Anglesey Mining Regulatory News (AYM)

22 Jul 2010 13:32

21 July 2010

Anglesey Mining plc LSE:AYM

Announcement of annual results

A UK mining company listed on the London Stock Exchange with -

A 41% interest in Labrador Iron Mines Holdings Limited, a TSX quoted Canadiancompany developing 150 million tons of direct shipping hematite iron ore nearSchefferville in Canada, with production due to commence later in 2010100% of the Parys Mountain copper-lead-zinc project in North Wales with a totalhistorical resource of 7.76 million tonnes at 9.3% combined copper, lead andzinc, held awaiting development

2010 - a special year - £8.2 million profit

"During the past year Labrador Iron has continued to develop its Labrador andQuebec properties, increased its resources and completed a C$35 millionfund-raising. We are now poised to complete the construction and bring thestage 1 deposits into production. Iron ore prices at very satisfactory levelslook set to continue for some time."

John Kearney - Chairman

"While our emphasis during the year has been very much on the Labrador developments, Parys Mountain remains a significant asset, and one which we would like to develop in co-operation with others."

Bill Hooley - Chief ExecutiveChairman's Statement

This past year has been extremely satisfactory for Anglesey Mining plc. The main project and major driver of shareholder value is the group's interest in Labrador Iron Mines (LIM) where excellent progress has been made.

LIM successfully raised a further C$35 million in equity for its operations andAnglesey raised £2.7 million through the sale of a small portion of its sharesin LIM. As a consequence of these fund raisings the group's interest in LIM isnow 41%, compared to its 50% interest at 31 March 2009 and the quoted marketvalue of the group's holding is £45 million at 6 July 2010 compared to £11million at 31 March 2009.

The profit this year of £8.2 million results from the deemed disposal arising on LIM's March 2010 placing in Toronto and the profit on sale of LIM shares.

Labrador Iron

Steady progress has been made in advancing the Schefferville Projects towardproduction with ongoing active programmes in respect of drilling, metallurgicaltesting, environmental, permitting, marketing, engineering and purchasing.

Since the last annual report we have -

acquired additional significant deposits in both Labrador and Quebec, including some with potential for the extraction of manganese,

carried out a property exchange which rationalised our mineral holdings and improved the potential of our iron ore deposits,

completed the environmental approval process for the stage 1 operations and obtained project approval from the Government of Newfoundland and Labrador,

established new estimates of resources (NI 43-101 compliant) on the James, Redmond and Houston deposits showing a significant increase in tonnage over the historical resources,

carried out metallurgical testwork confirming the high iron content, low gangue content and high quality of the ore to be produced in stage I of operations,

laid the 2.5 mile rail spur from the Sept-Žles - Schefferville main line to the Silver Yards area where it is planned to install the beneficiation plant,

signed an agreement with the Sept-Žles Port Authority for the use of the port to ship LIM's iron ore products.

In 2008, LIM and the Innu Nation of Labrador signed an Impact BenefitAgreement. The Labrador Innu, as represented by the Innu Nation, are the onlyaboriginal party with a land claim that has been accepted by the Government ofNewfoundland and Labrador. LIM has recently been in negotiations towards anImpact Benefit Agreement with the Quebec Innu who claim Aboriginal rights inthe general Schefferville area but has not yet concluded an agreement. Numerous permits and approvals have been received including the miningleases for the first stage James and Redmond deposits, the surface use leasesover the Silver Yards beneficiation area and the camp. LIM is awaiting theCertificate of Approval for the operation of the rail spur from the Governmentof Newfoundland and Labrador. The receipt of these permits has taken longerthan anticipated, which has resulted in some delay in LIM's plannedconstruction and production timeline.Upon receipt of all remaining necessary permits, licenses and approvals, andthe completion of the aboriginal agreements, LIM is planning to commenceconstruction of the mine and beneficiation facilities during the summer of 2010and hopes to achieve start up and initial production before the seasonal shutdown of operations at the end of November 2010. LIM plans to commence fullscale commercial production in April 2011 and expects output of 2 milliontonnes of iron ore during that calendar year.

Marketing

LIM has not yet entered into agreements for the sale of any iron ore but itanticipates that it will sell most of its early production into the spotmarket. Iron ore prices grew strongly during the year and whilst there has beensome softening recently it is expected that these prices will continue to besupported by robust Chinese demand.

Parys Mountain

During most of the year activities at Parys Mountain have been overshadowed bythe drive towards production in Labrador. We feel that the best route forwardfor developing Parys Mountain would be with a partner. Efforts in thisdirection will be increased in conjunction with limited technical programmesdesigned to improve geological understanding on the Parys deposits and thepotential of the property, such as the computer-based geological remodellingwhich was carried out over the past few months.

Financial

The fundraising by LIM resulted in the dilution of our stake in that company,and the operation of accounting standards means that this dilution is treatedfor accounting purposes as a 'deemed disposal' or partial sale; in additionsome of our shares were sold to raise funds for Anglesey. We have recordedprofits on the deemed and actual disposals of LIM shares of £8.8 million in theyear. After taking into account operating expenses and other items there was anet profit for the year of £8.2 million. The Canadian dollar has strengthenedagainst the pound sterling during the year so we have for the second yearrunning recorded an exchange rate gain on our investment in LIM and thistogether with the profits on sale mean that total shareholders' equity hasincreased by more than £10 million during the year.

Outlook

The progress of the past year, together with high iron ore prices and a greatdeal of market interest in iron ore generally, lead to the company's shareprice peaking at 44 pence in April 2010. This is a dramatic improvement on theprice of 4.75 pence when the 2009 annual report was issued.The stock market has been more than usually volatile and unpredictable over thepast few months following concerns that growth in the Chinese economy might beweaker than previously anticipated. We remain confident that iron ore pricelevels in 2011 will provide strong cashflows from the Labrador operations.The short term objective is very clear: to put Labrador Iron Mines intoproduction. In the medium term we would like to move Parys Mountain forward,preferably with an industry partner, and bring new projects into the group

fordevelopment.John F. KearneyChairman21 July 2010

The Schefferville Projects - Western Labrador and North-Eastern Quebec

The group has a 41% interest in Toronto-listed Labrador Iron Mines Holdings Limited (LIM) which is now poised to begin mining direct shipping iron ore in western Labrador near Schefferville, Quebec.

The Schefferville Projects are located in the west-central part of the LabradorTrough iron range, one of the major iron ore producing regions in the world,and are divided into two separate portions, one within the Province ofNewfoundland and Labrador, and the other within the Province of Quebec, bothlocated near the town of Schefferville, Quebec.

The iron ore deposits forming the Schefferville Projects are predominantly hematite ore and were part of the original Iron Ore Company of Canada direct-shipping Schefferville operations conducted from 1954 to 1982.

A compliant resource of 25.7 million tonnes has now been estimated in theJames, Redmond and Houston deposits. The remaining seventeen deposits,excluding James, Redmond and Houston, have a historical resource estimated atapproximately 125 million tons of direct shipping iron ore, based on workcarried out by IOC prior to the closure of its Schefferville operations in1984. The historical estimate was prepared according to the standards used byIOC and, while still considered relevant, is not compliant with NI 43-101.The plans for the Schefferville Projects envision the mining of the deposits infour stages. Stage 1 comprises the deposits closest to existing infrastructure,the mining of which will be undertaken in two phases. The first phase willinvolve mining of the James and Redmond deposits and the second phase theHouston, Knob, Gill and Ruth deposits, all in Labrador, together with theDenault, Star Creek and Malcolm deposits in Quebec.The James deposit is accessible by existing gravel roads and is locatedapproximately 5 km southwest of the town of Schefferville. The Redmond depositis located approximately 12 km south of the James deposit and can be reached byexisting gravel roads. The Knob Lake deposit, located approximately 3 kmsouthwest of the town of Schefferville, and the Houston deposit, locatedapproximately 20 km southeast of Schefferville, can also be reached by existinggravel roads.During the mining of the stage 1 deposits, planning will be undertaken for thefuture operation of the more distant deposits in stages 2, 3 and 4. Ascurrently envisioned stage 2 will comprise the Howse, Barney and other adjacentdeposits which are relatively close to existing infrastructure. The deposits ofstages 3 and 4 are more than 60 km from Schefferville and will requiresubstantial infrastructure investment.The in-situ ore is estimated to contain around 56% to 58% iron and it isexpected that the beneficiation process will enhance the product grade toapproximately 65% iron and remove unwanted material; production will be coarselump ore (about 25%) and a finer sinter feed. These products will betransported by the existing railroad systems to the port of Sept-Žles on theSt. Lawrence River for onward shipping, most likely to steel mills in Europe orAsia. The whole operation will utilize well proven, relatively basic technologyand will closely reflect that previously carried out by IOC in the same generallocation for almost thirty years from 1954 to 1982.

Mining operations

Mining and processing operations will be conducted for eight months per yearfrom April to November using conventional open pit mining methods employingdrilling and blasting operations at an anticipated initial rate of 6,000 tonnesper day. The processing schedule is anticipated to be over a period ofapproximately 212 days per year.Following plant assembly, stockpiled ore will be fed to the plant to allowcommissioning to take place. As soon as a steady state condition has beenreached saleable product of both lump ore and sinter fines will be produced.These will be loaded into leased rail cars that will be transported to a portfacility in Sept-Žles.

