
Losses on deemed disposals in associate - (6,793,789)
Loss on reclassification of associate as an investment - (16,149,722)
Impairment of investment 14 (5,451,267) (3,791,439)
Exchange difference on investment impairment 14 (1,255,280) 321,186
Investment income 6 2,630 36,941
Finance costs 7 (112,590) (115,023)
Foreign exchange (loss)/gain (3,741) 11,196
Loss before tax 4 (7,173,703) (31,451,398)
Tax 8 - -
Loss for the period (7,173,703) (31,451,398)
Loss per share
Basic - pence per share 9 (4.5)p (19.7)p
Diluted - pence per share 9 (4.5)p (19.7)p
Group consolidated statement of comprehensive income
Loss for the period (7,173,703) (31,451,398)
Other comprehensive income:
Exchange difference on translation - 975,771
of foreign holding in year
Exchange difference on translation - (4,216,941)
offoreign holding
Total comprehensive loss (7,173,703) (34,692,568)
for the year
Statement of financial position of the group
31 March 2014 31 March 2013
Notes £ £
Assets
Non-current assets
Mineral property exploration and evaluation 10 14,802,048 14,753,566
Property, plant and equipment 11 204,687 204,687
Investment 14 1,257,985 7,964,532
Deposit 15 122,596 122,204
16,387,316 23,044,989
Current assets
Other receivables 16 17,017 40,239
Cash and cash equivalents 17 289,097 670,345
306,114 710,584
Total assets 16,693,430 23,755,573
Liabilities
Current liabilities
Trade and other payables 18 (99,647) (100,677)
17
(99,647) (100,677)
Net current assets 206,467 609,907
Non-current liabilities
Loan 19 (2,418,873) (2,306,283)
Long term provision 20 (42,000) (42,000)
(2,460,873) (2,348,283)
Total liabilities (2,560,520) (2,448,960)
Net assets 14,132,910 21,306,613
Equity
Share capital 21 7,116,914 7,116,914
Share premium 9,848,949 9,848,949
Retained (losses)/earnings (2,832,953) 4,340,750
Total shareholders' equity 14,132,910 21,306,613
The financial statements of Anglesey Mining plc were approved by the board of
directors, authorised for issue on 30 July 2014 and signed on its behalf by:
John F. Kearney, Chairman
Danesh Varma, Finance Director
Statement of financial position of the company
31 March 2014 31 March 2013
Notes £ £
Assets
Non-current assets
Investments 13 13,977,564 13,956,680
13,977,564 13,956,680
Current assets
Other receivables 16 13,793 26,102
Cash and cash equivalents 17 267,045 623,215
280,838 649,317
Total Assets 14,258,402 14,605,997
Liabilities
Current liabilities
Trade and other payables 18 (86,007) (70,516)
(86,007) (70,516)
Net current assets 194,831 578,801
Non-current liabilities
Loan 19 (2,418,873) (2,306,283)
(2,418,873) (2,306,283)
Total liabilities (2,504,880) (2,376,799)
Net assets 11,753,522 12,229,198
Equity
Share capital 21 7,116,914 7,116,914
Share premium 9,848,949 9,848,949
Retained losses (5,212,341) (4,736,665)
Shareholders' equity 11,753,522 12,229,198
The financial statements of Anglesey Mining plc registered number 1849957 were
approved by the board of directors and authorised for issue on 30 July 2014,
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 2012 7,096,914 9,634,231 3,241,170 35,792,148 55,764,463
Total comprehensive loss for the year:
Loss for the year - - - (31,451,398) (31,451,398)
Exchange difference on - - 975,771 - 975,771
translation of foreign holding
Eliminate foreign holding - - (4,216,941) - (4,216,941)
exchange difference
Total comprehensive loss for the year - - (3,241,170) (31,451,398) (34,692,568)
Shares issued 20,000 220,000 - - 240,000
Share issue costs - (5,282) - - (5,282)
Equity at 31 March 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 - (2,832,953) 14,132,910
Company Share Share Retained Total
capital £ premium £ losses £ £
Equity at 31 March 2012 7,096,914 9,634,231 (4,243,847) 12,487,298
Total comprehensive loss for the year:
Loss for the year - - (492,818) (492,818)
Total comprehensive loss for the year - - (492,818) (492,818)
Shares issued 20,000 220,000 - 240,000
Share issue costs - (5,282) - (5,282)
Equity at 31 March 2013 7,116,914 9,848,949 (4,736,665) 12,229,198
Total comprehensive loss for the year:
Loss for the year - - (475,676) (475,676)
Total comprehensive loss for the year - - (475,676) (475,676)
Equity at 31 March 2014 7,116,914 9,848,949 (5,212,341) 11,753,522
Statement of cash flows of the group
Year ended 31 Year ended 31
Notes March 2014 March 2013
£ £
Operating activities
Loss for the period (7,173,703) (31,451,398)
Adjustments for:
Investment income 6 (2,630) (36,941)
Finance costs 7 112,590 115,023
Share of loss of associate - 4,572,320
Losses on deemed
disposals in associate - 6,793,789
Loss on reclassification of associate as an
investment - 16,149,722
Impairment of investment 14 5,451,267 3,791,439
Exchange difference on investment impairment 14 1,255,280 (321,186)
Foreign exchange movement 3,741 (11,196)
(353,455) (398,428)
Movements in working capital
Decrease in receivables 23,222 24,753
Decrease/(increase) in payables 15,491 (36,902)
Net cash used in operating activities (314,742) (410,577)
Investing activities
Investment income 2,238 36,422
Mineral property exploration and evaluation (65,003) (1,166,413)
Addition to AFS investment in LIM - (950,927)
Net cash used in investing activities (62,765) (2,080,918)
Loan received -
Net decrease in cash (377,507) (2,491,495)
and cash equivalents
Cash and cash equivalents at start of year 670,345 3,150,644
Foreign exchange movement (3,741) 11,196
Cash and cash equivalents at end of year 17 289,097 670,345
Statement of cash flows of the company
Notes Year ended 31 Year ended 31
March 2014 March 2013
£ £
Operating activities
Loss for the period 23 (475,676) (492,818)
Adjustments for:
Investment income (2,013) (27,361)
Finance costs 112,590 115,023
(365,099) (405,156)
Movements in working capital
Decrease/(increase) in receivables 12,309 (2,031)
Increase/(decrease) in payables 15,491 (36,902)
Net cash used in operating activities (337,299) (444,089)
Investing activities
Interest income 2,013 27,361
Investments and long term loans (20,884) (1,122,585)
Net cash used in investing activities (18,871) (1,095,224)
Financing activities
Inter-company loan received - 1,099,198
Net cash generated from financing activities - 1,099,198
Net decrease in cash and cash equivalents (356,170) (440,115)
Cash and cash equivalents at start of period 623,215 1,063,330
Cash and cash equivalents at end of period 267,045 623,215
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. For the reasons set out in the directors' report, the directors
believe that the going concern basis is appropriate for these accounts.
