Anglesey Mining Regulatory News (AYM)

Anglesey Mining plc A UK mining company listed on the London Stock Exchange Anglesey is the founder and holder of 15% of Toronto-listed Labrador Iron MinesHoldings Limited (TSX:LIM) which is producing iron ore from its James deposit,one of LIM's direct shipping iron ore deposits in western Labrador andnorth-eastern Quebec. Development of other deposits is planned and productionof the high grade hematite iron ore is targeted to grow from 1.7 million tonnesin 2012 to between 1.75 and 2 million tonnes in 2013. Anglesey is carrying out exploration, development and pre-feasibility work atits 100% owned Parys Mountain underground zinc-copper-lead-silver-gold depositin North Wales, UK. Anglesey owns 19.3m LIM shares (15%) and has issued 161m of its own shares allof which are admitted to trading on the London Stock Exchange. Chairman's Statement In a year of difficult trading conditions in all resource sectors I am pleasedto report that the company is weathering the storm and will see through theremainder of this current downturn. At Labrador Iron which we formed in 2007and is today Canada's only independent iron ore producer, the significantvariability in iron ore prices during the second half of 2012 resulted in largereported losses and put a drain on the cash resources of that company. Howeverfour major funding events in late 2012 and early 2013 provided LIM with thenecessary capital to enable it to enter its third year of mining operationswhich I am happy to report is now well under way. At Parys Mountain, followinglast summer's successful exploration programme, we are taking the opportunityto review all the information available on the project and to consider the bestalternatives whilst minimising expenditure at the current time. All mining stocks are suffering in the current marketplace and both LabradorIron and Anglesey Mining have been part of this severe downturn. We hope thatas LIM demonstrates its current production capability, and with the benefit ofa price protection programme in place to guard against any repeat of lastyear's low prices, that the market will recognise the inherent value in LIMwhich should be reflected in the Anglesey share price. There is undoubtedly pressure on commodity prices largely as a result of somereduction in the growth rate in China, however we do not support the notionthat there will be a return to the levels of the early years of this century.Iron ore prices have come off from their all-time highs but remain relativelystrong and it is far from certain that the forecast increase in supply willactually occur since many of the previously announced large undevelopedprojects are likely to find financing impossible to obtain. Meanwhile basemetals, which have slipped from their highs, also remain firm and with limitednew production coming on line or even planned, we look for significantimprovement in the middle term. Our strategy therefore is to weather the current turbulent times, to retaincash where possible, to maintain our holding in Labrador Iron which today has amarket value of almost £7 million and to leave ourselves ready and able to moveforward when metal prices and capital markets return to more positiveterritory. Labrador Iron Following the initial production year in 2011, 2012 began well and productionwas on target to meet the target of 2.0 million tonnes of saleable product.However a major downturn in iron ore prices in August and September which sawspot prices for 62% Fe CFR China fall from around $120 per tonne to $85 pertonne in just four weeks left LIM in a vulnerable position in which it had noalternative but to cut all expenditure and curtail some production.Nevertheless iron ore sales for the year amounted to just over 1.5 milliontonnes and LIM reported revenues from mining operations of C$96 million. Last year was also very successful on the exploration front with new techniquespermitting more and better drilling to be carried out for lower costs, and allthis new information led to significant increases in compliant resourcesparticularly on the Houston and Malcolm deposits, which will form the core ofthe next ten years production, and on the development of a maiden 620 milliontonne taconite deposit close to LIM's current infrastructure. After the financial difficulties in late 2012 it was necessary to rebuild theLIM balance sheet and I am pleased to report that very encouraging support wasreceived from the market place and $C59 million was raised in two equity issuesin late 2012 and early 2013. LIM also entered into a strategic agreement withTata Steel Canada regarding cooperation on a number of matters including thesale of a 51% interest in the Howse property which will result in the paymentto LIM of $C30 million on completion. After the end of the financial year LIMalso received a $35 million prepayment from RB Metalloyd as part of a two yeariron ore sales agreement. LIM began its third year of mining operations in late March 2013 and is now infull swing. Sales of between 1.75 and 2.0 million tonnes of iron ore aretargeted this year. To guard against what now looks to be an annual dip in ironore prices during the autumn period, LIM has put in place a price protectionprogramme for 825,000 tonnes of iron ore at a floor price of $105 per tonne. Parys Mountain During the summer of 2012 we completed a successful exploration drillingprogramme at Parys Mountain. This work demonstrated that mineralisation ateconomic grades exists across at least 1.5 kilometres from the Morris Shaftarea in the west of the property to the Pearl engine house area in the east.This work was followed by the production by Micon International of a JORCcompliant resource estimate on the majority of the known and readily reachabledevelopment targets. Micon had produced a JORC resource for White Rockpreviously but this new estimate also brought both the Engine zone and GarthDaniel resources into a modern compliant basis compared to the historicalestimates upon which the company had been reliant since 1990. Micon had also made progress on a scoping study for Parys Mountain but giventhe current market conditions the company has decided to have a fundamentalreview of the technical and geological information available and to evaluateall the options for moving this project forward to production. In July 2012 a net profits royalty on production from Parys Mountain was boughtout and cancelled and outstanding advance royalty payments of £759,680 weresettled for a cash payment of £630,000 and the issue of 2,000,000 ordinaryshares. Cancellation of that royalty will improve both the economics and theability to finance the Parys Mountain project. We hold freehold title to the area of Parys Mountain that contains all ourknown resources and infrastructure. We have very low on-going cash commitmentsand these remain well within the current financial capability of the company,allowing us the benefit of time to make assessment without any risk of loss ofresources. We continue to closely watch base metal markets both from a price perspectiveas well as from materials supply view. We remain confident that the zinc copperand lead in Parys Mountain will improve firstly in relative demand which willflow through to higher prices in the medium term and we will be well preparedto take advantage of this at the appropriate time. Financial Results There was a large loss after tax of £31,451,398 for the year ended 31 March2013. This compared to a profit of £19,386,555 reported in 2012. In both yearsa major factor was non-cash charges in respect of the accounting treatment ofdeemed disposals in LIM. These arise when LIM issues new shares to thirdparties; in 2012 they resulted in profits and in 2013 in losses due to thelower share prices at which these issues were made in that year. In addition,LIM reported significant operating losses in 2013 as well as amortisationcharges and write downs in intangible assets. During the year the group's holding in LIM was diluted from 26% to 15% as aresult of the new share issues by LIM. Consequently LIM ceased to be treated asan associate for accounting purposes and an accounting loss of £16,149,722 wasrecorded on recognition of the associate as an investment accounted for at fairvalue through profit and loss. There was a further non-cash loss of £3,791,439over the period following the reclassification as an investment at fair value. The group's cash balance at 31 March 2013 was £670,345 (2012 - £3,150,644). Thedecrease from last year was due to the investment in LIM shares in November2012 for £950,927, the cancellation of the Parys net profits royalty, Parysdevelopment expenditures and administrative expenses. The group's operating and administrative costs for the year were £398,428 (2012- £396,807). Ian Cuthbertson It would be remiss of me not to mention that Ian Cuthbertson will be leaving usat the end of July. Ian has been with Anglesey since its flotation in 1988 andhas been much involved with all the developments with their highs and lowssince then. During this time he has held the posts of accountant, companysecretary and finance director. However this does not tell the full story andduring this 25 year period of service he has been a central part, and indeedfor much of that time the major part, of the management of the company. Ianwill still be available give us on-going advice using his extensive knowledgeof the history and activities of the company - we wish him the very best ofgood fortune in his retirement and in the years to come. Outlook We are in a period in which patience will be a great virtue. We certainly needto see how LIM develops during 2013 but with its current year production planwell under way and with autumn prices protected we remain comfortable that animprovement is ahead. At Parys Mountain we do have the benefit of time ifneeded and we will take that opportunity to develop the most rational approachavailable under current and predicted price and market scenarios. John F. KearneyChairman23 July 2013 Directors' report The directors are pleased to submit their report and the audited accounts forthe year ended 31 March 2013. Principal activities and business review The group is engaged in the business of developing the wholly-owned ParysMountain project in North Wales and has a 15% holding (2012 - 26%) in theLabrador iron project in eastern Canada. Labrador Iron Mines is currently producing from its James deposit in Labrador,LIM's target is to ship between 1.75 and 2 million tonnes of iron ore in the2013 season. At Parys Mountain a programme of geophysical and overburden sampling work wascompleted and 1,815 metres of diamond coring in 11 holes was drilled betweenJanuary and the end of June 2012. The group continues its search for other mineral exploration and developmentopportunities. The aim of the group is to continue its participation in the Labrador projects,to create value in the Parys Mountain property, including by co-operativearrangements where appropriate, and to actively engage in other mineralventures using the group's own resources together with such external investmentand finance as may be required. Labrador Iron Production commenced at the James mine in June 2011 and up to the end of 2012two million dry tonnes of iron ore has been produced and sold into the Chinesespot market in 13 cape-size shipments. Operations are seasonal, fromapproximately the beginning of April to the end of November each year, with aplanned winter shut down. During the year ended 31 March 2013 significant operational progress was madeand necessary decisive action was taken to respond to severe market conditions.LIM met its reduced production target of 1.7 million wet tonnes of iron oreproduction and sold a total of just over 1.5 million dry tonnes of iron oreproducts, a substantial improvement from the 385,898 dry tonnes sold in fiscal2012. The reduction of the original planned target of 2 million tonnes for 2012was in response to market conditions and weaker spot iron ore prices during thesecond half of calendar 2012. Five million tonnes of ship loading capacity wassecured at the new multi-user berth being built by the Port of Sept-Iles,providing the opportunity to load cape size shipments when the berth andterminal handling facility are completed. LIM had a very successful exploration season, which included extensive drillingof Houston, Malcolm, James North and James South, as well as bulk samplinghistoric stockpiles. Exploration work also resulted in an initial resource of620 million tonnes on the