Transportation infrastructure

The 355 mile rail line between Schefferville and Sept-Iles has been incontinuous operation for over fifty years. Tshiuetin Rail Transportation Inc("TSH"), a consortium of three local Aboriginal First Nations, owns andoperates the approximately 130 mile main line track between Schefferville andRoss Bay Junction where it connects to IOC's railway which runs the remaining225 miles to Sept-Iles. Some refurbishment of the rails, ties and culverts ofthe TSH main line track will need to be carried out to enable it tocontinuously carry large volumes of iron ore traffic. LIM will lease rail carsand engines to transport its ore to Schefferville. The operation of the line issubject to common carrier arrangements.Ore will be shipped from the port of Sept-Žles on the North Shore of the Gulfof St. Lawrence on the Atlantic Ocean. Sept-Žles is a large natural harbour,more than 80 metres in depth, which is open to navigation year round, and isthe most important port for the shipment of iron ore in North America, servingthe Quebec and Labrador mining industry. Each year approximately 23 milliontonnes of merchandise is handled, comprised mainly of iron ore. It is aninternational marine hub for major maritime routes between North America,Europe and Asia, and nearly 80% of its merchandise traffic, mostly iron ore, isdestined for international markets.

First Nations

In July 2008, LIM and the Innu Nation of Labrador signed an impact benefitagreement. The Labrador Innu, as represented by the Innu Nation, are the onlyaboriginal party with a land claim that has been accepted by the Government ofNewfoundland and Labrador. LIM has recently been in negotiations towards animpact benefit agreement with the Quebec Innu based in Quebec, one of fourFirst Nations who claim aboriginal rights in the general Schefferville area.LIM respects the legitimate aspirations of all First Nations but believes thatnegotiations on impact benefit agreements for mining projects should not beside-tracked by larger land claim considerations between the Quebec Innu andthe Quebec and Labrador governments, where LIM has no say or ability to providesolutions. LIM has indicated that it is ready to continue negotiations and iscurrently in discussions with representatives of the Quebec Innu and with therelevant governments.MarketingMarketing discussions have continued with potential end users and samples havebeen dispatched to a number of steel mills and independent laboratories. Thesediscussions have indicated an encouraging level of interest in the LIM productsbased on the metallurgical test results and analysis of the samples supplied.The indicated high iron grades and the low level of impurities are importantand should ensure that both lump ore and sinter fines will be readily acceptedby a wide range of customers.Chinese and other Far Eastern consumers are showing a growing interest inseeking iron ore from Eastern Canada. The rapid development in Chinese demandfor iron ore, coupled with a desire by China to diversify from its traditionalsources of supply, has begun to make Eastern Canada a viable source for thismarket. Discussions continue with a number of Chinese customers and importersas well as a number of European producers.

LIM has not yet concluded any agreements for the sale of any iron ore. Initially LIM anticipates that it will sell all its production into the spot market and will utilize the services of a trading company for this process.

Quebec iron ore properties

During the year LIM established Schefferville Mines Inc ("SMI") to acquireinterests in mining rights in Quebec covering approximately 9,014 hectarestogether with an exclusive operating interest in a mining lease covering about2,816 hectares. These rights and interests are held subject to a royalty of $2per tonne of iron ore produced from the properties.

A preliminary review of these properties has been completed and an initial development plan generated and incorporated into the exploration plan. It is expected that this will permit at least one deposit to be brought into production in 2012, subject to receipt of satisfactory engineering, environmental and other permits.

The introduction of these Quebec properties, particularly those close to thetown of Schefferville, will have a positive effect on the overall projectdevelopment plan as it will extend the life of stage 1 and will as a resultdefer the time at which capital expenditure to reach the more distant phases 3and 4 deposits needs to be made.

Manganese properties

The manganese properties in both Quebec and Labrador that were acquired in 2009will also be the subject of exploration during 2010. It may be possible todevelop compliant resource estimates for one or two of these deposits in 2010and dependent upon engineering, environmental approvals and permit releasessome manganese concentrate may be able to be produced by 2012.

Directors' Report

The directors have pleasure in submitting their report and the audited accounts for the year ended 31 March 2010.

Principal activities and business review

The group's principal activities are the development of the Labrador iron project in eastern Canada in which the group has a 41% interest, and the Parys Mountain project in North Wales which is wholly owned.

Development of the Labrador properties is proceeding at an increased level. Arail spur has been completed and equipment for mining and processing is readyto be transported to site.In March 2010 Labrador Iron completed an underwritten placing in Toronto forC$35 million and as part of that placing Anglesey sold, for £2.7 million incash, 810,900 of the 18,600,000 LIM shares which it had previously held. Thesetransactions mean that both companies are now well-funded to carry out theirplanned activities. The group recorded a profit of £8.8 million on thesetransactions.

The group maintains its search for other mineral exploration and development opportunities with renewed vigour following the fund-raisings mentioned above.

The aim of the group is to continue to develop and operate the Labrador projects, to create value in the Parys Mountain property, including by co-operative arrangements, and to actively engage in other mineral ventures using the group's own resources together with such external investment and finance as may be required.

Labrador Iron

The group has a 41% interest in Toronto-listed LIM which is developing directshipping iron ore operations in western Labrador and north-eastern Quebec nearSchefferville in Canada.ProgressSteady progress has been made in advancing the Schefferville Projects towardproduction with ongoing active programmes, including drilling, metallurgicaltesting, environmental, permitting, marketing, engineering and purchasing.Upon receipt of all remaining necessary permits, licenses, approvals andre-established access to the site, LIM is planning to commence construction ofthe mine and beneficiation facilities during the summer of 2010 and hopes toachieve start up and initial production before the seasonal shut down ofoperations at the end of November 2010. LIM plans to commence full scaleproduction in April 2011 and expects production of 2 million tonnes of iron

oreduring that calendar year.Drilling and testworkA programme of reverse circulation drilling commenced at the beginning of June2009 and was completed at the end of October 2009. The deposits tested comprisethe four deposits planned to be mined in the stage 1 plan, being James,Redmond, Knob Lake and Houston, together with some limited drilling on the moredistant stage 2 Howse deposit.The results of this testwork formed the basis for NI 43-101 compliant resourceestimates on the James and Redmond deposits reported in November 2009 and forthe Houston deposit reported in April 2010, totalling 25.7 million tonnes. Thenew resource estimate for Houston showed a significant increase in tonnage overthe historical resources (not NI 43-101 compliant), previously estimated by theIron Ore Company of Canada prior to 1982.

Metallurgical testing

Metallurgical testwork continued during 2009 aimed at improving expectedrecovery levels from all size fractions of mined material while maintaininghigh iron and low impurity levels in the final product. The results and reportfrom that testwork on the James South samples indicate products will have ahigh iron content of approximately 67% with favourably low content ofdeleterious non-ferrous metals. The high iron content and low gangue contentindicate the high quality of these ores, and that they will be well accepted inthe European market.

Environmental and permitting work

In February 2010 the Schefferville Area Iron Ore Mine (the first phase of theSchefferville Projects) was released from environmental assessment and receivedproject approval from the Government of Newfoundland and Labrador, subject toterms and conditions which LIM believes are achievable within the plannedoperating parameters. Subsequent phases and stages of the ScheffervilleProjects will be subject to further environmental assessments by regulatoryauthorities in Labrador.All the applications and plans required for the operating permits, licenses andregulatory approvals have been submitted. Many of these have now been approved,including the construction permit for the Silver Yards Spur Line Railroad.Construction of this spur line has been completed.Mining leases for the James and Redmond properties have been received from theProvince of Newfoundland and Labrador. In addition surface use leases for allthose additional areas required for the construction and operation of the Jamesand Redmond stage of the Schefferville Projects, including the Silver Yardsbeneficiation area and the rail spur line, have also been received.An Environmental Protection Plan ("EPP") was approved by the Minister ofEnvironment and Conservation. The EPP addressed process effluent treatment andmonitoring procedures, settling pond design and operation for storm water andpit dewatering discharges, as well as caribou monitoring and mitigation in thevicinity of the Schefferville Projects.

Transportation infrastructure

LIM has continued to hold discussions with the relevant rail transportation companies and port operators regarding providing the necessary levels of service from 2010 onwards. There are a number of companies involved in these discussions, some with inter-connecting interests.

In February 2010, LIM signed an agreement with the Sept-Žles Port Authority forthe use of the port to ship LIM's iron ore products. LIM agreed to a base feeschedule with the Port Authority regarding wharfage fees for iron ore loadingfor LIM's shipping operations beginning in mid 2010. Agreements with therelevant rail companies or port operators for the transportation and handlingof the planned production of iron ore have not yet been concluded.

Planned site programme - summer 2010

A new programme of reverse circulation drilling and trenching is planned for2010. This programme will target both extensions to existing resources inLabrador previously drilled by LIM, other deposits in Labrador not previouslydrilled by LIM but included in the IOC historical resources, as well as on anumber of the Quebec deposits and properties recently acquired by LIM.A continuing programme of environmental baseline work will take place on thosedeposits designated for the next phases and stages of the project. This willinclude work on archaeology, terrestrial biology, wildlife (including fish),hydrology and noise and air quality. Offsite metallurgical testwork to assistin recovery of fine iron units as well as high silica material will continue.

Project construction

The first major construction activity has been the laying of the 2.5 mile railspur from the Sept-Žles to Schefferville main line to the Silver Yards areawhere it is planned to install the beneficiation plant. The majority of therail hardware was assembled offsite into track panels to permit speedyinstallation.A contract has been signed with a Labrador City based contractor for the miningand beneficiation activities. Once site access has been re-established a newaccommodation camp which has been built offsite will be brought to site andassembled. At about the same time the mining contractor will be mobilised tosite to commence mining activities including stockpiling of iron ore ahead ofthe crusher pad. A contract has also been signed for camp catering.All of the items of the beneficiation plant have been ordered and manufacturinghas been completed. These items are now at railheads at Sept-Žles and atLabrador City awaiting delivery to site. Some pre-assembly is taking place inLabrador City. Final assembly on site, subject to receipt of permits andlicences, should take place in the middle of the summer.