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.
Investment in associate
An associate is an entity over which the group exercises, or is in a position
to exercise, significant influence, but not control or joint control, through
participation in the financial or operating policy of the investee. In
considering the degree of control, any options or warrants over ordinary
shares which are capable of being exercised at the period end are taken into
consideration.
Where material, the results and assets and liabilities of associates are
incorporated in the financial statements using the equity method of
accounting, except when these associates are classified as held for sale.
Investments in associates are carried in the statement of financial position
at cost adjusted by any material post-acquisition changes in the net assets of
the associates, less any impairment of value in the individual investments.
Investments in associates cease to be treated as associates using the equity
method of accounting when the group loses significant influence. Any retained
interest is treated as an investment in accordance with IAS 39 `Financial
Instruments: Recognition and Measurement'. The transaction is treated as a
disposal of interest in the associate, with any difference arising between the
fair value of the retained interest, and the carrying value of the associate
at the date significant influence is lost recognised as a profit or loss on
reclassification within the income statement.
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 the operation is
disposed.
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, is such that any depreciation
would not be material. The carrying value is reviewed annually and 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.
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.
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 13 Fair Value Measurement: Original issue; Issued - May 2011; Effective -
Annual periods beginning on or after 1 January 2013
IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine; Effective
- Annual periods beginning on or after 1 January 2013
There has been no impact of adopting the standards.
The group and company have adopted the amendments to the following
interpretation:
IAS 1 Presentation of Financial Statements: Amendments to revise the way other
comprehensive income is presented; Issued - June 2011; Effective - Annual
periods beginning on or after 1 July 2012
IAS 19 Employee Benefits: Original issue; Issued - Amended June 2011;
Effective - Annual periods on or after 1 January 2013
Amendments resulting from Annual Improvements 2009-2011 Cycle in relation to
IFRS 1, IAS1, IAS16; Effective- Annual periods on or after 1 January 2013
Amendments resulting from Annual Improvements 2011-2013 Cycle in relation to
IFRS 1; Effective - Annual periods on or after 1 January 2013.
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:
IFRS 9 Financial Instruments; Original issue; Issued - November 2009; No
effective date
IFRS 10 Consolidated Financial Statements: Original issue; 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 2013
IFRS 12 Disclosure of Interests in Other Entities: Original issue; Issued -
May 2011; Effective - Annual periods beginning on or after 1 January 2014
IFRS14 Regularity Deferral Accounts : Original issue; Issued - January 2014;
Effective - Annual periods beginning on or after 1 January 2016
IFRS15 Revenue from contracts with customers : Original issue; Issued - May
2014; Effective - Annual periods beginning on or after 1 January 2017
IAS16 Property, plant and equipment: 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 27 Separate Financial Statements (as amended in 2011): Original issue;
Issued - May 2011; Effective - Annual periods beginning on or after 1 January
2014
IAS 28 Investments in Associated and Joint Ventures: Original issue; Issued -
May 2011; Effective - Annual periods beginning on or after 1 January 2014
IAS 32 Financial Instruments: Presentation: Amendments relating to the
offsetting of assets and liabilities; Issued - December 2011; Effective -
Annual periods beginning on or after 1 January 2014
IAS 36 Impairment of Assets: Amendments arising from Recoverable Amounts
Disclosure for Non-financial Assets; Issued - 2004, Amended - May 2013;
Effective Annual periods beginning on or after 1 January 2014
IAS 39 Financial Instruments: Amendments for novation of derivatives; Amended
June 2013; Effective for Annual periods beginning on or after 1 January 2014
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 39 Financial Instruments: Recognition and Measurement; Original issue;
Issued - June 2013; Effective for Annual periods beginning on or after 1
January 2014
IFRIC 21 Levies; Effective - Annual periods beginning on or after 1 January
2014.
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 July 2014.
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.
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.
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 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 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.
Income statement analysis
2014 2013
UK Canada - Total UK Canada - Total
investment investment
£ £ £ £ £ £
Expenses (353,455) - (353,455) (398,428) - (398,428)
Share of loss in associate - - - - (4,572,320) (4,572,320)
Loss on deemed disposals - - - - (6,793,789) (6,793,789)
Loss on recognition of
associate as an investment - - - - (16,149,722) (16,149,722)
Impairment of investment - (5,451,267) (5,451,267) - (3,791,439) (3,791,439)
Exchange difference on above - (1,255,280) (1,255,280) - 321,186 321,186
Investment income 2,630 - 2,630 36,941 - 36,941
Finance costs (112,590) - (112,590) (115,023) - (115,023)
Exchange rate (loss)/gain (3,741) - (3,741) 11,196 - 11,196
Loss for the year (467,156) (6,706,547) (7,173,703) (465,314) (30,986,084) (31,451,398)
Assets and liabilities
31 March 2014 31 March 2013
UK Canada - Total UK Canada - Total
investment investment
£ £ £ £ £ £
Non-current assets 15,129,331 1,257,985 16,387,316 15,080,457 7,964,532 23,044,989
Current assets 306,114 - 306,114 710,584 - 710,584
Liabilities (2,560,520) - (2,560,520) (2,448,960) - (2,448,960)
Net assets 12,874,925 1,257,985 14,132,910 13,342,081 7,964,532 21,306,613
4 Operating result
The loss for the year has been arrived at after charging:
2014 2013
£ £
Fees payable to the group's auditor:
for the audit of the annual accounts 22,000 26,794
for the audit of subsidiaries' accounts 3,000 5,000
for other services - taxation compliance 3,150 6,551
for other services 1,303 3,535
Directors' remuneration 112,333 139,000
Director's pension contributions 6,667 20,000
Foreign exchange loss/(gain) 3,741 (11,196)
5 Staff costs
The average monthly number of persons employed (including executive directors) was:
2014 2013
Administrative 4 3
4 3
Their aggregate remuneration was: £ £
Wages and salaries 104,998 100,000
Social security costs 11,691 11,733
Other pension costs 6,667 20,000
123,356 131,733
Details of directors' remuneration and share options are given in the
directors' remuneration report.
6 Investment income
2014 2013
£ £
Loans and receivables
Interest on bank deposits 2,238 36,423
Interest on site re-instatement
deposit 15 392 518
2,630 36,941
7 Finance costs
2014 2013
Loans and payables £ £
Loan interest to Juno Limited 19 112,590 115,023
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 2014 of £1.3 million (2013 - £1.2 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 £12.3 million
unclaimed and available at 31 March 2014 (2013 - £12.3 million). No deferred
tax asset is recognised in respect of these allowances.
