Anglesey Mining plc              

27 July 2001

Preliminary results for the year ended 31 March 2001

Chairman's statement

Perhaps the best thing that can be said about the past year is that the company successfully avoided engaging in the “new economy” sector. A number of projects that we were told were very attractive were evaluated: none were felt to be sufficiently robust. Whether by good fortune or perceptive management we can now be glad that the company did not become involved in this area of business.
The positive development that came out of the crash of the 'dot coms' is that investors and institutions, for the first time in a few years, appear willing to consider opportunities in the mineral sector of the traditional economy and to again invest in mining companies. In this market environment, the board has determined to 'stick to its knitting' within the mineral industry.
During the year we conducted a detailed evaluation of the Bula zinc deposit in Ireland which had been placed on the market by its bankers and, in joint venture with Minco plc, submitted an offer to the receiver. Unfortunately, we were not successful and were outbid by Tara Mines Limited, a wholly owned subsidiary of Outokumpu OYG, which operates the large Tara mine which forms the extension of the Bula orebody, and which has agreed to buy the Bula assets from the receiver for IR£27.5 million (£21.5 million) subject to court approval and other conditions.
During the past year we also evaluated a number of other mining opportunities including projects in Europe, Russia and China but, despite our efforts, no specific transaction has been concluded.

Parys Mountain
Closer to home we have continued to improve the Parys Mountain property. We were not able to undertake our planned major drilling program due to shortage of funds. However work during the past year concentrated on two studies on the geology of Parys Mountain which have led to the identification of a potential new zone of mineralisation on the property.
The potential new zone lies at the western end of the property, down dip from the White Rock zone, separated by faulting from the major part of the property and within a few hundred metres of the Morris shaft. It is believed to be comparable to the Northern Copper zone (a lens of disseminated/semi-massive sulphide estimated in the 1960s to contain 30 million tonnes averaging 0.7% copper, with minor zinc and lead) which lies to the north and down dip of the Carreg y Doll zone from which most of the underground mining took place throughout the first half of the nineteenth century. The potential new zone lies to the west and down dip of the White Rock zone (which contains a possible mineral resource of 1.5 million tonnes with grades averaging 5.81% zinc, 3.02% lead and 0.41% copper) within the same stratigraphic relationship to the White Rock zone as the Northern Copper zone has to the Carreg y Doll zone.
The identification of this potential new zone is very important because it opens up a second major exploration target, and new zone, to the west. The upper part of this potential new zone lies at reasonable depths and within close proximity to the existing Morris shaft. The identification of this new zone demonstrates again the unexplored potential of the entire Parys Mountain property. It is not possible to estimate the size or grade of the new zone without further drilling.
The company plans as soon as possible to undertake financing for a drilling programme to explore both this potential new zone and the previously identified exploration target areas on the Engine zone. Such a programme has the potential to very significantly increase the value of the mineral deposits at Parys Mountain.

Financial Results
The financial results for the year show a loss of £118,051, before exceptional items, compared to a loss of £164,184 in the previous year. In accordance with the relevant accounting policy, the carrying value of development costs of the company's intangible fixed assets was reviewed and compared to its estimated recoverable value at the balance sheet date. Following this review it was determined to make an impairment provision of £3,000,000 against the accumulated development costs of the Parys Mountain property. This exceptional item increased the loss for the year to £3,118,051. I would like to emphasise that making this accounting provision in no way indicates any kind of negative re-evaluation of the potential of the property.
Expenses during the year were kept to a bare minimum. In an effort to minimize costs the company is in negotiation with the lessor of the eastern part of the Parys Mountain property, who also holds a royalty on the entire property, with regard to the settlement of outstanding rent and a reduction of the rent and royalty payable. The company has successfully negotiated with the Crown Commissioners a temporary reduction on the rent payable for the lease of the Dolaucothi gold property. Due to the low gold price no work was carried out at Dolaucothi during the year.

Funding
It is now important that the company seek additional financing for its planned exploration programmes and any new opportunities. In order to provide greater flexibility in the financing of the company it is proposed to put resolutions to the forthcoming AGM to reduce the nominal value of the company's shares from 5 pence to 1 penny and to continue the authority of the directors to issue shares.

