Anglesey Mining plc              

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.

Parys Mountain

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.

Financial

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.

Developments

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

Chairman

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           186,206
Total fixed assets                         9,441,291        12,343,840 
Current assets
Debtors                                      100,938           101,893 
Cash                                           9,288                -
Total current assets                         110,226           101,893 
Current 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        11,628,761

Shareholders' funds
Share 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        11,628,761
Equity 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 account
                                        Six 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             29,620
Loss on ordinary activities 
            before and after taxation          51,116             70,559
Loss per share - basic                      0.04 pence       0.1 pence
Loss per share - fully diluted              0.04 pence       0.1 pence
The directors are unable to recommend a dividend.  
There are no minority interests or extraordinary items.

Unaudited consolidated cash flow statement
                                        Six 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         35,106
Increase/(decrease) in cash                     8,544         (3,630)

 

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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