2014 2013
£ £
Current tax - -
Deferred tax - -
Total tax - -
Domestic income tax is calculated at 23% of the estimated assessed profit for the year. In 2013
the
rate used was 24% 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 (7,173,703) (34,692,568)
Tax at the domestic income tax rate of
23% (2013 - 24%) (1,649,952) (8,326,216)
Tax effect of:
Losses on deemed disposals in associate - 1,630,509
Share of loss of associate - 1,097,357
Losses on interest in associates and
investments 1,649,952 5,598,350
Total tax - -
9 Earnings per ordinary share
2014 2013
£ £
Earnings
Loss for the year (7,173,703) (31,451,398)
Number of shares
Weighted average number of ordinary
shares for the
purposes of basic earnings per share 160,608,051 159,966,407
Shares deemed to be issued for no
consideration in
respect of employee options
Weighted average number of ordinary
shares for the
purposes of diluted earnings per
share 160,608,051 159,966,407
Basic earnings per share (4.5)p (19.7)p
Diluted earnings per share (4.5)p (19.7)p
As the group has a loss for the year ended 31 March 2014 the effect of the
11.55 million options outstanding 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 2012 14,255,818
Additions - site 468,837
Additions - rentals &
charges 28,911
At 31 March 2013 14,753,566
Additions - site 32,661
Additions - rentals &
charges 15,821
At 31 March 2014 14,802,048
Carrying amount
Net book value 2014 14,802,048
Net book value 2013 14,753,566
Included in the additions are mining lease expenses of £15,500 (2013 -
£15,500) and £nil for the cancellation of the Intermine net profits royalty
agreement (2013 -£113,241).
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 2014. This review was based on an estimate of discounted
future cash flows from the development and operation of the Parys Mountain
project. 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 will be 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: zinc price 1.05 US$/lb; copper price 3.25 US$/lb; lead price
1.00 US$/lb; silver price US$21.50 g/t and gold price US$1335 g/t. Exchange
rate for metal prices £/US$ 1.71; long term exchange rate US$1.60/£.
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.
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
Group Freehold Plant & Office Total
land and equipment equipment
property
Cost £ £ £ £
At 1 April 2012 204,687 17,434 5,487 227,608
At 31 March 2013 and
2014 204,687 17,434 5,487 227,608
Depreciation
At 1 April 2012 - 17,434 5,487 22,921
At 31 March 2013 and
2014 - 17,434 5,487 22,921
Carrying amount
At 31 March 2013 and
2014 204,687 - - 204,687
Company Freehold Plant & Office Total
land and equipment equipment
property
Cost £ £ £ £
At 1 April 2012 - 17,434 5,487 22,921
At 31 March 2013 and
2014 - 17,434 5,487 22,921
Depreciation
At 1 April 2012 - 17,434 5,487 22,921
At 31 March 2013 and
2014 - 17,434 5,487 22,921
Carrying amount
At 31 March 2013 and
2014 - - - -
12 Subsidiaries - company
The subsidiaries of the company at 31 March 2014 and 2013 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
13 Investments - company
Shares at cost Loans Total
£ £ £
At 1 April 2012 100,103 13,598,472 13,698,575
Advanced - 1,357,303 1,357,303
Repaid - (1,099,198) (1,099,198)
At 31 March 2013 100,103 13,856,577 13,956,680
Advanced - 20,884 20,884
Repaid - - -
At 31 March 2014 100,103 13,877,461 13,977,564
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
31 March 2014 31 March 2013
£ £
Value brought forward 7,964,532 -
Value of investment upon
recognition as a financial
investment - 10,483,858
Addition to investment - 950,927
Impairment resulting from adjustment
to fair
value (5,451,267) (3,791,439)
Exchange difference arising on
adjustment above (1,255,280) 321,186
Amount carried in the group accounts 1,257,985 7,964,532
The published fair value of the group's investment in LIM at 31 March 2014 is
£1.3 million (2013 - £8.0 million). At 14 July 2014 the published fair value
of the group's investment was £630,000.
The shares included above represent an investment in listed equity securities
that present the group with opportunity for return through dividend income and
trading gains. The group holds a strategic non-controlling interest, following
the dilution of its interest in Labrador Iron Holdings Limited to 15.3% in
November 2012. These shares are not held for trading and accordingly are
classified as `available for sale' which is deemed to be the most appropriate
classification under IFRS. The fair values of all equity securities are based
on quoted market prices.
The above investment is 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.
The value of the investment is deemed to be impaired given the recent period
of decline in the share price.
15 Deposit
Group Company
2014 2013 2014 2013
£ £ £ £
Site re-instatement deposit 122,596 122,204 - -
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
2014 2013 2014 2013
£ £ £ £
Other 17,017 40,239 13,793 26,102
The carrying value of the receivables approximates to their fair value.
17 Cash
Group Company
2014 2013 2014 2013
£ £ £ £
Held in sterling 269,044 646,760 267,045 623,215
Held in Canadian dollars 20,053 23,585 - -
289,097 670,345 267,045 623,215
The carrying value of the cash approximates to its fair value.
18 Trade and other payables
Group Company
2014 2013 2014 2013
£ £ £ £
Trade creditors (34,863) (33,860) (28,224) (10,700)
Taxes (11,029) (13,064) (11,029) (13,064)
Other accruals (53,755) (53,753) (46,754) (46,752)
(99,647) (100,677) (86,007) (70,516)
The carrying value of the trade and other payables approximates to their fair
value.
19 Loan
Group Company
2014 2013 2014 2013
£ £ £ £
Loan from Juno Limited (2,418,873) (2,306,283) (2,418,873) (2,306,283)
The loan from Juno Limited 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.
20 Provision
Group Company
2014 2013 2014 2013
£ £ £ £
Provision for site reinstatement (42,000) (42,000) - -
The provision for site reinstatement covers the estimated costs of
reinstatement at the Parys Mountain site of the work done and changes made by
the group up to the date of the accounts. These costs would be payable on
completion of mining activities (which is estimated to be in more than 20
years' time) 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. There
has been no movement during the year.
21 Share capital
Ordinary shares of Deferred shares of Total
1p 4p
Issued and Nominal Number Nominal Number Nominal
fully paid value £ value £ value £
At 31 March 2012 1,586,081 158,608,051 5,510,833 137,770,835 7,096,914
Issued 11 July 2012 20,000 2,000,000 - - 20,000
-
At 31 March 2013 and 31 March
2014 1,606,081 160,608,051 5,510,833 137,770,835 7,116,914
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
The 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.
2014 2013
Options Weighted Options Weighted
average average
exercise exercise
price in price in
pence pence
Outstanding at beginning of period 11,550,000 10.90 11,550,000 10.90
Granted during the period - - - -
Forfeited during the period - - - -
Exercised during the period - - - -
Expired during the period - - - -
Outstanding at the end of the period 11,550,000 10.90 11,550,000 10.90
Exercisable at the end of the period 11,550,000 10.90 11,550,000 10.90
No options were granted, forfeited or expired during the year or the prior
year. The options outstanding at 31 March 2014 had a weighted average
exercise price of 10.90 pence (2013 - 10.90 pence), and a weighted average
remaining contractual life of 2 years (2013 - 3 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
2013 and 2014.
