25 November 2009

Interim report and financial statements at 30 September 2009.

Chairman's statement

Anglesey Mining with its flagship Labrador iron ore project has made major progress during the half year ended 30 September 2009. Labrador is moving steadily towards iron ore production and has been successful in reaching its targets. We are pleased that the market has begun to recognise both what we are achieving and what we intend to achieve during the next twelve months. This is shown by both improved market understanding of the project and a share price which is beginning to reflect the underlying value of the group's assets.

Labrador Iron Ore

Labrador Iron Mines (LIM) the group's 50% owned Toronto Stock Exchange listed associate has made good progress in advancing its Schefferville direct shipping iron ore project towards production with active programmes including drilling, metallurgical testing, environmental permitting and marketing. 

On 5 November 2009 the Department of Environment and Conservation of the Province of Newfoundland and Labrador confirmed that LIM's Environmental Impact Statement for phase I complies with the Environmental Protection Act and requires no further work. Final release of project environmental approval is now awaited following which LIM will submit applications for the necessary operating permits and licenses. Assuming these permits and licences are issued during the fourth quarter of calendar 2009, it is planned to begin initial site construction during the winter of 2009-10, ahead of the start up of commercial production, which is currently scheduled for the middle of calendar 2010.

Activities

A programme of reverse circulation drilling commenced at the beginning of June 2009 and was completed at the end of October. A total of 4,830 metres of reverse circulation drilling in 72 drill holes and 1,525 meters of trenching in 31 trenches was completed. Most of the work was at the four deposits planned to be mined in the phase 1 development plan.

The results of this testwork, together with results from the 2006 and 2008 programmes, were combined with historical data generated by the Iron Ore Company of Canada during its 30 year operational occupation of the Schefferville area, to form the basis for compliant resource estimates on the James and Redmond deposits. These new independent estimates show a significant increase in tonnage over the historical resources estimated by the Iron Ore Company of Canada prior to 1982 which were not compliant with current Canadian reporting standard NI 43-101.

Indicated Resource Estimates compared to Historical Resources

(at a cut off grade of 50% iron)  (Mt=million tonnes of ore)

Deposit

New Resource Mt

Grade

(% Fe)

Historical Resource Mt

James

8.1

57.7

4.0

Redmond

2.9

56.4

1.2

Total

11.0

57.4

5.2

A second programme of hydro-geological drilling and testing comprising three large diameter pumping wells totalling 271 meters in depth was carried out in 2009 to confirm expected flow rates and water quality from future mining operations at the James deposit. This work will enable dewatering plans including any potential additional perimeter wells to be properly designed and installed in a timely manner.

Metallurgical testwork continued during 2009 aimed at improving expected recovery levels from all size fractions of mined material while maintaining high iron and low impurity levels in the final product. Testwork on the sintering properties of the fines was carried out at an independent laboratory in Germany, and the results and report from that testwork are very positive

All of the exploration, hydrogeological, and metallurgical testwork, together with open-pit planning and infrastructure design, is being incorporated into the final engineering and cost study. This will allow orders to be placed with suppliers and contractors for infrastructure, mining and beneficiation facilities in sufficient time to ensure they are available for the planned mid-2010 production start up.

On-going environmental baseline and field measurements related to both the current permit application areas as well as to future application areas continued during 2009 including a wide area airborne survey for migratory and sedentary caribou around the project sites.

LIM has signed asset exchange and rail co-operation agreements with a neighbouring company. These agreements will enable LIM to mine and operate its direct shipping ore deposits in as efficient a manner as is possible. The rail agreement will also provide the framework under which the companies will co-operate in the development of the transportation facilities for their direct shipping iron ore projects in the Schefferville area and enable each company to rebuild the necessary rail infrastructure in their respective operating areas.

Marketing discussions have continued with potential end users and samples have been dispatched to a number of steel mills. These discussions have indicated an encouraging level of interest in the LIM products based on the metallurgical test results and analysis of the samples supplied. The indicated high iron grades and the low level of impurities are important and should ensure that LIM will be able to market both its lump ore and its sinter fines products. In addition to European interest there is significant Chinese interest in seeking iron ore from eastern Canada and discussions continue with a number of Chinese customers and importers.

Parys Mountain

Parys Mountain remains on a care and maintenance basis and no active programmes have been undertaken in the period under review. The continued improvement in the prices of copper, zinc and lead, the major products to be produced from Parys Mountain, has led to renewed interest in the project from a number of external companies and these are being followed and encouraged.