Parys Mountain

The Parys Mountain property is the largest known base metal deposit in theUnited Kingdom. A feasibility study carried out in 1991 identified a resourceof 6.5 million tonnes of zinc, copper and lead with small amounts of silver andgold. This historic resource together with the White Rock JORC compliantresource identified more recently amounts in aggregate to 7.8 million tonnes at9.3% combined metals. The 1991 feasibility study demonstrated the technical andeconomic viability of bringing the property into production at a rate of350,000 tonnes per annum, producing zinc, copper and lead concentrates. Howeverthere was limited development over the period from 1991 to 2003 chiefly due topoor metal prices. Efforts to develop the property since then have beenfrustrated by external factors unrelated to the property itself.

Activities during the year have been limited. Work on the geological modelling of the Parys deposits was brought up to date and a new computer simulation produced. A new geological report has been received and reviewed. Further drilling has been recommended however no decision has yet been taken as to whether to go forward; it is not planned to undertake any major programmes.

The directors considered the carrying value of the Parys Mountain property andcarried out an impairment review the detail of which is set out in note 10. Thereview indicated that no impairment provision was required or justified.Operation of the mine and the receipt of cashflows from it are dependent onfinance being available to fund the development of the property.

Dolaucothi

In addition to its other mineral assets, the group holds the Dolaucothi goldproperty in South Wales. It is not the company's current intention to incursignificant expenditures on this property, however this situation will be keptunder review.Other activities

Management continues to search for new properties suitable for development within a relatively short time frame and within the financing capability likely to be available to the group.

Performance

So far as the directors are aware, there are no standardised indicators whichcan usefully be employed to gauge the performance of the group at this stage ofits development other than the performance of the parent company's listedshares. The directors expect to be judged by their success in creating valuefor shareholders.The chief external factors affecting the ability of the group to move forwardare the availability of finance, levels of metal prices and exchange rates;these and other factors are dealt with in the risks and uncertainties sectionbelow.DividendThe group has no revenues and the directors are unable to recommend a dividend(2009 - nil). Since the date of the accounts the activities of the group havecontinued in accordance with the directors' expectations.

Financial position

The group has no revenues from the operation of its properties. The profit forthe year after tax was £8,204,337 (2009 - restated loss £573,203). Of thisprofit £8,788,063 (2009 - nil) was attributable to the effects of the LIMfinancing and to Anglesey's sale of part of its LIM shareholding, both of whichtook place in March 2010 in Canada.During the year there were no additions to fixed assets (2009 - nil) and £175,994 was capitalised in respect of the development of the Parys Mountainproperty (2009 - £192,189). The Labrador properties are held in an associatedcompany. The group's cash position at 31 March 2009 was £2,766,074 (2009 - £150,431),this significant increase from last year being due to the receipt of proceedsfrom the sale of shares in LIM referred to above.

At 31 March 2010 the company had 153,158,051 ordinary shares in issue, 600,000 more than in 2009 as a result of the exercise of share options.

The directors believe that the group has adequate funding for its current andproposed operations. Further finance may be required for any new mineralproperties which may be evaluated, engaged in or acquired; however such outlaysare at the discretion of the directors and would not be made unless finance wasavailable.

Risks and uncertainties

In conducting its business the group faces a number of risks and uncertainties some of which have been described above in regard to particular projects. However, there are also risks and uncertainties of a nature common to all mineral projects and these are summarised below.

General mining risks

Actual results relating to, amongst other things, mineral reserves, mineralresources, results of exploration, capital costs, mining production costs andreclamation and post closure costs, could differ materially from thosecurrently anticipated by reason of factors such as changes in general economicconditions and conditions in the financial markets, changes in demand andprices for minerals that the group expects to produce, legislative,environmental and other judicial, regulatory, political and competitivedevelopments in areas in which the group operates, technological andoperational difficulties encountered in connection with the group's activities,labour relations matters, costs and changing foreign exchange rates and othermatters.The mining industry is competitive in all of its phases. There is aggressivecompetition within the mining industry for the discovery and acquisition ofproperties considered to have commercial potential. The group faces strongcompetition from other mining companies in connection with the acquisition andretention of properties, mineral claims, leases and other mineral interests aswell as for the recruitment and retention of qualified employees and otherpersonnel.

Development and liquidity risk

The injection of £2.7 million into the UK operations from the sale of shares inLIM will provide adequate funding for its current and proposed operations. Aswell as this source of funds, the company has in the past and may in the futurerely upon share issues and/or on loans from its major shareholder Juno Limited.Labrador Iron Mines Holdings Limited is believed to be fully funded for theforeseeable future.

Exploration and development

Exploration for minerals and development of mining operations involve manyrisks, many of which are outside the group's control. The group currentlyoperates in politically stable environments and hence is unlikely to be subjectto expropriation of its properties but exploration by its nature is lookinginto the unknown or little known and unforeseen or unwanted results are alwayspossible.Metal pricesThe prices of metals fluctuate widely and are affected by many factors outsidethe group's control. The relative prices of metals and future expectations forsuch prices have a significant impact on the market sentiment for investment inmining and mineral exploration companies. Metal price fluctuations may beeither exacerbated or mitigated by international currency fluctuations whichaffect the actual amount which might be received by the group in sterling.

Foreign exchange

The activities of LIM are carried out in Canada; the group's interest in LIM iscarried in the group accounts on an equity basis and is affected by an exchangerate risk. Operations at Parys Mountain are in the UK and exchange rate risksare minor. Most of the cash balance at the year end was held in Canadiandollars - see notes 17 and 24.

Permitting, environment and social

LIM does not currently have all of the operating permits required for theLabrador Iron project. The directors believe that all required permits will beobtainable although any delay in the issue of permits is likely to result in adelay to the expected time of first production.LIM conducts its operations in Labrador and Quebec, in areas which are subjectto conflicting First Nations land claims. There are a number of First Nationspeoples living in the Quebec-Labrador peninsula with overlapping claims totreaty or asserted aboriginal land rights. Aboriginal claims to lands, and theconflicting claims to traditional rights between aboriginal groups, may have animpact on LIM's ability to develop the Schefferville Projects.The group holds a planning permission for the development of the Parys Mountainproperty but further consents will be required to carry out proposed activitiesand these permits may be subject to various reclamation and operationalconditions.

Employees and personnel

The group is dependent on the services of a small number of key executives including the chairman, chief executive and finance director. Due to the small size of the group, the loss of these persons or the group's inability to attract and retain additional highly skilled and experienced employees may adversely affect its business or future operations.

Financial instruments

The group's use of financial instruments is not significant and is described in note 24.

DirectorsThe names of the directors with biographical details are shown on the insiderear cover. In accordance with the company's practice, John Kearney and IanCuthbertson retire by rotation and, being eligible, offer themselves forre-election. Since Danesh Varma has served for more than nine years as anon-executive director, current corporate governance practice requires that hebe re-elected annually, and, being eligible, he is also proposed forre-election.

The company maintains a directors' and officers' liability policy on normal commercial terms which includes third party indemnity provisions. Unless otherwise determined by ordinary resolution, the number of directors, other than alternate directors, shall not be subject to any maximum, but shall not be less than two. The powers of 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 Combined Code, the Companies Acts and relatedlegislation. The Articles themselves may be amended by special resolution ofthe shareholders. Under the Articles, any director appointed by the boardduring the year must retire at the Annual General Meeting following hisappointment. In addition, the Articles require that one-third of the remainingdirectors retire by rotation at each general meeting and seek re-appointment.The company wishes to adopt new Articles following the implementation of theCompanies Act 2006 and a resolution to that effect will be proposed at theforthcoming AGM. The provisions of the preceding paragraph are also included inthe new Articles.

Directors' interests in material contracts

Juno Limited (Juno), which is registered in Bermuda, holds 37.8% 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 charges andan advance to the group of £100,000 in September 2009 (2008 - £200,000) therewere no transactions between the group and Juno or its group during the year.An independent committee reviews and approves any transactions and potentialtransactions with Juno. Danesh Varma is a director and, through his familyinterests, a significant shareholder of Juno.John Kearney is chairman and chief executive of Labrador Iron Mines HoldingsLimited (LIM), Bill Hooley is a director and chief operations officer andDanesh Varma is chief financial officer. All three are shareholders of LIM, areentitled to remuneration from LIM and have been granted options over the sharesof LIM. There are no transactions between LIM, the group and the company whichare required to be disclosed.

There are no other contracts of significance in which any director has or had during the year a material interest.

Directors' shareholdings

The interests of the directors in the share capital of the company, all of which are beneficial, are set out below:

6 July 2010 31 March 2010 31 March 2009 Director Number of Number of Number of Number of Number of Number options ordinary options ordinary options of shares shares ordinary shares John Kearney 5,400,000 - 5,400,000 - 5,400,000 -Bill Hooley 2,900,000 100,000 2,900,000 100,000 2,900,000 100,000Ian Cuthbertson 2,100,000 1,027,300 2,100,000 1,027,300 2,400,000 727,300David Lean 700,000 - 700,000 - 700,000 -Howard Miller 900,000 - 900,000 - 1,200,000 -Roger Turner 1,100,000 - 1,100,000 - 1,100,000 -Danesh Varma 1,400,000 - 1,400,000 - 1,400,000 -

Further details of directors' options are provided in the Directors' Remuneration Report.

Substantial shareholders

At 6 July 2010 the following shareholders had advised the company ofinterests in the issued ordinary share capital of the company, all of which aredirectly held:Name Number Percentage of of shares share capital Juno Limited 57,924,248 37.8%

Passport Special Opportunities Master Fund 26,525,000 17.3% Morgan Stanley Securities Limited 10,652,000 7.0%

10,600,000 of the shares notified by Passport Special Opportunities Master Fundwere disclosed (under UKLA rules introduced on 1 June 09) in connection with aswap. The directors believe that these 10,600,000 shares might also form partof the Morgan Stanley Securities Limited disclosure.

