Anglesey Mining Regulatory News (AYM)

Anglesey Mining plc Anglesey Mining plc today announces it final results for the year to31 March 2014 condensed to exclude the Directors Remuneration andCorporate Governance Reports available in the Annual Report. The remaininginformation presented is extracted from the Annual Report.Copies of the Annual Report 2014 will be posted to shareholderstogether with the Notice of the 2014 Annual General Meeting (“AGM Notice”)to be held at the offices of the company's lawyers, DLA Piper UK LLP,1 London Wall, London, EC2Y 5EA on 30 September 2014 at 11.00 a.m.In accordance with the Listing Rules, the Annual Report 2014, together withthe AGM Notice, has been submitted to the National Storage Mechanism andwill shortly be available for inspection at:http://www.morningstar.co.uk/uk/NSM .Shareholder documents can also be accessed on the company's website at:www.angleseymining.co.uk Annual Report 2014 * A UK mining company listed on the London Stock Exchange * In May 2014 Anglesey entered into agreements giving it the right to acquire a controlling interest in the Grangesberg Iron project in Sweden. * Anglesey is carrying out exploration, evaluation and pre-feasibility work at its 100% owned Parys Mountain underground zinc-copper-lead-silver-gold deposit in North Wales, UK. * Anglesey holds 15% of Toronto-listed Labrador Iron Mines Holdings Limited (TSX:LIM) which has direct shipping iron ore deposits in western Labrador and north-eastern Quebec. Strategic report - Chairman's statement In what has been a quiet year in the resources sector the company maintainedsteady progress on a number of fronts whilst awaiting a general turnaround inthe underlying markets. Parys Mountain has seen limited activity during theyear while operations at Labrador Iron have been disappointing and continuedto suffer from low product prices. After the year end we began participation in the Grangesberg Iron operation inSweden, which has been a major producer in the past and over the coming yearwe plan to fully evaluate this opportunity and if justified increase ourinterest to a majority position. We believe that Grangesberg should become avery exciting project for the company in the future. Whilst metal prices remained depressed during the financial year there are nowvery positive signs of a marked upturn. The price of zinc is currently overUS$1.00 per pound, a figure last seen in 2011 and copper after some weaknessis now back trading at the US$3.25 per pound level. A continuation of thisimprovement will allow us to take a far more positive view on the developmentof Parys Mountain than we have been able to do for some years. Iron ore aftera very weak second quarter in 2014 is now slowly recovering and expectationsare for continuing improvement. This bodes well both for Labrador and forGrangesberg. We will continue to monitor these improvements in metal prices and we lookforward to an ensuing improvement in the financing and equities markets thatwould then enable us to bring our two projects forward and to provide muchneeded support for Labrador Iron. Parys Mountain Activity on site has been quiet during the year but Micon InternationalLimited has been engaged to review the mineral potential of the entire ParysMountain property in North Wales. This review will cover both those resourceson which Micon has previously provided JORC compliant indicated and inferredresource estimates as well as studying a number of other zones within theproperty that were not included in earlier estimates. The price for zinc metal is now improving and is getting closer to a levelthat will support the development of a production operation at Parys Mountain,and at the same time demand for concentrates in European markets appears to begrowing. Grangesberg In May 2014 Anglesey completed the contractual arrangements to securemanagement control, including the majority of board seats, over theGrangesberg iron ore mine in Sweden. This mine was a significant producer ofiron ore until 1989 and current planning indicates a return to production ataround 2.0 to 2.5 mtpa later this decade. This could be a very importantinvestment for the company, sourcing iron ore in the European marketcommencing when the current world-wide expansion of production begins toabate. A number of technical and commercial activities are in the final planningstages and these will commence imminently. These activities are part of alonger term plan to assess the optimum development and financing strategy forthe mine. The company expects to report further progress during the comingmonths. Labrador Production activities in Labrador during the summer 2013 operating seasonsuffered from deteriorating grade and feed product quality. This causedoperational difficulties in the processing plant and resulted in lower gradeand quality product being sold than anticipated and this followed through tosignificantly lower revenues than expected. Labrador Iron has decided tosuspend production activities for 2014 while it seeks to raise additionalfinance to develop its flagship Houston deposit. Providing it is successful inthis fundraising then it is expected that production will re-commence in thespring of next year. At that time it should be on a substantially firmercommercial footing and better able to weather the vagaries of geology and themarkets. Outlook There is certainly more confidence in the air this year than last and whilethe capital markets for junior miners still remain quite depressed there issome expectation that they will improve in the near term as the benefits ofincreases in metal prices flows through. Given this expectation we lookforward to our projects moving forward positively during the current year. John F. Kearney Chairman 30 July 2014 Strategic report - operations Principal activities and business review The group is engaged in the business of exploring and evaluating thewholly-owned Parys Mountain project in North Wales and has a 15% holding (2013- 15%) in the Labrador iron project in eastern Canada. In May 2014 the groupacquired an option to manage the Grangesberg iron ore property in Sweden. At Parys Mountain there were limited activities during the year but since theyear end evaluation of the geological information revealed by the recentdrilling programmes is being carried out and a new and more comprehensivegeological model is under preparation. Operations at Labrador Iron Mines' James deposit in Labrador are currentlysuspended pending additional fund raising. The group continues its search for other mineral exploration and developmentopportunities. The aim of the group is, to create value in the Parys Mountain property,including by co-operative arrangements where appropriate, to continue itsparticipation in the Labrador projects and to actively engage in other mineralventures using the group's own resources together with such externalinvestment and finance as may be required. Parys Mountain The Parys Mountain property is a significant UK zinc, copper and lead depositwith small amounts of silver and gold. A feasibility study in 1991demonstrated the technical and economic viability of bringing the propertyinto production at a rate of 350,000 tonnes per annum, producing zinc, copperand lead concentrates. In 2012 the first JORC Code compliant resource estimateof the property was published. It showed 2.1 million tonnes at 6.9% combinedbase metals in the indicated category and 4.1 million tonnes at 5.0% combinedin the inferred category. The site has a head frame, a 300m deep production shaft and planningpermission for operations; consequently the lead time to production isexpected to be relatively short. The group has freehold ownership of theminerals and surface land and there is substantial exploration potential.Infrastructure is good, political risk is low and the project has the supportof local people and government. During the financial year activities have been limited to some follow-upgeological work, however since the year end a programme of further geologicalre-examination across the property has begun dealing particularly with areasnot covered by the JORC estimate. This remodelling project is being undertakenby Micon Consulting, the company which prepared the JORC estimate, with inputfrom experienced geologists who have previously worked on Parys Mountain. There are technical and other matters to be addressed to ensure that theproject moves towards production, however the directors are of the opinionthat this 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. After due consideration the directors decided to undertake an impairmentreview, however this review did not indicate any requirement for impairmentagainst the value of the Parys Mountain mineral asset on the balance sheet. Operation of the mine and the receipt of cashflows from it are dependent onfinance being available to fund the development of the property. Grangesberg Iron AB In May 2014 the group acquired an option to develop the Grangesberg iron oreproperty in Sweden. The Grangesberg iron ore mine is situated in the mineral-rich Bergslagendistrict of central Sweden about 200 kilometres north-west of Stockholm. Untilits closure in 1989 due to prevailing market conditions, the Grangesberg minewas the third largest iron ore mine in Sweden, next only to the Kiruna andMalmberget mines in the north of Sweden, with in excess of 150 million tonnesof iron ore mined down to around 500 metres deep. Prior indications are that at least 115 million tonnes of iron ore containingaround 40% iron remain for exploitation at Grängesberg. The homogenous ironore body in Grängesberg is of significant size and of the Kiruna geologicaltype, making it well suited for cost-effective production of attractive ironore products. The Grangesberg mine site benefits from excellent infrastructure and islocated adjacent to the Swedish national rail system which will permit easyaccess to ice free port of Oxelosund on the Baltic Sea on the south-east coastof Sweden, the location of SSAB Sweden's largest steel plant. Significantunderground and surface infrastructure remains intact at Grangesberg,including a fully operational railway line from mine to port. It is expected that following the normal environmental permitting processesand engineering design and financing, a conventional underground bulk miningoperation followed by processing using standard technology can produce some2.0 to 2.5 million tonnes per year of saleable iron ore concentrate for theEuropean, Middle East and Asian steel markets. In a series of agreements the company has purchased for US$145,000 a direct 6%interest in Grangesberg Iron AB ("GIAB"), a private Swedish company that wasfounded in 2007 with the target of re-opening the historic iron ore mine inGrangesberg and which, in conjunction with this investment and with assistancefrom Anglesey, has recently completed a financial and capital restructuring.GIAB holds a 25 year exploitation permit covering the previously minedGrangesberg underground mining operations granted by the Swedish MiningInspectorate in May 2013. At the same time the company has negotiated a 12 month evaluation option toacquire 51% of the enlarged share capital of GIAB for the issue of newordinary shares of the company. Anglesey has also entered into shareholder andcooperation agreements such that during the term of the option the companyholds management control and operatorship of GIAB and will appoint three outof five directors to the board of GIAB including the chairman. The remaining 43% of GIAB is held by Roslagen Resources AB, a Swedish privatecompany, which has led the re-development of the Grangesberg iron projectsince 2007. Roslagen will appoint two directors to the board of GIAB andprovide experienced local executive management. As part of the agreements and reorganisation an outstanding loan in GIAB inthe principal amount of US$3.5 million due to KII Holdings Limited, a Cypriotcompany has been renegotiated and is now repayable by the end of 2016. At the same time, Eurang Limited, a UK private company, has agreed to investUS$1.75 million, of which US$1.25 million has been invested in GIAB, for newshares representing the 51% shareholding interest in GIAB. This has beencarried out through a new wholly owned special purpose Swedish company, EurmagAB over which, during the term of the option, the company will hold managementand control rights. The additional US$500,000 will be used to covertransaction costs and expenses and certain outstanding liabilities. Option to acquire 51% of Grangesberg Upon the exercise of the option, which will be entirely at the company'sdiscretion, the company will acquire all of the shares of Eurang Limited bythe issue of new shares of the company to the value of US$1.75 million, to bepriced at the average of the the company share price at the date of option(3.375p) and the 20 day average share price prior to date of exercise, (but atno lower than 3.375p), and thereby acquire direct ownership and control of the51% shareholding in GIAB, and thus increase the company's direct interest inGIAB to 57%. GIAB will have debt outstanding of about US$5 million, (about US$4 millionincluding accrued interest payable to KII and about US$1 million ofsubordinated debt payable on a deferred basis to Roslagen), while EurangLimited will have debt of approximately US$4.5 million. During the term of the option the company will hold management control overEurmag with the ability to exercise voting rights on the shares of GIAB. Iffollowing its evaluation and assessment the company does not exercise itsoption it will relinquish its board seats and management direction and controlof GIAB at the end of the 12 month option period but could continue to hold 6%of the shares of GIAB. Grangesberg development plan The company intends to carry out an evaluation of the Grangesberg projectincluding a technical and economic assessment to determine the viability ofputting the Grangesberg iron ore mine back into commercial production underthe economic conditions to be expected during the proposed mine