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 from Exercisable
value £ price until
2004 Unapproved 5,500,000 55,000 4.13p 22 October 2004 21 October 2014
2004 Unapproved 1,550,000 15,500 10.625p 15 January 2007 14 January 2016
2004 Unapproved 3,800,000 38,000 21.90p 26 November 2008 26 November 2017
2004 Unapproved 700,000 7,000 5.00p 27 March 2010 27 March 2019
Total 11,550,000 115,500
23 Results attributable to Anglesey Mining plc
The loss after taxation in the parent company amounted to £475,676 (2013 loss
£492,818). 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. The group could
consider sale of shares in the group's investment to provide continued
funding.
Trade creditors are payable on normal credit terms which are usually 30 days.
The loans due to Juno carry a notice period of 367 days; in keeping with its
practice since drawdown commenced more than 10 years ago, Juno has indicated
that it has no current intention of demanding repayment and no such notice had
been received by 14 July 2014. However the Juno loan is classified as having a
maturity date between one and two years from the period end date.
Currency risk
The functional currency of the 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.
The investment in LIM is denominated in Canadian dollars and amounts to
C$2,314,692 equivalent to £1,257,985. If the rate of exchange between the
Canadian dollar and sterling were to move against sterling by 10% there would
be a loss to the group of £114,000 and if it were to move in favour of
sterling by a similar amount there would be a gain of £140,000.
At the year end the group held C$36,897 in Canadian dollars, equivalent to
£20,053. If the rate of exchange between the Canadian dollar and sterling were
to move 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.
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 & Financial liabilities
asset receivables
31 31 31 31 31 March 31 March
March March March March 2014 2013
2014 2013 2014 2013
£ £ £ £ £ £
Financial assets
Investment 1,257,985 7,964,532 - - - -
Deposit - - 122,596 122,204 - -
Other debtors - - 17,017 40,239 - -
Cash and cash
equivalents - - 289,097 670,345 - -
- -
Financial
liabilities - -
Trade creditors - - - - (34,863) (33,860)
Loans due to Juno - - - - (2,418,873) (2,306,283)
1,257,985 7,964,532 428,710 832,788 (2,453,736) (2,340,143)
Company
Loans & receivables Financial liabilities
31 March 31 March 31 March 31 March
2014 2013 2014 2013
£ £ £ £
Financial assets
Investment - loan 13,877,460 13,856,576
Other debtors 13,793 26,102 - -
Cash and cash
equivalents 267,045 623,215 - -
Financial liabilities
Trade creditors - - (28,224) (10,700)
Loans due to Juno - - (2,418,873) (2,306,283)
14,158,298 14,505,893 (2,447,097) (2,316,983)
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. There were no transactions between the group and Juno or its
group during the year other than the accrual of interest due to Juno. Danesh
Varma is a director and, through his family interests, a significant
shareholder of Juno.
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 £10,321 is payable for the year
beginning 23 March 2013; 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
terminates 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 terminates 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
2014 - £15,821; between 1 April 2015 and 31 March 2020 - £84,168. 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 (2013 -
nil).
29 Contingent liabilities
There are no contingent liabilities (2013 - nil).
30 Events after the period end
On 28 May 2014 the group purchased an indirect 6% holding in Grangesberg Iron
AB, a company incorporated in Sweden, for a consideration of US$145,000.
Also on 28 May 2014 the group was granted an option over 100% of the share
capital of Eurang Limited, which itself acquired a 51% interest in Grangesberg
Iron AB. For details of this option see the Strategic Report on page 4. The
group has yet to complete an assessment of the financial impact of the
transaction and therefore is not able to provide the additional disclosures
required by IFFRS3 paragraph B64.
Since the year end the market value of the group's shareholding in LIM has
fallen below the amount at which it is held in the statement of financial
position - see note 14.
Otherwise there are no events after the period end to report.
Notice of AGM
Notice is given that the 2014 annual general meeting of Anglesey Mining plc
will be held at the offices of the company's lawyers, DLA Piper UK LLP, 1
London Wall, London, EC2Y 5EA on 30 September 2014 at 11.00 a.m. to consider
and, if thought fit, to pass the following resolutions. Resolutions 1 to 13
will be proposed as ordinary resolutions and resolution 14 will be proposed as
a special resolution:
As ordinary business
To receive the annual accounts and directors' and auditor's reports for the
year ended 31 March 2013
To approve the directors' remuneration policy report for the year ended 31
March 2013
To approve the directors' remuneration report for the year ended 31 March 2013
To reappoint John F. Kearney as a director
To reappoint Bill Hooley as a director
To reappoint David Lean as a director
To reappoint Howard Miller as a director
To reappoint Roger Turner as a director
To reappoint Danesh Varma as a director
To reappoint Mazars LLP as auditor
To authorise the directors to determine the remuneration of the auditor
As special business
12. To approve the adoption of the Anglesey Mining plc 2014 Unapproved Share
Option Scheme ("the Scheme") the proposed rules of which are provided
following this notice and to authorise the directors to do all acts and things
necessary to establish the Scheme.
13. That, pursuant to section 551 of the Companies Act 2006 ("Act"), the
directors be and are generally and unconditionally authorised to exercise all
powers of the Company to allot shares in the Company or to grant rights to
subscribe for or to convert any security into shares in the Company up to an
aggregate nominal amount of £840,000, provided that (unless previously
revoked, varied or renewed) this authority shall expire on 31 December 2015,
save that the Company may make an offer or agreement before this authority
expires which would or might require shares to be allotted or rights to
subscribe for or to convert any security into shares to be granted after this
authority expires and the directors may allot shares or grant such rights
pursuant to any such offer or agreement as if this authority had not expired.
This authority is in substitution for all existing authorities under section
551 of the Act (which, to the extend unused at the date of this resolution,
are revoked with immediate effect).
14. That pursuant to section 570 of the Act, the directors be and are
generally empowered to allot equity securities (within the meaning of section
560 of the Act) for cash pursuant to the authority granted under section 551
of the Act pursuant to resolution 13 above as if section 561(1) of the Act did
not apply to any such allotment, provided that this power shall be limited to
the allotment of equity securities:
(a) in connection with an offer of equity securities (whether by way of a
rights issue, open offer or otherwise) (i) to holders of ordinary shares in
the capital of the company in proportion (as nearly as practicable) to the
respective numbers of ordinary shares held by them; and (ii) to holders of
other equity securities in the capital of the company, as required by the
rights of those securities or, subject to such rights, as the directors
otherwise consider necessary but subject to such exclusions or other
arrangements as the directors may deem necessary or expedient in relation to
treasury shares, fractional entitlements, record dates or any legal or
practical problems under the laws of any territory or the requirements of any
regulatory body or stock exchange; and
(b) otherwise than pursuant to paragraph 14(a) above, up to an aggregate
nominal amount of £401,500
and (unless previously revoked, varied or renewed) this power shall expire on
31 December 2015, save that the Company may make an offer or agreement before
this power expires which would or might require equity securities to be
allotted for cash after this power expires and the directors may allot equity
securities for cash pursuant to any such offer or agreement as if this power
had not expired. This power is in substitution for all existing powers under
section 570 of the Act which, to the extent effective at the date of this
resolution, are revoked with immediate effect.