Shares

Authority to allot shares

Under the Articles of Association, the company has authority to allot theunissued shares of the company, and a resolution will be put to the AGMgranting authority to the directors to do so in respect of £510,000 of sharecapital (representing 33% of the company's issued ordinary share capital at 6July 2010). This will enable the directors to issue up to 51,000,000 ordinaryshares within five years of the date of the AGM. The directors have no presentintention of exercising this authority.The directors would usually wish to allot any new share capital on apre-emptive basis, however in the light of the group's potential requirement toraise further funds for the acquisition of new mineral ventures, otheractivities and working capital, they believe that it is appropriate to have alarger amount available for issue at their discretion without pre-emption thanis normal for larger listed companies. Accordingly a further resolution will beput to the AGM to renew the directors' authority to allot shares in the companyfor cash without pre-emption. In the case of allotments other than for rightsor other pre-emptive issues, it is proposed that such authority will be for upto £382,000 of share capital being 38,200,000 ordinary shares, which isequivalent to 25% of the issued ordinary share capital at 5H6 July 2010. Whilstsuch authority is in excess of the 5% of existing issued ordinary share capitalwhich is commonly accepted for larger listed companies, it will provideadditional flexibility which the directors believe is in the best interests ofthe group in its present circumstances. It is the directors' present intentionto renew this power each year.

Rights and obligations attaching to shares

The rights and obligations attaching to the ordinary and deferred shares areset out in the Articles of Association. Details of the authorised and issuedshare capital are shown in note 21.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 Acts, the rights attached to any class may be varied with the consent of the holders of three-quarters in nominal value of the issued shares of the class or with the sanction of an extraordinary resolution passed at a separate general meeting of the holders of 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 before the time appointed for holding themeeting or adjourned meeting.No member shall be entitled to vote at a general meeting or at a separatemeeting of the holders of any class of shares in the capital of the company,either in person or by proxy, in respect of any share held by him unless allmonies presently payable by him in respect of that share have been paid.Furthermore, no shareholder shall be entitled to attend or vote eitherpersonally or by proxy at a general meeting or at a separate meeting of theholders of that class of shares or on a poll if he has been served with anotice after failing to provide the company with information concerninginterests in his shares required to be provided under the Companies Acts.

Shares held in uncertificated form

Subject to the provisions of the Uncertificated Securities Regulations 2001,the Board may permit the holding of shares in any class of shares inuncertificated form and the transfer of title to shares in that class by meansof a relevant system and may determine that any class of shares shall cease tobe a participating security.

Significant agreements and change of control

There are no agreements between the company and its directors or employees thatprovide for compensation for loss of office or employment that may occurbecause of a takeover bid. The company's share plans contain provisionsrelating to a change of control. Outstanding awards and options would normallyvest and become exercisable on a change of control, subject to the satisfactionof any performance conditions.

Employment, community, donations and environment

The group is an equal opportunity employer in all respects and aims for highstandards from and for its employees. It also aims to be a valued andresponsible member of the communities which it affects or operates in. Sincethere are no revenues from operations, it is the group's general policy not tomake charitable or political donations and none were made during the year (2009- nil).The group, which for these purposes does not include LIM, is small and has nooperations; consequently its affect on the environment is very slight, beinglimited to the operation of two small offices, where recycling and energy usageminimisation are taken seriously and encouraged. It is not practical or usefulto quantify the effects of these measures.

Creditor payment policy

The group conducts its business on the normal trade credit terms of each of itssuppliers and tries to ensure that suppliers are paid in accordance with thoseterms. The group's average creditor payment period at 31 March 2010 was 59

days(2009 - 61 days).Going concern

The directors have considered the business activities of the group as well asits principal risks and uncertainties as set out in this report. Based on thegroup's cash flow forecasts and projections, and after making due enquiry inthe light of current and anticipated economic conditions, the directorsconsider that the group and company have adequate resources to continue inbusiness for the foreseeable future. For this reason, the going concern basiscontinues to be adopted in the preparation of the financial statements.

Statement of directors' responsibilities

The directors are responsible for preparing the annual report and the financialstatements. The directors are required to prepare the financial statements forthe group in accordance with International Financial Reporting Standards asadopted by the European Union (IFRS-EU) and have also elected to preparefinancial statements for the company in accordance with IFRS-EU. Company lawrequires the directors to prepare such financial statements in accordance withIFRS-EU, the Companies Act 2006 and, in relation to the group financialstatements, Article 4 of the IAS Regulation.International Accounting Standard 1 requires that financial statements presentfairly for each financial year the group's financial position, financialperformance and cash flows. This requires the faithful representation of theeffects of transactions, other events and conditions in accordance with thedefinitions and recognition criteria for assets, liabilities, income andexpenses set out in the International Accounting Standards Board's 'Frameworkfor the Preparation and Presentation of Financial Statements'. In virtually allcircumstances, a fair presentation will be achieved by compliance with allapplicable International Financial Reporting Standards.

Directors are also required to:

properly select and apply accounting policies;

present information, including accounting policies, in a manner that provides relevant, reliable comparable and understandable information; and

provide additional disclosures when compliance with the specific requirementsin IFRS-EU is insufficient to enable users to understand the impact ofparticular transactions, other events and conditions on the entity's financialposition and financial performance.

The directors are responsible for keeping proper accounting records which disclose with reasonable accuracy at any time the financial position of the group, for safeguarding the assets, for taking reasonable steps for the prevention and detection of fraud and other irregularities and for the preparation of a directors' report and directors' remuneration report which comply with the requirements of the Companies Act 2006.

The directors confirm that the financial statements have (a) been prepared inaccordance with applicable accounting standards; (b) give a true and fair viewof the results of the group and the assets, liabilities and financial positionof the group and the parent company; and (c) that the directors' reportincludes a fair review of the development and performance of the business andthe position of the group and the parent company together with a description ofthe principal risks and uncertainties that they face.

The directors are responsible for the maintenance and integrity of the group website.

AuditorsEach of the directors in office at the date of the annual report confirms thatso far as they are aware there is no relevant audit information of which thegroup's auditors are unaware and that each director has taken all of the stepswhich they ought to have taken as directors in order to make themselves awareof that information. This confirmation is given and should be interpreted inaccordance with the provisions of s418 of the Companies Act 2006.

A resolution to reappoint Mazars LLP as auditors and to authorise the directors to fix their remuneration will be proposed at the annual general meeting.

Articles of Association

The company wishes to bring its Articles up to date following the implementation of the provisions of the Companies Act 2006 and a resolution to that effect will be proposed at the forthcoming AGM.

By order of the boardIan CuthbertsonCompany Secretary 21 July 2010

Independent auditor's report to the members of Anglesey Mining plc

We have audited the financial statements of Anglesey Mining plc for the yearended 31 March 2010 which comprise the Group Income Statement, the GroupStatement of Comprehensive Income, the Group and Company Statement of FinancialPosition, the Group and Company Statement of Changes in Equity, the Group andCompany Statement of Cash Flows and the related notes. The financial reportingframework that has been applied in their preparation is applicable law andInternational Financial Reporting Standards (IFRSs) as adopted by the EuropeanUnion and, as regards the parent company financial statements, as applied inaccordance with the provisions of the Companies Act 2006.

Respective responsibilities of directors and auditors

As explained more fully in the Directors' Responsibilities Statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view.

Our responsibility is to audit the financial statements in accordance withapplicable law and International Standards on Auditing (UK and Ireland). Thosestandards require us to comply with the Auditing Practices Board's (APB's)Ethical Standards for Auditors. This report is made solely to the company'smembers, as a body, in accordance with Chapter 3 of Part 16 of the CompaniesAct 2006. Our audit work has been undertaken so that we might state to thecompany's members those matters we are required to state to them in anauditor's report and for no other purpose. To the fullest extent permitted bylaw, we do not accept or assume responsibility to anyone other than the companyand the company's members as a body for our audit work, for this report, or forthe opinions we have formed.

Scope of the audit of the financial statements

A description of the scope of an audit of financial statements is provided on the APB's web-site at www.frc.org.uk/apb/scope/UKP.

Opinion on the financial statements

In our opinion:

the financial statements give a true and fair view of the state of the group's and of the parent company's affairs as at 31 March 2010 and of the group's profit for the year then ended;

the group financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union;

the parent company financial statements have been properly prepared in accordance with IFRSs as adopted by the European Union and as applied in accordance with the provisions of the Companies Act 2006; and

the financial statements have been prepared in accordance with the requirements of the Companies Act 2006 and, as regards the group financial statements, Article 4 of the IAS Regulation.

Emphasis of matter

In forming our opinion, which is not qualified, we have considered the adequacyof the disclosures in the financial statements concerning the valuation ofintangible assets (note 10) of £13,792,743 in the group financial statementsand the valuation of investment in subsidiary undertakings (note 13) of £14,109,987 in the company financial statements.

The financial statements and related notes have been prepared based on the validity of the following:

the successful development of Parys Mountain mineral property;

the raising of new finance to exploit mineral reserves; and

No adjustments have been made to the statement of financial position and related notes to reflect changes to these assets' carrying values that might be necessary should the above conditions not be met.

Opinion on other matters prescribed by the Companies Act 2006

In our opinion:

the part of the Directors' Remuneration Report to be audited has been properly prepared in accordance with the Companies Act 2006; and

the information given in the Directors' Report for the financial year for which the financial statements are prepared is consistent with the financial statements.

Matters on which we are required to report by exception

We have nothing to report in respect of the following:

Under the Companies Act 2006 we are required to report to you if, in our opinion:

adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

the parent company financial statements and the part of the Directors' Remuneration Report to be audited are not in agreement with the accounting records and returns; or

certain disclosures of directors' remuneration specified by law are not made; or

we have not received all the information and explanations we require for our audit.