life. Immediate planned work will include a programme of geo-mechanics andmonitoring at the mine site as a prelude to obtaining permission to dewaterthe mine. In the same time-frame Grangesberg plans to produce a new compliantore resource estimate and to progress work on the pre-feasibility study onreopening the Grangesberg mine. In parallel with these activities the ongoing background environmental studiesand permit applications will be progressed. Anglesey will also carry outdetailed marketing studies on both the Swedish and the greater Europeanmarkets for Grangesberg iron ore products. In the subsequent periods, following the exercise of the option and subject tosuccessful financing, it is expected that a definitive feasibility study willbe undertaken, including mine definition drilling, process test-work anddetailed engineering design and costing. Labrador Iron Labrador Iron Mines Holdings Limited (LIM) was formerly an associate companyin the group however following a dilution of the group's holding in November2012 it became an investment in which Anglesey holds a 15% interest. Labrador Iron Mines is engaged in the mining of iron ore and in theexploration and development of direct shipping iron ore projects (the"Schefferville Projects") in the central part of the prolific Labrador Troughregion, one of the major iron ore producing regions in the world, situated inthe Menihek area in the Province of Newfoundland and Labrador and in theProvince of Québec, centred near the town of Schefferville, Québec. The Schefferville Projects consist of the James Mine and adjacent Stage 1deposits and Silver Yards processing facility ("Silver Yards"), the Stage 2Houston property ("Houston"), which includes the Malcolm deposit, the Stage 3Howse property ("Howse"), now held in a joint venture with Tata Steel MineralsCanada Limited ("TSMC") and, subject to further exploration and development,other iron ore properties in the vicinity of Schefferville. LIM'sSchefferville Projects are connected by a direct railway to the Port ofSept-Îles on the Atlantic Ocean and benefit from established infrastructure,including the town of Schefferville, airport, roads, hydro power and railservice. LIM commenced production at its James Mine in June 2011 and completed itsthird year of mining operations in November 2013. From 2011 to the end of2013, LIM sold 23 cape-size shipments into the Chinese spot market totallingapproximately 3.6 million dry tonnes of iron ore, all sourced from the Stage 1deposits and stockpiles. LIM's mine operations are seasonal, from approximately the beginning of Aprilto the end of November each year, with a planned winter shut down fromapproximately the beginning of December to the end of March each year. LIM has not recommenced mine operating activities for the 2014 operatingseason, due to a combination of the prevailing low price of iron ore in 2014to date, an assessment of the current economics of the remaining resources ofthe James Mine and other Stage 1 deposits and a strategic shift in corporatefocus towards establishing a lower cost operating framework and completingdevelopment of its flagship Stage 2 Houston Mine, while concurrentlynegotiating the commercial terms of major contracts and seeking additionalcapital investment and working capital. Accordingly, LIM's plan for the balance of calendar 2014 is to focus ondeveloping the Houston Mine and, subject to completion of financing andnegotiation of major contracts, to be in a position to begin mining productionfrom Houston in 2015. Other activities Management continues to search for new properties suitable for developmentwithin a relatively short time frame and within the financing capabilitylikely to 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 identified, 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. Financial results and position The group has no revenues from the operation of its properties. The loss forthe year after tax was £7,173,703 compared to a loss of £31,451,398 in 2013when substantial losses in connection with LIM's value and accountingtreatment were recorded. Most of the 2014 loss is also in respect of the LIMinvestment which has declined in value during the year and has also beennegatively affected as a result of the strength of the pound sterling againstthe Canadian dollar. Administrative and other costs in the UK excluding investment income andfinance charges were £353,455 compared to £398,428 in the previous year. During the year there were no additions to fixed assets (2013 - nil) and£48,482 (2013 - £497,748) was capitalised in respect of the Parys Mountainproperty. The reduction in the amounts capitalised was largely due to thedrilling programme at Parys Mountain being completed in 2013 and to theadditional costs of cancelling of a net profits royalty interest in 2013. The group's cash balance at 31 March 2014 was £289,097 (2013 - £670,345).Theforeign exchange loss of £3,741 (2013 - gain £11,196) shown in the incomestatement arises on the cash balances held in Canadian dollars. At 31 March 2014 the company had 160,608,051 ordinary shares in issue,unchanged from last year. 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. The group has no operations; consequently its effect on the environment isvery slight, being limited to the operation of two small offices, whererecycling and energy usage minimisation are taken seriously and encouraged. Itis not practical or useful to quantify the effects of these measures. Thereare no social or community issues which require the provision of furtherinformation in this report. 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'sactivities, labour relations, costs and changing foreign exchange rates andother 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 On occasions the group has relied upon largest shareholder, Juno Limited, forfinancial support and may be required to do so in the future to ensure thegroup will have adequate funds for its current activities. However in theabsence of support from Juno Limited the group would be dependent on theproceeds of share issues or other sources of funding. Developing the Parysproject will be dependent on raising further funds from various sources. 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 investmentin mining 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 proposedactivities and these permits may be subject to various reclamation andoperational conditions. 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 ofthese persons 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. At 31 March 2014 the company had six male directors and one maleemployee; there were no female directors or employees. Financial instruments The group's use of financial instruments is described in note 24. Approved by the board of directors and signed on its behalf Bill Hooley Chief executive officer 30 July 2014 Diectors' report The directors are pleased to submit their report and the audited accounts forthe year ended 31 March 2014. The corporate governance statement which follows forms part of this report. Inaccordance with statutory requirements introduced this year, the principalactivities of the group and certain other information are set out in thestrategic report section preceding this report. 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 resolutionsfor all directors at each annual general meeting. Ian Cuthbertson retired on31 July 2013 and Danesh Varma was appointed as finance director and companysecretary. The company maintains a directors' and officers' liability policy on normalcommercial terms which includes third party indemnity provisions. The powersof the 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 directorsretire by rotation at each general meeting and seek re-appointment. However itis now the company's practice to submit re-election resolutions for alldirectors at each 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. In May 2014 Bill Hooley and Danesh Varma were appointed as directors ofGrangesberg Iron AB; further details of these appointments are included in thestrategic report. There are no other contracts of significance in which any director has or hadduring the year a material interest. Substantial shareholders At 14 July 2014 the following shareholder had advised the company of aninterest in the issued ordinary share capital: Juno Limited notified aninterest in 57,924,248 shares representing 36.1% of the issued ordinaryshares. Shares Allotment authorities and 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 requirementto raise 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 or recommended for larger listed companies. At this year's annualgeneral meeting, the directors will seek a renewal and replacement of thecompany's existing share allotment authorities. The authority sought in resolution 13 of the notice of the AGM is for twopurposes and in aggregate is to enable the directors to allot shares up to anominal value of £840,000 (84,000,000 ordinary shares). The first purpose isto allow the directors to allot new shares and grant rights to subscribe for,or convert other securities into shares, up to a nominal value of £540,000(54,000,000 ordinary shares) which is approximately one third of the totalissued ordinary share capital of the company as at 14 July 2014. The directorswill consider issuing shares if they believe it would be appropriate to do soin respect of business opportunities that arise consistent with the company'sstrategic objectives. The directors have no present intention of exercisingthis general authority, other than in connection with the issue of sharespursuant to the company's employee share and incentive plans. The second part of the authority relates to the option agreement to acquire,indirectly, 51% of the enlarged share capital of Grangesberg Iron AB which wasentered into in May 2014 and described in the strategic report on page 4. Thisamount would cover the potential issue of shares in the event that the companywere to exercise its option and is in respect of shares with a nominal valueof £300,000 (30,000,000 ordinary shares). The authority sought underresolution 13 will expire on 31 December 2015. The directors intend to seekrenewal of this authority at future annual general meetings. The purpose of resolution 14 is to authorise the directors to allot new sharespursuant to the general authority given by resolution 13 in connection with apre-emptive offer or offers to holders of other equity securities if requiredby the rights of those securities or as the board otherwise considersnecessary, or otherwise up to an aggregate nominal amount of £401,500(40,150,000 ordinary shares). This aggregate nominal amount representsapproximately 25% of the issued ordinary share capital of the company at 30July 2014. Whilst such authority is in excess of the 5% of existing issuedordinary share capital which is commonly accepted and recommended for largerlisted companies, it will provide additional flexibility which the directorsbelieve is in the best interests of the group in its present circumstances.The authority sought under resolution 14 will expire on 31 December 2015. Thedirectors intend to seek renewal of this authority at future annual generalmeetings. 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 capitalare shown 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 toany class 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 holdersof the 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 (excluding any part of a day that is not aworking day) before the time appointed for holding the meeting or adjournedmeeting. 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 employeesthat provide 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 thesatisfaction of any performance conditions. Dividend The group has no revenues and the directors are unable to recommend a dividend(2013 - nil). 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 directorsof UK companies 2009". Based on the group's cash flow forecasts andprojections to December 2015, and after making due enquiry in the light ofcurrent and anticipated economic conditions, the directors consider that withongoing support from its largest shareholder, Juno Limited, they have areasonable expectation that the group has adequate resources to continue inoperational existence for the foreseeable future. Accordingly the goingconcern basis continues to be adopted in the preparation of the financialstatements. In the absence of support from Juno Limited the group could bedependent on the proceeds of share issues or other sources of funding.Development at the Parys project will be dependent on raising further fundsfrom various sources. Greenhouse Gas emissions The group does not itself undertake any activities or processes which lead tothe production of greenhouse gases. The extent to which its administrative andmanagement functions result in greenhouse gas emissions is slight and thedirectors do not believe that any useful purpose would be served by attemptingto quantify the amounts of these emissions. Post balance sheet events See note 30. Statement of directors' responsibilities The directors are responsible for preparing the annual report and thefinancial statements. The directors are required to prepare the financialstatements for the group in accordance with International Financial ReportingStandards as adopted by the European Union ("IFRS") and have also elected toprepare financial statements for the company in accordance with IFRS. Companylaw requires the directors to prepare group and parent company financialstatements for each financial year. Under that law they are required to theprepare the financial statements in accordance with IFRS, the Companies Act2006 and, in relation to the group financial statements, Article 4 of the IASRegulation. Under company law the directors must not approve the financial statementsunless they are satisfied that they give a true and fair view of the state ofaffairs of the group and parent company financial statements and of theirprofit