Elizabeth taconite deposit located near the currentlyproducing James mine. Despite the many operational accomplishments, the year ended 31 March 2013 wasadversely impacted by the rapid and severe drop in spot iron ore prices whichoccurred between August 2012 and November 2012. Iron ore spot prices andtransaction volumes suffered a sharp decline in August, with spot pricesdropping 33% during that quarter to below US$90 per tonne on a 62% Fe CFR Chinabasis. In response revised strategies were implemented in the mine, processplant and rail transport areas and a critical review of operating and capitalspending resulted in decisive measures to reduce costs and conserve cash. Theseincluded utilization of the new lower cost dry classifying system to producesinter and lump ore only; deferring all non-committed capital expendituresrelating to the Silver Yards processing plant and also deferring approximately$52 million of additional planned capital investment originally budgeted for2012 largely on the Houston project. In addition a $30 million equity financing was completed in November 2012 and afurther $29 million equity financing was completed in February 2013. LIMbelieves that the cost reductions in operations combined with the deferral ofcapital expenditures were necessary steps and will ensure continued sustainableactivities. In March 2013 a strategic relationship arrangement with Tata Steelwas agreed whereby the two companies will cooperate with each other in variousaspects of their respective iron ore operations in the Labrador Trough and aspart this, upon completion of the formal agreements, LIM will receive $30million for the sale of a 51% interest in LIM's Howse deposit. Subsequent to the fiscal year-end a US$35 million advance payment against thesale of iron ore to be delivered in 2013 and 2014 was secured and a new twoyear iron or sales agreement with Iron Ore Company of Canada was agreed. Full scale production of iron ore re-commenced as planned in April 2013 andproduction of approximately 1.75 to 2.0 million tonnes of saleable productduring the 2013 operating season is targeted. Resources As at 31 March 2013, LIM has confirmed a total of approximately 59.5 milliontonnes at an average grade of 56.7% Fe of NI 43-101 compliant, measured andindicated mineral resources on the Schefferville Projects. Of this total,approximately 36.9 million tonnes are measured mineral resources andapproximately 22.5 million tonnes are indicated resources. There is also atotal of approximately 4.7 million tonnes of inferred resources at an averagegrade of 55.8% Fe. In addition to the foregoing, there are previously minedhistorical stockpiles, with a NI 43-101 compliant, indicated resource ofapproximately 3.5 million tonnes at an average grade of 49.1% Fe and aninferred resource of approximately 2.9 million tonnes at an average grade of48.8% Fe. LIM Financial Revenues from mining operations for the year were $95.7 million, net of oceanfreight and IOC's participation, on sales of approximately 1.56 million drytonnes of iron ore in ten shipments completed during fiscal 2013. Revenues werenegatively impacted by a decline of 33% in the spot price of iron ore duringthe period from August to October 2012. For 2013 LIM reported a loss of $129.7 million, or $1.56 per share, compared toa loss of $14.7 million, or $0.27 per share, during the previous fiscal year.The variance in the results of operations relates largely to an operating lossbefore depletion and depreciation of $28.9 million in fiscal 2013, depletionand depreciation of $29.7 million, a write-down of mineral property interestsof $58.1 million and a $3.1 million provision against certain doubtfulreceivables. In the previous year, no operating loss or depletion anddepreciation charges were recorded, since the commencement of commercialproduction for accounting purposes began on 1 April 2012. Parys Mountain The Parys Mountain property is a significant UK base metal deposit where afeasibility study carried out in 1991 identified a resource of 6.5 milliontonnes containing zinc, copper and lead with small amounts of silver and gold.The study demonstrated the technical and economic viability of bringing theproperty into production at a rate of 350,000 tonnes per annum, producing zinc,copper and lead concentrates. At Parys there is a head frame, a 300m deep production shaft and planningpermission for operations, consequently the lead time to production is expectedto be relatively short. The group has freehold ownership of the minerals andsurface land and there is substantial exploration potential. Infrastructure isgood, political risk is low and the project has the support of local people andgovernment. During the year drilling continued as part of the programme commenced inJanuary 2012. Initially this was in the shallower White Rock area to the westof the property after which the rig was moved to two locations near the GreatOpen Cast pit and ended the programme with three holes from a location adjacentto the Pearl engine house in the east of the property, the last of these beingcompleted in July 2012. All the stages of this programme are considered to have been successful. Whilstit was a little disappointing that the upper portions of the Engine zone, nearthe White Rock zone in the west, could not be established at economic gradesand widths at higher levels, the results in the first two holes did extend thepotentially viable zone upwards. The Pearl area drilling is particularly encouraging as it opens up an area thatis more than one kilometre away from the Morris Shaft and in conjunction withprevious results from the Garth Daniel area which lie midway between the Pearlengine house and Morris Shaft locations demonstrates that mineralisation atpotentially economic grades and widths occurs across the entire property. Following the drilling programme the first property-wide JORC Code-compliantresource estimate was prepared by Micon International Co Limited ("Micon"): Parys Mountain Mineral Resource estimate at $80 per tonne GMPV* cut-off Zone Category Tonnes Cu % Pb % Zn % Ag g/t Au g/t Engine Indicated 489,000 1.38 2.61 4.99 92.80 0.50 Inferred 121,000 1.74 3.42 6.74 70.00 0.50 Deep Engine Inferred 618,000 1.95 1.90 4.22 23.00 0.20 White Rock Indicated 1,625,000 0.34 2.05 3.84 33.00 0.50 Inferred 534,000 0.38 1.93 4.04 41.00 0.40 Garth Daniel Inferred 299,000 2.06 3.07 6.43 75.00 0.20 Northern Inferred 2,542,000 1.48 0.56 0.94 6.00 0.40 Total Indicated 2,114,000 0.58 2.18 4.11 46.00 0.50 Inferred 4,114,000 1.46 1.20 2.40 20.00 0.30 Source: Micon. GMPV (gross mineral product value) based on Cu $3.50/lb, Pb$1.00/lb, Zn $0.90/lb, Ag $33/oz, Au $1700/oz; This new estimate follows a previous report by Micon in 2007 that dealt onlywith the White Rock deposit. The current estimate includes all the knowncontiguous deposits on site and is reported on a JORC Code-compliant basis.With the exception of the 2007 White Rock estimate, the previous resource washistorical (estimated in 1990) and was not JORC Code-compliant. In nowreporting all estimates on a JORC Code-compliant basis the project has beenbrought up to date and put in a position to be properly recognised for futurefunding. The Garth Daniel zone had been partially identified in 1990 but benefitted froma further drilling programme in 2005 and 2006. The current estimate draws allthis information together. The Northern zone was previously poorly identifiedand without any significant continuity. Micon has now shown such continuity toexist and has defined a major resource for two discreet overlapping structures. There are several other areas on Parys Mountain that have had exploration anddrilling carried out on them that have not been included in these estimates.These include the area between the Deep Engine zone and Garth Daniel, and thearea around the Pearl Engine House that was drilled earlier this year. Theseand other targets will be subject to additional exploration in the future, andit is hoped that additional data will enable further continuity to bedemonstrated with subsequent additions to the resource base. At the appropriate time it is planned to carry out additional development anddrilling to bring some or all of the Inferred mineral resource in to theIndicated mineral resource category. This will be dependent on funding and, insome cases, underground access to these areas. In producing its estimates, Micon has followed all the normal proceduresrequired to make a JORC Code-compliant estimate. These have included avalidation of the drill hole database, construction of wireframes around thevarious deposits, basic statistical analysis of the resultant assay data toidentify the extent to which top-cutting was required, the basis for assaycompositing, detailed variography analysis to identify the principal trends ofthe mineralisation, appropriate block sizes to represent the volume of themineralisation and a determination of the appropriate search ellipsoid to beapplied for grade interpolation in each deposit. Grade interpolation usingOrdinary Kriging was then applied to the block model and the data wasvalidated. Specific gravity data was reviewed to develop bulk densities fortonnage calculations. A mineral resource estimate was then made based on a suite of metal prices.These metal prices were assigned to each block and the sum of the products ofthese prices and the various block grades produced a single Gross Metal ProductValue ("GMPV") value for each block. Micon reported the mineral resources bycategory following the guidelines of the JORC Code, for a range of GMPV cut-offvalues from $0 per tonne to $200 per tonne. The resource estimate methodology employed now is quite different from thatused in 1990 and provides a higher degree of confidence than previouslyenjoyed. This methodology has resulted in differing grade:tonnage combinationsthan previously reported. There are technical and other matters to be addressed to ensure that theproject moves towards production, however the directors are of the opinion thatthis project is at an advanced state and the existence of the originalfeasibility study, together with the valid planning permissions, will do muchto reduce both the volume of work required to move the project into productionand the risks associated with this work. In July 2012 an agreement was reached with Intermine Limited in respect of thetermination of a net profits royalty on production from Parys Mountain. A cashpayment of C$1,000,000 (£630,000) was made and 2,000,000 ordinary shares in thecompany issued to discharge the amount due to Intermine of £759,680 at 31 March2012 and to cancel the royalty in its entirety and release the charge. After due consideration the directors have decided that an impairment review isnot required in respect of the Parys Mountain mineral asset on the balancesheet. Operation of the mine and the receipt of cashflows from it are dependent onfinance being available to fund the development of the property. Other activities Management continues to search for new properties suitable for developmentwithin a relatively short time frame and within the financing capability likelyto be available to the group. Performance The directors expect to be judged by results of project development and/orexploration and by their success in creating long term value for shareholders.The group holds shares in Labrador Iron Mines Holdings Limited and hasinterests in exploration and evaluation properties and, until economicallyrecoverable reserves can be developed, there are no standardised performanceindicators which can usefully be employed to gauge the performance of thegroup, other than the market price of the company's shares. The chief external factors affecting the ability of the group to move forwardare primarily the demand for metals and minerals, levels of metal prices andexchange rates; these and other factors are dealt with in the risks anduncertainties section below. Dividend The group has no revenues and the directors are unable to recommend a dividend(2012 - nil). Financial position The group has no revenues from the operation of its properties. The loss forthe year after tax was £31,451,398 compared to a profit of £19,386,555 in 2012.The profit in 2012 was primarily due to the effects of gains on deemeddisposals which resulted from LIM's fund raisings during that year. Similar LIMshare issues in 2013 have also diluted the company's holding but have resultedin substantial losses due to the lower share prices at which these issues weremade in this current period. LIM's