Under the Listing Rules we are required to review:

the directors' statement in relation to going concern; and

the part of the Corporate Governance Statement relating to the company's compliance with the nine provisions of the June 2008 Combined Code specified for our review.

Richard KarmelSenior statutory auditorfor and on behalf of Mazars LLP, Chartered Accountants (Statutory auditor)Tower Bridge House, St. Katharine's Way, London, E1W 1DD

21 July 2010Group income statement

All attributable to equity holders of the company

Notes Year ended Year ended 31 March 31 March 2009 2010 (restated) All operations are continuing Revenue - - Expenses (253,684) (224,737) Equity-settled employee benefits 22

(28,127) (271,112)

Share of (loss) of associate 14

(203,173) (698,258)

Gains on deemed disposals in associate 14 7,054,967 - Profit on sale of shares in associate 14 1,733,096 - Investment income 6 1,076 7,118 Finance costs 7 (99,818) (84,535) Parys properties fair value adjustments 10 - 698,321 Profit/(loss) before tax 4 8,204,337 (573,203) Tax 8 - - Profit/(loss) for the period 8,204,337 (573,203) Profit/(loss) per share Basic - pence per share 9 5.4 p (0.4)p Diluted - pence per share 9 5.3 p (0.4)p Statement of comprehensive income Profit/(loss) for the period

8,204,337 (573,203)

Other comprehensive income: Translation differences on foreign operations

2,148,426 1,835,562

Total comprehensive income for the period

10,352,763 1,262,359

Statement of financial position of the group

31 March 2010 31 March 2009 Notes £ £ Assets Non-current assets Mineral property development 10

13,792,743 13,616,749

Property, plant and equipment 11 204,687 204,687 Interest in associate 14 21,868,314 13,821,013 Deposit 15 120,574 119,549 35,986,318 27,761,998 Current assets Other receivables 16 8,327 2,915 Cash and cash equivalents 17 2,766,074 150,431 2,774,401 153,346 Total assets 38,760,719 27,915,344 Liabilities Current liabilities Trade and other payables 18 (817,869) (608,682) 17 (817,869) (608,682) Net current assets/(liabilities) 1,956,532 (455,336) Non-current liabilities Loan 19 (1,960,347) (1,760,529) Long term provision 20 (42,000) (42,000) (2,002,347) (1,802,529) Total liabilities (2,820,216) (2,411,211) Net assets 35,940,503 25,504,133 Equity Share capital 21 7,042,414 7,036,414 Share premium 8,097,973 8,092,423 Currency translation reserve 3,981,270 1,832,844 Retained earnings 16,818,846 8,542,452 Total shareholders' equity 35,940,503 25,504,133 The financial statements of Anglesey Mining plc registered number 1849957 wereapproved by the board of directors and authorised for issue on 21 July 2010,and signed on its behalf by:John F. Kearney, Chairman

Ian Cuthbertson, Finance Director

Statement of financial position of the company

Notes 31 March 31 March 2010 2009 £ £ Assets Non-current assets Investments 13 14,109,987 14,081,396 14,109,987 14,081,396 Current assets Other receivables 16 4,254 1,433 Cash and cash equivalents 17 7,201 149,110 11,455 150,543 Total Assets 14,121,442 14,231,939 Liabilities Current liabilities Trade and other payables 18 (166,365) (125,478) (166,365) (125,478)

Net current (liabilities)/assets

(154,910) 25,065 Non-current liabilities Loan 19 (1,960,347) (1,760,529) (1,960,347) (1,760,529) Total liabilities (2,126,712) (1,886,007) Net assets 11,994,730 12,345,932 Equity Share capital 21 7,042,414 7,036,414 Share premium 8,097,973 8,092,423 Retained losses (3,145,657) (2,782,905) Shareholders' equity 11,994,730 12,345,932 The financial statements of Anglesey Mining plc registered number 1849957 wereapproved by the board of directors and authorised for issue on 21 July 2010,and signed on its behalf by:John F. Kearney, Chairman

Ian Cuthbertson, Finance Director

Statements of changes in equity

All attributable to equity holders of the company.

Group Share Share Currency Retained capital premium translation earnings reserve (restated) Total £ £ £ £ £ Equity at 1 April 2008 7,036,414 8,092,423 (2,718) 8,229,110 23,355,229 Total comprehensive income for the year: (Loss) for the year - - - (573,203) (573,203) Exchange differences on - - 1,835,562 - 1,835,562 translation of foreign holdings Total comprehensive - - 1,835,562 (573,203) 1,262,359 income for the year Equity-settled benefits credit: - - - 615,433 615,433 - associate - company - - - 271,112 271,112 Equity at 31 March 2009 7,036,414 8,092,423 1,832,844 8,542,452 25,504,133 Total comprehensive income for the year Profit for the year - - - 8,204,337 8,204,337 Exchange differences on - - 2,148,426 - 2,148,426 translation of foreign holdings Total comprehensive - - 2,148,426 8,204,337 10,352,763 income for the year Shares issued for cash 6,000 6,000 - - 12,000 Share issue costs - (450) - - (450) Equity-settled benefits credit: - - - 43,930 43,930 - associate - company - - - 28,127 28,127 Equity at 31 March 2010 7,042,414 8,097,973 3,981,270 16,818,846 35,940,503 Company Share Share Accumulated capital premium losses Total £ £ £ £ Equity at 1 April 2008 7,036,414 8,092,423 (3,170,014) 11,958,823 Total comprehensive income for the year Profit for the year - - 115,997 115,997 Total comprehensive - - 115,997 115,997 income for the year Equity-settled benefits credit - - 271,112 271,112 Equity at 31 March 2009 7,036,414 8,092,423 (2,782,905) 12,345,932 Total comprehensive income for the year Loss for the year - - (390,879) (390,879) Total comprehensive - - (390,879) (390,879) income for the year Shares issued for cash 6,000 6,000 - 12,000 Share issue costs - (450) - (450) Equity-settled benefits credit - - 28,127 28,127 Equity at 31 March 2010 7,042,414 8,097,973

(3,145,657) 11,994,730

Statement of cash flows of the group

Notes Year ended Year ended 31 March 31 March 2010 2009 (restated) £ £Operating activities

Profit/(loss) for the year

8,204,337 (573,203)

Adjustments for non-cash items: Investment revenue 6 (1,076) (7,118) Finance costs 7 99,818 84,535 Equity-settled employee benefits

28,127 271,112

Share of loss of associate 14

203,173 698,258

Gain on deemed disposal in associate 14 (7,054,967) - Profit on sale of shares in associate 14 (1,733,096) - Parys properties fair value adjustments - (698,321) (253,684) (224,737) Movements in working capital (Increase)/decrease in receivables

(5,412) 22,775 Increase in payables 209,187 122,122 Cash utilised by operations (49,909) (79,840) Interest paid - -

Net cash used in operating activities

(49,909) (79,840) Investing activities Interest received 6 51 4,492

Net proceeds from sale of shares in associate 14 2,729,945 - Mineral property development 10

(175,994) (192,189) Net cash received/(used) in investing activities 2,554,002 (187,697) Financing activities Proceeds from issue of shares 11,550 - Loans 100,000 200,000

Net cash generated from financing activities

111,550 200,000 Net increase/(decrease) in cash and cash equivalents

2,615,643 (67,537)

Cash and cash equivalents at start of year

150,431 217,968

Cash and cash equivalents at end of year 17

2,766,074 150,431

Statement of cash flows of the company

Notes Year ended Year ended 31 March 31 March 2010 2009 £ £ Operating activities

(Loss)/profit for the year 23

(390,879) 115,997

Adjustments for non-cash items: Investment revenue recognised in profit or loss (51) (4,400) Finance costs recognised in profit or loss 99,818 84,535 Equity-settled benefits 28,127 271,112 Parys properties fair value adjustment - (698,321) (262,985) (231,077) Movements in working capital (Increase)/decrease in receivables

(2,821) 3,086 Increase in payables 40,887 65,659 Cash utilised by operations (224,919) (162,332) Net cash used in operating activities (224,919) (162,332) Investing activities Interest received 51 4,400 Investments (28,591) (84,708) Net cash used in investing activities (28,540) (80,308) Financing activities Proceeds from issue of shares 11,550 - Loans 100,000 200,000

Net cash generated from financing activities

111,550 200,000 Net (decrease) in cash and cash equivalents

(141,909) (42,640)

Cash and cash equivalents at start of year

149,110 191,750

Cash and cash equivalents at end of year

7,201 149,110 Notes to the accounts

1 General information

Anglesey Mining plc is domiciled and incorporated in the United Kingdom under the Companies Act. The nature of the group's operations and its principal activities are set out in note 3 and in the business review section of the directors' report.

These financial statements are presented in pounds sterling because that is thecurrency of the primary economic environment in which the group has beenoperating. Foreign operations are included in accordance with the policies setout in note 2.

2 Significant accounting policies

Basis of Accounting

The financial statements have been prepared in accordance with InternationalFinancial Reporting Standards (IFRS) as adopted by the European Union andtherefore the group financial statements comply with Article 4 of the EU IASRegulation.

The financial statements have been prepared on the historical cost basis. The principal accounting policies adopted are set out below.

Going concern

The financial statements are prepared on a going concern basis. The validity ofthe going concern basis is dependent on finance being available for thecontinuing working capital requirements of the group. For the reasons set outin the directors' report, the directors believe that the going concern basis isappropriate for these accounts.