and loss for that period. In preparing the financial statements the directors are required to: select suitable accounting policies and then apply them consistently; make judgements and estimates that are reasonable and prudent; state that the financial statements comply with IFRSs as adopted by theEuropean Union; and prepare the financial statements on the going concern basis unless it isinappropriate to presume that the group and the parent company will continuein business. The directors confirm that they consider the annual report and accounts, takenas a whole, is fair, balanced and understandable and provides the informationnecessary for shareholders to assess the company and group's performance,business model and strategy. The directors are responsible for keeping adequate accounting records that aresufficient to show and explain the parent company's transactions and disclosewith reasonable accuracy at any time the financial position of the parentcompany and the group and enable them to ensure that the financial statementscomply with the Companies Act 2006. They are also responsible for safeguardingthe assets of the parent company and the group and hence for taking reasonablesteps for the prevention and detection of fraud and other irregularities. Under applicable law and regulations the, the directors are also responsiblefor preparing a Strategic Report, Directors' Report, Remuneration Report andCorporate Governance Statement that comply with that law and thoseregulations. The directors are responsible for the maintenance and integrity of the groupwebsite. Legislation in the United Kingdom governing the preparation anddissemination of financial statements may differ from legislation in otherjurisdictions. Each of the directors, whose names and functions are listed on the inside rearcover, confirm that, to the best of their knowledge: the group financial statements, which have been prepared in accordance withIFRSs as adopted by the EU, give a true and fair view of the assets,liabilities, financial position and loss of the group; and the Strategic and Directors' Reports include a fair review of the developmentand performance of the business and the position of the group, together with adescription of the principal risks and uncertainties that it faces. 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 a director in order to makethemselves aware of that information and to establish that the company'sauditor is 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. Approved by the board of directors and signed on its behalf Danesh Varma Company Secretary 30 July 2014 Report of the auditors Opinion on the financial statements We have audited the financial statements of Anglesey Mining plc for the yearended 31 March 2014 which comprise the Group Income Statement, the GroupConsolidated Statement of Comprehensive Income, the Group and CompanyStatement of Financial Position, the Group and Company Statement of Changes inEquity, the Group and Company Statement of Cash Flows and the related notes.The financial reporting framework that has been applied in their preparationis applicable law and International Financial Reporting Standards (IFRSs) asadopted by the European Union. In our opinion: the financial statements give a true and fair view of the state of the group'sand of the parent company's affairs as at 31 March 2014 and of the group'sloss for the year then ended; the group financial statements have been properly prepared in accordance withIFRSs as adopted by the European Union; the parent company financial statements have been properly prepared inaccordance with IFRSs as adopted by the European Union and as applied inaccordance with the provisions of the Companies Act 2006; and the financial statements have been prepared in accordance with therequirements of the Companies Act 2006 and, as regards the group financialstatements, Article 4 of the IAS Regulation. Our assessment of the risks of material misstatement In arriving at our audit opinion, the risks of material misstatement which hadthe greatest effect on our overall audit strategy, the allocation of ourresources in the audit and directing the efforts of the engagement team, wereas follows: Potential impairment of capitalised costs associated with theexploration and evaluation of the Parys Mountain mine site The risk: The group has held rights to explore and mine the site for a numberof years but has not completed exploration and evaluation activities andfeasibility assessments to an extent where the site has been confirmed asbeing commercial viable and mining activities commenced. There is a risk thataccounting criteria associated with the capitalisation of exploration andevaluation expenditure may no longer be appropriate and that capitalised costsexceed the value in use i.e. there is an indication of potential impairment.Any assessment of the value in use is highly judgemental based on thedirectors' assessment of long term metal commodity prices, the estimatedmineral deposits from independent experts' studies, costs associated withmineral extraction and sale, discount rates and exchange rate factors. Our response: Our audit work included, but was not restricted to, a review ofthe directors' assessment of the criteria for the capitalisation ofexploration and evaluation expenditure and whether there are any indicators ofimpairment to capitalised costs. The directors concluded that there wereindicators of potential impairment and our work included a review of theintegrity of the discounted cash flow model used by the directors to make anassessment as to whether actual impairment had occurred, as well as using ourprofessional scepticism to challenge and test the key assumptions forsensitivity to the model. These key assumptions included the expected futurerevenue and costs associated with the extraction and sale of the mineraldeposits, future market prices, currency exchange rates, demand for theminerals and the discount rate utilised in the financial model. Potential impairment of the investment in the subsidiary, Parys Mountain MinesLimited, in the company financial statements The risk: The cost of the investment in and loan due from the subsidiary,Parys Mountain Mines Limited, held in the balance sheet of the company, issupported by the future cash flows associated with the recovery of theexploration and evaluation assets following the development of the ParysMountain site held by Parys Mountain Mines Limited. If there were impairmentin the exploration and evaluation assets, this would have a direct impact onthe carrying value of the investment in and loan due from the subsidiary,which may need to be written down in the company's accounts. Our response: In conjunction with our work associated with the potentialimpairment of the exploration and evaluation assets held within Parys MountainMine Limited, we considered whether there was an indication that the cost ofthe investment in and loan due from the subsidiary required writing down inthe company. As there was no impairment of the asset held by Parys MountainMine Limited, there is no indication that the carrying value of the investmentin and loan due from the company was not recoverable. Going concern The risk: The accounts are prepared on a going concern basis in accordancewith IAS1 `Presentation of Financial Statements'. Given the cash position ofthe group at the year end, and net cash outflows since the year end, weidentified that there is a potential material uncertainty that the group doesnot have sufficient cash resources to continue in operation for at least 12months from the dates of authorising these financial statements. Our response: We evaluated the directors' assessment of the group's ability tocontinue as a going concern. In particular, we reviewed the cash flowforecasts including key assumptions to assess the risk of the inability tomeet liabilities as they fall due. We have considered the group's reliance onongoing support from its largest shareholder, Juno Limited and the availabilityof other sources of finance to the group to support the going concernassumption. The audit procedures relating to the above mentioned matters were designed inthe context of our audit of the financial statements as a whole. Our opinionon the financial statements is not modified with respect to any of these risksand we do not express an opinion on these individual risks. Our assessment and application of materiality We apply the concept of materiality both in planning and performing our audit,and in evaluating the effect of misstatements on the financial statements andour audit. Materiality is used so we can plan and perform our audit to obtainreasonable, rather than absolute, assurance about whether the financialstatements are free from material misstatement. The level of materiality we set is based on our assessment of the magnitude ofmisstatements that, individually or in aggregate, could reasonably be expectedto have influence on the economic decisions of the users of the financialstatements. The overall materiality level we set for the group's financialstatements was £424,000. This has been calculated with reference to thegroup's net assets, of which it represents approximately 3%. Net assetsrepresents shareholders' funds and we have determined it to be one of theprincipal benchmarks within the financial statements relevant to shareholders,as the group has no revenues and is still exploring and evaluating mineralsites in which it retains an interest. We agreed with the Audit Committee that we would report to it all auditdifferences in excess of £13,000, as well as differences below that thresholdthat, in our view, warranted reporting on qualitative grounds Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in thefinancial statements sufficient to give reasonable assurance that thefinancial statements are free from material misstatement, whether caused byfraud or error. This includes an assessment of: whether accounting policiesare appropriate to the group's circumstances and have been consistentlyapplied and adequately disclosed, the reasonableness of significant accountingestimates made by the directors and the overall presentation of the financialstatements. In addition, we read all the financial and non-financialinformation in the annual report in order to identify material inconsistencieswith the audited financial statements and to identify any information that isapparently materially incorrect based on, or materially inconsistent with, theknowledge acquired by us in the course of performing the audit. If we becomeaware of any apparent material misstatements or inconsistencies we considerthe implications for our report. There are 6 legal entities accounting for 100% of the group's operating loss,100% of net assets and 100% of total assets all of which were subject to fullscope audits for the year ended 31 March 2014. The audit of all the entitieswithin the group was undertaken by the group audit team. 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 properlyprepared in accordance with the Companies Act 2006; the information given in the Strategic Report and the Directors' Report forthe financial year for which the financial statements are prepared isconsistent with the financial statements; and the information given in the Corporate Governance Statement with respect tointernal control and risk management systems in relation to financialreporting processes and about share capital is consistent with the financialstatements 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 no exceptions to report arising from the following responsibilities: Under the Companies Act 2006, we are required to report to you, if in ouropinion: adequate accounting records have not been kept, or returns adequate for ouraudit 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 accountingrecords 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 ouraudit; 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 page 8, in relation to going concern; and the part of the Corporate Governance Statement relating to the company'scompliance with the nine provisions of the UK Corporate Governance Codespecified for our review. Under the International Standards on Auditing (ISAs) (UK and Ireland), we arerequired to report to you if, in our opinion, information in the annual reportis: materially inconsistent with the information in the audited financialstatements; or apparently materially incorrect based on, or materially inconsistent with, ourknowledge of the company acquired in the course of performing our audit; or otherwise misleading. In particular we are required to consider whether we have identified anyinconsistencies between our knowledge acquired during the audit and thedirectors' statement that they consider the annual report is fair, balancedand understandable and whether the annual report discloses those matters thatwe communicated to the audit committee which we consider should have beendisclosed. Respective responsibilities of directors and auditor As explained more fully in the Directors' Responsibilities Statement on page9, 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 ISAs (UK and Ireland). Thosestandards require us to comply with the Auditing Practices Board's EthicalStandards for Auditors. This report is made solely to the company's members asa body in accordance with Chapter 3 of Part 16 of the Companies Act 2006. Ouraudit work has been undertaken so that we might state to the company's membersthose matters we are required to state to them in an auditor's report and forno other purpose. To the fullest extent permitted by law, we do not accept orassume responsibility to anyone other than the company and the company'smembers as a body for our audit work, for this report, or for the opinions wehave formed. Richard Metcalfe (Senior Statutory Auditor) for and on behalf of Mazars LLP Chartered Accountants and Statutory Auditor Tower Bridge House, St. Katharine's Way, London, E1W 1DD Date: 30 July 2014 Group income statement All attributable to equity holders of the