19 December 2001
Interim Report to Shareholders - 30 September 2001
The renewed investment interest in the minerals sector that we perceived to be present at the beginning of the year has disappeared. It would seem that just as investors and institutions began to consider investing in the mineral sector again, the impact of the terrorist attacks of 11 September drove away this renewal of interest and potential for financing.
Worldwide demand for zinc, the principal metal in the company's Parys Mountain property, fell precipitously during 2001 back to the levels of 1998. A supply surplus of almost 300,000 tonnes is now forecast for calendar 2001, compared to deficits in each of the three previous years. As a result the price of zinc has dropped below US$0.35 per pound, reaching historic lows in real terms. During the year China continued to export at record levels, even at these low prices, at which virtually the whole zinc mining industry is losing money and the smelters are also struggling.
The consequent list of mine closures is growing. The first cut-back was at the Trail smelter in Canada. Boliden has closed its Los Frailes mine in Spain and Myra Falls in British Columbia. Closer to home, Outokumpu's Tara mine in Ireland, the largest zinc producer in Europe, has also closed temporarily. Even China has now announced production cutbacks and slowed exports.
The inevitable result of all these closures and the consequent reduction in supply will be to take the excess stocks of zinc out of the market. Whilst the zinc price may languish for some time we believe it must increase as reduced supply and gradually increasing demand exert pressure on the market.
The combination of low metal prices, mine closures and the disastrous financial results of many mining companies has prevented the company undertaking any financing for its planned exploration programmes and new opportunities. Consequently, minimal work was carried out on Parys Mountain during the half year.
Negotiations continued in respect of the lease of the eastern part of the Parys Mountain property with regard to the settlement of outstanding rent and a reduction of the rent and royalty payable, however there was little significant progress. The company has served notice of intention to surrender this lease in March 2002 if new terms cannot be settled. All the mineral reserves delineated to date are under the western portion of Parys Mountain, where the freehold is owned by the company and unaffected by this matter.
The loss for the half year was £17,672, down 57% on the figure for last year due to the reduced level of activity. Parys expenditures were £36,523 up from £12,400 last year due to adjustments to lease payments. Accrued interest of £33,444 brought the loss for the period to £51,116, down from £70,559 in the previous half year.
At the AGM held on 20 September 2001 shareholders approved a reduction in the nominal value of the company's shares from 5 pence to 1 penny. This change will provide greater flexibility in the financing of the company. Also at the AGM two new directors, David Lean and Howard Miller, were elected and we welcome them to the board.
One of the effects of the depressed state of the minerals industry has been a noticeable increase in the number and the quality of opportunities being presented to us; some of these are being evaluated carefully. The disappointment is that we do not have the immediate funding necessary to take advantage of the situation. In turbulent times our best, and perhaps our only, strategy is to batten down the hatches and ride out the storm.
On behalf of the board of directors
John F Kearney
19 December 2001
Unaudited consolidated balance sheet 30 September 2001 30 September 2000 £ £ Fixed assets Intangible assets 9,255,884 12,157,634 Tangible assets 185,407 186,206Total fixed assets 9,441,291 12,343,840Current assets Debtors 100,938 101,893 Cash 9,288 -Total current assets 110,226 101,893Current liabilities (note 1) Creditors - amounts due within one year (998,847) (816,972)Net current liabilities (888,621) (715,079)Net assets 8,552,670 11,628,761Shareholders' fundsShare capital 6,673,247 6,650,745 Share premium 5,737,346 5,737,346 Profit & loss account - deficit (3,857,923) (759,330)Total shareholders' funds 8,552,670 11,628,761Equity shareholders' funds 3,041,837 10,767,583 Non equity shareholders' funds 5,510,833 861,178
Notes : -
1 Current liabilities include £807,332 (2000 - £666,227) due to Juno Limited, the ultimate parent company.
2 The half year figures are unaudited. The accounts have been prepared on a basis consistent with that of the accounts for the year ended 31 March 2001. The auditors' report on those accounts was not qualified and did not contain a statement under section 237 of the Companies Act 1985.
3 This interim statement is being posted to all shareholders and is displayed on the company's website at www.angleseymining.co.uk. Copies are available on request from the company's registered office.
Unaudited consolidated profit and loss accountSix months to Six months to 30 September 30 September 2001 2000 £ £ Turnover - - Net operating expenses - continuing operations 17,672 40,939 Interest payable 33,444 29,620Loss on ordinary activities before and after taxation 51,116 70,559Loss per share - basic 0.04 pence 0.1 pence Loss per share - fully diluted 0.04 pence 0.1 penceThe directors are unable to recommend a dividend. There are no minority interests or extraordinary items.Unaudited consolidated cash flow statementSix months to Six months to 30 September 30 September 2001 2000 £ £Net cash outflow from continuing operating activities (28,962) (25,042)Returns on investments and servicing of finance Interest paid (68) (13)Capital expenditure and financial investment Payments to acquire intangible fixed assets (13,356) (13,681)Net cash outflow from capital investment and financial investment (13,356) (13,681)Net cash outflow before financing (42,386) (38,736)Financing Increase in loans 50,930 35,306 Expenses of share issues in year - (200)50,930 35,106Increase/(decrease) in cash 8,544 (3,630)
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