Basis of consolidation

The consolidated financial statements incorporate the financial statements ofthe company and entities controlled by the company (its subsidiaries) made upto 31 March each year. Control is achieved where the company has the power togovern the financial and operating policies of an investee entity so as toobtain benefits from its activities.On acquisition, the assets and liabilities and contingent liabilities of asubsidiary are measured at their fair values at the date of acquisition. Anyexcess of the cost of acquisition over the fair values of the identifiable netassets acquired is recognised as goodwill. Any deficiency of the cost ofacquisition below the fair values of the identifiable net assets acquired (i.e.discount on acquisition) is credited to profit and loss in the period ofacquisition. The results of subsidiaries acquired or disposed of during theyear are included in the consolidated income statement from the effective dateof acquisition or up to the effective date of disposal, as appropriate.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with those used by the group.

All intra-group transactions, balances, income and expenses are eliminated on consolidation.

Revenue recognitionInterest income is accrued on a time basis, by reference to the principaloutstanding and at the effective interest rate applicable, which is the ratethat exactly discounts estimated future cash receipts through the expected lifeof the financial asset to that asset's net carrying amount.

Foreign currencies

Transactions in currencies other than pounds sterling are recorded at the ratesof exchange prevailing on the dates of the transactions. At the end of eachreporting period, monetary assets and liabilities that are denominated inforeign currencies are retranslated at the rates prevailing on the period enddate. Non-monetary assets and liabilities carried at fair value that aredenominated in foreign currencies are translated at the rates prevailing at thedate when the fair value was determined. Gains and losses arising onretranslation are included in net profit or loss for the period, except forexchange differences arising on non-monetary assets and liabilities where thechanges in fair value are recognised directly in equity.On consolidation, the assets and liabilities of the group's overseas operationsare translated at exchange rates prevailing on the period end date. Exchangedifferences arising, if any, are classified as equity and transferred to thegroup's translation reserve. Such translation differences are recognised asincome or as expense in the period in which the operation is disposed.

Segmental analysis

The group has adopted IFRS 8 with effect from 1 April 2009. This sets out thedisclosure requirements concerning an entity's operating segments, products,services, geographical areas in which it operates and its major customers andreplaces IAS 14, Segmental Reporting. IFRS 8 requires operating segments to beidentified on the basis of internal reports about components of the group thatare regularly reviewed by the chief operating decision-maker.

Retirement benefit costs

Payments to defined contribution retirement benefit schemes are charged as an expense as they fall due. There are no defined benefit retirement schemes.

Equity-settled employee benefits

The group provides equity-settled benefits to certain employees. Equity-settledemployee benefits are measured at fair value at the date of grant. The fairvalue determined at the grant date is expensed on a straight-line basis overthe vesting period, based on the group's estimate of shares that willeventually vest and adjusted for the effect of non-market based vestingconditions.Fair value is measured by use of a Black-Scholes model. The expected life usedin the model has been adjusted from the longer historical average life, basedon directors' estimates of the effects of non-transferability, exerciserestrictions, market conditions, age of recipients and behaviouralconsiderations.

Taxation

Deferred tax is the tax expected to be payable or recoverable on differencesbetween the carrying amounts of assets and liabilities in the financialstatements and the corresponding tax bases used in the computation of taxableprofit, and is accounted for using the period end liability method. Deferredtax liabilities are generally recognised for all taxable temporary differencesand deferred tax assets are recognised to the extent that it is probable thattaxable profits will be available against which deductible temporarydifferences can be utilised. Such assets and liabilities are not recognised ifthe temporary difference arises from goodwill or from the initial recognition(other than in a business combination) of other assets and liabilities in atransaction that affects neither the tax profit nor the accounting profit.Deferred tax liabilities are recognised for taxable temporary differencesarising on investments in subsidiaries and associates, and interests in jointventures, except where the group is able to control the reversal of thetemporary difference and it is probable that the temporary difference will notreverse in the foreseeable future.The carrying amount of any deferred tax assets is reviewed at each period enddate and reduced to the extent that it is no longer probable that sufficienttaxable profits will be available to allow all or part of the asset to berecovered.Deferred tax is calculated at the tax rates that are expected to apply in theperiod when the liability is settled or the asset is realised. Deferred tax ischarged or credited in the income statement, except when it relates to itemscharged or credited directly to equity, in which case the deferred tax is alsodealt with in equity.Property, plant and equipment

The group's freehold land is stated in the statement of financial position atcost. The directors consider that the estimated residual value of buildings,based on prices prevailing at the date of acquisition, is such that anydepreciation would not be material. The carrying value is reviewed annually andany impairment in value would be charged immediately to the income statement.

Plant, equipment, fixtures and motor vehicles are stated in the statement of financial position at cost, less depreciation. Depreciation is charged on a straight line basis at the following annual rates: plant and equipment 25%, fixtures and fittings 20% and motor vehicles 25%. Residual values and the useful lives of these assets are also reviewed annually.

Intangible assets - mineral property development costs

Intangible assets are stated in the statement of financial position at cost, less amounts written off and provisions for impairment.

Costs incurred prior to obtaining the legal rights to explore a mineralproperty are expensed immediately to the income statement. Mineral propertydevelopment costs are capitalised until the results of the projects, which areusually based on geographical areas, are known. Mineral property developmentcosts include an allocation of administrative and management costs asdetermined appropriate to the project by management.Where a project is successful, the related exploration costs are written offover the life of the estimated mineral reserve on a unit of production basis.Where a project is terminated, the related exploration costs are written offimmediately. 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

Mineral properties are written down when any impairment in their value has occurred and are written off when abandoned. Where a provision is made or reversed it is dealt with in the income statement in the period in which it arises.

Investment in associates

An associate is an entity over which the group exercises, or is in a positionto exercise, significant influence, but not control or joint control, throughparticipation in the financial or operating policy of the investee. Inconsidering the degree of control, any options or warrants over ordinary shareswhich are capable of being exercised at the period end are taken intoconsideration.Where material, the results and assets and liabilities of associates areincorporated in the financial statements using the equity method of accounting,except when these associates are classified as held for sale. Investments inassociates are carried in the statement of financial position at cost adjustedby any material post-acquisition changes in the net assets of the associates,less any impairment of value in the individual investments.

Investments

Investments in subsidiaries are shown at cost less provisions for impairment invalue. Income from investments in subsidiaries together with any relatedwithholding tax is recognised in the income statement in the period in which itis recoverable.ProvisionsProvisions are recognised when the group has a present obligation as a resultof a past event and it is probable that the group will be required to settlethat obligation. Provisions are measured at the directors' best estimate of theexpenditure required to settle that obligation at the end of the reportingperiod and are discounted to present value where the effect is material.

Financial instruments

Financial assets and liabilities are initially recognised and subsequently measured based on their classification as "loans and receivables" 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. The group'sloans and receivables comprise "deposits", "trade and other receivables" and"cash and cash equivalents" in the statement of financial position.(a) Trade and other receivables. Trade and other receivables are measured atinitial recognition at fair value and are subsequently measured at amortisedcost using the effective interest rate method. Appropriate allowances forestimated irrecoverable amounts are recognised in the income statement whenthere is objective evidence that the asset is impaired.(b) Cash and cash equivalents. The group considers all highly liquidinvestments which are readily convertible into known amounts of cash and have amaturity of three months or less when acquired to be cash equivalents. Themanagement believes that the carrying amount of cash equivalents approximatesfair value because of the short maturity of these financial instruments.

(c) Trade and other payables. Trade payables are not interest bearing and are stated at their fair value.

Equity instruments

Equity instruments issued by the company are recorded at the proceeds received, net of direct issue costs.

Cash flow statement

The cash flow statement is prepared by the indirect method set out in IAS 7 on cash flow statements and presents cash flows by operating, investing and financing activities.

New accounting standards

The group has adopted IFRS 8: Operating segments. The effect of this standardis to disclose information concerning the group's reporting segments howeveradoption of this standard did not materially change the analysis of the group'sresults and performance.The group and company adopted IAS1 (revised): Presentation of financialstatements. The effect of this standard is purely presentational, however underthis newly applied standard the prior year adjustment (see note 27) wouldusually require an additional restated comparative statement of financialposition. Since there has been no change to the amounts and totals in any ofthe statements of financial position, and the net adjustment is immaterial, noadditional comparative information as at 1 April 2008 has been shown.

Since 1 April 2009 the group has applied the following updated standards, amendments and interpretations which have no significant impact on the financial statements:

Amendment to IFRS 7 Improving Disclosures about Financial Instruments. Theamendment introduces a three-level hierarchy of the fair values of financialinstruments. The amendment also requires further information about the relativereliability of fair values to facilitate the evaluation. In addition, theamendment extends the presentation requirements of liquidity risk.

Amendments to IFRS 1 and IAS 27. Cost of investment in a subsidiary, jointly controlled entity and associate.

The group and the company have not applied the following IFRS, IAS and IFRICs that are applicable and have been issued but are not yet effective.

IFRS 9 Financial instruments, Classification and measurement, effective for financial periods beginning on or after 1 January 2013

IAS 24 Related party disclosures. Revised definition of related parties effective for financial years beginning on or after 1 January 2011

IAS 27 Consolidated and Separate Financial Statements - Consequential amendments arising from amendments to IFRS 3, effective for financial years beginning on or after 1 July 2009

IAS 28 Investments in Associates - Consequential amendments arising from amendments to IFRS 3, effective for financial years beginning on or after 1 July 2009

The directors expect that the adoption of the above pronouncements will have no material impact on the financial statements in the period of initial application.

In addition to the above, there are a number of minor adjustments to variousstandards which are part of the IASB's annual improvement project published inApril 2009. These amendments are not expected to have significant impact on thegroup's accounts and are effective for financial years beginning on or after 1January 2010.

There have been no other new or revised International Financial Reporting Standards, International Accounting Standards or Interpretations that are in effect since that last annual report that have a material impact on the financial statements.