company Year ended 31 Year ended 31 Notes March 2014 March 2013All operations are continuing £ £ Revenue - - Expenses (353,455) (398,428) Share of loss of associate - (4,572,320) Losses on deemed disposals in associate - (6,793,789) Loss on reclassification of associate as an investment - (16,149,722) Impairment of investment 14 (5,451,267) (3,791,439) Exchange difference on investment impairment 14 (1,255,280) 321,186 Investment income 6 2,630 36,941 Finance costs 7 (112,590) (115,023) Foreign exchange (loss)/gain (3,741) 11,196 Loss before tax 4 (7,173,703) (31,451,398) Tax 8 - - Loss for the period (7,173,703) (31,451,398) Loss per share Basic - pence per share 9 (4.5)p (19.7)p Diluted - pence per share 9 (4.5)p (19.7)p Group consolidated statement of comprehensive income Loss for the period (7,173,703) (31,451,398) Other comprehensive income: Exchange difference on translation - 975,771 of foreign holding in year Exchange difference on translation - (4,216,941) offoreign holding Total comprehensive loss (7,173,703) (34,692,568)for the year Statement of financial position of the group 31 March 2014 31 March 2013 Notes £ £Assets Non-current assets Mineral property exploration and evaluation 10 14,802,048 14,753,566 Property, plant and equipment 11 204,687 204,687 Investment 14 1,257,985 7,964,532 Deposit 15 122,596 122,204 16,387,316 23,044,989 Current assets Other receivables 16 17,017 40,239 Cash and cash equivalents 17 289,097 670,345 306,114 710,584 Total assets 16,693,430 23,755,573 Liabilities Current liabilities Trade and other payables 18 (99,647) (100,677) 17 (99,647) (100,677) Net current assets 206,467 609,907 Non-current liabilities Loan 19 (2,418,873) (2,306,283) Long term provision 20 (42,000) (42,000) (2,460,873) (2,348,283) Total liabilities (2,560,520) (2,448,960) Net assets 14,132,910 21,306,613 Equity Share capital 21 7,116,914 7,116,914 Share premium 9,848,949 9,848,949 Retained (losses)/earnings (2,832,953) 4,340,750 Total shareholders' equity 14,132,910 21,306,613 The financial statements of Anglesey Mining plc were approved by the board ofdirectors, authorised for issue on 30 July 2014 and signed on its behalf by: John F. Kearney, Chairman Danesh Varma, Finance Director Statement of financial position of the company 31 March 2014 31 March 2013 Notes £ £Assets Non-current assets Investments 13 13,977,564 13,956,680 13,977,564 13,956,680 Current assets Other receivables 16 13,793 26,102 Cash and cash equivalents 17 267,045 623,215 280,838 649,317 Total Assets 14,258,402 14,605,997 Liabilities Current liabilities Trade and other payables 18 (86,007) (70,516) (86,007) (70,516) Net current assets 194,831 578,801 Non-current liabilities Loan 19 (2,418,873) (2,306,283) (2,418,873) (2,306,283) Total liabilities (2,504,880) (2,376,799) Net assets 11,753,522 12,229,198 Equity Share capital 21 7,116,914 7,116,914 Share premium 9,848,949 9,848,949 Retained losses (5,212,341) (4,736,665) Shareholders' equity 11,753,522 12,229,198 The financial statements of Anglesey Mining plc registered number 1849957 wereapproved by the board of directors and authorised for issue on 30 July 2014,and signed on its behalf by: John F. Kearney, Chairman Danesh Varma, Finance Director Statements of changes in equity All attributable to equity holders of the company. Group Share Share Currency Retained Total capital premium translation (losses)/ reserve earnings £ £ £ £ £ Equity at 1 April 2012 7,096,914 9,634,231 3,241,170 35,792,148 55,764,463 Total comprehensive loss 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 holding - - (4,216,941) - (4,216,941) exchange difference Total comprehensive loss for the year - - (3,241,170) (31,451,398) (34,692,568) 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 Total comprehensive loss for the year: Loss for the year - - - (7,173,703) (7,173,703) Total comprehensive loss for the year - - - (7,173,703) (7,173,703) Equity at 31 March 2014 7,116,914 9,848,949 - (2,832,953) 14,132,910 Company Share Share Retained Total capital £ premium £ losses £ £ Equity at 31 March 2012 7,096,914 9,634,231 (4,243,847) 12,487,298 Total comprehensive loss for the year: Loss for the year - - (492,818) (492,818) Total comprehensive loss for the year - - (492,818) (492,818) 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 Total comprehensive loss for the year: Loss for the year - - (475,676) (475,676) Total comprehensive loss for the year - - (475,676) (475,676) Equity at 31 March 2014 7,116,914 9,848,949 (5,212,341) 11,753,522 Statement of cash flows of the group Year ended 31 Year ended 31 Notes March 2014 March 2013 £ £Operating activities Loss for the period (7,173,703) (31,451,398) Adjustments for: Investment income 6 (2,630) (36,941) Finance costs 7 112,590 115,023 Share of loss of associate - 4,572,320 Losses on deemed disposals in associate - 6,793,789 Loss on reclassification of associate as an investment - 16,149,722 Impairment of investment 14 5,451,267 3,791,439 Exchange difference on investment impairment 14 1,255,280 (321,186) Foreign exchange movement 3,741 (11,196) (353,455) (398,428) Movements in working capital Decrease in receivables 23,222 24,753 Decrease/(increase) in payables 15,491 (36,902) Net cash used in operating activities (314,742) (410,577) Investing activities Investment income 2,238 36,422 Mineral property exploration and evaluation (65,003) (1,166,413) Addition to AFS investment in LIM - (950,927) Net cash used in investing activities (62,765) (2,080,918) Loan received - Net decrease in cash (377,507) (2,491,495)and cash equivalentsCash and cash equivalents at start of year 670,345 3,150,644Foreign exchange movement (3,741) 11,196 Cash and cash equivalents at end of year 17 289,097 670,345 Statement of cash flows of the company Notes Year ended 31 Year ended 31 March 2014 March 2013 £ £Operating activities Loss for the period 23 (475,676) (492,818) Adjustments for: Investment income (2,013) (27,361) Finance costs 112,590 115,023 (365,099) (405,156) Movements in working capital Decrease/(increase) in receivables 12,309 (2,031) Increase/(decrease) in payables 15,491 (36,902) Net cash used in operating activities (337,299) (444,089) Investing activities Interest income 2,013 27,361 Investments and long term loans (20,884) (1,122,585) Net cash used in investing activities (18,871) (1,095,224) Financing activities Inter-company loan received - 1,099,198 Net cash generated from financing activities - 1,099,198 Net decrease in cash and cash equivalents (356,170) (440,115) Cash and cash equivalents at start of period 623,215 1,063,330 Cash and cash equivalents at end of period 267,045 623,215 Notes to the Accounts 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 strategic report. The registeredoffice address is as shown on the rear cover. These financial statements are presented in pounds sterling because that isthe currency 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 withArticle 4 of the EU IAS Regulation. The financial statements have been prepared on the historical cost basisexcept for the fair valuation of certain financial assets. The principalaccounting policies adopted are set out below. Going concern The financial statements are prepared on a going concern basis. The validityof the going concern basis is dependent on finance being available for thecontinuing working capital requirements of the group for the foreseeablefuture, being a period of at least twelve months from the date of approval ofthe accounts. For the reasons set out in the directors' report, the directorsbelieve that the going concern basis is appropriate 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 theperiod of acquisition. The results of subsidiaries acquired or disposed ofduring the year are included in the group income statement from the effectivedate of acquisition 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 usedby the 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 ordinaryshares which 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 ofaccounting, except when these associates are classified as held for sale.Investments in associates are carried in the statement of financial positionat cost adjusted by any material post-acquisition changes in the net assets ofthe 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 associateat the 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 expectedlife of the financial asset to that asset's net carrying amount. Foreign currencies Transactions in currencies other than pounds sterling are recorded at therates of exchange prevailing on the dates of the transactions. At the end ofeach reporting 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 atthe date 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 overseasoperations are translated at exchange rates prevailing on the period end date.Exchange differences arising, if any, are classified as items of othercomprehensive income and transferred to the group's translation reserve withinequity. Such translation differences are reclassified to profit or loss, andrecognised as income or as expense, in the period in which the operation isdisposed. 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-settled employee benefits are measured at fair value at the date ofgrant. The fair value determined at the grant date is expensed on astraight-line basis over the vesting period, based on the group's estimate ofshares that will eventually vest and adjusted for the effect of non-marketbased vesting conditions. 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 and office equipment are stated in the statement of financial positionat cost, less depreciation. Depreciation is charged on a straight line basisat the annual rate of 25%. Residual values and the useful lives of theseassets are also reviewed annually. Intangible assets - mineral property exploration and evaluation 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 propertyexploration and evaluation costs are capitalised until the results of theprojects, which are usually based on geographical areas, are known; theseinclude an allocation of administrative and management costs as determinedappropriate to the project by management. Where a project is successful, the related exploration costs are amortisedover the life of the estimated mineral reserve on a unit of production basis.Where a 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 impairmentin value. Income from investments in subsidiaries together with any relatedwithholding tax is recognised in the income statement in the period to whichit relates. 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 ofthe expenditure 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 havea maturity 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 monetaryasset. Other foreign exchange gains and losses are recognised in othercomprehensive income. (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. (f) Loans. Loans are recognised at fair value on initial recognition and aresubsequently measured at amortised cost using the effective interest ratemethod. Equity instruments Equity instruments issued by the company are recorded at the proceedsreceived, 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 unless they relate tomineral property exploration and evaluation in which case they arecapitalised. There are no finance leases or other operating leases. New accounting standards The group and company have adopted the following new accounting standards andinterpretations: IFRS 13 Fair Value Measurement: Original issue; Issued - May 2011; Effective -Annual periods beginning on or after 1 January 2013 IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine; Effective- Annual periods beginning on or after 1 January 2013 There has been no impact of adopting the standards. The group and company have adopted the amendments to the followinginterpretation: 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 Amendments resulting from Annual Improvements 2009-2011 Cycle in relation toIFRS 1, IAS1, IAS16; Effective- Annual periods on or after 1 January 2013 Amendments resulting from Annual Improvements 2011-2013 Cycle in relation toIFRS 1; Effective - Annual periods on or after 1 January 2013.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; Noeffective date IFRS 10 Consolidated Financial Statements: Original issue; Issued October2012; 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 -May 2011; Effective - Annual periods beginning on or after 1 January 2014 IFRS14 Regularity Deferral Accounts : Original issue; Issued - January 2014;Effective - Annual periods beginning on or after 1 January 2016 IFRS15 Revenue from contracts with customers : Original issue; Issued - May2014; Effective - Annual periods beginning on or after 1 January 2017 IAS16 Property, plant and equipment: Amendments regarding the clarification ofacceptable methods of depreciation and amortisation; Amended May 2014;Effective for Annual periods beginning on or after 1 January 2016 IAS 27 Separate Financial Statements (as amended in 2011): Original issue;Issued - May 2011; Effective - Annual periods beginning on or after 1 January2014 IAS 28 Investments in Associated and Joint Ventures: Original issue; Issued -May 2011; Effective - Annual periods beginning on or after 1 January 2014 IAS 32 Financial Instruments: Presentation: Amendments relating to theoffsetting of assets and liabilities; Issued - December 2011; Effective -Annual periods beginning on or after 1 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 38 Intangible assets: Amendments regarding the clarification of acceptablemethods of depreciation and amortisation; Amended May 2014; Effective forAnnual periods beginning on or after 1 January 2016 IAS 39 Financial Instruments: Recognition and Measurement; Original issue;Issued - June 2013; Effective for Annual periods beginning on or after 1January 2014 IFRIC 21 Levies; Effective - Annual periods beginning on or after 1 January2014. The directors expect that the adoption of the above pronouncements will haveno material impact to the financial statements in the period of initialapplication other than disclosure. The directors do not consider the adoption of the amendments resulting fromthe Annual Improvements 2010 - 2012 cycle will result in a material impact onthe financial information of the group and company. These amendments to IFRS2,IFRS3, IFRS8 IAS 16, IAS24 and IAS38 are effective for accounting periodsbeginning on or after 1 July 2014. The directors do not consider the adoption of the amendments resulting fromthe Annual Improvements 2011 - 2013 cycle will result in a material impact onthe financial information of the group and company. These amendments to IFRS3,IFRS13 and IAS40 are effective for accounting periods beginning on or after 1July 2014. 