27 November 2007 LSE:AYM
In last year’s interim report we described a period of major developments and significant progress for the company. I am pleased to be able to report this year that progress has accelerated and that we now intend to begin a series of further developments which will radically change the fortunes of the group.
Most of these developments have been communicated to you in the recently published annual report. Since that report a circular describing in detail the proposed initial public offering (IPO) in Canada of our Labrador properties was sent to shareholders on 6 November 2007 and on 21 November a letter supplemental to that circular was posted to shareholders setting out the terms on which the IPO is proposed to be carried out. We are extremely pleased with the very positive reception which the IPO met with in both North America and in Europe, and with the terms on which it is now proposed, subject to shareholder approval, to carry out the IPO. These proposals will result in funding of up to approximately £26 million at the current rate of exchange, prior to expenses, being received by the newly floated company. The group will at that point hold over 50% of the new company, Labrador Iron Mines Holdings Limited.
This funding will enable the Schefferville project to move forward rapidly towards production of lump and sinter fines iron ore for direct sale into world markets. First production is currently expected to occur in 2009.
At Parys Mountain we have cleared and fenced the site of the planned new decline which will provide access between the proposed processing plant and the existing 300 metre deep production-sized shaft. From the shaft the decline will spiral down allowing access first to the newly discovered White Rock area and later to the deeper higher grade Engine Zone and other resource zones. Additional funding will be required to complete this decline and other work associated with the move to production, and we are in discussions with a number of potential sources of such finance. Contracts for the initial excavation of the box cut which leads to the decline portal have been let; a contract for the decline itself is in the course of preparation and it is our intention to commence underground excavation in January 2008.
Approval of the detailed plans for the decline box cut excavation and related works, as required by the conditions of the company's existing and valid planning permission granted in 1988, has been received from the Isle of Anglesey County Council, the relevant mineral planning authority.
A detailed proposal for a bankable feasibility study on the White Rock project has been received and it is anticipated that a contract will be awarded for this work following some ongoing discussions. We expect to commence bringing ore to surface during 2008 with first concentrate production during 2009.
The loss for the six month period was £184,982 (2006 - £230,918 including share based remuneration of £44,116). Development expenses capitalised amounted to £186,925 (2006 - £721,344) of which £102,096 (2006 - £450,964) was in respect of Labrador and £84,829 (2006 - £270,380) was in respect of Parys Mountain. The group has no revenues from the operation of its properties.
On 19 July 2007 a fund raising for £1,100,000 before expenses was effected by way of a private placing of 13,750,000 new ordinary shares at 8 pence per share to 5 institutional and/or sophisticated investors.
We are moving into a completely new phase in the growth and development of the group. Our focus is now clearly on bringing our projects into production as rapidly as possible. The outlook for the iron ore, base and precious metals we intend to produce is generally favourable and we have a good spread of forecast revenue streams: iron ore, zinc, lead, copper, silver and gold, however we do always need to be cognisant of external pressures on financial and commodity markets that could affect progress. We will be expanding our management team to meet the challenges ahead and are confident that we can continue the transformation of Anglesey into a successful producing minerals company over the course of the next few years.
27 November 2007
Consolidated income statement - unaudited
for the six months ended 30 September 2007
Consolidated balance sheets – unaudited
Consolidated cashflow statement - unaudited
for the six months ended 30 September 2007
Capital and reserves reconciliation – unaudited
Significant accounting policies and notes to accounts
1. BASIS OF ACCOUNTING: The unaudited interim condensed 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 company’s accounts at 31 March 2007. There are no minority interests or exceptional items.
2. LOSS PER SHARE: The calculation and reporting of basic and diluted loss per share (LPS) are in accordance with IAS 33. Basic loss per share is computed by dividing the loss of £184,982 (2006 - £230,918) attributable to ordinary shareholders by 144,217,887 (2006 – 137,915,722) - the weighted average number of ordinary shares in issue during the period. Since there is a loss for the period, basic and diluted LPS are the same.
3. SHARE-BASED PAYMENTS: IFRS 2 “Share-based Payment” requires the recognition of 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 to be expensed is determined by a Black-Scholes option pricing model using a volatility factor of 70% and an option life of 3 years as the significant assumptions. However there is no charge for share based payments for the six months to 30 September 2007.
4. DEFERRED TAX: There is an unrecognised deferred tax asset of £1.25 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.
5. BUSINESS AND GEOGRAPHICAL SEGMENTS: All activities relate to the group’s principal activity which is the exploration and development of mining properties: hence only the geographical segments have been disclosed below:
6. CHANGES IN SHARE CAPITAL: On 20 July 2007, 13,750,000 shares were issued in respect of an institutional placing at 8 pence per share.
7. DEVELOPMENT EXPENDITURE: Mineral development expenditure incurred by the group is carried in the condensed financial statements at cost less an impairment provision. The recovery of this expenditure is dependent upon the successful development of the Parys Mountain and Labrador projects which is itself conditional on finance being available to fund those developments.
8. FINANCIAL INFORMATION: This 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 2007 which were prepared under International Financial Reporting Standards, 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 and was not qualified, but did contain a reference to fundamental uncertainties.
9. BOARD APPROVAL: These interim results were approved by the board on 27 November 2007. The half-yearly results for the current and comparative period are neither audited nor reviewed by the company's auditors.
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 2007:
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 2007 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.
By order of the board
Bill Hooley Ian Cuthbertson
Executive Finance Director
For further details:
Bill Hooley, Chief Executive +(44) 1492 541981
Ian Cuthbertson, Finance Director +(44) 1248 361333
Parkgreen Communications +(44) 20 7851 7480
|Anglesey Mining plc
Parys Mountain, Amlwch,
Anglesey, LL68 9RE, UK
|Phone +44 1248 361333