own losses increased significantly in 2013as did the group's share of those losses for the period during which LIMremained as an associate. During the year the group's holding in LIM has been diluted from 26% to 15%.From the date on which this holding fell below 20% in November 2012, itsaccounting treatment has changed and LIM is now held as an investment. Thischange resulted in charges to the income statement of £16,677,214 in 2013 (2012- nil) and there was a further loss in value for the period from November 2012to 31 March 2013 charged to the income statement. Administrative and other costs in the UK excluding investment income andfinance charges were £398,428 compared to £396,807 in the previous year. During the year there were no additions to fixed assets (2012 - nil) and £497,748 (2012 - £355,225) was capitalised in respect of the development of theParys Mountain property. As in 2012 most of this cost was in respect of thedrilling programme at Parys Mountain however in 2013 there were also chargesfor resource estimations and scoping studies, and for the cancellation of a netprofits royalty interest in Parys Mountain held by Intermine Limited. The group's cash balance at 31 March 2013 was £670,345 (2012 - £3,150,644),this decrease from last year being due to the purchase of LIM shares inNovember 2012, the net profits royalty cancellation referred to above,expenditures on the development of Parys Mountain (including drilling costs andfeasibility study fees) and administrative expenses. The foreign exchange gainof £11,196 (2012 - loss £41,914) shown in the income statement arises on thecash balances held in Canadian dollars. At 31 March 2013 the company had 160,608,051 ordinary shares in issue,2,000,000 more than last year as a result of the issue of shares to IntermineLimited. The directors believe that the group has adequate funding for its current andproposed operations. Risks and uncertainties In conducting its business the group faces a number of risks and uncertaintiessome of which have been described above in regard to particular projects.However, there are also risks and uncertainties of a nature common to allmineral projects and these are summarised below. General mining risks Actual results relating to, amongst other things, mineral reserves, mineralresources, results of exploration, capital costs, mining production costs andreclamation and post closure costs, could differ materially from thosecurrently anticipated by reason of factors such as changes in general economicconditions and conditions in the financial markets, changes in demand andprices for minerals that the group expects to produce, legislative,environmental and other judicial, regulatory, political and competitivedevelopments in areas in which the group operates, technological andoperational difficulties encountered in connection with the group's activities,labour relations, costs and changing foreign exchange rates and other matters. The mining industry is competitive in all of its phases. There is aggressivecompetition within the mining industry for the discovery and acquisition ofproperties considered to have commercial potential. The group faces strongcompetition from other mining companies in connection with the acquisition andretention of properties, mineral claims, leases and other mineral interests aswell as for the recruitment and retention of qualified employees and otherpersonnel. Development and liquidity risk The company has adequate funds for its current and planned operations. LIM isbelieved to be fully funded for the foreseeable future. Exploration and development Exploration for minerals and development of mining operations involve risks,many of which are outside the group's control. The group currently operates inpolitically stable environments and hence is unlikely to be subject toexpropriation of its properties but exploration by its nature is subject touncertainties and unforeseen or unwanted results are always possible. Metal prices The prices of metals fluctuate widely and are affected by many factors outsidethe group's control. The relative prices of metals and future expectations forsuch prices have a significant impact on the market sentiment for investment inmining and mineral exploration companies. Metal price fluctuations may beeither exacerbated or mitigated by international currency fluctuations whichaffect the actual amount which might be received by the group in sterling. Foreign exchange LIM is a Canadian company and the value of the group's holding in LIM isaffected by an exchange rate risk. Operations at Parys Mountain are in the UKand exchange rate risks are minor. The majority of the cash balance at theyear-end was held in sterling - see notes 17 and 24. Permitting, environment and social The group holds planning permission for the development of the Parys Mountainproperty but further consents will be required to carry out proposed activitiesand these permits may be subject to various reclamation and operationalconditions. LIM conducts its operations in Labrador and Quebec, in areas which are subjectto conflicting First Nations land claims. There is a number of First Nationspeoples living in the Quebec-Labrador peninsula with overlapping claims toasserted aboriginal land rights. Aboriginal claims to lands, and theconflicting claims to traditional rights between aboriginal groups, which alsooverlap the Quebec-Labrador provincial border, may have an impact on LIM'sability to operate and develop the Schefferville deposits. Employees and personnel The group is dependent on the services of a small number of key executivesincluding the chairman, chief executive and finance director. The loss of thesepersons or the group's inability to attract and retain additional highlyskilled and experienced employees for the operations of LIM or any other areasin which the group might engage may adversely affect its business or futureoperations. Financial instruments The group's use of financial instruments is described in note 24. Directors The names of the directors with biographical details are shown on the insiderear cover. It is the company's procedure to submit re-election resolutions forall directors at each annual general meeting. Ian Cuthbertson who has beenemployed by the company since July 1988 is to retire on 31 July 2013 and DaneshVarma will take over his duties as finance director and company secretary. Ianwill continue to provide services to the company in connection with the ParysMountain project under a consulting agreement. The company maintains a directors' and officers' liability policy on normalcommercial terms which includes third party indemnity provisions. The powers ofthe directors are described in the Corporate Governance Report. With regard to the appointment and replacement of directors, the company isgoverned by its Articles, the Corporate Governance Code, the Companies Act andrelated legislation. The Articles themselves may be amended by specialresolution of the shareholders. Under the Articles, any director appointed bythe board during the year must retire at the AGM following his appointment. Inaddition, the Articles require that one-third of the remaining directors retireby rotation at each general meeting and seek re-appointment. However it is nowthe company's practice to submit re-election resolutions for all directors ateach AGM. Directors' interests in material contracts Juno Limited (Juno), which is registered in Bermuda, holds 36.1% of thecompany's ordinary share capital. The company has a controlling shareholderagreement and working capital agreement with Juno. Advances made under theworking capital agreement are shown in note 19. Apart from interest chargesthere were no transactions between the group and Juno or its group during theyear. An independent committee reviews and approves any transactions andpotential transactions with Juno. Danesh Varma is a director and, through hisfamily interests, a significant shareholder of Juno. John Kearney is chairman and chief executive of LIM, Bill Hooley is a directorand vice-chairman of LIM and Danesh Varma is a director of LIM. All three areshareholders of LIM, are entitled to remuneration from LIM. There are notransactions between LIM, the group and the company which are required to bedisclosed. There are no other contracts of significance in which any director has or hadduring the year a material interest. Directors' shareholdings The interests of the directors in the share capital of the company, all ofwhich are beneficial, are set out below: 17 July 2013 31 March 2013 31 March 2012 Director Number of Number of Number of Number of Number of Number of options ordinary options ordinary options ordinary shares shares shares John Kearney 5,000,000 - 5,000,000 - 5,000,000 - Bill Hooley 2,500,000 200,000 2,500,000 200,000 2,500,000 100,000 Ian Cuthbertson 1,500,000 1,120,300 1,500,000 1,120,300 1,500,000 1,120,300 David Lean 450,000 - 450,000 - 450,000 - Howard Miller 600,000 - 600,000 - 600,000 - Roger Turner 500,000 - 500,000 - 500,000 - Danesh Varma 1,000,000 - 1,000,000 - 1,000,000 - 11,550,000 1,320,300 11,550,000 1,320,300 11,550,000 1,220,300 Further details of directors' options are provided in the Directors'Remuneration Report. Substantial shareholders At 17 July 2013 shareholders had advised the company of the followinginterests in the issued ordinary share capital: Name Number of Percentage shares of share capital Juno Limited 57,924,248 36.1% Shares Disapplication of pre-emption rights The directors would usually wish to allot any new share capital on apre-emptive basis, however in the light of the group's potential requirement toraise further funds for the acquisition of new mineral ventures, otheractivities and working capital, they believe that it is appropriate to have alarger amount available for issue at their discretion without pre-emption thanis normal for larger listed companies. In the case of allotments other than forrights or other pre-emptive issues, it is proposed that such authority will befor a nominal value of up to £401,500 of share capital being 40,150,000ordinary shares, which is equivalent to 25% of the issued ordinary sharecapital at 17 July 2013. Whilst such authority is in excess of the 5% ofexisting issued ordinary share capital which is commonly accepted for largerlisted companies, it will provide additional flexibility which the directorsbelieve is in the best interests of the group in its present circumstances. Itis the directors' present intention to renew this power each year. Rights and obligations attaching to shares The rights and obligations attaching to the ordinary and deferred shares areset out in the Articles of Association. Details of the issued share capital areshown in note 21. Details of employee share schemes are set out in theDirectors Remuneration Report and in note 22. Each ordinary share carries the right to one vote at general meetings of thecompany. Holders of deferred shares, which are of negligible value, are notentitled to attend, speak or vote at any general meeting of the company, norare they entitled to receive notice of general meetings. Subject to the provisions of the Companies Act 2006, the rights attached to anyclass may be varied with the consent of the holders of three-quarters innominal value of the issued shares of the class or with the sanction of anextraordinary resolution passed at a separate general meeting of the holders ofthe shares of the class. There are no restrictions on the transfer of the company's shares. Voting rights Votes may be exercised at general meetings in relation to the business beingtransacted either in person, by proxy or, in relation to corporate members, bycorporate representative. The Articles provide that forms of proxy shall besubmitted not less than 48 hours before the time appointed for holding themeeting or adjourned meeting. No member shall be entitled to vote at a general meeting or at a separatemeeting of the holders of any class of shares in the capital of the company,either in person or by proxy, in respect of any share held by him unless allmonies presently payable by him in respect of that share have been paid.Furthermore, no shareholder shall be entitled to attend or vote eitherpersonally or by proxy at a general meeting or at a separate meeting of theholders of that class of shares or on a poll if he has been served with anotice after failing to provide the company with information concerninginterests in his shares required to be provided under the Companies Act 2006. Significant