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 applyingthe group's accounting policies: (a) In determining the treatment of exploration, evaluation and developmentexpenditures the directors are required to make estimates and assumptions asto future 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 mayalter the economic status of a mining unit and result in resources or reservesbeing restated. Operation of a mine and the receipt of cashflows from it aredependent on finance being available to fund the development of the property. (b) 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, less any direct costs of issue. The currency translation reserverepresents the revaluation of overseas foreign subsidiaries 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 exploring and evaluating thewholly-owned Parys Mountain project in North Wales and has an investment inthe Labrador iron project in eastern Canada. In the opinion of the directors,the group's activities comprise one class of business which is mineexploration, evaluation and development. The group reports geographicalsegments; these are the basis on which information is reported to the board. Income statement analysis 2014 2013 UK Canada - Total UK Canada - Total investment investment £ £ £ £ £ £Expenses (353,455) - (353,455) (398,428) - (398,428)Share of loss in associate - - - - (4,572,320) (4,572,320)Loss on deemed disposals - - - - (6,793,789) (6,793,789)Loss on recognition ofassociate as an investment - - - - (16,149,722) (16,149,722)Impairment of investment - (5,451,267) (5,451,267) - (3,791,439) (3,791,439)Exchange difference on above - (1,255,280) (1,255,280) - 321,186 321,186Investment income 2,630 - 2,630 36,941 - 36,941Finance costs (112,590) - (112,590) (115,023) - (115,023)Exchange rate (loss)/gain (3,741) - (3,741) 11,196 - 11,196 Loss for the year (467,156) (6,706,547) (7,173,703) (465,314) (30,986,084) (31,451,398) Assets and liabilities 31 March 2014 31 March 2013 UK Canada - Total UK Canada - Total investment investment £ £ £ £ £ £Non-current assets 15,129,331 1,257,985 16,387,316 15,080,457 7,964,532 23,044,989Current assets 306,114 - 306,114 710,584 - 710,584Liabilities (2,560,520) - (2,560,520) (2,448,960) - (2,448,960) Net assets 12,874,925 1,257,985 14,132,910 13,342,081 7,964,532 21,306,613 4 Operating result The loss for the year has been arrived at after charging: 2014 2013 £ £Fees payable to the group's auditor:for the audit of the annual accounts 22,000 26,794for the audit of subsidiaries' accounts 3,000 5,000for other services - taxation compliance 3,150 6,551for other services 1,303 3,535Directors' remuneration 112,333 139,000Director's pension contributions 6,667 20,000Foreign exchange loss/(gain) 3,741 (11,196) 5 Staff costs The average monthly number of persons employed (including executive directors) was: 2014 2013Administrative 4 3 4 3 Their aggregate remuneration was: £ £Wages and salaries 104,998 100,000Social security costs 11,691 11,733Other pension costs 6,667 20,000 123,356 131,733 Details of directors' remuneration and share options are given in thedirectors' remuneration report. 6 Investment income 2014 2013 £ £Loans and receivablesInterest on bank deposits 2,238 36,423Interest on site re-instatementdeposit 15 392 518 2,630 36,941 7 Finance costs 2014 2013Loans and payables £ £Loan interest to Juno Limited 19 112,590 115,023 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 2014 of £1.3 million (2013 - £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 millionunclaimed and available at 31 March 2014 (2013 - £12.3 million). No deferredtax asset is recognised in respect of these allowances. 2014 2013 £ £Current tax - -Deferred tax - - Total tax - - Domestic income tax is calculated at 23% of the estimated assessed profit for the year. In 2013therate used was 24% and the change this year is due to a change in Corporation Tax rates. Taxation forother jurisdictions is calculated at the rates prevailing in the relevant jurisdictions. The total charge for the year can be reconciled to the accounting profit or loss as follows: Loss for the year (7,173,703) (34,692,568) Tax at the domestic income tax rate of23% (2013 - 24%) (1,649,952) (8,326,216)Tax effect of:Losses on deemed disposals in associate - 1,630,509Share of loss of associate - 1,097,357Losses on interest in associates andinvestments 1,649,952 5,598,350 Total tax - - 9 Earnings per ordinary share 2014 2013 £ £EarningsLoss for the year (7,173,703) (31,451,398) Number of sharesWeighted average number of ordinaryshares for thepurposes of basic earnings per share 160,608,051 159,966,407 Shares deemed to be issued for noconsideration inrespect of employee optionsWeighted average number of ordinaryshares for thepurposes of diluted earnings pershare 160,608,051 159,966,407 Basic earnings per share (4.5)p (19.7)p Diluted earnings per share (4.5)p (19.7)p As the group has a loss for the year ended 31 March 2014 the effect of the11.55 million options outstanding is anti-dilutive and diluted earnings arereported to be the same as basic earnings. 10 Mineral property exploration and evaluation costs - group Parys MountainCost £At 1 April 2012 14,255,818Additions - site 468,837Additions - rentals &charges 28,911 At 31 March 2013 14,753,566Additions - site 32,661Additions - rentals &charges 15,821 At 31 March 2014 14,802,048 Carrying amountNet book value 2014 14,802,048Net book value 2013 14,753,566 Included in the additions are mining lease expenses of £15,500 (2013 -£15,500) and £nil for the cancellation of the Intermine net profits royaltyagreement (2013 -£113,241). Potential impairment of mineral property Accumulated exploration and evaluation expenditure in respect of the Parysproject is carried in the financial statements at cost, less an impairmentprovision where there are grounds to believe that the discounted present valueof the future cash flows from the project is less than the carrying value orthere are other reasons to indicate that the carrying value is unsuitable. This year the directors carried out an impairment review with an effectivedate of 26 March 2014. This review was based on an estimate of discountedfuture cash flows from the development and operation of the Parys Mountainproject. The directors have used past experience and an assessment of futureconditions, together with external sources of information, to determine theassumptions which were adopted in the preparation of a financial model used toestimate the cashflows. The key assumptions utilised were: Capital costs will be estimated at current costs when the expenditure isplanned to be incurred; neither revenues nor operating costs will take intoaccount any inflation. Metal prices: zinc price 1.05 US$/lb; copper price 3.25 US$/lb; lead price1.00 US$/lb; silver price US$21.50 g/t and gold price US$1335 g/t. Exchangerate for metal prices £/US$ 1.71; long term exchange rate US$1.60/£. The discount rate of 10% applied to future cashflows is one which reflects thedirectors' current market assessment of the time value of money and any riskfactors which have not been adjusted already in the preparation of theforecast. Based on the above parameters the directors believe that no impairmentprovision is necessary or appropriate. However estimates of the net presentvalue of any project, and particularly one like Parys Mountain, are alwayssubject to many factors and wide margins of error. The directors believe thatthe estimates and calculations supporting their conclusions have beencarefully considered and are a fair representation of the projected financialperformance of the project. Based on the review set out above the directors have determined that noimpairment provision is required in the financial statements in respect of thecarrying value of the Parys property. 11 Property, plant and equipment Group Freehold Plant & Office Total land and equipment equipment propertyCost £ £ £ £At 1 April 2012 204,687 17,434 5,487 227,608 At 31 March 2013 and2014 204,687 17,434 5,487 227,608DepreciationAt 1 April 2012 - 17,434 5,487 22,921 At 31 March 2013 and2014 - 17,434 5,487 22,921Carrying amountAt 31 March 2013 and2014 204,687 - - 204,687 Company Freehold Plant & Office Total land and equipment equipment propertyCost £ £ £ £At 1 April 2012 - 17,434 5,487 22,921 At 31 March 2013 and2014 - 17,434 5,487 22,921DepreciationAt 1 April 2012 - 17,434 5,487 22,921 At 31 March 2013 and2014 - 17,434 5,487 22,921Carrying amountAt 31 March 2013 and2014 - - - - 12 Subsidiaries - company The subsidiaries of the company at 31 March 2014 and 2013 were as follows: Name of company Country of Percentage Principal activity incorporation ownedLabrador Iron plc Isle of Man 100% Holder of the company's investment in Labrador Iron Mines Holdings LimitedAnglo Canadian Exploration England & 100% Dormant(Ace) Limited WalesParys Mountain Mines Limited England & 100% Development of the Wales Parys Mountain mining propertyParys Mountain Land Limited England & 100% Holder of part of Wales the Parys Mountain propertyParys Mountain Heritage England & 100% Holder of part ofLimited Wales the Parys Mountain property 13 Investments - company Shares at cost Loans Total £ £ £At 1 April 2012 100,103 13,598,472 13,698,575Advanced - 1,357,303 1,357,303Repaid - (1,099,198) (1,099,198) At 31 March 2013 100,103 13,856,577 13,956,680Advanced - 20,884 20,884Repaid - - - At 31 March 2014 100,103 13,877,461 13,977,564 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 Investments - group 31 March 2014 31 March 2013 £ £Value brought forward 7,964,532 -Value of investment uponrecognition as a financialinvestment - 10,483,858Addition to investment - 950,927Impairment resulting from adjustmentto fairvalue (5,451,267) (3,791,439)Exchange difference arising onadjustment above (1,255,280) 321,186Amount carried in the group accounts 1,257,985 7,964,532 The published fair value of the group's investment in LIM at 31 March 2014 is£1.3 million (2013 - £8.0 million). At 14 July 2014 the published fair valueof the group's investment was £630,000. 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 to 15.3% inNovember 2012. These shares are not held for trading and accordingly areclassified as `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. The value of the investment is deemed to be impaired given the recent periodof decline in the share price. 15 Deposit Group Company 2014 2013 2014 2013 £ £ £ £Site re-instatement deposit 122,596 122,204 - - This deposit was required and made under the terms of a Section 106 Agreementwith the Isle of Anglesey County Council which has granted planningpermissions for mining at Parys Mountain. The deposit is refundable uponrestoration of the permitted area to the satisfaction of the PlanningAuthority. The carrying value of the deposit approximates to its fair value. 16 Other receivables Group Company 2014 2013 2014 2013 £ £ £ £Other 17,017 40,239 13,793 26,102 The carrying value of the receivables approximates to their fair value. 17 Cash Group Company 2014 2013 2014 2013 £ £ £ £Held in sterling 269,044 646,760 267,045 623,215Held in Canadian dollars 20,053 23,585 - - 289,097 670,345 267,045 623,215 The carrying value of the cash approximates to its fair value. 18 Trade and other payables Group Company 2014 2013 2014 2013 £ £ £ £Trade creditors (34,863) (33,860) (28,224) (10,700)Taxes (11,029) (13,064) (11,029) (13,064)Other accruals (53,755) (53,753) (46,754) (46,752) (99,647) (100,677) (86,007) (70,516) The carrying value of the trade and other payables approximates to their fairvalue. 19 Loan Group Company 2014 2013 2014 2013 £ £ £ £Loan from Juno Limited (2,418,873) (2,306,283) (2,418,873) (2,306,283) The loan from Juno Limited is provided under a working capital agreement,denominated in sterling, unsecured and carries interest at 10% per annum onthe principal only. It is repayable from any future financing undertaken bythe company, or on demand following a notice period of 367 days. The terms ofthe facility were approved by an independent committee of the board. Thecarrying value of the loan approximates to its fair value. 20 Provision Group Company 2014 2013 2014 2013 £ £ £ £Provision for site reinstatement (42,000) (42,000) - - 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 ofthis provision, which include judgements of changes to the legal andregulatory framework, magnitude of possible contamination and the timing,extent and costs of required restoration and rehabilitation activity. Therehas been no movement during the year. 21 Share capital Ordinary shares of Deferred shares of Total 1p 4pIssued and Nominal Number Nominal Number Nominalfully paid value £ value £ value £ At 31 March 2012 1,586,081 158,608,051 5,510,833 137,770,835 7,096,914Issued 11 July 2012 20,000 2,000,000 - - 20,000 - At 31 March 2013 and 31 March2014 1,606,081 160,608,051 5,510,833 137,770,835 7,116,914The deferred shares are non-voting, have no entitlement to dividends and havenegligible rights to return of capital on a winding up. 