Financial

The loss for the six month period was £368,100 (2008 - £444,330) of which share based remuneration amounted to £14,298 (2008 - £206,156). The group's share of the loss in Labrador was £226,880 (2008 - profit £3,014). Development expenses capitalised in respect of Parys Mountain amounted to £52,245 (2008 - £76,824). The group has no revenues from the operation of its properties. LIM reported cash in treasury in excess of Canadian $28 million (£16.4 million) at 30 September 2009.

Outlook

We look forward to further progress at Labrador during the next few months, including the construction of a spur rail line and the beneficiation plant which will be assembled on site in spring to enable commencement of commercial production in the middle of next year.

Anglesey remains very well placed to take advantage of the current resurgence of interest in commodities, in particular iron ore and base metals. There are considerable grounds for optimism about the likely level of iron ore prices next year when Labrador is scheduled to begin commercial production. Continuing strength in base metals will also presage well for the advancement of Parys Mountain.

We confidently expect that 2010 will be a very exciting year for Anglesey Mining.

John F Kearney

Chairman

25 November 2009

 

 

Anglesey Mining plc - Group

Condensed income statement - unaudited

 

 

 Notes

Six months ended 30 September 2009

Six months ended 30 September 2008

Year ended 31 March 2009

All operations are continuing

 

£

£

£

 

 Revenue

 

 - 

 - 

 - 

 

 Expenses

 

 (85,419)

 (211,490)

 (224,737)

 

 Equity-settled employee benefits

5

 (14,298)

 (206,156)

 (271,112)

 

 Share of (loss) of associate

 

 (226,880)

3,014

 (254,069)

 

 Investment income

 

1,352

5,240

7,118

 

 Finance costs

 

 (42,855)

 (34,938)

 (84,535)

 

 Parys properties fair value adjustments

7

 - 

 - 

698,321

 

 

 

 

 

 

 (Loss) before tax

 

 (368,100)

 (444,330)

 (129,014)

 

 

 

 

 

 

 

 Tax

9

 - 

 - 

 - 

 

 

 

 

 

 

 (Loss) for the period

 

 (368,100)

 (444,330)

 (129,014)

 

 

 

 

 

 

 

 (Loss) per share 

 

 

 

 

 

 Basic - pence per share

6

 (0.2)p

(0.3)p

(0.1)p

 

 Diluted - pence per share

 

 (0.2)p

(0.3)p

(0.1)p

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Condensed statement of comprehensive income

 

 

 

 

 

 

 

 

 

 

 (Loss) for the period

 

 (368,100)

 (444,330)

 (129,014)

 

Other comprehensive income:

 

 

 

 

 

Translation differences on foreign operations

 

374,123

2,722

1,835,562

 

 

 

 

 

 

 Total comprehensive profit
       /(loss) for the period

   

6,023

 (441,608)

1,706,548

 

 

 

 

 

 

 

 

 

 

 

 

Condensed statement of financial position - unaudited

 

 

 

30 September 2009

30 September 2008

31 March 2009

 

 

 

 Notes

£

£

£

 

Assets

 

 

 

 

 

 

 Non-current assets

 

 

 

 

 

 

 Mineral property development

11

13,668,994

12,803,062

13,616,749

 

 

 Property, plant and equipment

 

204,687

204,687

204,687

 

 

 Interest in associate

 

13,970,113

12,074,012

13,821,013

 

 

 Deposit

 

120,849

118,223

119,549

 

 

 

 

 

 

 

 

 

 

 

27,964,643

25,199,984

27,761,998

 

 

 

 

 

 

 

 

 

 Current assets

 

 

 

 

 

 

 Other receivables

 

2,933

3,497

2,915

 

 

 Cash and cash equivalents

 

148,460

80,483

150,431

 

 

 

 

 

 

 

 

 

 

 

151,393

83,980

153,346

 

 

 

 

 

 

 

 

 Total assets

 

28,116,036

25,283,964

27,915,344

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 Current liabilities

 

 

 

 

 

 

 Trade and other payables

 

 (638,566)

 (611,256)

 (608,682)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 (638,566)

 (611,256)

 (608,682)

 

 

 

 

 

 

 

 

 

 Net current (liabilities)/assets

 

 (487,173)

 (527,276)

 (455,336)

 

 

 

 

 

 

 

 

 

 Non-current liabilities

 

 

 

 

 

 

 Loan

 

 (1,903,384)

 (1,510,931)

 (1,760,529)

 

 

 Long term provision

 

 (42,000)

 (42,000)

 (42,000)

 

 

 

 

 

 

 

 

 

 

 

 (1,945,384)

 (1,552,931)

 (1,802,529)

 

 

 

 

 

 

 

 

 Total liabilities

 

 (2,583,950)

 (2,164,187)