agreements and change of control There are no agreements between the company and its directors or employees thatprovide for compensation for loss of office or employment that may occurbecause of a takeover bid. The company's share plans contain provisionsrelating to a change of control. Outstanding awards and options would normallyvest and become exercisable on a change of control, subject to the satisfactionof any performance conditions. Employment, community, donations and environment The group is an equal opportunity employer in all respects and aims for highstandards from and for its employees. It also aims to be a valued andresponsible member of the communities which it affects or operates in. Sincethere are no revenues from operations, it is the group's general policy not tomake charitable or political donations and none were made during the year (2012- nil). The group has no operations; consequently its effect on the environment is veryslight, being limited to the operation of two small offices, where recyclingand energy usage minimisation are taken seriously and encouraged. It is notpractical or useful to quantify the effects of these measures. There are nosocial or community issues which require the provision of further informationin this report. Creditor payment policy The group conducts its business on the normal trade credit terms of each of itssuppliers and tries to ensure that suppliers are paid in accordance with thoseterms. The group's average creditor payment period at 31 March 2013 was 17 days(2012 - 113 days). Going concern The directors have considered the business activities of the group as well asits principal risks and uncertainties as set out in this report. When doing sothey have carefully applied the guidance given in the Financial ReportingCouncil's document "Going concern and liquidity risk: Guidance for directors ofUK companies 2009". Based on the group's cash flow forecasts and projections toDecember 2014, and after making due enquiry in the light of current andanticipated economic conditions, the directors consider that the group andcompany have adequate resources to continue in business for the foreseeablefuture. For this reason, the going concern basis continues to be adopted in thepreparation of the financial statements. Post balance sheet events See note 30. Statement of directors' responsibilities The directors are responsible for preparing the annual report and the financialstatements. The directors are required to prepare the financial statements forthe group in accordance with International Financial Reporting Standards asadopted by the European Union ("IFRS") and have also elected to preparefinancial statements for the company in accordance with IFRS. Company lawrequires the directors to prepare such financial statements in accordance withIFRS, the Companies Act 2006 and, in relation to the group financialstatements, Article 4 of the IAS Regulation. International Accounting Standard 1 requires that financial statements presentfairly for each financial year the group's financial position, financialperformance and cash flows. This requires the faithful representation of theeffects of transactions, other events and conditions in accordance with thedefinitions and recognition criteria for assets, liabilities, income andexpenses set out in the International Accounting Standards Board's `Frameworkfor the Preparation and Presentation of Financial Statements'. In virtually allcircumstances, a fair presentation will be achieved by compliance with allapplicable International Financial Reporting Standards. Directors are also required to: * properly select and apply accounting policies; * present information, including accounting policies, in a manner that provides relevant, reliable comparable and understandable information; * provide additional disclosures when compliance with the specific requirements in IFRS is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity's financial position and financial performance; and * make an assessment of the company's ability to continue as a going concern. The directors are responsible for keeping proper accounting records whichdisclose with reasonable accuracy at any time the financial position of theparent and the group, for safeguarding the assets, for taking reasonable stepsfor the prevention and detection of fraud and other irregularities and for thepreparation of a directors' report and directors' remuneration report whichcomply with the requirements of the Companies Act 2006. The directors confirm that the financial statements have (a) been prepared inaccordance with applicable accounting standards; (b) give a true and fair viewof the results of the group and the assets, liabilities and financial positionof the group and the parent company; and (c) that the directors' reportincludes a fair review of the development and performance of the business andthe position of the group and the parent company together with a description ofthe principal risks and uncertainties that they face. The directors are responsible for the maintenance and integrity of the groupwebsite. Auditor Each of the directors in office at the date of approval of the annual reportconfirms that so far as they are aware there is no relevant audit informationof which the company's auditor is unaware and that each director has taken allof the steps which they ought to have taken as directors in order to makethemselves aware of that information. This confirmation is given and should beinterpreted in accordance with the provisions of s418 of the Companies Act2006. A resolution to reappoint Mazars LLP as auditor and to authorise the directorsto fix their remuneration will be proposed at the annual general meeting. By order of the board Ian CuthbertsonCompany Secretary23 July 2013 Report of the auditor to the members of Anglesey Mining plc We have audited the financial statements of Anglesey Mining plc for the yearended 31 March 2013 which comprise the Group Income Statement, the GroupStatement of Comprehensive Income, the Group and Company Statement of FinancialPosition, the Group and Company Statement of Changes in Equity, the Group andCompany Statement of Cash Flows and the related notes. The financial reportingframework that has been applied in their preparation is applicable law andInternational Financial Reporting Standards (IFRSs) as adopted by the EuropeanUnion. Respective responsibilities of directors and auditorAs explained more fully in the Directors' Responsibilities Statement on pages 9and 10, the directors are responsible for the preparation of the financialstatements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financialstatements in accordance with applicable law and International Standards onAuditing (UK and Ireland). Those standards require us to comply with theAuditing Practices Board's (APB's) Ethical Standards for Auditors. This reportis made solely to the company's members as a body in accordance with Chapter 3of Part 16 of the Companies Act 2006. Our audit work has been undertaken sothat we might state to the company's members those matters we are required tostate to them in an auditor's report and for no other purpose. To the fullestextent permitted by law, we do not accept or assume responsibility to anyoneother than the company and the company's members as a body for our audit work,for this report, or for the opinions we have formed. Scope of the audit of the financial statements A description of the scope of an audit of financial statements is provided onthe Financial Reporting Council's website at www.frc.org.uk/auditscopeukprivate. Opinion on the financial statements In our opinion the financial statements: * give a true and fair view of the state of the group's and of the parent company's affairs as at 31 March 2013 and of the group's profit for the year then ended; * have been properly prepared in accordance with IFRSs as adopted by the European Union; and * have been prepared in accordance with the requirements of the Companies Act. Opinion on other matters prescribed by the Companies Act 2006 In our opinion: * the part of the Directors' Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006; * the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements; and * the information given in the Corporate Governance Statement with respect to internal control and risk management systems in relation to financial reporting processes and about share capital is consistent with the financial statements and rules 7.2.5 and 7.2.6 of the Disclosure and Transparency Rules. Matters on which we are required to report by exception We have nothing to report in respect of the following matters where theCompanies Act 2006 requires us to report to you if, in our opinion: * adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us; or * the parent company financial statements and the part of the Directors' Remuneration Report to be audited are not in agreement with the accounting records and returns; or * certain disclosures of directors' remuneration specified by law are not made; or * we have not received all the information and explanations we require for our audit; or * a Corporate Governance Statement has not been prepared by the company. Under the Listing Rules we are required to review: * the directors' statement, set out on pages 9 and 10, in relation to going concern; * the part of the Corporate Governance Statement relating to the company's compliance with the nine provisions of the UK Corporate Governance Code for reporting periods commencing on or after 29 June 2010 specified for our review; and * certain elements of the report to the shareholders by the Board on directors' remuneration. Richard Metcalfe (Senior Statutory Auditor)for and on behalf of Mazars LLPChartered Accountants and Statutory AuditorTower Bridge House, St. Katharine's Way, London, E1W 1DD23 July 2013 Financial statements Group income statement All attributable to equity holders of the company Notes Year ended Year ended 31 March 31 March 2013 2012 All operations are continuing £ £ Revenue - - Expenses (398,428) (396,807) Share of loss of associate 14a (4,572,320) (3,484,140) (Losses)/gains on deemed 14a (6,793,789) 23,374,274 disposals in associate Loss on reclassification of 14b (16,149,722) - associate as an investment Loss on fair value of investment 14b (3,791,439) - Exchange difference on loss 14b 321,186 - above Investment income 6 36,941 49,041 Finance costs 7 (115,023) (113,899) Foreign exchange profit/(loss) 11,196 (41,914) (Loss)/profit before tax 4 (31,451,398) 19,386,555 Tax 8 - - (Loss)/profit for the period (31,451,398) 19,386,555 (Loss)/profit per share Basic - pence per share 9 (19.7)p 12.2 p Diluted - pence per share 9 (19.7)p 11.6 p Group consolidated statement of comprehensive income (Loss)/profit for the period (31,451,398) 19,386,555 Other comprehensive income: Exchange difference on 975,771 (379,827) translation of foreign holding in year Exchange difference on (4,216,941) - translation of foreign holding reclassified to income statement Total comprehensive (loss)/income (34,692,568) 19,006,728for the period Statement of financial position of the group 31 March 31 March 2013 2012 Notes £ £ Assets Non-current assets Mineral property development 10 14,753,566 14,255,818 Property, plant and equipment 11 204,687 204,687 Interest in associate 14 - 41,240,859 Investment 14 7,964,532 - Deposit 15 122,204 121,685 23,044,989 55,823,049 Current assets Other receivables 16 40,239 64,991 Cash and cash equivalents 17 670,345 3,150,644 710,584 3,215,635 Total assets 23,755,573 59,038,684 Liabilities Current liabilities Trade and other payables 18 (100,677) (1,040,961) 17 (100,677) (1,040,961) Net current assets 609,907 2,174,674 Non-current liabilities Loan 19 (2,306,283) (2,191,260) Long term provision 20 (42,000) (42,000) (2,348,283) (2,233,260) Total liabilities (2,448,960) (3,274,221) Net assets 21,306,613 55,764,463 Equity Share capital 21 7,116,914 7,096,914 Share premium 9,848,949 9,634,231 Currency translation reserve - 3,241,170 Retained earnings 4,340,750 35,792,148 Total shareholders' equity 21,306,613 55,764,463 The financial statements of Anglesey Mining plc were approved by the board ofdirectors, authorised for issue on 23 July 2013 and signed on its behalf by:John F. Kearney, ChairmanIan Cuthbertson, Finance Director Statement of financial position of the company Notes 31 March 31 March 2013 2012 £ £ Assets Non-current assets Investments 13 13,956,680 13,698,575 13,956,680 13,698,575 Current assets Other receivables 16 