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 oneyear. If the options remain unexercised after a period of 10 years from thedate of grant, they expire. Options are forfeited if the employee leavesemployment with the group before the options vest. 2014 2013 Options Weighted Options Weighted average average exercise exercise price in price in pence penceOutstanding at beginning of period 11,550,000 10.90 11,550,000 10.90Granted during the period - - - -Forfeited during the period - - - -Exercised during the period - - - -Expired during the period - - - -Outstanding at the end of the period 11,550,000 10.90 11,550,000 10.90Exercisable at the end of the period 11,550,000 10.90 11,550,000 10.90 No options were granted, forfeited or expired during the year or the prioryear. The options outstanding at 31 March 2014 had a weighted averageexercise price of 10.90 pence (2013 - 10.90 pence), and a weighted averageremaining contractual life of 2 years (2013 - 3 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 March2013 and 2014. A summary of options granted and outstanding, all of which are over ordinaryshares of 1 pence, is as follows: Scheme Number Nominal Exercise Exercisable from Exercisable value £ price until2004 Unapproved 5,500,000 55,000 4.13p 22 October 2004 21 October 20142004 Unapproved 1,550,000 15,500 10.625p 15 January 2007 14 January 20162004 Unapproved 3,800,000 38,000 21.90p 26 November 2008 26 November 20172004 Unapproved 700,000 7,000 5.00p 27 March 2010 27 March 2019 Total 11,550,000 115,50023 Results attributable to Anglesey Mining plc The loss after taxation in the parent company amounted to £475,676 (2013 loss£492,818). The directors have taken advantage of the exemptions availableunder section 408 of the Companies Act 2006 and not presented an incomestatement for the 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 beable to continue as going concerns while optimising the debt and equitybalance. The capital structure of the group consists of debt, which includesthe borrowings disclosed in note 19, the cash and cash equivalents and equitycomprising issued 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. Themain risks arising from the group's financial instruments are currency riskand interest rate risk. The board reviews and agrees policies for managingeach of these 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 thegroup's operations 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 continuedfunding. 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 14 July 2014. 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$2,314,692 equivalent to £1,257,985. 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 £114,000 and if it were to move in favour ofsterling by a similar amount there would be a gain of £140,000. At the year end the group held C$36,897 in Canadian dollars, equivalent to£20,053. 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 £1,800and if it were to move in favour of sterling by a similar amount there wouldbe a gain of £2,200. 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. Group Available for sale Loans & Financial liabilities asset receivables 31 31 31 31 31 March 31 March March March March March 2014 2013 2014 2013 2014 2013 £ £ £ £ £ £Financial assetsInvestment 1,257,985 7,964,532 - - - -Deposit - - 122,596 122,204 - -Other debtors - - 17,017 40,239 - -Cash and cashequivalents - - 289,097 670,345 - - - -Financialliabilities - -Trade creditors - - - - (34,863) (33,860)Loans due to Juno - - - - (2,418,873) (2,306,283) 1,257,985 7,964,532 428,710 832,788 (2,453,736) (2,340,143) Company Loans & receivables Financial liabilities 31 March 31 March 31 March 31 March 2014 2013 2014 2013 £ £ £ £Financial assetsInvestment - loan 13,877,460 13,856,576Other debtors 13,793 26,102 - -Cash and cashequivalents 267,045 623,215 - - Financial liabilitiesTrade creditors - - (28,224) (10,700)Loans due to Juno - - (2,418,873) (2,306,283) 14,158,298 14,505,893 (2,447,097) (2,316,983) 25 Related party transactions Transactions between Anglesey Mining plc and its subsidiaries are summarisedin note 13. Juno Limited Juno Limited (Juno) which is registered in Bermuda holds 36.1% of thecompany's issued ordinary share capital. The group has the followingagreements with Juno: (a) a controlling shareholder agreement dated September1996 and (b) a consolidated working capital agreement of 12 June 2002.Interest payable to Juno is shown in note 7 and the balance due to Juno isshown in note 19. There were no transactions between the group and Juno or itsgroup during the year other than the accrual of interest due to Juno. DaneshVarma is a director and, through his family interests, a significantshareholder 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,as defined for tax purposes, from production of freehold minerals is payable.The mining rights over and under this area, and the leasehold area describedin (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 £10,321 is payable for the yearbeginning 23 March 2013; 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 silverfrom the lease area is also payable. The lease may be terminated at 12 months'notice and otherwise terminates in 2020. Lease payments All the group's leases may be terminated with 12 months' notice. If they arenot so terminated, the minimum payments due in respect of the leases androyalty agreement are analysed as follows: within the year commencing 1 April2014 - £15,821; between 1 April 2015 and 31 March 2020 - £84,168. Thereafterthe payments will continue at proportionate annual rates, in some cases withincreases for inflation, so long as the leases are retained or extended. 27 Material non cash transactions There were no material 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 (2013 -nil). 29 Contingent liabilities There are no contingent liabilities (2013 - nil). 30 Events after the period end On 28 May 2014 the group purchased an indirect 6% holding in Grangesberg IronAB, a company incorporated in Sweden, for a consideration of US$145,000. Also on 28 May 2014 the group was granted an option over 100% of the sharecapital of Eurang Limited, which itself acquired a 51% interest in GrangesbergIron AB. For details of this option see the Strategic Report on page 4. Thegroup has yet to complete an assessment of the financial impact of thetransaction and therefore is not able to provide the additional disclosuresrequired by IFFRS3 paragraph B64. 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 14. Otherwise there are no events after the period end to report. Notice of AGM Notice is given that the 2014 annual general meeting of Anglesey Mining plcwill be held at the offices of the company's lawyers, DLA Piper UK LLP, 1London Wall, London, EC2Y 5EA on 30 September 2014 at 11.00 a.m. to considerand, if thought fit, to pass the following resolutions. Resolutions 1 to 13will be proposed as ordinary resolutions and resolution 14 will be proposed asa special resolution: As ordinary business To receive the annual accounts and directors' and auditor's reports for theyear ended 31 March 2013 To approve the directors' remuneration policy report for the year ended 31March 2013 To approve the directors' remuneration report for the year ended 31 March 2013 To reappoint John F. Kearney as a director To reappoint Bill Hooley as a director To reappoint David Lean as a director To reappoint Howard Miller as a director To reappoint Roger Turner as a director To reappoint Danesh Varma as a director To reappoint Mazars LLP as auditor To authorise the directors to determine the remuneration of the auditor As special business 12. To approve the adoption of the Anglesey Mining plc 2014 Unapproved ShareOption Scheme ("the Scheme") the proposed rules of which are providedfollowing this notice and to authorise the directors to do all acts and thingsnecessary to establish the Scheme. 13. That, pursuant to section 551 of the Companies Act 2006 ("Act"), thedirectors be and are generally and unconditionally authorised to exercise allpowers of the Company to allot shares in the Company or to grant rights tosubscribe for or to convert any security into shares in the Company up to anaggregate nominal amount of £840,000, provided that (unless previouslyrevoked, varied or renewed) this authority shall expire on 31 December 2015,save that the Company may make an offer or agreement before this authorityexpires which would or might require shares to be allotted or rights tosubscribe for or to convert any security into shares to be granted after thisauthority expires and the directors may allot shares or grant such rightspursuant to any such offer or agreement as if this authority had not expired. This authority is in substitution for all existing authorities under section551 of the Act (which, to the extend unused at the date of this resolution,are revoked with immediate effect). 14. That pursuant to section 570 of the Act, the directors be and aregenerally empowered to allot equity securities (within the meaning of section560 of the Act) for cash pursuant to the authority granted under section 551of the Act pursuant to resolution 13 above as if section 561(1) of the Act didnot apply to any such allotment, provided that this power shall be limited tothe allotment of equity securities: (a) in connection with an offer of equity securities (whether by way of arights issue, open offer or otherwise) (i) to holders of ordinary shares inthe capital of the company in proportion (as nearly as practicable) to therespective numbers of ordinary shares held by them; and (ii) to holders ofother equity securities in the capital of the company, as required by therights of those securities or, subject to such rights, as the directorsotherwise consider necessary but subject to such exclusions or otherarrangements as the directors may deem necessary or expedient in relation totreasury shares, fractional entitlements, record dates or any legal orpractical problems under the laws of any territory or the requirements of anyregulatory body or stock exchange; and (b) otherwise than pursuant to paragraph 14(a) above, up to an aggregatenominal amount of £401,500 and (unless previously revoked, varied or renewed) this power shall expire on31 December 2015, save that the Company may make an offer or agreement beforethis power expires which would or might require equity securities to beallotted for cash after this power expires and the directors may allot equitysecurities for cash pursuant to any such offer or agreement as if this powerhad not expired. This power is in substitution for all existing powers undersection 570 of the Act which, to the extent effective at the date of thisresolution, are revoked with immediate effect. By order of the board Danesh Varma Company secretary 30 July 2014 Notes to the notice of AGM Entitlement to attend and vote 1. The right to vote at the meeting is determined by reference to the registerof members. Only those shareholders registered in the register of members ofthe Company as at 6.00 p.m. on 26 September 2014 (or, if the meeting isadjourned, 48 hours (excluding any part of a day that is not a working day)before the date and time of the adjourned meeting) shall be entitled to attendand vote at the meeting in respect of the number of shares registered in theirname at that time. Changes to entries in the register of members after thattime shall be disregarded in determining the rights of any person to attend orvote (and the number of votes they may cast) at the meeting. Proxies 2. A shareholder is entitled to appoint another person as his or her proxy toexercise all or any of his or her rights to attend and to speak and vote atthe meeting. A proxy need not be a member of the Company. A shareholder mayappoint more than one proxy in relation to the meeting, provided that eachproxy is appointed to exercise the rights attached to a different share orshares held by that shareholder. Failure to specify the number of shares eachproxy appointment relates to or specifying a number which when taken togetherwith the numbers of shares set out in the other proxy appointments is inexcess of the number of shares held by the shareholder may result in the proxyappointment being invalid. A proxy may be appointed only in accordance withthe procedures set out in note 3 and the notes to the proxy form. Theappointment of a proxy will not preclude a shareholder from attending andvoting in person at the meeting. 