By order of the board
Danesh Varma
Company secretary
30 July 2014
Notes to the notice of AGM
Entitlement to attend and vote
1. The right to vote at the meeting is determined by reference to the register
of members. Only those shareholders registered in the register of members of
the Company as at 6.00 p.m. on 26 September 2014 (or, if the meeting is
adjourned, 48 hours (excluding any part of a day that is not a working day)
before the date and time of the adjourned meeting) shall be entitled to attend
and vote at the meeting in respect of the number of shares registered in their
name at that time. Changes to entries in the register of members after that
time shall be disregarded in determining the rights of any person to attend or
vote (and the number of votes they may cast) at the meeting.
Proxies
2. A shareholder is entitled to appoint another person as his or her proxy to
exercise all or any of his or her rights to attend and to speak and vote at
the meeting. A proxy need not be a member of the Company. A shareholder may
appoint more than one proxy in relation to the meeting, provided that each
proxy is appointed to exercise the rights attached to a different share or
shares held by that shareholder. Failure to specify the number of shares each
proxy appointment relates to or specifying a number which when taken together
with the numbers of shares set out in the other proxy appointments is in
excess of the number of shares held by the shareholder may result in the proxy
appointment being invalid. A proxy may be appointed only in accordance with
the procedures set out in note 3 and the notes to the proxy form. The
appointment of a proxy will not preclude a shareholder from attending and
voting in person at the meeting.
3. A form of proxy is enclosed. When appointing more than one proxy, complete
a separate proxy form in relation to each appointment. Additional proxy forms
may be obtained by contacting the Company's registrar Capita Asset Services,
Proxies, The Registry, 34 Beckenham Road, Kent BR3 4TU or the proxy form may
be photocopied. State clearly on each proxy form the number of shares in
relation to which the proxy is appointed. To be valid, a proxy form must be
received by post or (during normal business hours only) by hand at the offices
of the Company's registrar, Capita Asset Services, Proxies, The Registry, 34
Beckenham Road, Kent BR3 4TU, no later than 11.00 a.m. on 26 September 2014
(or, if the meeting is adjourned, no later than 48 hours (excluding any part
of a day that is not a working day) before the time of any adjourned meeting).
Corporate representatives
4. A shareholder which is a corporation may authorise one or more persons to
act as its representative(s) at the meeting. Each such representative may
exercise (on behalf of the corporation) the same powers as the corporation
could exercise if it were an individual shareholder, provided that (where
there is more than one representative and the vote is otherwise than on a show
of hands) they do not do so in relation to the same shares.
Total voting rights
5. As at 14 July 2014 (being the last practicable date before the publication
of this notice), the issued share capital consists of 160,608,051 ordinary
shares of £0.01 each, carrying one vote each and 21,529,451 Deferred A Shares
and 116,241,384 Deferred B Shares which do not carry any rights to vote.
Therefore, the total voting rights as at 14 July 2014 are 160,608,051.
Nominated Persons
6. Where a copy of this notice is being received by a person who has been
nominated to enjoy information rights under section 146 of the Companies Act
2006 ("Act") ("Nominated Person"):
(a) the Nominated Person may have a right under an agreement between him/her
and the shareholder by whom he/she was nominated, to be appointed, or to have
someone else appointed, as a proxy for the meeting; or
(b) if the Nominated Person has no such right or does not wish to exercise
such right, he/she may have a right under such an agreement to give
instructions to the shareholder as to the exercise of voting rights. The
statement of the rights of shareholders in relation to the appointment of
proxies in note 2 does not apply to a Nominated Person. The rights described
in such notes can only be exercised by shareholders of the Company.
Shareholders' right to require circulation of resolutions to be proposed at
the meeting
7. A shareholder or shareholders meeting the qualification criteria set out in
note 10 below may require the Company to give shareholders notice of a
resolution which may properly be proposed and is intended to be proposed at
the meeting in accordance with section 338 of the Act. A resolution may
properly be proposed unless (i) it would, if passed, be ineffective (whether
by reason of inconsistency with any enactment or the Company's constitution or
otherwise), (ii) it is defamatory of any person, or (iii) it is frivolous or
vexatious. The business which may be dealt with at the meeting includes a
resolution circulated pursuant to this right. Any such request must (i)
identify the resolution of which notice is to be given, by either setting out
the resolution in full or, if supporting a resolution requested by another
shareholder, clearly identifying the resolution which is being supported (ii)
comply with the requirements set out in note 11 below, and (iii) be received
by the Company no later than six weeks before the meeting.
Shareholders' right to have a matter of business dealt with at the meeting
8. A shareholder or shareholders meeting the qualification criteria set out in
note 10 below may require the Company to include in the business to be dealt
with at the meeting any matter (other than a proposed resolution) which may
properly be included in the business in accordance with section 338A of the
Act. A matter may properly be included unless (i) it is defamatory of any
person, or (ii) it is frivolous or vexatious. Any such request must (i)
identify the matter to be included in the business, by either setting out the
matter in full or, if supporting a matter requested by another shareholder,
clearly identifying the matter which is being supported (ii) set out the
grounds for the request (iii) comply with the requirements set out in note 11
below and (iv) be received by the Company no later than six weeks before the
meeting.
Website publication of audit concerns
9. A shareholder or shareholders who meet the qualification criteria set out
in note 10 below may require the Company to publish on its website a statement
setting out any matter that such shareholders propose to raise at the meeting
relating to either the audit of the Company's accounts (including the
auditors' report and the conduct of the audit) that are to be laid before the
meeting or any circumstances connected with an auditor of the Company ceasing
to hold office since the last annual general meeting of the Company in
accordance with section 527 of the Act. Any such request must (i) identify the
statement to which it relates, by either setting out the
statement in full or, if supporting a statement requested by another
shareholder, clearly identify the statement which is being supported (ii)
comply with the requirements set out in note 11 below and (iii) be received by
the Company at least one week before the meeting. Where the Company is
required to publish such a statement on its website (i) it may not require the
shareholders making the request to pay any expenses incurred by the Company in
complying with the request (ii) it must forward the statement to the Company's
auditors no later than the time when it makes the statement available on the
website and (iii) the statement may be dealt with as part of the business of
the meeting.