26,102 24,071 Cash and cash equivalents 17 623,215 1,063,330 649,317 1,087,401 Total Assets 14,605,997 14,785,976 Liabilities Current liabilities Trade and other payables 18 (70,516) (107,418) (70,516) (107,418) Net current assets 578,801 979,983 Non-current liabilities Loan 19 (2,306,283) (2,191,260) (2,306,283) (2,191,260) Total liabilities (2,376,799) (2,298,678) Net assets 12,229,198 12,487,298 Equity Share capital 21 7,116,914 7,096,914 Share premium 9,848,949 9,634,231 Retained losses (4,736,665) (4,243,847) Shareholders' equity 12,229,198 12,487,298 The financial statements of Anglesey Mining plc registered number 1849957 wereapproved by the board of directors and authorised for issue on 23 July 2013,and signed on its behalf by:John F. Kearney, ChairmanIan Cuthbertson, Finance Director Statements of changes in equity All attributable to equity holders of the company. Group Share Share Currency Retained Total capital premium translation earnings reserve £ £ £ £ £ Equity at 1 April 2011 7,092,414 9,621,181 3,620,997 15,748,173 36,082,765 Total comprehensive income for the year: Profit for the year - - - 19,386,555 19,386,555 Exchange difference on - - (379,827) - (379,827) translation of foreign holding Total comprehensive - - (379,827) 19,386,555 19,006,728 income for the year Shares issued for cash 4,500 19,073 - - 23,573 Share issue costs - (6,023) - - (6,023) Equity-settled benefits - - - 657,420 657,420 credit: - associate Equity at 31 March 2012 7,096,914 9,634,231 3,241,170 35,792,148 55,764,463 Total comprehensive income for the year: (Loss) for the year - - - (31,451,398) (31,451,398) Exchange difference on - - 975,771 - 975,771 translation of foreign holding Eliminate foreign - - (4,216,941) - (4,216,941) holding exchange difference Total comprehensive - - (3,241,170) (31,451,398) (34,692,568) loss for the year Shares issued 20,000 220,000 - - 240,000 Share issue costs - (5,282) - - (5,282) Equity at 31 March 2013 7,116,914 9,848,949 - 4,340,750 21,306,613 Company Share Share Retained Total capital £ premium £ losses £ £ Equity at 31 March 2011 7,092,414 9,621,181 (3,747,888) 12,965,707 Total comprehensive income for the year: Loss for the year - - (495,959) (495,959) Total comprehensive - - (495,959) (495,959) loss for the year Shares issued for cash 4,500 19,073 - 23,573 Share issue costs - (6,023) - (6,023) Equity at 31 March 2012 7,096,914 9,634,231 (4,243,847) 12,487,298 Total comprehensive income for the year: Loss for the year - - (492,818) (492,818) Total comprehensive - - (492,818) (492,818) loss for the year Shares issued 20,000 220,000 - 240,000 Share issue costs - (5,282) - (5,282) Equity at 31 March 2013 7,116,914 9,848,949 (4,736,665) 12,229,198 Statement of cash flows of the group Notes Year ended Year ended 31 March 31 March 2013 2012 £ £ Operating activities (Loss)/profit for the period (31,451,398) 19,386,555 Adjustments for non-cash items: Investment revenue 6 (36,941) (49,041) Finance costs 7 115,023 113,899 Share of loss of associate 14a 4,572,320 3,484,140 Losses/(gains) on deemed 14a 6,793,789 (23,374,274) disposals in associate Loss on reclassification of 14a 16,149,722 - associate as an investment Loss on fair value of investment 14b 3,791,439 - Exchange difference on loss 14b (321,186) - above Foreign exchange movement (11,196) 41,914 (398,428) (396,807) Movements in working capital Decrease/(increase) in 24,753 (42,522) receivables (Increase)/decrease in payables (36,902) 7,047 Net cash used in operating (410,577) (432,282)activities Investing activities Investment revenue 36,422 48,502 Mineral property development (1,166,413) (112,459) Addition to AFS investment in (950,927) - LIM Net cash used in investing activities (2,080,918) (63,957) Financing activities Proceeds from issue of shares - 17,550 Loan received - Net cash generated from financing - 17,550activities Net decrease in cash (2,491,495) (478,689)and cash equivalents Cash and cash equivalents at start 3,150,644 3,671,247of period Foreign exchange movement 11,196 (41,914) Cash and cash equivalents at end 17 670,345 3,150,644of period Statement of cash flows of the company Notes Year ended Year ended 31 March 31 March 2013 2012 £ £ Operating activities Loss for the period 23 (492,818) (495,959) Adjustments for non-cash items: Investment revenue (27,361) (26,969) Finance costs 115,023 113,899 (405,156) (409,029) Movements in working capital Increase in receivables (2,031) (9,040) (Increase)/decrease in payables (36,902) 7,047 Net cash used in operating (444,089) (411,022)activities Investing activities Interest received 27,361 26,969 Investments and long term loans (1,122,585) (161,904) Net cash used in investing (1,095,224) (134,935)activities Financing activities Proceeds from issue of shares - 17,550 Inter-company loan received 1,099,198 93,600 Net cash generated from financing 1,099,198 111,150activities Net decrease in cash and cash (440,115) (434,807)equivalents Cash and cash equivalents at 1,063,330 1,498,137start of period Cash and cash equivalents at end 623,215 1,063,330of period Notes to the financial statements 1 General information Anglesey Mining plc is domiciled and incorporated in England and Wales underthe Companies Act. The nature of the group's operations and its principalactivities are set out in note 3 and in the business review section of thedirectors' report. The registered office address is as shown on the rear cover. These financial statements are presented in pounds sterling because that is thecurrency of the primary economic environment in which the group has beenoperating. Foreign operations are included in accordance with the policies setout in note 2. 2 Significant accounting policies Basis of Accounting The group and company financial statements have been prepared in accordancewith International Financial Reporting Standards (IFRS) as adopted by theEuropean Union and therefore the group financial statements comply with Article4 of the EU IAS Regulation. The financial statements have been prepared on the historical cost basis. Theprincipal accounting policies adopted are set out below. Going concern The financial statements are prepared on a going concern basis. The validity ofthe going concern basis is dependent on finance being available for thecontinuing working capital requirements of the group for a period of twelvemonths from the date of approval of the accounts. For the reasons set out inthe directors' report, the directors believe that the going concern basis isappropriate for these accounts. Basis of consolidation The consolidated financial statements incorporate the financial statements ofthe company and entities controlled by the company (its subsidiaries) made upto 31 March each year. Control is achieved where the company has the power togovern the financial and operating policies of an investee entity so as toobtain benefits from its activities. On acquisition, the assets and liabilities and contingent liabilities of asubsidiary are measured at their fair values at the date of acquisition. Anyexcess of the cost of acquisition over the fair values of the identifiable netassets acquired is recognised as goodwill. Any deficiency of the cost ofacquisition below the fair values of the identifiable net assets acquired (i.e.discount on acquisition) is credited to the income statement in the period ofacquisition. The results of subsidiaries acquired or disposed of during theyear are included in the group income statement from the effective date ofacquisition or up to the effective date of disposal, as appropriate. Where necessary, adjustments are made to the financial statements ofsubsidiaries to bring the accounting policies used into line with those used bythe group. All intra-group transactions, balances, income and expenses areeliminated on consolidation. Investment in associate An associate is an entity over which the group exercises, or is in a positionto exercise, significant influence, but not control or joint control, throughparticipation in the financial or operating policy of the investee. Inconsidering the degree of control, any options or warrants over ordinary shareswhich are capable of being exercised at the period end are taken intoconsideration. Where material, the results and assets and liabilities of associates areincorporated in the financial statements using the equity method of accounting,except when these associates are classified as held for sale. Investments inassociates are carried in the statement of financial position at cost adjustedby any material post-acquisition changes in the net assets of the associates,less any impairment of value in the individual investments. Investments in associates cease to be treated as associates using the equitymethod of accounting when the group loses significant influence. Any retainedinterest is treated as an investment in accordance with IAS 39 `FinancialInstruments: Recognition and Measurement'. The transaction is treated as adisposal of interest in the associate, with any difference arising between thefair value of the retained interest, and the carrying value of the associate atthe date significant influence is lost recognised as a profit or loss onreclassification within the income statement. Revenue recognition Interest income is accrued on a time basis, by reference to the principaloutstanding and at the effective interest rate applicable, which is the ratethat exactly discounts estimated future cash receipts through the expected lifeof the financial asset to that asset's net carrying amount. Foreign currencies Transactions in currencies other than pounds sterling are recorded at the ratesof exchange prevailing on the dates of the transactions. At the end of eachreporting period, monetary assets and liabilities that are denominated inforeign currencies are retranslated at the rates prevailing on the period enddate. Non-monetary assets and liabilities carried at fair value that aredenominated in foreign currencies are translated at the rates prevailing at thedate when the fair value was determined. Gains and losses arising onretranslation are included in net profit or loss for the period. On consolidation, the assets and liabilities of the group's overseas operationsare translated at exchange rates prevailing on the period end date. Exchangedifferences arising, if any, are classified as items of other comprehensiveincome and transferred to the group's translation reserve within equity. Suchtranslation differences are reclassified to profit or loss, and recognised asincome or as expense, in the period in which the operation is disposed. Segmental analysis Operating segments are identified on the basis of internal reports aboutcomponents of the group that are regularly reviewed by the chief operatingdecision-maker. Retirement benefit costs Payments to defined contribution retirement benefit schemes are charged as anexpense as they fall due. There are no defined benefit retirement schemes. Equity-settled employee benefits The group provides equity-settled benefits to certain employees. Equity-settledemployee benefits are measured at fair value at the date of grant. The fairvalue determined at the grant date is expensed on a straight-line basis overthe vesting period, based on the group's estimate of shares that willeventually vest and adjusted for the effect of non-market based vestingconditions. Fair value is measured by use of a Black-Scholes model. The expected life usedin the model has been adjusted from the longer historical average life, basedon directors' estimates of the effects of non-transferability, exerciserestrictions, market conditions, age of recipients and behaviouralconsiderations. Taxation Deferred tax is the tax expected to be payable or recoverable on differencesbetween the carrying amounts of assets and liabilities in the financialstatements and the corresponding tax bases used in the computation of taxableprofit, and is accounted for using the period end liability method. Deferredtax liabilities are generally recognised for all taxable temporary differencesand deferred tax assets are recognised to the extent that it is probable thattaxable profits will be available against which deductible temporarydifferences can be utilised. Such assets and liabilities are not recognised ifthe temporary difference arises from goodwill or from the initial recognition(other than in a business combination) of other assets and liabilities in atransaction that affects neither the tax profit nor the accounting profit. Deferred tax liabilities are recognised for taxable