3. A form of proxy is enclosed. When appointing more than one proxy, completea separate proxy form in relation to each appointment. Additional proxy formsmay be obtained by contacting the Company's registrar Capita Asset Services,Proxies, The Registry, 34 Beckenham Road, Kent BR3 4TU or the proxy form maybe photocopied. State clearly on each proxy form the number of shares inrelation to which the proxy is appointed. To be valid, a proxy form must bereceived by post or (during normal business hours only) by hand at the officesof the Company's registrar, Capita Asset Services, Proxies, The Registry, 34Beckenham Road, Kent BR3 4TU, no later than 11.00 a.m. on 26 September 2014(or, if the meeting is adjourned, no later than 48 hours (excluding any partof a day that is not a working day) before the time of any adjourned meeting). Corporate representatives 4. A shareholder which is a corporation may authorise one or more persons toact as its representative(s) at the meeting. Each such representative mayexercise (on behalf of the corporation) the same powers as the corporationcould exercise if it were an individual shareholder, provided that (wherethere is more than one representative and the vote is otherwise than on a showof hands) they do not do so in relation to the same shares. Total voting rights 5. As at 14 July 2014 (being the last practicable date before the publicationof this notice), the issued share capital consists of 160,608,051 ordinaryshares of £0.01 each, carrying one vote each and 21,529,451 Deferred A Sharesand 116,241,384 Deferred B Shares which do not carry any rights to vote.Therefore, the total voting rights as at 14 July 2014 are 160,608,051. Nominated Persons 6. Where a copy of this notice is being received by a person who has beennominated to enjoy information rights under section 146 of the Companies Act2006 ("Act") ("Nominated Person"): (a) the Nominated Person may have a right under an agreement between him/herand the shareholder by whom he/she was nominated, to be appointed, or to havesomeone else appointed, as a proxy for the meeting; or (b) if the Nominated Person has no such right or does not wish to exercisesuch right, he/she may have a right under such an agreement to giveinstructions to the shareholder as to the exercise of voting rights. Thestatement of the rights of shareholders in relation to the appointment ofproxies in note 2 does not apply to a Nominated Person. The rights describedin such notes can only be exercised by shareholders of the Company. Shareholders' right to require circulation of resolutions to be proposed atthe meeting 7. A shareholder or shareholders meeting the qualification criteria set out innote 10 below may require the Company to give shareholders notice of aresolution which may properly be proposed and is intended to be proposed atthe meeting in accordance with section 338 of the Act. A resolution mayproperly be proposed unless (i) it would, if passed, be ineffective (whetherby reason of inconsistency with any enactment or the Company's constitution orotherwise), (ii) it is defamatory of any person, or (iii) it is frivolous orvexatious. The business which may be dealt with at the meeting includes aresolution circulated pursuant to this right. Any such request must (i)identify the resolution of which notice is to be given, by either setting outthe resolution in full or, if supporting a resolution requested by anothershareholder, clearly identifying the resolution which is being supported (ii)comply with the requirements set out in note 11 below, and (iii) be receivedby the Company no later than six weeks before the meeting. Shareholders' right to have a matter of business dealt with at the meeting 8. A shareholder or shareholders meeting the qualification criteria set out innote 10 below may require the Company to include in the business to be dealtwith at the meeting any matter (other than a proposed resolution) which mayproperly be included in the business in accordance with section 338A of theAct. A matter may properly be included unless (i) it is defamatory of anyperson, or (ii) it is frivolous or vexatious. Any such request must (i)identify the matter to be included in the business, by either setting out thematter in full or, if supporting a matter requested by another shareholder,clearly identifying the matter which is being supported (ii) set out thegrounds for the request (iii) comply with the requirements set out in note 11below and (iv) be received by the Company no later than six weeks before themeeting. Website publication of audit concerns 9. A shareholder or shareholders who meet the qualification criteria set outin note 10 below may require the Company to publish on its website a statementsetting out any matter that such shareholders propose to raise at the meetingrelating to either the audit of the Company's accounts (including theauditors' report and the conduct of the audit) that are to be laid before themeeting or any circumstances connected with an auditor of the Company ceasingto hold office since the last annual general meeting of the Company inaccordance with section 527 of the Act. Any such request must (i) identify thestatement to which it relates, by either setting out the statement in full or, if supporting a statement requested by anothershareholder, clearly identify the statement which is being supported (ii)comply with the requirements set out in note 11 below and (iii) be received bythe Company at least one week before the meeting. Where the Company isrequired to publish such a statement on its website (i) it may not require theshareholders making the request to pay any expenses incurred by the Company incomplying with the request (ii) it must forward the statement to the Company'sauditors no later than the time when it makes the statement available on thewebsite and (iii) the statement may be dealt with as part of the business ofthe meeting. Notes 7, 8 and 9 above: qualification criteria and methods of making requests 10. In order to require the Company (i) to circulate a resolution to beproposed at the meeting as set out in note 7, (ii) to include a matter in thebusiness to be dealt with at the meeting as set out in note 8, or (iii) topublish audit concerns as set out in note 9, the relevant request must be madeby (i) a shareholder or shareholders having a right to vote at the meeting andholding at least five per cent of the total voting rights of the Company or(ii) at least 100 shareholders having a right to vote at the meeting andholding, on average, at least £100 of paid up share capital. For informationon voting rights, including the total voting rights of the Company, see note 5above and the website referred to in note 15 below. 11. Any request by a shareholder or shareholders to require the Company (i) tocirculate a resolution to be proposed at the meeting as set out in note 7 (ii)to include a matter in the business to be dealt with at the meeting as set outin note 8 or (iii) to publish audit concerns as set out in note 9 may be madeeither (a) in hard copy, by sending it to Anglesey Mining plc, Tower Bridge,St Katharine's Way, London E1W 1DD (marked for the attention of the CompanySecretary); or (b) in electronic form, by sending an email todanesh@angleseymining.co.uk; and must state the full name(s) and address(es)of the shareholder(s) and (where the request is made in hard copy form ) mustbe signed by the shareholder(s). Questions at the meeting 12. Shareholders have the right to ask questions at the meeting relating tothe business being dealt with at the meeting in accordance with section 319Aof the Act. The Company must answer any such question unless: (a) to do sowould interfere unduly with the preparation for the meeting or would involvethe disclosure of confidential information; (b) the answer has already beengiven on a website in the form of an answer to a question; or (c) it isundesirable in the interests of the Company or the good order of the meetingthat the question be answered. Documents available for inspection 13. The following documents will be available for inspection during normalbusiness hours at the registered office of the Company from the date of thisnotice until the time of the meeting. They will also be available forinspection at the place of the meeting from at least 15 minutes before themeeting until it ends: (a) copies of the service contracts of the executivedirectors, (b) copies of the letters of appointment of the non-executivedirectors and (c) the Articles of Association of the Company. Biographical details of directors 14. Biographical details of all those directors who are offering themselvesfor reappointment at the meeting are set out in the annual report andaccounts. Website providing information about the meeting 15. The information required by section 311A of the Act to be published inadvance of the meeting, which includes the matters set out in this notice andinformation relating to the voting rights of shareholders, is available atwww.angleseymining.co.uk. Rules of the Unapproved Share Option Scheme Submitted for approval at the AGM on 30 September 2014: The Company hereby establishes a share option scheme to be known as the 2014Unapproved Share Option Scheme for directors, officers, employees andassociates of Anglesey Mining plc. The purposes of the Scheme are: (i) to reward the abilities and efforts of the directors, officers andemployees and other providers of management or consulting services for theCompany who have contributed to or could contribute to the success of theCompany; (ii) to provide an incentive to achieve the long term objectives of theCompany; (iii) to attract persons of experience and ability to serve as directors,officers and employees of, and other providers of management or consultingservices for, the Company; and (iv) to encourage such directors, officers, employees and other serviceproviders to promote the affairs of the Company. 1 Interpretation In these Rules: 1.1 unless the context otherwise requires, the words and expressions set outbelow shall have the following meanings: "Cause" means any of the following: (a) gross neglect or dereliction of the Eligible Employee's duties (excludingany period during which the Eligible Employee is suffering from a Disability)or other grave misconduct by the Eligible Employee or, if curable, the failureto cure such situation within thirty (30) days after notice thereof authorisedby the Board of Directors is given to the Eligible Employee; (b) the Eligible Employee engaging in conduct which he knows or should haveknown would cause, and has in fact caused, demonstrable and serious injury tothe Company or any of its subsidiaries in whole or in part, monetary orotherwise, as evidenced by a written determination authorised by the Board ofDirectors. "Company" - Anglesey Mining plc (registered in England and Wales under number1849957); "Control" - the meaning given to that expression by section 840 of ICTA 1988; "Date of Adoption" - the date of the adoption of this Scheme by resolution ofthe Remuneration Committee; "Date of Grant" - the date upon which an Option is granted; "Eligible Employee" - means the directors and/or officers and/or employees ofthe Company or its subsidiaries and any other person or company engaged toprovide ongoing management or consulting services for the Company or for anyentity controlled by the Company, in each case as designated from time to timeby the Remuneration Committee as eligible for participation hereunder; "Exercise Condition" - the meaning set out in Rule 5; "Group Member" - the Company or any Subsidiary from time to time; "ICTA 1988" - the Income and Corporation Taxes Act 1988; "In Concert" - the meaning given to that term in The City Code on Takeoversand Mergers as amended from time to time; "Issue or Reorganisation" - any increase or variation of the share capital ofthe Company including, without limitation, any rights issue, capitalisation,consolidation, sub-division or reduction of capital by the Company which, inthe opinion of the Remuneration Committee, justifies a variation to an Optionin accordance with Rule 7; "Model Code" - the Model Code on directors' dealings in securities, publishedby the London Stock Exchange; "Option" - a right to acquire Shares pursuant to this Scheme; "Option Holder" - a person holding an Option or, where the context so admits,his/her personal representatives; "Option Price" - the acquisition price for a share determined by theRemuneration Committee in accordance with Rule 2.5; "Recognised Investment Exchange" - the meaning given to that expression insection 207 Financial Services Act 1986; "Remuneration Committee" - the remuneration committee means the committee ofindividuals appointed by the board of directors responsible for, among otherthings, the granting of options hereunder and the administration of the Schemeand, failing the appointment of such a committee, shall mean the board ofdirectors itself; "Scheme" - Anglesey Mining plc 2014 Unapproved Share Option Scheme establishedby these Rules in its present form or as from time to time amended inaccordance with the provisions hereof, "Shares" - ordinary shares of 1p each in the capital of the Company; "Subsidiary" - a body corporate which is a subsidiary of the Company withinthe meaning of section 1159 of the Companies Act 2006 and of which the Companyhas Control; 1.2 words denoting the singular shall include the plural and words denotingone gender shall include the others; 1.3 the headings herein and the index hereto are for ease of reference onlyand shall not affect construction; 1.4 any reference to any statute or any provision thereof or any guideline orregulation include that statute, provision, guideline or regulation asamended, modified, re-enacted or replaced from time to time whether before orafter the Date of Adoption of this Scheme; and 1.5 any reference to a Rule is a reference to a Rule of this Scheme. 2 Grant of Options 2.1 Subject as herein provided, the Remuneration Committee may grant Optionsto such Eligible Employees as it may select in its absolute discretion. 2.2 An Option may only be granted within the period of 10 years beginning withthe Date of Adoption. 2.3 No Option may be granted at a time when such grant would not be inaccordance with the Model Code. 2.4 There shall be no monetary consideration for the grant of an Option and,accordingly, an Option shall be granted by deed. 2.5 The Remuneration Committee shall, in its absolute discretion, determinethe Option Price before the grant of the relevant Option provided that suchamount shall not be less than the average closing price of Ordinary Sharestraded on the London Stock Exchange or any recognised replacement investmentexchange on the three trading days immediately preceding the Date of Grant orthe nominal value of the share which is the subject of the option. 2.6 Each Option shall be personal to the Option Holder to whom it is grantedand shall not be transferable, assignable, chargeable or otherwise availablefor disposition except upon death of the Option Holder. An Option shall lapseforthwith if it is, or is purported to be, transferred, assigned, charged,disposed of or otherwise dealt with or if the Option Holder is adjudgedbankrupt. 3 Restrictions on the Grant of Options 3.1 No Option shall be granted which would, at the time it is granted, causethe aggregate number of Shares which shall have been or may be issued inpursuance of options granted under the Scheme or any other scheme in the last10 years to exceed such number as represents 10% of the issued ordinary sharecapital of the Company at that time. 3.2 In the event that an Option is granted in breach of Rule 3.1 above, suchoption shall be deemed, for the purposes of this Scheme, to be an Option toacquire such number of Shares which would not cause Rule 3.1 to be breachedand save to that extent shall be of no force or effect. 4 Exercise of Options 4. 1 The exercise of an Option in accordance with Rule 4 shall be effected insuch form and manner as the Remuneration Committee may from time to timeprescribe. 