Notes 7, 8 and 9 above: qualification criteria and methods of making requests
10. In order to require the Company (i) to circulate a resolution to be
proposed at the meeting as set out in note 7, (ii) to include a matter in the
business to be dealt with at the meeting as set out in note 8, or (iii) to
publish audit concerns as set out in note 9, the relevant request must be made
by (i) a shareholder or shareholders having a right to vote at the meeting and
holding at least five per cent of the total voting rights of the Company or
(ii) at least 100 shareholders having a right to vote at the meeting and
holding, on average, at least £100 of paid up share capital. For information
on voting rights, including the total voting rights of the Company, see note 5
above and the website referred to in note 15 below.
11. Any request by a shareholder or shareholders to require the Company (i) to
circulate a resolution to be proposed at the meeting as set out in note 7 (ii)
to include a matter in the business to be dealt with at the meeting as set out
in note 8 or (iii) to publish audit concerns as set out in note 9 may be made
either (a) in hard copy, by sending it to Anglesey Mining plc, Tower Bridge,
St Katharine's Way, London E1W 1DD (marked for the attention of the Company
Secretary); or (b) in electronic form, by sending an email to
danesh@angleseymining.co.uk; and must state the full name(s) and address(es)
of the shareholder(s) and (where the request is made in hard copy form ) must
be signed by the shareholder(s).
Questions at the meeting
12. Shareholders have the right to ask questions at the meeting relating to
the business being dealt with at the meeting in accordance with section 319A
of the Act. The Company must answer any such question unless: (a) to do so
would interfere unduly with the preparation for the meeting or would involve
the disclosure of confidential information; (b) the answer has already been
given on a website in the form of an answer to a question; or (c) it is
undesirable in the interests of the Company or the good order of the meeting
that the question be answered.
Documents available for inspection
13. The following documents will be available for inspection during normal
business hours at the registered office of the Company from the date of this
notice until the time of the meeting. They will also be available for
inspection at the place of the meeting from at least 15 minutes before the
meeting until it ends: (a) copies of the service contracts of the executive
directors, (b) copies of the letters of appointment of the non-executive
directors and (c) the Articles of Association of the Company.
Biographical details of directors
14. Biographical details of all those directors who are offering themselves
for reappointment at the meeting are set out in the annual report and
accounts.
Website providing information about the meeting
15. The information required by section 311A of the Act to be published in
advance of the meeting, which includes the matters set out in this notice and
information relating to the voting rights of shareholders, is available at
www.angleseymining.co.uk.
Rules of the Unapproved Share Option Scheme
Submitted for approval at the AGM on 30 September 2014:
The Company hereby establishes a share option scheme to be known as the 2014
Unapproved Share Option Scheme for directors, officers, employees and
associates of Anglesey Mining plc.
The purposes of the Scheme are:
(i) to reward the abilities and efforts of the directors, officers and
employees and other providers of management or consulting services for the
Company who have contributed to or could contribute to the success of the
Company;
(ii) to provide an incentive to achieve the long term objectives of the
Company;
(iii) to attract persons of experience and ability to serve as directors,
officers and employees of, and other providers of management or consulting
services for, the Company; and
(iv) to encourage such directors, officers, employees and other service
providers to promote the affairs of the Company.
1 Interpretation
In these Rules:
1.1 unless the context otherwise requires, the words and expressions set out
below shall have the following meanings:
"Cause" means any of the following:
(a) gross neglect or dereliction of the Eligible Employee's duties (excluding
any period during which the Eligible Employee is suffering from a Disability)
or other grave misconduct by the Eligible Employee or, if curable, the failure
to cure such situation within thirty (30) days after notice thereof authorised
by the Board of Directors is given to the Eligible Employee;
(b) the Eligible Employee engaging in conduct which he knows or should have
known would cause, and has in fact caused, demonstrable and serious injury to
the Company or any of its subsidiaries in whole or in part, monetary or
otherwise, as evidenced by a written determination authorised by the Board of
Directors.
"Company" - Anglesey Mining plc (registered in England and Wales under number
1849957);
"Control" - the meaning given to that expression by section 840 of ICTA 1988;
"Date of Adoption" - the date of the adoption of this Scheme by resolution of
the Remuneration Committee;
"Date of Grant" - the date upon which an Option is granted;
"Eligible Employee" - means the directors and/or officers and/or employees of
the Company or its subsidiaries and any other person or company engaged to
provide ongoing management or consulting services for the Company or for any
entity controlled by the Company, in each case as designated from time to time
by the Remuneration Committee as eligible for participation hereunder;
"Exercise Condition" - the meaning set out in Rule 5;
"Group Member" - the Company or any Subsidiary from time to time;
"ICTA 1988" - the Income and Corporation Taxes Act 1988;
"In Concert" - the meaning given to that term in The City Code on Takeovers
and Mergers as amended from time to time;
"Issue or Reorganisation" - any increase or variation of the share capital of
the Company including, without limitation, any rights issue, capitalisation,
consolidation, sub-division or reduction of capital by the Company which, in
the opinion of the Remuneration Committee, justifies a variation to an Option
in accordance with Rule 7;
"Model Code" - the Model Code on directors' dealings in securities, published
by the London Stock Exchange;
"Option" - a right to acquire Shares pursuant to this Scheme;
"Option Holder" - a person holding an Option or, where the context so admits,
his/her personal representatives;
"Option Price" - the acquisition price for a share determined by the
Remuneration Committee in accordance with Rule 2.5;
"Recognised Investment Exchange" - the meaning given to that expression in
section 207 Financial Services Act 1986;
"Remuneration Committee" - the remuneration committee means the committee of
individuals appointed by the board of directors responsible for, among other
things, the granting of options hereunder and the administration of the Scheme
and, failing the appointment of such a committee, shall mean the board of
directors itself;
"Scheme" - Anglesey Mining plc 2014 Unapproved Share Option Scheme established
by these Rules in its present form or as from time to time amended in
accordance with the provisions hereof,
"Shares" - ordinary shares of 1p each in the capital of the Company;
"Subsidiary" - a body corporate which is a subsidiary of the Company within
the meaning of section 1159 of the Companies Act 2006 and of which the Company
has Control;
1.2 words denoting the singular shall include the plural and words denoting
one gender shall include the others;
1.3 the headings herein and the index hereto are for ease of reference only
and shall not affect construction;
1.4 any reference to any statute or any provision thereof or any guideline or
regulation include that statute, provision, guideline or regulation as
amended, modified, re-enacted or replaced from time to time whether before or
after the Date of Adoption of this Scheme; and
1.5 any reference to a Rule is a reference to a Rule of this Scheme.
2 Grant of Options
2.1 Subject as herein provided, the Remuneration Committee may grant Options
to such Eligible Employees as it may select in its absolute discretion.
