27 July 2001
Preliminary results for the year ended 31 March 2001
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.
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.
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.
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
27 July 2001
Consolidated balance sheet at 31 March 2001Group Company2001 2000 2001 2000£ £ £ £Fixed assetsIntangible assets 9,219,362 12,143,953 9,028,435 11,954,276Tangible assets 185,573 186,206 185,573 186,206Investments - - 100,001 100,0019,404,935 12,330,159 9,314,009 12,240,483Current assetsDebtors 100,785 100,729 287,771 286,435Cash at bank and in hand 744 3,630 744 3,630101,529 104,359 288,515 290,065Current liabilitiesCreditors - amounts duewithin one year (902,678) (734,983) (998,678) (830,983)Net current liabilities (801,149) (630,624) (710,163) (540,918)Total assets lesscurrent liabilities 8,603,786 11,699,535 8,603,846 11,699,565Capital and reservesShare capital 6,673,247 6,650,745 6,673,247 6,650,745Share premium account 5,737,346 5,737,546 5,737,346 5,737,546Profit & lossaccount - deficit (3,806,807) (688,756) (3,806,747) (688,726)8,603,786 11,699,535 8,603,846 11,699,565Shareholders' fundsEquity 7,742,608 10,838,357 7,742,668 10,838,387Non 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 operationsNet operating expensesExceptional item:Provision for impairmentof intangible assetsLoss on ordinary activitiesbefore interest & taxationInterest receivableInterest payableLoss on ordinary activitiesbefore taxationTax on loss on ordinary activitiesLoss for the financial yearLoss per share - basicLoss per share - diluted
(3,118,051)-(3,118,051)(2.7) pence(2.7) pence
(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 continuingoperating activitiesReturns on investments and servicing of financeInterest paidCapital expenditure andfinancial investmentPayments to acquireintangible fixed assetsNet cash outflow from capitalinvestment & financial investmentNet cash outflow before financingFinancingIncrease in loansExpenses of share issues in yearDecrease in cash
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
|Anglesey Mining plc
Parys Mountain, Amlwch,
Anglesey, LL68 9RE, UK
|Phone +44 1248 361333