4.2 Any Option which has not lapsed may be exercised in whole or in part atany time following the earliest of the following events: 4.2.1 the first anniversary of the date of grant or date of commencement ofemployment, whichever comes first 4.2.2 the death of the Option Holder 4.2.3 the Option Holder ceasing to be a director or employee of the Company orany of its subsidiaries by reason of injury, disability, redundancy orretirement 4.3 An Option shall lapse on the earliest of the following events: 4.3.1 the tenth anniversary of the date of grant; 4.3.2 the first anniversary of the Option Holders death; 4.3.3 immediately for reasons of cause or bankruptcy whether or not it wasexercisable prior to such cessation of service 4.4 A female Option Holder who ceases to be a full-time director or afull-time employee by reason of pregnancy or confinement and who exercises herright to return to work under the Employment Rights Act 1996 before exercisingan Option shall be treated for those purposes as not having ceased to be sucha full-time director or a full-time employee. 4.5 Notwithstanding any other provision of this Scheme, an Option may not beexercised after the expiration of the period of 10 years (or such shorterperiod as the Remuneration Committee may have determined before the grant ofOptions) beginning with the Date of Grant. 4.6 Within five (5) days after an Option has been exercised by any personentitled thereto, subject to receipt by the Company of the Option Price inrespect of the relevant Shares, the Company shall allot to the relevant OptionHolder or, as appropriate, procure the transfer to him/her of the number ofShares in respect of which the Option has been properly exercised. 4.7 All Shares allotted under this Scheme shall rank pari passu in allrespects with the shares of the same class for the time being in issue save asregards any rights attaching to such shares by reference to a record dateprior to the date of the allotment. 4.8 No Option may be exercised at a time when such exercise would not be inaccordance with the Model Code. 5 Exercise Condition The Remuneration Committee may impose one or more objective conditions (each,an "Exercise Condition") on any Option which they grant preventing itsexercise (other than in accordance with Rule 7) unless such conditions havebeen complied with. If, subsequently, events occur which cause theRemuneration Committee to consider that an Exercise Condition no longerachieves its original purpose they may vary the Exercise Condition providedthat they act fairly and reasonably in making such variation. 6 Adjustment of Options 6.1 Upon the occurrence of an Issue or Reorganisation the RemunerationCommittee may make any adjustments to any one or more of the following as itconsiders appropriate so as to put the Option Holder in substantially the sameposition as if the Issue or Reorganisation had not taken place: 6.1.1 the number of Shares in respect of which any Option may be exercised; 6.1.2 the price at which Shares may be acquired by the exercise of any suchOption; 6.1.3 where an Option has been exercised but no Shares have been allotted ortransferred pursuant to such exercise, the number of Shares which may be soallotted or transferred and the price at which they may be acquired, providedthat no adjustment shall be made where it would result in a Share being issuedat less than its nominal value. 6.2 An adjustment pursuant to Rule 6.1 above shall only be made upon theoccurrence of an Issue or Reorganisation. 6.3 Notice of any adjustments referred to in Rule 6.1 above shall be given tothe Option Holders by the Remuneration Committee. 7 Takeover of Company 7.1 Subject to Rule 7.3, if at any time any person obtains Control of theCompany as a result of making: 7.1.1 a general offer to acquire the whole of the issued ordinary sharecapital of the Company which was made on a condition such that if it wassatisfied that the person making the offer would have Control of the Company;or 7.1.2 a general offer to acquire all the Shares, all outstanding Options may be exercised at any time prior to, but conditionalupon, the change of control occurring or during the period of six months afterthe time when the offeror has obtained Control of the Company and anyconditions subject to which the offer is made have been satisfied. If not soexercised, the Option shall lapse upon the expiry of such six month period. 7.2 For the purpose of Rule 7.1: 7.2.1 a person shall be deemed to have acquired Control of the Company if heand others acting In Concert with him have together obtained Control of it; 7.2.2 a person shall be deemed to have obtained Control of the Company as aresult of making such a general offer as is referred to in Rule 7.1 if heobtains Control of the Company as a result of entering into an agreement toacquire ordinary shares in the capital of the Company with one or moreshareholders of the Company and in such case he shall be deemed to haveobtained Control of the Company on entering into such agreement and anyconditions subject to which the offer was made being satisfied. 7.3 If during the six month period referred to in Rule 7.1 the offeror becomesentitled to exercise rights of compulsory acquisition of Shares under sections979 to 982 and 983 to 985 of the Companies Act 2006 and gives notice of itsintention to exercise such rights in respect of all Shares issued on theexercise of Options prior to a specified date (not being earlier than onemonth after the date of such notice), all outstanding Options may be exercisedat any time until such date. If not so exercised, the Options shall lapseimmediately. 7.4 If a compromise or arrangement under section 899 Companies Act 2006 isproposed for the purpose of, or in connection with, a scheme for thereconstruction of the Company or its amalgamation with any other company orcompanies, all outstanding Options may be exercised, conditionally on thecompromise or arrangement becoming effective, immediately prior to the Courtsanctioning the compromise or arrangement and up to the date the compromise orarrangement becomes effective. If not so exercised, the Option shall lapseimmediately. 7.5 If notice is given of a resolution for the voluntary winding up of theCompany, all outstanding Options may be exercised, conditionally on thepassing of the resolution, at any time during the period commencing on thedate the notice is given and ending on the commencement of the winding up. Ifnot so exercised, the Options shall lapse immediately. 7.6 The Company shall, as soon as reasonably practicable, notify each OptionHolder of the occurrence of any of the events referred to in Rule 7 andexplain how this affects his position under the Scheme. 8 Alterations 8.1 Subject to Rule 8.2, the Remuneration Committee may at any time alter oradd to all or any of the provisions of this Scheme, or the terms of an Optiongranted under it, in any respect. 8.2 No alteration or addition shall be made under Rule 8.1 which maymaterially adversely affect an Option Holder as regards an Option grantedprior to the alteration or addition being made without the consent of OptionHolders who, if they exercised their Options in full would thereby becomeentitled, in aggregate, to not less than three quarters of all the Shareswhich would fall to be allotted upon exercise in full of all outstandingOptions. 8.3 As soon as reasonably practicable after making any alteration or additionunder Rule 8.1, the Company shall give notice in writing thereof to any OptionHolder affected thereby. 9 Listing 9.1 While the Shares are listed or traded on OFEX, the Alternative InvestmentMarket, the Official list of the London Stock Exchange, NASDAQ, EASDAQ or anyother Recognised Investment Exchange, the Company shall, at its expense, makeapplication for and use its reasonable endeavours to obtain listing for, oradmission to trading on, such relevant exchange for Shares allotted pursuantto the exercise of any Option. 10 Powers of Remuneration Committee and administration of Scheme 10.1 The Remuneration Committee shall be responsible for, and shall have theconduct of, the administration of the Scheme, including but not limited todetermining the Eligible Employees to whom, and subject to the rules of thescheme the terms on which, Options are granted. 10.2 Subject to Rules 10.3 and 10.4, the decision of the RemunerationCommittee shall be final and binding in all matters relating to the Scheme,including but not limited to the resolution of any ambiguity in the Rules ofthe Scheme, and it may at any time discontinue selecting Eligible Employeesfor the grant of further Options or amend any of the Rules of the Scheme inany way it thinks fit. 10.3 Subject to Rules 10.4 and 10.5, no amendment may be made for the benefitof Option Holders to the Rules of the Scheme without the prior approval of theCompany in general meeting except for: 10.3.1 minor amendments to benefit the administration of the scheme, to takeaccount of a change in legislation or to obtain or maintain favourable tax,exchange control or regulatory treatment for participants in the scheme or forthe Company or for members of its group. 10.3.2 an amendment which is necessary or desirable in order to comply with ortake account of the requirements of the London Stock Exchange, the guidelinespublished by the Association of British Insurers, the National Association ofPension Funds or any other organisation representing institutional investorsor any other legal or regulatory requirement or any proposed change thereto. 10.4 The Remuneration Committee may, in its absolute discretion, send toOption Holders copies of any notice or other document sent to the Company'sshareholders. 11 Indemnity 11.1 The Option Holder will indemnify the Company from and against allliability, actions, claims and reasonable costs in respect of any PAYE andrelated costs, fines or penalties, or employees' and employers' NationalInsurance contributions in respect of the exercise of an Option by the OptionHolder in the event that the Company is held liable for such payment whichsums shall become payable to the Company, within one month of the exercise ofan Option in accordance with Rule 4. 12 Miscellaneous 12.1 The rights and obligations of any individual under the terms of hisoffice or employment with any Group Member shall not be affected by hisparticipation in this Scheme or any right which he may have to participatetherein, and an individual who participates therein shall waive any and allclaims to compensation or damages in consequence of the termination of hisoffice or employment for any reason whatsoever insofar as those claims ariseor may arise from his ceasing to have rights under or be entitled to exerciseany Option as a result of such termination. 12.2 Any notice or other communication under or in connection with this Schememay be given by personal delivery or by sending the same by post, in the caseof the Company to its registered office, and in the case of an individual tohis last known address, or, where he is a director or employee of a GroupMember, either to his last known address or to the address of the place ofbusiness at which he performs the whole or substantially the whole of theduties of his office or employment, and where a notice or other communicationis given by first-class post, it shall be deemed to have been received 48hours after it was put into the post properly addressed and stamped. 12.3 The Company shall at all times keep available for issue such authorisedand unissued Shares as may be required to meet in full the subsistingsubscription rights of Option Holders. 12.4 In the event that Shares are transferred to an Option Holder in pursuanceof any Option granted under this Scheme, the Option Holder shall, if sorequired by the person making the transfer, join that person in making a claimfor relief under section 165 of the Taxation of Chargeable Gains Act 1992 inrespect of the disposal made by him in effecting such transfer. 12.5 The formation, existence, construction, performance, validity and allaspects whatsoever of this Scheme, any term of this Scheme and any Optiongranted under it shall be governed by English law. The English Courts shallhave jurisdiction to settle any disputes which may arise out of or inconnection with this Scheme. 13 Termination The Company in general meeting or the Remuneration Committee may at any timeresolve to terminate this Scheme in which event no further Options shall begranted but the provisions of this Scheme shall in relation to the Optionsthen subsisting continue in full force and effect. Anglesey Mining plc Parys Mountain, Amlwch, Anglesey, LL68 9REPhone 01407 831275mail@angleseymining.co.uk London office Painters' Hall9 Little Trinity Lane, London, EC4V 2ADPhone 020 7653 9881 Labrador Iron - Toronto 220 Bay Street, Suite 700Toronto, Ontario, M5J 2W4, CanadaPhone +1 647 728 4107 Registrars Capita Asset ServicesNorthern House, Woodsome ParkFenay Bridge, Huddersfield, HD8 0LAPhone 0871 664 0300 Calls cost 10p per minute plus network extrasFrom overseas +44 208 639 3399Fax 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 Glossary AGM - the annual general meeting to be held on 30 September 2014. C$ - Canadian dollars. At 31 March 2014 £1 sterling was equivalent to C$1.84(2013 - C$1.55). DRO - direct railing ore - iron ore which can be mined and sold without anyfurther processing. DSO - direct shipping ore - iron ore which can be mined and sold after asimple washing and screening operation. Hematite or haematite - iron oxide Fe2O3, one of the most abundant forms ofiron ore. Chemically pure hematite is about 71% iron. JORC - Australasian Joint Ore Reserves Committee - a set of minimum standardsfor public reporting and displaying information related to mineral properties. LIM - Labrador Iron Mines Holdings Limited and its group of companies. mtpa - million tonnes per annum NI 43-101 - a standard equivalent to JORC used in Canada. tonne - metric tonne of 2,204.6 pounds avoirdupois, used for measuring currentmineral production and resources.