Judgements made in applying accounting policies and key sources of estimation uncertainty

The following critical judgements have been made in the process of applying the group's accounting policies:

(a) The directors' believe, after careful consideration, that the group doesnot, as a matter of fact, control the activities and operations of LabradorIron Mines Holdings Limited (LIM), and that it is correctly accounted for on anequity basis as an associate company.(b) In determining the treatment of exploration, evaluation and developmentexpenditures the directors are required to make estimates and assumptions as tofuture events and circumstances. There are uncertainties inherent in makingsuch assumptions, especially with regard to: ore resources and the life of amine; recovery rates; production costs; commodity prices and exchange rates.Assumptions that are valid at the time of estimation may change significantlyas new information becomes available and changes in these assumptions may alterthe economic status of a mining unit and result in resources or reserves beingrestated. Operation of a mine and the receipt of cashflows from it aredependent on finance being available to fund the development of the property.(c) In connection with possible impairment of assets the directors assess eachpotentially cash generating unit annually to determine whether any indicationof impairment exists. The judgements made when doing so are similar to thoseset out above and are subject to the same uncertainties.

Nature and purpose of equity reserves

The share premium reserve represents the consideration that has been received in excess of the nominal value of shares on issue of new ordinary share capital.

The currency translation reserve represents the revaluation of overseas foreign subsidiaries and associates.

The retained earnings reserve represents profits and losses retained in previous and the current period.

3 Segmental information

The group is engaged in the business of developing the Labrador iron project ineastern Canada in which it has a 41% interest and the wholly-owned ParysMountain project in North Wales. Neither had any revenue generating operationsduring the year. In the opinion of the directors, the group's activitiescomprise one class of business at present. As a result, the group reportsgeographical segments; these are the basis on which information is reported toBill Hooley, the chief executive and chief operating decision maker.A proportion of the salary and corporate costs in the UK are in respect ofinvestigating other mineral development opportunities, however there are atpresent no records which enable this proportion to be reliably measured. Income statement analysis 2010 2009 - restated Canada- Canada- UK associate Total UK associate Total £ £ £ £ £ £ Expenses 253,684 - 253,684 224,737 - 224,737 Equity-settled 28,127 - 28,127 271,112 - 271,112employee benefits Share of loss - 203,173 203,173 - 698,258 698,258in associate Gain on deemed - (7,054,967) (7,054,967) - - -disposals Profit on sale of - (1,733,096) (1,733,096) - - -shares in associate Investment income (1,076) - (1,076) (7,118) - (7,118) Finance costs 99,818 - 99,818 84,535 - 84,535 Parys properties - - - (698,321) - (698,321)fair value adjustments (Profit)/loss 380,553 (8,584,890) (8,204,337) (125,055) 698,258 573,203for the year Assets and liabilities 31 March 2010 31 March 2009 Canada- Canada- associate Total UK associate Total UK £ £ £ £ £ £ Assets 16,892,405 21,868,314 38,760,719 14,094,331 13,821,013 27,915,344 Liabilities (2,820,216) - (2,820,216) (2,411,211) - (2,411,211) Net assets 14,072,189 21,868,314 35,940,503

11,683,120 13,821,013 25,504,133 4 Operating result

The operating result for the year has been arrived at after charging/

(crediting): 2010 2009 £ £

Fees payable to the group's auditors: for the audit of the annual accounts 29,870

55,580

for other services - tax services - 1,500 Directors' remuneration 93,940 56,406 Equity-settled employee benefits 28,127

271,112

Parys properties fair value adjustment -

(698,321)

Audit fees for the subsidiaries are included in the fees paid in respect of the company.

5 Staff costsThe average monthly number of persons employed (including executive directors)was: 2010 2009 Technical - 1 Administrative 3 3 3 4

Their aggregate remuneration was:

£ £ Wages and salaries 95,890 189,870 Social security costs 25,562 7,151 Other pension costs 10,320 10,000 131,772 207,021

Details of directors' remuneration and share options are given in the directors' remuneration report.

6 Investment income 2010 2009 £ £ Loans and receivables Interest on bank deposits 51 4,492

Interest on site re-instatement deposit 1,025

2,626 1,076 7,1187 Finance costs 2010 2009 Loans and payables £ £ Loan interest to Juno Limited 99,818 84,535 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 2010 of £1.5 million (2009 - £1.4 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 £11.2 million unclaimedand available at 31 March 2010 (2009 - £10.7 million). 2010 2009 restated £ £ Current tax - - Deferred tax - - Total tax - -

Domestic income tax is calculated at 28% (2009 - 28%) of the estimated assessed profit for the year. Taxation for other 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:

Profit/(loss) for the year 8,204,337

(573,203)

Tax at the domestic income tax rate of 28% 2,297,214

(160,497) Tax effect of:

Expenses that are not deductible 7,955

108,921 in determining taxable result

Fair value adjustment not subject to tax -

(195,530)

Gains on deemed disposals in associate (1,975,391)

-

Profit on sale of shares in associate (485,267)

- Share of loss of associate 56,888 195,512

Tax losses for which no deferred tax asset 98,601

51,594 was recognised Total tax - - 9 Earnings per ordinary share 2010 2009 restated £ £Earnings Profit/(loss) for the year 8,204,337 (573,203) Number of shares Weighted average number of ordinary shares for the purposes 152,845,722 152,558,051of basic earnings per share

Shares deemed to be issued for no consideration in respect 3,111,816

-of employee options Weighted average number of ordinary shares for the purposes 155,957,538 152,558,051of diluted earnings per share Basic earnings per share 5.4p (0.4)p Diluted earnings per share 5.3p (0.4)p

In 2009 the effect of the outstanding share options was anti-dilutive.

10 Mineral property development costs - group Parys Dolaucothi Total Mountain Cost £ £ £ At 1 April 2008 - 194,065 194,065 Additions - own expenditure 192,189 - 192,189 Reverse reclassification as 13,424,560 - 13,424,560 assets held for sale At 31 March 2009 13,616,749 194,065 13,810,814 Additions - own expenditure 175,994 - 175,994 At 31 March 2010 13,792,743 194,065 13,986,808 Impairment provision

At 1 April 2008, 2009 and 2010 - (194,065)

(194,065) Carrying amount Net book value 2010 13,792,743 - 13,792,743 Net book value 2009 13,616,749 - 13,616,749

Potential impairment of mineral properties

Accumulated development expenditure in respect of each project is carried inthe financial statements at cost, less an impairment provision where there aregrounds to believe that the discounted present value of the future cash flowsfrom the project is less than the carrying value or there are other reasons toindicate that the carrying value is unsuitable. Each project or cash generatingunit is reviewed separately in order to make a determination of whether anyimpairment of its value has occurred.

Parys Mountain

At Parys Mountain, impairment provisions were made over the financial years2001 to 2003 in recognition of the decline in prices of the metals to beproduced from the mine. However in 2007 these provisions were reversed sincethe result of re-estimating the discounted cash flows of the Parys Mountainproject was a value significantly higher than the carrying value. The basis forthese calculations was the directors' estimates of future metal prices (inpractice current spot prices were used) and capital and operating costs, and adiscount rate of 10% (which had also been used in the previous calculationswhich gave rise to the impairment).This year the directors carried out an impairment review with an effective dateof 12 March 2010. As in previous years, this review was based on an estimate ofdiscounted future cash flows from the development and operation of the ParysMountain project. The directors have used past experience and an assessment offuture conditions, together with external sources of information, to determinethe assumptions which were adopted in the preparation of a financial model usedto estimate the cashflows.

The key assumptions utilised were:

The mine will be developed largely as envisaged in the Kilborn Feasibility Study prepared in 1991, except where management has determined otherwise.

All the resources, both historical (including inferred resources) and thosemore recently estimated under JORC codes, will be developed and produced exceptthat the tonnage of those classified as inferred in the 1991 Feasibility Studywill be reduced by 20%.

Capital costs will be estimated at current costs when the expenditure is planned to be incurred; neither revenues nor operating costs will take into account any inflation.

The net present value is at 31 March 2010 and based on the assumption that mine development commences three years after that date.

Base metal prices are based on the 27 month forward prices quoted on the LondonMetal Exchange at 12 March 2010; the exchange rates used are those of the sameday; gold and silver prices are spot rates on 12 March 2010; these rates andprices are tabulated below.

The following principal smelter terms have been estimated by the directors: zinc $273 pt treatment with a basis price of $2,500 pt and a +9% / -6% variance; copper $47 pt treatment, $0.47 pt produced refining charge, lead $230 pt.

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.

Table of assumptions significantly affecting the discounted net present value of Parys cashflows

SensitivityParameter Value Unit Factor* Zinc price $2,347 $/tonne 27 months forward - Copper price $7,435 $/tonne 27 months forward -84% Lead price $2,235 $/tonne 27 months forward - Silver price $17.30 Spot - Gold price $1,102 Spot -

Exchange rate £/$ 1.5163 LME rate 13 Mar 09 +75%

Capital expenditure +304% Operating costs +127% Discount rate 10% +134% * The sensitivity factor is the percentage change in each specific assumptionwhich would, on its own, result in a net present value equal to the carryingvalue of the intangible asset in the accounts. Where no factor is shown, thereis no change possible which would produce this result. All $ figures are in

USdollars. Parys summary

The estimated net present value of the Parys Mountain project calculated by thedirectors and based on their estimates of all the required parameters,particularly those set out above, is US$138 million, equivalent to £91 million.The carrying value of the Parys Mountain project is £13.7 million.Estimates of the net present value of any project, and particularly one likeParys Mountain, are always subject to many factors and wide margins of error.The directors believe that the estimates and calculations supporting theirconclusions have been carefully considered and are a fair representation of theprojected financial performance of the project.The calculations above have been repeated using the spot metal prices andexchange rates of 6 July 2010 (major factors: exchange rate £/US$ 1.52, zincprice $1,915 and copper price $6,485) and the net present value at 10% on thisbasis was US$94 million, equivalent to £62 million. This reduction is largelyas a result of lower metal prices.Based on the review set out above the directors have determined that noimpairment provision is required in the financial statements at 31 March 2010in respect of the carrying value of the Parys property. Operation of the mineand the receipt of cashflows from it are dependent on finance being availableto fund the development of the property and if this were not the caseadjustments would have to be made to reduce the carrying value of the mineralproperty development to its realisable value.A Parys properties fair value adjustment of £698,321 made in relation to thepotential sale, which did not proceed, of the Parys Mountain project in thestatement of financial position and income statement for the year ended 31March 2008 is no longer required or appropriate and has been reversed in theyear to 31 March 2009.Dolaucothi impairment

The group has no active plans to develop the Dolaucothi project in the near future and made a full impairment provision against the carrying value of the Dolaucothi expenditure in 2006.