temporary differencesarising on investments in subsidiaries and associates, and interests in jointventures, except where the group is able to control the reversal of thetemporary difference and it is probable that the temporary difference will notreverse in the foreseeable future. The carrying amount of any deferred tax assets is reviewed at each period enddate and reduced to the extent that it is no longer probable that sufficienttaxable profits will be available to allow all or part of the asset to berecovered. Deferred tax is calculated at the tax rates that are expected to apply in theperiod when the liability is settled or the asset is realised. Deferred tax ischarged or credited in the income statement, except when it relates to itemscharged or credited directly to equity, in which case the deferred tax is alsodealt with in equity. Property, plant and equipment The group's freehold land is stated in the statement of financial position atcost. The directors consider that the residual value of buildings, based onprices prevailing at the date of acquisition, is such that any depreciationwould not be material. The carrying value is reviewed annually and anyimpairment in value would be charged immediately to the income statement. Plant, equipment, fixtures and motor vehicles are stated in the statement offinancial position at cost, less depreciation. Depreciation is charged on astraight line basis at the following annual rates: plant and equipment 25% andmotor vehicles 25%. Residual values and the useful lives of these assets arealso reviewed annually. Intangible assets - mineral property development costs Intangible assets are stated in the statement of financial position at cost,less accumulated amortisation and provisions for impairment. Costs incurred prior to obtaining the legal rights to explore a mineralproperty are expensed immediately to the income statement. Mineral propertydevelopment costs are capitalised until the results of the projects, which areusually based on geographical areas, are known. Mineral property developmentcosts include an allocation of administrative and management costs asdetermined appropriate to the project by management. Where a project is successful, the related exploration costs are amortised overthe life of the estimated mineral reserve on a unit of production basis. Wherea project is terminated, the related exploration costs are expensedimmediately. Where no internally-generated intangible asset can be recognised,development expenditure is recognised as an expense in the period in which itis incurred. Impairment of tangible and intangible assets The values of mineral properties are reviewed annually for indications ofimpairment and when these are present a review to determine whether there hasbeen any impairment is carried out. They are written down when any impairmentin their value has occurred and are written off when abandoned. Where aprovision is made or reversed it is dealt with in the income statement in theperiod in which it arises. Investments Investments in subsidiaries are shown at cost less provisions for impairment invalue. Income from investments in subsidiaries together with any relatedwithholding tax is recognised in the income statement in the period to which itrelates. Provisions Provisions are recognised when the group has a present obligation as a resultof a past event and it is probable that the group will be required to settlethat obligation. Provisions are measured at the directors' best estimate of theexpenditure required to settle that obligation at the end of the reportingperiod and are discounted to present value where the effect is material. Financial instruments Financial assets and liabilities are initially recognised and subsequentlymeasured based on their classification as "loans and receivables", "availablefor sale financial assets" or "other financial liabilities". Loans and receivables are non-derivative financial assets with fixed ordeterminable payments that are not quoted in an active market. They areincluded in current assets, except where they mature more than 12 months afterthe period end date: these are classified as non-current assets. (a) Trade and other receivables. Trade and other receivables are measured atinitial recognition at fair value and are subsequently measured at amortisedcost using the effective interest rate method. Appropriate allowances forestimated irrecoverable amounts are recognised in the income statement whenthere is objective evidence that the asset is impaired. (b) Cash and cash equivalents. The group considers all highly liquidinvestments which are readily convertible into known amounts of cash and have amaturity of three months or less when acquired to be cash equivalents. Themanagement believes that the carrying amount of cash equivalents approximatesfair value because of the short maturity of these financial instruments. (c) Available for sale financial assets. Listed shares held by the group thatare traded in an active market are classified as being AFS and are stated atfair value. Gains and losses arising from changes in fair value are recognisedin other comprehensive income and accumulated in the investments revaluationreserve with the exception of impairment losses and foreign exchange gains andlosses on monetary assets, which are recognised directly in profit or loss.Where the investment is disposed of or is determined to be impaired, thecumulative gain or loss previously recognised in the investments revaluationreserve is reclassified to profit or loss. Dividends on AFS equity instruments are recognised in profit or loss when thegroup's right to receive the dividends is established. The fair value of AFS monetary assets denominated in a foreign currency isdetermined in that foreign currency and translated at the spot rate at thebalance sheet date. The foreign exchange gains and losses that are recognisedin profit or loss are determined based on amortised cost of the monetary asset.Other foreign exchange gains and losses are recognised in other comprehensiveincome. (d) Trade and other payables. Trade payables are not interest bearing and areinitially recognised at fair value and subsequently measured at amortised costusing the effective interest rate method. (e) Deposits. Deposits are recognised at fair value on initial recognition andare subsequently measured at amortised cost using the effective interest ratemethod. Equity instruments Equity instruments issued by the company are recorded at the proceeds received,net of direct issue costs. Leases Leases are classified as finance leases whenever the terms of the leasetransfer substantially all the risks and rewards of ownership to the lessee.All other leases are classified as operating leases. Mining lease payments are recognised as an operating expense in the incomestatement on a straight line basis over the lease term. There are no financeleases or other operating leases. New accounting standards The group and company have adopted the amendments to the followinginterpretation: IFRS 7 Financial Instruments: Amendments related to the offsetting of assetsand liabilities; Issued - December 2011; Effective - Annual periods beginningon or after 1 July 2011 IAS 12 Income Taxes: Limited scope amendments (recovery of underlying assets);Issued - December 2010; Effective - Annual periods beginning on or after 1January 2012 There has been no impact of adopting the amendments. The group and the company have not applied the following IFRS, IAS and IFRICsthat are applicable and have been issued but are not yet effective: IFRS 9 Financial Instruments; Original issue; Issued - November 2009; Effective- Annual periods beginning on or after 1 January 2015 IFRS 10 Consolidated Financial Statements: Original issue; Issued October 2012;Effective - Annual periods beginning on or after 1 January 2014 IFRS 11 Joint Arrangements: Original issue; Issued - May 2011; Effective -Annual periods beginning on or after 1 January 2013 IFRS 12 Disclosure of Interests in Other Entities: Original issue; Issued - May2011; Effective - Annual periods beginning on or after 1 January 2014 IFRS 13 Fair Value Measurement: Original issue; Issued - May 2011; Effective -Annual periods beginning on or after 1 January 2013 IAS 1 Presentation of Financial Statements: Amendments to revise the way othercomprehensive income is presented; Issued - June 2011; Effective - Annualperiods beginning on or after 1 July 2012 IAS 19 Employee Benefits: Original issue; Issued - Amended June 2011; Effective- Annual periods on or after 1 January 2013. IAS 27 Separate Financial Statements (as amended in 2011): Original issue;Issued - May 2011; Effective - Annual periods beginning on or after 1 January2013 IAS 28 Investments in Associated and Joint Ventures: Original issue; Issued -May 2011; Effective - Annual periods beginning on or after 1 January 2013 IAS 32 Financial Instruments: Presentation: Amendments relating to theoffsetting of assets and liabilities; Issued - December 2011; Effective -Annual periods beginning on or after January 2014 IAS 36 Impairment of Assets: Amendments arising from Recoverable AmountsDisclosure for Non-financial Assets; Issued - 2004, Amended - May 2013;Effective Annual periods beginning on or after 1 January 2014 IAS 39 Financial Instruments: Amendments for novation of derivatives; AmendedJune 2013; Effective for Annual periods beginning on or after 1 January 2014 IAS 39 Financial Instruments: Recognition and Measurement; Original issue;Issued - June 2013; Effective for Annual periods beginning on or after 1January 2014 IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine; Effective -Annual periods beginning on or after 1 January 2013 IFRIC 21 Levies; Effective - Annual periods beginning on or after 1 January2014. The directors expect that the adoption of the above pronouncements will have nomaterial impact to the financial statements in the period of initialapplication other than disclosure. The directors do not consider the adoption of the amendments resulting from theAnnual Improvements 2009 - 2011 cycle will result in a material impact on thefinancial information of the group and company. These amendments to IAS 1, IAS16 and IAS 32 are effective for accounting periods beginning on or after 1January 2013. There have been no other new or revised International Financial ReportingStandards, International Accounting Standards or Interpretations that are ineffect since that last annual report that have a material impact on thefinancial statements. Judgements made in applying accounting policies and key sources of estimationuncertainty The following critical judgements have been made in the process of applying thegroup's accounting policies: (a) Following the reduction in the group's holding in Labrador Iron MinesHoldings Limited to less than 20% in November 2012, the directors' believe thatthe group does not have significant influence and does not control theactivities and operations of LIM, and that this holding should be accounted foras an investment. (b) In determining the treatment of exploration, evaluation and developmentexpenditures the directors are required to make estimates and assumptions as tofuture events and circumstances. There are uncertainties inherent in makingsuch assumptions, especially with regard to: ore resources and the life of amine; recovery rates; production costs; commodity prices and exchange rates.Assumptions that are valid at the time of estimation may change significantlyas new information becomes available and changes in these assumptions may alterthe economic status of a mining unit and result in resources or reserves beingrestated. Operation of a mine and the receipt of cashflows from it aredependent on finance being available to fund the development of the property. (c) In connection with possible impairment of assets the directors assess eachpotentially cash generating unit annually to determine whether any indicationof impairment exists. The judgements made when doing so are similar to thoseset out above and are subject to the same uncertainties. Nature and purpose of equity reserves The share premium reserve represents the consideration that has been receivedin excess of the nominal value of shares on issue of new ordinary sharecapital. The currency translation reserve represents the revaluation of overseas foreignsubsidiaries and associates. The retained earnings reserve represents profits and losses retained inprevious and the current period. 