 (2,411,211)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 Net assets

 

25,532,086

23,119,777

25,504,133

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 Share capital 

10

7,039,414

7,036,414

7,036,414

 

 

 Share premium

 

8,095,198

8,092,423

8,092,423

 

 

 Currency translation reserve

 

2,206,967

 - 

1,832,844

 

 

 Retained earnings

 

8,190,507

7,990,940

8,542,452

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Total shareholders' equity

 

25,532,086

23,119,777

25,504,133

 

 

Condensed statement of cashflows - unaudited

 

 

 Notes

Six months ended 30 September 2009

Six months ended 30 September 2008

Year ended 31 March 2009

 

 

 

£

£

£

Operating activities

 

 

 

 

 

 (Loss) for the period

 

 (368,100)

 (444,330)

 (129,014)

 

 Adjustments:

 

 

 

 

 

 Investment revenue recognised in loss

 

 (1,352)

 (5,240)

 (7,118)

 

 Finance costs recognised in loss

 

42,855

34,938

84,535

 

 Equity-settled employee benefits

5

14,298

206,156

271,112

 

 Share of (loss) of associate

 

226,880

 (3,014)

254,069

 

 Parys properties fair value adjustments

7

 - 

 - 

 (698,321)

 

 

 

 

 

 

 

 

 

 (85,419)

 (211,490)

 (224,737)

 

Movements in working capital

 

 

 

 

 

 (Increase)/decrease in receivables

 

 (18)

22,192

22,775

 

 Increase in payables

 

29,884

124,696

122,122

 

 

 

 

 

 

 

Cash utilised by operations

 

 (55,553)

 (64,602)

 (79,840)

 

 

 

 

 

 

 

 Interest paid

 

 - 

 - 

 - 

 

 

 

 

 

 

Net cash used in operating activities

 

 (55,553)

 (64,602)

 (79,840)

 

 

 

 

 

 

Investing activities

 

 

 

 

 

 Interest received

 

52

3,940

4,492

 

 Mineral property development

 

 (52,245)

 (76,823)

 (192,189)

 

 

 

 

 

 

Net cash used in investing activities

 

 (52,193)

 (72,883)

 (187,697)

 

 

 

 

 

 

Financing activities

 

 

 

 

 

 Proceeds from issue of shares

 

5,775

 - 

 - 

 

 Loans

 

100,000

 

200,000

 

 

 

 

 

 

Net cash generated from financing activities

 

105,775

 - 

200,000

 

 

 

 

 

 

Net (decrease) in cash and cash equivalents

 

 (1,971)

 (137,485)

 (67,537)

 Cash and cash equivalents at start of year

 

150,431

217,968

217,968

 

 

 

 

 

 

 Cash and cash equivalents at end of year

 

148,460

80,483

150,431

 

Capital and reserves reconciliation - unaudited

 

 

Six months ended 30 September 2009

Six months ended 30 September 2008

Year ended 31 March 2009

 

 

£

£

£

 

 At beginning of period

25,504,133

23,355,229

23,355,229

 

 Shares issued for cash

5,775

 - 

 - 

 

 Equity-settled employee benefits credit:

 

 

 

      - associate

1,857

 - 

171,244

 

      - company

14,298

206,156

271,112

 

 Comprehensive (loss) for the period

6,023

 (441,608)

1,706,548

 

 

 

 

 

Total shareholders' equity

25,532,086

23,119,777

25,504,133

 

Statement of directors' responsibilities

The directors are responsible for preparing the half yearly financial report in accordance with applicable laws and regulations.

 

The directors confirm that to the best of their knowledge, these condensed financial statements which should be read in conjunction with the annual financial statements for the year ended 31 March 2009:

 

i) have been prepared in accordance with IAS 34 'Interim financial reporting' as adopted by the European Union; and

 

ii) include a fair review of the information required by the Financial Services Authority's Disclosure and Transparency Rules 4.2.7R and 4.2.8R.

 

The directors of the company are listed in the annual report and accounts for 2009 and there have been no changes to the board since its publication. A list of current directors is also maintained on the company's website to be found at www.angleseymining.co.uk.

 

These interim results were approved by the board on 25 November 2009. The half-yearly results for the current and comparative period are neither audited nor reviewed by the company's auditors.

 

By order of the board

 

Bill Hooley                                Ian Cuthbertson

 

Chief Executive                       Finance Director

 

 

Significant accounting policies and notes to accounts

 

1.  BASIS OF ACCOUNTING:  The unaudited condensed interim financial statements have been prepared under the historical cost convention, on a going concern basis and in accordance with the accounting policies employed in the 31 March 2009 annual report. Any accounting assumptions and estimates made in connection with these statements are consistent with those applied in that report. They should be read in conjunction with that annual report which is available on the company's website at www.angleseymining.co.uk.