2.2 An Option may only be granted within the period of 10 years beginning with
the Date of Adoption.
2.3 No Option may be granted at a time when such grant would not be in
accordance with the Model Code.
2.4 There shall be no monetary consideration for the grant of an Option and,
accordingly, an Option shall be granted by deed.
2.5 The Remuneration Committee shall, in its absolute discretion, determine
the Option Price before the grant of the relevant Option provided that such
amount shall not be less than the average closing price of Ordinary Shares
traded on the London Stock Exchange or any recognised replacement investment
exchange on the three trading days immediately preceding the Date of Grant or
the nominal value of the share which is the subject of the option.
2.6 Each Option shall be personal to the Option Holder to whom it is granted
and shall not be transferable, assignable, chargeable or otherwise available
for disposition except upon death of the Option Holder. An Option shall lapse
forthwith if it is, or is purported to be, transferred, assigned, charged,
disposed of or otherwise dealt with or if the Option Holder is adjudged
bankrupt.
3 Restrictions on the Grant of Options
3.1 No Option shall be granted which would, at the time it is granted, cause
the aggregate number of Shares which shall have been or may be issued in
pursuance of options granted under the Scheme or any other scheme in the last
10 years to exceed such number as represents 10% of the issued ordinary share
capital of the Company at that time.
3.2 In the event that an Option is granted in breach of Rule 3.1 above, such
option shall be deemed, for the purposes of this Scheme, to be an Option to
acquire such number of Shares which would not cause Rule 3.1 to be breached
and save to that extent shall be of no force or effect.
4 Exercise of Options
4. 1 The exercise of an Option in accordance with Rule 4 shall be effected in
such form and manner as the Remuneration Committee may from time to time
prescribe.
4.2 Any Option which has not lapsed may be exercised in whole or in part at
any time following the earliest of the following events:
4.2.1 the first anniversary of the date of grant or date of commencement of
employment, whichever comes first
4.2.2 the death of the Option Holder
4.2.3 the Option Holder ceasing to be a director or employee of the Company or
any of its subsidiaries by reason of injury, disability, redundancy or
retirement
4.3 An Option shall lapse on the earliest of the following events:
4.3.1 the tenth anniversary of the date of grant;
4.3.2 the first anniversary of the Option Holders death;
4.3.3 immediately for reasons of cause or bankruptcy whether or not it was
exercisable prior to such cessation of service
4.4 A female Option Holder who ceases to be a full-time director or a
full-time employee by reason of pregnancy or confinement and who exercises her
right to return to work under the Employment Rights Act 1996 before exercising
an Option shall be treated for those purposes as not having ceased to be such
a full-time director or a full-time employee.
4.5 Notwithstanding any other provision of this Scheme, an Option may not be
exercised after the expiration of the period of 10 years (or such shorter
period as the Remuneration Committee may have determined before the grant of
Options) beginning with the Date of Grant.
4.6 Within five (5) days after an Option has been exercised by any person
entitled thereto, subject to receipt by the Company of the Option Price in
respect of the relevant Shares, the Company shall allot to the relevant Option
Holder or, as appropriate, procure the transfer to him/her of the number of
Shares in respect of which the Option has been properly exercised.
4.7 All Shares allotted under this Scheme shall rank pari passu in all
respects with the shares of the same class for the time being in issue save as
regards any rights attaching to such shares by reference to a record date
prior to the date of the allotment.
4.8 No Option may be exercised at a time when such exercise would not be in
accordance with the Model Code.
5 Exercise Condition
The Remuneration Committee may impose one or more objective conditions (each,
an "Exercise Condition") on any Option which they grant preventing its
exercise (other than in accordance with Rule 7) unless such conditions have
been complied with. If, subsequently, events occur which cause the
Remuneration Committee to consider that an Exercise Condition no longer
achieves its original purpose they may vary the Exercise Condition provided
that they act fairly and reasonably in making such variation.
6 Adjustment of Options
6.1 Upon the occurrence of an Issue or Reorganisation the Remuneration
Committee may make any adjustments to any one or more of the following as it
considers appropriate so as to put the Option Holder in substantially the same
position as if the Issue or Reorganisation had not taken place:
6.1.1 the number of Shares in respect of which any Option may be exercised;
6.1.2 the price at which Shares may be acquired by the exercise of any such
Option;
6.1.3 where an Option has been exercised but no Shares have been allotted or
transferred pursuant to such exercise, the number of Shares which may be so
allotted or transferred and the price at which they may be acquired, provided
that no adjustment shall be made where it would result in a Share being issued
at less than its nominal value.
6.2 An adjustment pursuant to Rule 6.1 above shall only be made upon the
occurrence of an Issue or Reorganisation.
6.3 Notice of any adjustments referred to in Rule 6.1 above shall be given to
the Option Holders by the Remuneration Committee.
7 Takeover of Company
7.1 Subject to Rule 7.3, if at any time any person obtains Control of the
Company as a result of making:
7.1.1 a general offer to acquire the whole of the issued ordinary share
capital of the Company which was made on a condition such that if it was
satisfied that the person making the offer would have Control of the Company;
or
7.1.2 a general offer to acquire all the Shares,
all outstanding Options may be exercised at any time prior to, but conditional
upon, the change of control occurring or during the period of six months after
the time when the offeror has obtained Control of the Company and any
conditions subject to which the offer is made have been satisfied. If not so
exercised, the Option shall lapse upon the expiry of such six month period.
7.2 For the purpose of Rule 7.1:
7.2.1 a person shall be deemed to have acquired Control of the Company if he
and others acting In Concert with him have together obtained Control of it;
7.2.2 a person shall be deemed to have obtained Control of the Company as a
result of making such a general offer as is referred to in Rule 7.1 if he
obtains Control of the Company as a result of entering into an agreement to
acquire ordinary shares in the capital of the Company with one or more
shareholders of the Company and in such case he shall be deemed to have
obtained Control of the Company on entering into such agreement and any
conditions subject to which the offer was made being satisfied.
7.3 If during the six month period referred to in Rule 7.1 the offeror becomes
entitled to exercise rights of compulsory acquisition of Shares under sections
979 to 982 and 983 to 985 of the Companies Act 2006 and gives notice of its
intention to exercise such rights in respect of all Shares issued on the
exercise of Options prior to a specified date (not being earlier than one
month after the date of such notice), all outstanding Options may be exercised
at any time until such date. If not so exercised, the Options shall lapse
immediately.
7.4 If a compromise or arrangement under section 899 Companies Act 2006 is
proposed for the purpose of, or in connection with, a scheme for the
reconstruction of the Company or its amalgamation with any other company or
companies, all outstanding Options may be exercised, conditionally on the
compromise or arrangement becoming effective, immediately prior to the Court
sanctioning the compromise or arrangement and up to the date the compromise or
arrangement becomes effective. If not so exercised, the Option shall lapse
immediately.