3 Segmental information The group is engaged in the business of developing the wholly-owned ParysMountain project in North Wales and has an investment in the Labrador ironproject in eastern Canada. During the year the group's holding in LIM has beendiluted from 26% to 15%. From the date on which this holding fell below 20%,its accounting treatment has changed and LIM is now held as an investment. Inthe opinion of the directors, the group's activities comprise one class ofbusiness which is mine development. The group reports geographical segments;these are the basis on which information is reported to the board. Income statementanalysis 2013 2012 UK Canada - Total UK Canada - Total investment investment £ £ £ £ £ £ Expenses (398,428) - (398,428) (396,807) - (396,807) Share of loss in - (4,572,320) (4,572,320) - (3,484,140) (3,484,140)associate (Loss)/gain on - (6,793,789) (6,793,789) - 23,374,274 23,374,274deemed disposals Loss on recognition - (16,149,722) (16,149,722) - - -ofassociate as aninvestment Loss on fair value - (3,791,439) (3,791,439) - - -of investment Exchange difference - 321,186 321,186 - - -on loss above Investment income 36,941 - 36,941 49,041 - 49,041 Finance costs (115,023) - (115,023) (113,899) - (113,899) Exchange rate loss 11,196 - 11,196 (41,914) - (41,914) (Loss)/profit for (465,314) (30,986,084) (31,451,398) (503,579) 19,890,134 19,386,555the year Assets andliabilities 31 March 2013 31 March 2012 UK Canada - Total UK Canada - Total investment investment £ £ £ £ £ £ Assets 15,791,041 7,964,532 23,755,573 17,797,825 41,240,859 59,038,684 Liabilities (2,448,960) - (2,448,960) (3,274,221) - (3,274,221) Net assets 13,342,081 7,964,532 21,306,613 14,523,604 41,240,859 55,764,463 4 Operating result The operating result for the year has beenarrived at after charging: 2013 2012 £ £ Fees payable to the group'sauditors: for the audit of the annual 30,329 28,871accounts for the audit of subsidiaries' 5,000 5,000accounts for other services - taxation 6,551 9,547compliance Directors' remuneration 139,000 112,297 Director's pension 20,000 20,000contributions Foreign exchange (gain)/loss (11,196) 41,914 5 Staff costs The average monthly number of persons employed (includingexecutive directors) was: 2013 2012 Administrative 3 3 3 3 Their aggregate remuneration was: £ £ Wages and salaries 100,000 73,297 Social security costs 11,733 12,868 Other pension costs 20,000 20,000 131,733 106,165 Details of directors' remuneration and share options are given in thedirectors' remuneration report. 6 Investment income 2013 2012 £ £ Loans and receivables Interest on bank deposits 36,423 48,502 Interest on site 518 539re-instatement deposit 15 36,941 49,041 7 Finance costs 2013 2012 Loans and payables £ £ Loan interest to Juno Limited 115,023 113,89919 8 Taxation Activity during the year has generated trading losses for taxation purposeswhich may be offset against investment income and other revenues. Accordinglyno provision has been made for Corporation Tax. There is an unrecogniseddeferred tax asset at 31 March 2013 of £1.2 million (2012 - £1.2 million)which, in view of the group's trading results, is not considered by thedirectors to be recoverable in the short term. There are also capitalallowances, including mineral extraction allowances, of £12.3 million unclaimedand available at 31 March 2013 (2012 - £11.8 million). No deferred tax asset isrecognised in respect of these allowances. 2013 2012 £ £ Current tax - - Deferred tax - - Total tax - - Domestic income tax is calculated at 24% of the estimatedassessed profit for the year. In 2012 the rate used was 26% and the change this year is due to a change inCorporation Tax rates. Taxation for other jurisdictions is calculated at the rates prevailing inthe relevant jurisdictions. The total charge for the year can be reconciled to theaccounting profit or loss as follows: (Loss)/profit for the year (34,692,568) 19,386,555 Tax at the domestic income tax (8,326,216) 5,040,504rate of 24% (2012 - 26%) Tax effect of: Losses/(gains) on deemed 1,630,509 (6,077,311)disposals in associate Share of loss of associate 1,097,357 905,876 Losses on interest in associates 5,598,350 130,931and investments Total tax - - 9 Earnings per ordinary share 2013 2012 £ £ Earnings (Loss)/profit for the year (31,451,398) 19,386,555 Number of shares Weighted average number of 159,966,407 158,403,406ordinary shares for the purposesof basic earnings per share Shares deemed to be issued for - 8,884,238no consideration in respect ofemployee options Weighted average number of 159,966,407 167,287,644ordinary shares for the purposesof diluted earnings per share Basic earnings per share (19.7)p 12.2p Diluted earnings per share (19.7)p 11.6p As the group has a loss for the year ended 31 March 2013 the effect of the11.55 million optionsoutstanding is anti-dilutive and diluted earnings are reported to be the sameas basic earnings. 10 Mineral property development costs - group Parys Mountain Cost £ At 1 April 2011 13,900,593 Additions - site 259,156 Additions - rentals & 96,069charges At 31 March 2012 14,255,818 Additions - site 468,837 Additions - rentals & 28,911charges At 31 March 2013 14,753,566 Carrying amount Net book value 2013 14,753,566 Net book value 2012 13,900,593 Included in the additions are mining lease expenses of £15,500 (2012 - £11,225)and £113,241 for the cancellation of the Intermine net profits royaltyagreement (2012 - nil). The Parys Mountain property is currently being explored and evaluated and thereare no grounds to believe that the asset is impaired. 11 Property, plant and equipment Group Freehold Plant & Office Total land and equipment equipment property Cost £ £ £ £ At 1 April 2010 204,687 17,434 5,487 227,608 At 31 March 2011, 204,687 17,434 5,487 227,6082012 and 2013 Depreciation At 1 April 2010 - 17,434 5,487 22,921 At 31 March 2011, - 17,434 5,487 22,9212012 and 2013 Carrying amount At 31 March 2011, 204,687 - - 204,6872012 and 2013 Company Freehold Plant & Office Total land and equipment equipment property Cost £ £ £ £ At 1 April 2010 - 17,434 5,487 22,921 At 31 March 2011, - 17,434 5,487 22,9212012 and 2013 Depreciation At 1 April 2010 - 17,434 5,487 22,921 At 31 March 2011, - 17,434 5,487 22,9212012 and 2013 Carrying amount At 31 March 2011, - - - -2012 and 2013 12 Subsidiaries - company The subsidiaries of the company at 31 March 2013 and 2012 were as follows: Name of company Country of Percentage Principal incorporation owned activity Labrador Iron plc Isle of Man 100% Holder of the company's investment in Labrador Iron Mines Holdings Limited Anglo Canadian England & 100% DormantExploration (Ace) Limited Wales Parys Mountain Mines England & 100% Development ofLimited Wales the Parys Mountain mining property Parys Mountain Land England & 100% Holder of part ofLimited Wales the Parys Mountain property Parys Mountain Heritage England & 100% Holder of part ofLimited Wales the Parys Mountain property 13 Investments - company Shares at Loans Total cost £ £ £ At 1 April 2011 100,103 13,530,168 13,630,271 Advanced - 161,904 161,904 Repaid - (93,600) (93,600) At 31 March 2012 100,103 13,598,472 13,698,575 Advanced - 1,357,303 1,357,303 Repaid - (1,099,198) (1,099,198) At 31 March 2013 100,103 13,856,577 13,956,680 The realisation of investments is dependent on finance being available fordevelopment and on a number of other factors. No interest was charged in the year on inter-company loans. 14 a Interest in associate LIM is a company registered in Ontario Canada, which is independently managedand is the 100% owner and operator of a series of iron ore properties inLabrador and Quebec, many of which were formerly held and initially explored bythe group. On 6 November 2012 the group's holding in LIM was diluted from 26%to 15% as a result of LIM share issues to third party interests. From that dateits accounting treatment has changed and LIM is now held as an investment. Value in group financial 31 March 31 March statements 2013 2012 while held as an associate: £ £ Value brought forward from 41,240,859 21,073,132 previous period Group's share of losses of (4,786,514) (3,484,140) associate Group's share of equity-settled 214,194 657,420 benefits included in losses above and now added back (Loss)/profit on deemed disposals (6,793,789) 23,374,274 following LIM share issues Exchange rate movement 975,771 (379,827) Loss on adjustment to fair value (20,366,663) at date of recognition as an investment Value of group's share of net 10,483,858 assets at the date on which LIM ceased to be an associate Amount carried in the group 41,240,859 accounts 14 b Investments Value in group financial statements 31 Marchwhile held as an investment: 2013 £ Value of investment upon 10,483,858recognition as a financialinvestment Addition to investment 950,927 Loss on adjustment to fair value at (3,791,439)year end Exchange difference arising on 321,186adjustment above Amount carried in the group 7,964,532accounts The published fair value of the group's investment in LIM at 31 March 2013 is £7.9 million (2012 - £51 million). The shares included above represent an investment in listed equity securitiesthat present the group with opportunity for return through dividend income andtrading gains. The group holds a strategic non-controlling interest, followingthe dilution of its interest in Labrador Iron Holdings Limited (see note 14a)to 15.3%. These shares are not held for trading and accordingly are classifiedas `available for sale' which is deemed to be the most appropriateclassification under IFRS. The fair values of all equity securities are basedon quoted market prices. The above investment is measured subsequent to initial recognition at fairvalue as `Level 1' AFS based on the degree to which the fair value isobservable. Level 1 fair value measurements are those derived from quotedpriced (unadjusted) in active markets. Values as shown in the published 31 March 31 Marchaccounts of the associate (100%) 2013 2012including a fair value uplift in £ £respect of mineral properties, afterconversion into sterling: Total assets 191,199,592 238,839,086 Total liabilities (21,655,917) (29,348,232) Total net assets 169,543,674 209,490,854 2013 2012 Revenues 60,573,862 - (Loss) for the year (82,072,824) (9,285,932) 15 Deposit Group Company 2013 2012 2013 2012 £ £ £ £ Site re-instatement 122,204 121,685 - -deposit This deposit was required and made under the terms of a Section 106 Agreementwith the Isle of Anglesey County Council which has granted planning permissionsfor mining at Parys Mountain. The deposit is refundable upon restoration of thepermitted area to the satisfaction of the Planning Authority. The carryingvalue of the deposit approximates to its fair value. 16 Other receivables Group Company 2013 2012 2013 2012 £ £ £ £ Other 40,239 64,991 26,102 24,071 The carrying value of the receivables approximates to their fair value. 17 Cash Group Company 2013 2012 2013 2012 £ £ £ £ Held in sterling 646,760 1,092,216 623,215 1,063,330 Held in Canadian dollars 23,585 2,058,428 - - 670,345 3,150,644 623,215 1,063,330 The carrying value of the cash approximates to its fair value. 18 Trade and other payables Group Company 2013 2012 2013 2012 £ £ £ £ Trade creditors (33,860) (207,331) (10,700) (41,021) Property royalties and - (759,680) - -rentals Taxes (13,064) (30,398) (13,064) (30,398) Other accruals (53,753) (43,552) (46,752) (35,999) (100,677) (1,040,961) (70,516) (107,418) The carrying value of the trade and other payables approximates to their fairvalue. During the year the amounts due in respect of property royalties andrentals were discharged - see note 26 (d). 19 Loan Group Company 2013 2012 2013 2012 £ £ £ £ Loan from Juno Limited (2,306,283) (2,191,260) (2,306,283) (2,191,260) The loan from Juno Limited is provided under a working capital agreement,denominated in sterling, unsecured and carries interest at 10% per annum on theprincipal only. It is repayable from any future financing undertaken by thecompany, or on demand following a notice period of 367 days. The terms of thefacility were approved by an independent committee of the board. The carryingvalue of the loan approximates to its fair value. 