2.  RISKS AND UNCERTAINTIES:  The risks and uncertainties applicable to these condensed financial statements are equivalent to those described in the annual report for the year ended 31 March 2009.

 

3.  NEW OR AMENDED IFRSs:  These statements reflect the amendments introduced to IAS 1 which were effective from 1 January 2009. Other amendments to IFRSs are not applicable to these statements.

 

4.  ACTIVITIES:  The group is engaged in mineral property development and has no turnover. There are no minority interests or exceptional items.

 

5.  EQUITY SETTLED EMPLOYEE BENEFITS:  IFRS 2 "Share-based Payment" requires the recognition of equity settled share-based payments (which in the case of the group during the period are for share options only) at fair value at the date of grant. The fair value of the options expensed in these statements has been determined by a Black-Scholes option pricing model using a volatility factor of 71% and an option life of 3 years as the significant assumptions.

 

6.  EARNINGS PER SHARE:  The calculation and reporting of basic and diluted earnings per share are in accordance with IAS 33. These earnings per share are computed by dividing the loss attributable to ordinary shareholders of £368,100 (2008 £444,330) by 152,858,051 (2008 - 152,558,051) - the weighted average number of ordinary shares in issue during the period.

 

7.  ASSETS AND LIABILITIES HELD FOR SALE: Previously the group's Parys Mountain assets, liabilities and operations had been classified as held for sale, and a Parys properties fair value adjustment made in respect of a potential impairment in the carrying value of those Parys assets and liabilities. Following the termination of specific negotiations for sale, this classification was rescinded and the Parys project is not classified as being held for sale. Consequently the Parys properties fair value adjustment has been shown as a reversal in the accounts to 31 March 2009.

 

8.  BUSINESS AND GEOGRAPHICAL SEGMENTS:  There are no revenues. The cost of all activities charged in the income statement relates to exploration and development of mining properties which is the group's principal activity and no analysis is therefore provided. The group's assets and liabilities are analysed by geographical location.

 

Assets and liabilities - geographical analysis

 

 

 

 

30 September 2009

 31 March 2009

 

UK

Canada

Total

UK

Canada

Total

 

£

£

£

£

£

£

 

 

 

 

 

 

 

Assets

14,145,923

13,970,113

28,116,036

14,094,331

13,821,013

27,915,344

Liabilities

 (2,583,950)

 - 

 (2,583,950)

 (2,411,211)

 - 

 (2,411,211)

 

 

 

 

 

 

 

Net assets

11,561,973

13,970,113

25,532,086

11,683,120

13,821,013

25,504,133

 

9.  DEFERRED TAX:  There is an unrecognised deferred tax asset of £1.4 million which in view of the group's trading results, is not considered to be recoverable in the short term. There are also capital allowances, including mineral extraction allowances, exceeding £9 million unclaimed and available. Because the recoverability of any taxation relative to these amounts from future operations is uncertain, no deferred tax asset is reflected in the condensed financial statements.

 

10.  CHANGES IN SHARE CAPITAL:  On 23 April 2009, 300,000 shares were issued following the exercise by a director of a share option grant. 

 

11.  DEVELOPMENT EXPENDITURE:  Mineral development expenditure incurred by the group is carried in the condensed financial statements at cost, less an impairment provision if appropriate. The recovery of this expenditure is dependent upon the successful development and operation of the Parys Mountain project which is itself conditional on finance being available to fund such development.

 

12.  FINANCIAL INFORMATION:  This condensed financial information does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. Statutory accounts for the year ended 31 March 2009 which were prepared under International Financial Reporting Standards as approved by the European Union, have been delivered to the Registrar of Companies. The report of the auditors on those accounts did not contain a statement under Section 237 of the Companies Act 1985, was not qualified and did not include a reference to any matters to which the auditors drew attention by way of emphasis.  

 

13.  EVENTS AFTER THE REPORTING PERIOD:  None.

 

14.  RELATED PARTY TRANSACTIONS:  None.

 

 About Anglesey Mining

Anglesey Mining plc is a UK based company listed on the London Stock Exchange with a 50% interest in a 90 million ton iron ore project in Labrador, Canada, which is under active development towards mining production in 2010. The company also holds the Parys Mountain base metals project with a historical resource of 7.7 million tonnes at 9.3% combined copper, lead and zinc in Anglesey, UK. 

 

For further information:

Bill Hooley, Chief Executive            +(44) 1492 541981

Ian Cuthbertson, Finance Director   +(44) 1248 361333