Anglesey Mining has been fortunate to have been able to attract the support of its directors, advisors, consultants and major shareholders and I would like to thank them for this continued support.

John F. Kearney
Chairman

27 July 2001


Consolidated balance sheet at 31 March 2001

                                        Group                             Company
                               2001               2000               2001               2000
                                 £                   £                 £                   £
Fixed assets
Intangible assets         9,219,362          12,143,953          9,028,435         11,954,276
Tangible assets             185,573             186,206            185,573            186,206
Investments                      -                  -              100,001            100,001
                          9,404,935          12,330,159          9,314,009         12,240,483
Current assets
Debtors                     100,785             100,729            287,771            286,435
Cash at bank and in hand        744               3,630                744              3,630
 
                            101,529             104,359            288,515            290,065
Current liabilities
Creditors - amounts due
   within one year         (902,678)           (734,983)          (998,678)          (830,983)
 
Net current liabilities    (801,149)           (630,624)          (710,163)          (540,918)
 
Total assets less
    current liabilities   8,603,786          11,699,535          8,603,846         11,699,565
 
Capital and reserves                                                                
Share capital             6,673,247           6,650,745          6,673,247          6,650,745
Share premium account     5,737,346           5,737,546          5,737,346          5,737,546
Profit & loss
account - deficit        (3,806,807)           (688,756)        (3,806,747)          (688,726)
                          8,603,786          11,699,535          8,603,846         11,699,565
Shareholders' funds
Equity                    7,742,608          10,838,357          7,742,668         10,838,387
Non equity                  861,178             861,178            861,178            861,178


Consolidated profit and loss account for the year ended 31 March 2001

 
 
2001
  £
2000
  £
Turnover - continuing operations
Net operating expenses
Exceptional item:
      Provision for impairment
         of intangible assets
Loss on ordinary activities
     before interest & taxation
Interest receivable
Interest payable
Loss on ordinary activities
      before taxation
Tax on loss on ordinary activities
Loss for the financial year
 
Loss per share - basic
Loss per share - diluted

 

-
(59,637)

 

 

(3,000,000)

 

(3,059,637)
3,132
(61,546)

 

(3,118,051)
-
(3,118,051)
 
(2.7) pence
(2.7) pence

 

 

-
(115,929)

 

 

-

 

(115,929)
2,693
(50,948)

 

(164,184)
-
164,184)
 
(0.1) pence
(0.1) pence

 

 

The group has no recognised gains or losses other than the losses shown above and therefore no separate statement of total recognised gains and losses has been presented.

There is no difference between the loss on ordinary activities before taxation and the retained loss for the year stated above, and their historical cost equivalents.


Consolidated cash flow statement for the year ended 31 March 2001

 
 
Net cash outflow from continuing
      operating activities
Returns on investments and servicing of finance
     Interest paid
 
Capital expenditure and
 financial investment
     Payments to acquire
     intangible fixed assets
Net cash outflow from capital
     investment & financial investment
 
 
Net cash outflow before financing
Financing
        Increase in loans
        Expenses of share issues in year
 
 
Decrease in cash

 

2001
£

 

(26,753)

 

(141)

 

 

 

(6,491)

 

(6,491)

 

 

(33,385)

 

30,699
(200)
30,499
 
(2,886)

 

2000
£      

 

(96,948)

 

-  

 

 

 

(74,895)

 

(74,895)

 

 

(171,843)

 

163,937
(400)
163,537
 
(8,306)

 

As in previous years, the auditors report on the financial statements will contain explanatory paragraphs regarding fundamental uncertainties in respect of the going concern basis and the valuation of intangible fixed assets, however it will not be qualified in respect of these matters.

Contacts :  
Ian Cuthbertson John F. Kearney
Company Secretary Chairman
(44)1248 361333 (1)416 362 6686

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  Anglesey Mining plc
Parys Mountain, Amlwch,
Anglesey, LL68 9RE, UK
  Phone  +44 1248 361333  
 mail@angleseymining.co.uk
 

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