20 Provision Group Company 2013 2012 2013 2012 £ £ £ £ Provision for site (42,000) (42,000) - -reinstatement The provision for site reinstatement covers the estimated costs ofreinstatement at the Parys Mountain site of the work done and changes made bythe group up to the date of the accounts. These costs would be payable oncompletion of mining activities (which is estimated to be in more than 20years' time) or on earlier abandonment of the site. There are significantuncertainties inherent in the assumptions made in estimating the amount of thisprovision, which include judgements of changes to the legal and regulatoryframework, magnitude of possible contamination and the timing, extent and costsof required restoration and rehabilitation activity. There has been no movementduring the year. 21 Share capital Ordinary shares of 1p Deferred shares of 4p Total Issued and Nominal Number Nominal Number Nominalfully paid value £ value £ value £ At 31 March 1,581,581 158,158,051 5,510,833 137,770,835 7,092,4142011 Issued 5 2,500 250,000 - - 2,500April 2011 Issued 22 2,000 200,000 - - 2,000March 2012 At 31 March 1,586,081 158,608,051 5,510,833 137,770,835 7,096,9142012 Issued 11 20,000 2,000,000 - - 20,000July 2012 At 31 March 1,606,081 160,608,051 5,510,833 137,770,835 7,116,9142013 The deferred shares are non-voting, have no entitlement to dividends and havenegligible rights to return of capital on a winding up. The issue of 2,000,000 shares on 24 July 2012 was to Intermine Limited at thethen market price of 12 pence per share for consideration of £240,000 as partof the discharge of amounts due and cancellation of a royalty agreement - seenote 26 (d). 22 Equity-settled employee benefits 2004 Unapproved share option plan The group plan provides for a grant price equal to or above the average quotedmarket price of the ordinary shares for the three trading days prior to thedate of grant. All options granted to date have carried a performancecriterion, namely that the company's share price performance from the date ofgrant must exceed that of the companies in the top quartile of the FTSE 100index. The vesting period for any options granted since 2004 has been one year.If the options remain unexercised after a period of 10 years from the date ofgrant, they expire. Options are forfeited if the employee leaves employmentwith the group before the options vest. 2013 2012 Options Weighted Options Weighted average average exercise exercise price in price in pence pence Outstanding at 11,550,000 10.90 12,000,000 10.69beginning of period Granted during the - - - -period Forfeited during the - - - -period Exercised during the - - 450,000 5.24period Expired during the - - - -period Outstanding at the 11,550,000 10.90 11,550,000 10.90end of the period Exercisable at the 11,550,000 10.90 11,550,000 10.90end of the period No options were granted, forfeited or expired during the year or the prioryear. The options outstanding at 31 March 2013 had a weighted averageexercise price of 10.90 pence (2012 - 10.90 pence), and a weighted averageremaining contractual life of 3.0 years (2012 - 4 years). As all options hadvested by 31 March 2010, the group recognised no expenses in respect ofequity-settled employee remuneration in respect of the years ended 31 March2012 and 2013. A summary of options granted and outstanding, all of which are over ordinaryshares of 1 pence, is as follows: Scheme Number Nominal Exercise Exercisable Exercisable Value £ price from until 2004 5,500,000 55,000 4.13p 22 October 21 OctoberUnapproved 2004 2014 2004 1,550,000 15,500 10.625p 15 January 14 JanuaryUnapproved 2007 2016 2004 3,800,000 38,000 21.90p 26 November 26 NovemberUnapproved 2008 2017 2004 700,000 7,000 5.00p 27 March 27 MarchUnapproved 2010 2019 Total 11,550,000 115,500 23 Results attributable to Anglesey Mining plc The loss after taxation in the parent company amounted to £492,818 (2012 loss £495,959). The directors have taken advantage of the exemptions available undersection 408 of the Companies Act 2006 and not presented an income statement forthe company alone. 24 Financial instruments Capital risk management There have been no changes during the year in the group's capital riskmanagement policy. The group manages its capital to ensure that entities in the group will be ableto continue as going concerns while optimising the debt and equity balance. Thecapital structure of the group consists of debt, which includes the borrowingsdisclosed in note 19, the cash and cash equivalents and equity comprisingissued capital, reserves and retained earnings. The group does not enter into derivative or hedging transactions and it is thegroup's policy that no trading in financial instruments be undertaken. The mainrisks arising from the group's financial instruments are currency risk andinterest rate risk. The board reviews and agrees policies for managing each ofthese risks and these are summarised below. Interest rate risk The amounts advanced under the Juno loans are at a fixed rate of interest of10% per annum and as a result the group is not exposed to interest ratefluctuations. Interest received on cash balances is not material to the group'soperations or results. The company (Anglesey Mining plc) is exposed to minimal interest rate risks. Liquidity risk The group has ensured continuity of funding through a mixture of issues ofshares and the working capital agreement with Juno Limited. The group couldconsider sale of shares in the group's investment to provide continued funding. Trade creditors are payable on normal credit terms which are usually 30 days.The loans due to Juno carry a notice period of 367 days; in keeping with itspractice since drawdown commenced more than 10 years ago, Juno has indicatedthat it has no current intention of demanding repayment and no such notice hadbeen received by 17 July 2013. However the Juno loan is classified as having amaturity date between one and two years from the period end date. Currency risk The functional currency of the company is pounds sterling. The loan from JunoLimited is denominated in pounds sterling. As a result, the group has nocurrency exposure in respect of this loan. The investment in LIM is denominated in Canadian dollars and amounts toC$12,325,025 equivalent to £7,964,532. If the rate of exchange between theCanadian dollar and sterling were to move against sterling by 10% there wouldbe a loss to the group of £724,000 and if it were to move in favour of sterlingby a similar amount there would be a gain of £885,000. At the year end the group held C$36,555 in Canadian dollars, equivalent to £22,990. If the rate of exchange between the Canadian dollar and sterling wereto move against sterling by 10% there would be a loss to the group of £2,100and if it were to move in favour of sterling by a similar amount there would bea gain of £2,600. Credit risk The directors consider that the entity has limited exposure to credit risk asthe entity has immaterial receivable balances at the year-end on which a thirdparty may default on its contractual obligations. The carrying amount of thegroup's financial assets represents its maximum exposure to credit risk. Cashis deposited with BBB or better rated banks. A table showing the financial instruments of the group and the company is setout below: Group Available for Loans & Other financial sale asset receivables liabilities 31 March 31 31 March 31 March 31 March 31 March 2013 March 2013 2012 2013 2012 2012 £ £ £ £ £ £ Financialassets Investment 7,964,532 - - - - - Deposit - - 122,204 121,685 - - Other - - 40,239 64,991 - -debtors Cash and - - 670,345 3,150,644 - -cashequivalents - - Financial - -liabilities Trade - - - - (33,860) (207,331)creditors Loans due to - - - - (2,306,283) (2,191,260)Juno 7,964,532 - 832,788 3,337,320 (2,340,143) (2,398,591) Company Loans & Other financial receivables liabilities 31 31 March 31 March 31 March March 2012 2013 2012 2013 £ £ £ £ Financialassets Other debtors 26,102 24,071 - - Cash and cash 623,215 1,063,330 - -equivalents Financialliabilities Trade - - (10,700) (41,021)creditors Loans due to - - (2,306,283) (2,191,260)Juno 649,317 1,087,401 (2,316,983) (2,232,281) 25 Related party transactions Transactions between Anglesey Mining plc and its subsidiaries are summarised innote 13. Juno Limited Juno Limited (Juno) which is registered in Bermuda holds 36.1% of the company'sissued ordinary share capital. The group has the following agreements withJuno: (a) a controlling shareholder agreement dated September 1996 and (b) aconsolidated working capital agreement of 12 June 2002. Interest payable toJuno is shown in note 7 and the balance due to Juno is shown in note 19. Therewere no transactions between the group and Juno or its group during the yearother than the accrual of interest due to Juno. Danesh Varma is a director and,through his family interests, a significant shareholder of Juno. Key management personnel All key management personnel are directors and appropriate disclosure withrespect to them is made in the directors' remuneration report. There are noother contracts of significance in which any director has or had during theyear a material interest. 26 Mineral holdings Parys (a) Most of the mineral resources delineated to date are under the westernportion of Parys Mountain, the freehold and minerals of which are owned by thegroup. A royalty of 6% of net profits after deduction of capital allowances, asdefined for tax purposes, from production of freehold minerals is payable. Themining rights over and under this area, and the leasehold area described in (b)below, are held in the Parys Mountain Mines Limited subsidiary. (b) Under a lease from Lord Anglesey dated December 2006, the subsidiary ParysMountain Land Limited holds the eastern part of Parys Mountain, formerly knownas the Mona Mine. An annual certain rent of £10,000 is payable for the yearbeginning 23 March 2012; the base part of this rent increases to £20,000 whenextraction of minerals at Parys Mountain commences; this rental isindex-linked. A royalty of 1.8% of net smelter returns from mineral sales isalso payable. The lease may be terminated at 12 months' notice and otherwiseterminates in 2070. (c) Under a mining lease from the Crown dated December 1991 there is an annuallease payment of £5,000. A royalty of 4% of gross sales of gold and silver fromthe lease area is also payable. The lease may be terminated at 12 months'notice and otherwise terminates in 2020. (d) A royalty agreement with Intermine Limited required annual payments ofC$50,000 (approximately £31,000) until production commences at the ParysMountain mine and a royalty of 4% of net profits (as defined after variousdeductions) generated from production at the mine. The royalty agreement alsoprovided an option to cancel the royalty and advance payments. In July 2012 under an agreement with Intermine Limited a cash payment ofC$1,000,000 (£630,000) was made and 2,000,000 ordinary shares in the companyissued to cancel the royalty in its entirety, release the charge and dischargethe amount due of £759,680 at 31 March 2012. Lease payments All the group's leases and the royalty agreement may be terminated with 12months' notice. If they are not so terminated, the minimum payments due inrespect of the leases and royalty agreement are analysed as follows: within theyear commencing 1 April 2013 - £15,500; between 1 April 2014 and 31 March 2019- £82,000. Thereafter the payments will continue at proportionate annual rates,in some cases with increases for inflation, so long as the leases and royaltyagreement are retained or extended. 27 Material non cash transactions Other than the issue of shares to Intermine (see note 26d) there were nomaterial non-cash transactions in the year. 28 Commitments Other than commitments under leases (note 26) there is no capital expenditureauthorised or contracted which is not provided for in these accounts (2012 -nil). 29 Contingent liabilities There are no contingent liabilities (2012 - nil). 30 Events after the period end Since the year end the market value of the group's shareholding in LIM hasfallen below the amount at which it is held in the statement of financialposition - see note 14b. Otherwise there are no events after the period end to report. Anglesey Mining plc Parys MountainAmlwch, Anglesey, LL68 9RE Phone 01407 831275mail@angleseymining.co.uk London office Painter's Hall Chambers8 Little Trinity Lane, London, EC4V 2ANPhone 020 7653 9881 Labrador Iron - Toronto 220 Bay Street, Suite 700Toronto, Ontario, M5J 2W4, CanadaPhone +1 647 728 4107 Registrars Capita RegistrarsNorthern House, Woodsome ParkFenay Bridge, Huddersfield, HD8 0LAPhone 0871 664 0300 Calls cost 10p per minute plus network extrasFrom overseas +44 208 639 3399 Fax 01484 600911 Registered office Tower Bridge House,St. Katharine's Way, London, E1W 1DD Web site www.angleseymining.co.uk Company registered number 1849957 Shares listed The London Stock Exchange - LSE:AYM www.angleseymining.co.uk www.labradorironmines.ca