7.5 If notice is given of a resolution for the voluntary winding up of the
Company, all outstanding Options may be exercised, conditionally on the
passing of the resolution, at any time during the period commencing on the
date the notice is given and ending on the commencement of the winding up. If
not so exercised, the Options shall lapse immediately.
7.6 The Company shall, as soon as reasonably practicable, notify each Option
Holder of the occurrence of any of the events referred to in Rule 7 and
explain how this affects his position under the Scheme.
8 Alterations
8.1 Subject to Rule 8.2, the Remuneration Committee may at any time alter or
add to all or any of the provisions of this Scheme, or the terms of an Option
granted under it, in any respect.
8.2 No alteration or addition shall be made under Rule 8.1 which may
materially adversely affect an Option Holder as regards an Option granted
prior to the alteration or addition being made without the consent of Option
Holders who, if they exercised their Options in full would thereby become
entitled, in aggregate, to not less than three quarters of all the Shares
which would fall to be allotted upon exercise in full of all outstanding
Options.
8.3 As soon as reasonably practicable after making any alteration or addition
under Rule 8.1, the Company shall give notice in writing thereof to any Option
Holder affected thereby.
9 Listing
9.1 While the Shares are listed or traded on OFEX, the Alternative Investment
Market, the Official list of the London Stock Exchange, NASDAQ, EASDAQ or any
other Recognised Investment Exchange, the Company shall, at its expense, make
application for and use its reasonable endeavours to obtain listing for, or
admission to trading on, such relevant exchange for Shares allotted pursuant
to the exercise of any Option.
10 Powers of Remuneration Committee and administration of Scheme
10.1 The Remuneration Committee shall be responsible for, and shall have the
conduct of, the administration of the Scheme, including but not limited to
determining the Eligible Employees to whom, and subject to the rules of the
scheme the terms on which, Options are granted.
10.2 Subject to Rules 10.3 and 10.4, the decision of the Remuneration
Committee shall be final and binding in all matters relating to the Scheme,
including but not limited to the resolution of any ambiguity in the Rules of
the Scheme, and it may at any time discontinue selecting Eligible Employees
for the grant of further Options or amend any of the Rules of the Scheme in
any way it thinks fit.
10.3 Subject to Rules 10.4 and 10.5, no amendment may be made for the benefit
of Option Holders to the Rules of the Scheme without the prior approval of the
Company in general meeting except for:
10.3.1 minor amendments to benefit the administration of the scheme, to take
account of a change in legislation or to obtain or maintain favourable tax,
exchange control or regulatory treatment for participants in the scheme or for
the Company or for members of its group.
10.3.2 an amendment which is necessary or desirable in order to comply with or
take account of the requirements of the London Stock Exchange, the guidelines
published by the Association of British Insurers, the National Association of
Pension Funds or any other organisation representing institutional investors
or any other legal or regulatory requirement or any proposed change thereto.
10.4 The Remuneration Committee may, in its absolute discretion, send to
Option Holders copies of any notice or other document sent to the Company's
shareholders.
11 Indemnity
11.1 The Option Holder will indemnify the Company from and against all
liability, actions, claims and reasonable costs in respect of any PAYE and
related costs, fines or penalties, or employees' and employers' National
Insurance contributions in respect of the exercise of an Option by the Option
Holder in the event that the Company is held liable for such payment which
sums shall become payable to the Company, within one month of the exercise of
an Option in accordance with Rule 4.
12 Miscellaneous
12.1 The rights and obligations of any individual under the terms of his
office or employment with any Group Member shall not be affected by his
participation in this Scheme or any right which he may have to participate
therein, and an individual who participates therein shall waive any and all
claims to compensation or damages in consequence of the termination of his
office or employment for any reason whatsoever insofar as those claims arise
or may arise from his ceasing to have rights under or be entitled to exercise
any Option as a result of such termination.
12.2 Any notice or other communication under or in connection with this Scheme
may be given by personal delivery or by sending the same by post, in the case
of the Company to its registered office, and in the case of an individual to
his last known address, or, where he is a director or employee of a Group
Member, either to his last known address or to the address of the place of
business at which he performs the whole or substantially the whole of the
duties of his office or employment, and where a notice or other communication
is given by first-class post, it shall be deemed to have been received 48
hours after it was put into the post properly addressed and stamped.
12.3 The Company shall at all times keep available for issue such authorised
and unissued Shares as may be required to meet in full the subsisting
subscription rights of Option Holders.
12.4 In the event that Shares are transferred to an Option Holder in pursuance
of any Option granted under this Scheme, the Option Holder shall, if so
required by the person making the transfer, join that person in making a claim
for relief under section 165 of the Taxation of Chargeable Gains Act 1992 in
respect of the disposal made by him in effecting such transfer.
12.5 The formation, existence, construction, performance, validity and all
aspects whatsoever of this Scheme, any term of this Scheme and any Option
granted under it shall be governed by English law. The English Courts shall
have jurisdiction to settle any disputes which may arise out of or in
connection with this Scheme.
13 Termination
The Company in general meeting or the Remuneration Committee may at any time
resolve to terminate this Scheme in which event no further Options shall be
granted but the provisions of this Scheme shall in relation to the Options
then subsisting continue in full force and effect.
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
Labrador Iron - Toronto 220 Bay Street, Suite 700
Toronto, Ontario, M5J 2W4, Canada
Phone +1 647 728 4107
Registrars Capita Asset Services
Northern House, Woodsome Park
Fenay Bridge, Huddersfield, HD8 0LA
Phone 0871 664 0300
Calls cost 10p per minute plus network extras
From overseas +44 208 639 3399
Fax 01484 600911
Registered office Tower Bridge House,
St. Katharine's Way, London, E1W 1DD
Web site www.angleseymining.co.uk
Company registered number 1849957
Shares listed The London Stock Exchange - LSE:AYM
Glossary
AGM - the annual general meeting to be held on 30 September 2014.
C$ - Canadian dollars. At 31 March 2014 £1 sterling was equivalent to C$1.84
(2013 - C$1.55).
DRO - direct railing ore - iron ore which can be mined and sold without any
further processing.
DSO - direct shipping ore - iron ore which can be mined and sold after a
simple washing and screening operation.
Hematite or haematite - iron oxide Fe2O3, one of the most abundant forms of
iron ore. Chemically pure hematite is about 71% iron.
JORC - Australasian Joint Ore Reserves Committee - a set of minimum standards
for public reporting and displaying information related to mineral properties.
LIM - Labrador Iron Mines Holdings Limited and its group of companies.
mtpa - million tonnes per annum
NI 43-101 - a standard equivalent to JORC used in Canada.
tonne - metric tonne of 2,204.6 pounds avoirdupois, used for measuring current
mineral production and resources.