11 Property, plant and equipmentGroup Freehold land and Plant & Office Total property equipment equipment Cost £ £ £ £ At 1 April 2008 - - - - Reverse reclassification as 204,687 17,434 5,487 227,608held for sale At 31 March 2009 and 2010 204,687 17,434 5,487 227,608 Depreciation At 1 April 2008 - - - - Reverse reclassification as - 17,434 5,487 22,921held for sale At 31 March 2009 and 2010 - 17,434 5,487 22,921 Carrying amount At 31 March 2009 and 2010 204,687 - - 204,687 Company Freehold land and Plant & Office property equipment equipment Total Cost £ £ £ £ At 1 April 2008 - - - -

Reverse reclassification as held for sale - 17,434

5,487 22,921 Inter-company transfers (17,434) (5,487) (22,921) At 31 March 2009 and 2010 - - - - Depreciation At 1 April 2008 - - - -

Reverse reclassification as held for sale - 17,434

5,487 22,921 Inter-company transfer - (17,434) (5,487) (22,921) At 31 March 2009 and 2010 - - - - Carrying amount At 31 March 2009 and 2010 - - - - 12 Subsidiaries - company

The subsidiaries of the company at 31 March 2009 and 2010 were as follows:

Name of company Country of Percentage Principal activity incorporation owned Labrador Iron plc Isle of Man 100% Holder of the company's investment in Labrador Iron Mines Holdings Limited, an associated company Anglo Canadian England & 100% Holder of the Dolaucothi property Exploration (Ace) Wales Limited Parys Mountain Mines England & 100% Development of the Parys Mountain mining property Limited Wales Parys Mountain Land England & 100% Holder of part of the Parys Mountain property Limited Wales Parys Mountain England & 100% Holder of part of the Parys Mountain property Heritage Limited Wales 13 Investments - company Shares at Amounts cost due Total £ £ £ At 1 April 2008 2 681,236 681,238 Added in year - 84,709 84,709

Reverse Parys properties fair value adjustment 698,321

698,321

Add back assets no longer classified as held for 100,101 12,517,027 12,617,128sale At 31 March 2009 100,103 13,981,293 14,081,396 Added in year - 28,591 28,591 At 31 March 2010 100,103 14,009,884 14,109,987

The realisation of investments is dependent on finance being available for development and other factors as set out in more detail in note 10.

A Parys properties fair value adjustment of £698,321 made in relation to the potential sale, which did not proceed, of the Parys Mountain project in the statement of financial position and income statement for the year ended 31 March 2008 was reversed in the year to 31 March 2009.

14 Investment in associate

At 31 March 2010 the group had a 41% interest in Labrador Iron Mines HoldingsLimited (LIM), a company registered in Ontario Canada, which is independentlymanaged and is accounted for in these financial statements as an associatecompany. LIM is the 100% owner and operator of a series of iron ore propertiesin Labrador and Quebec, some of which were formerly held and initially exploredby the group. At 31 March 2009 the group's interest in LIM was 50.1%, howeverfollowing the issue of shares by LIM and the sale of 810,900 shares from thecompany's total shareholding of 18,600,000 shares in LIM on 31 March 2010, theinterest in LIM was reduced to 41%. The fully diluted interest of the group

inLIM was 39% (2009 - 38%). 31 March 31 March 2010 2009 (restated) £ £

Values in group financial statements: Value brought forward from previous year

13,821,013 12,068,276

Group's share of (losses), adjusted to eliminate any fair value uplift (203,173) (698,258)

and related taxation in associate's accounts Group's share of equity-settled benefits included in (losses) above and 43,930 615,433 now added back Profit on deemed disposals following LIM share issues 7,054,967 Less: carrying value of LIM shares sold

(996,849) Exchange rate adjustments 2,148,426 1,835,562

Amount carried in the group accounts - being the value of group's share 21,868,314 13,821,013

of net assets of the associate without any fair value adjustment in respect of mineral properties The group's interest in LIM is held in these financial statements at originalcost to the group, adjusted by material post-acquisition changes in the netassets of the associate and any impairment of value in the individualinvestments. It is adjusted to reflect the exchange rate current at the end ofthe accounting period.

The profit on deemed disposal shown above is an adjustment to the group's carrying value of the associate arising as a result of LIM's issues of new shares, chiefly as part of a fundraising in March 2010, for a value of C$35 million. This dilutes the group's holding in LIM, however since the shares were issued at a price per share which exceeds the group's carrying value, the effect on the group's investment is beneficial and is represented by the increase of £7,054,968 in the carrying value.

In March 2010 as part of the LIM fundraising, the company sold for cash 810,900of the 18,600,000 LIM shares which it had previously held which resulted in

aprofit calculated as follows: £ Net proceeds of shares sold 2,729,945 Carrying value of shares sold 996,849 Profit on sale 1,733,096

The published fair value of the group's investment in LIM at 31 March 2010 is £75 million (2009 - £11 million). This is derived by valuing the group'sshareholding in LIM at the LIM share price quoted in Toronto on 31 March 2010of Canadian $6.50 (2009 - $1.05) per common share.At 6 July 2010 the published fair value of the group's investment in LIM was £45 million based on a share price of Canadian $4.06 per common share at thatdate.

The directors have considered whether there has been any impairment to the carrying value of the group's investment in LIM; in their opinion there is none.

Values as shown in the published accounts of the associate (100%) including afair value uplift in respect of mineral properties, after conversion intosterling: 31 March 31 March 2010 2009 £ £ Total assets 136,829,785 100,048,329 Total liabilities (22,426,183) (20,699,563) Total net assets 114,403,602 79,348,766 2010 2009 Revenues - - Profit/(loss) for the year 668,641 (184,163) Reconciliation of values shown in the associate's published accounts with thegroup accounts C$ C$ Shareholders' equity in associate

$175,609,529 $140,923,409

Less: fair value uplift net of tax - see note below $(93,770,841) $(91,899,196) $81,838,688 $49,024,213 Group share - 41.02% (2009 - 50.07%)

$33,567,864 $24,546,121

Group carrying value after conversion to sterling

£21,868,314 £13,821,013

In the financial statements of LIM the Labrador mineral properties are carriedat a fair value derived from the value ascribed to the Labrador companies inthe December 2007 Canadian flotation, after subsequent adjustments. If thegroup were to use a similar basis for its accounts, its share of this fairvalue uplift, net of tax, would add approximately £25 million (2009 - £26million) to group net assets.

The associated undertakings of the group were as follows:

Name of company Country of Percentage Principal activity incorporation owned 31 31 Mar Mar 10 09 Labrador Iron Mines Canada 41% 50.1% Holding company for Holdings Limited (LIM) Labrador Iron Mines Limited (100%) Labrador Iron Mines Canada 41% 50.1% Development of iron Limited, a 100% owned mines in Labrador subsidiary of LIM

LabRail Inc, a 100% owned Canada 41% 50.1% Transport operations subsidiary of LIM

Centre Ferro Ltd, a 100% Canada 41% 50.1% Property holding owned subsidiary of LIM

Schefferville Mines Inc, Canada 41% - Development of iron a 100% owned subsidiary

mines in Quebec of LIM

The group holds its interest in these associated companies through Labrador Iron plc, a 100% owned subsidiary.

15 Deposit Group Company 2010 2009 2010 2009 £ £ £ £ Due from Isle of 120,574 119,549 - -Anglesey County Council This deposit was required and made under the terms of the group's Section 106Agreement with the Isle of Anglesey County Council which has granted planningpermissions for mining at Parys Mountain. 16 Other receivables Group Group Company Company 2010 2009 2010 2009 £ £ £ £ Other 8,327 2,915 4,254 1,433

The carrying value of the receivables approximates to their fair value.

17 Cash Group Group Company Company 2010 2009 2010 2009 £ £ £ £ Held in sterling 10,070 150,431 7,201 149,110 Held in Canadian dollars 2,756,004 - - - 2,766,074 150,431 7,201 149,110

All of the Canadian dollar cash balance was received on 31 March 2010 and consequently no foreign exchange difference arose in the year.

18 Trade and other payables Group Group Company Company 2010 2009 2010 2009 £ £ £ £ Trade creditors (42,971) (79,930) (42,443) (79,011) Property royalties (613,665) (469,285) - -and rentals Other accruals (161,233) (59,467) (123,922) (46,467) (817,869) (608,682) (166,365) (125,478) The carrying value of the trade and other payables approximates to their fairvalue.19 Loan Group Group Company Company 2010 2009 2010 2009 £ £ £ £ Loan from Juno Limited (1,960,347) (1,760,529) (1,960,347) (1,760,529) The loan from Juno Limited is provided under a working capital agreement,denominated in sterling, unsecured and carries interest at 10% per annum. It isrepayable from any future financing undertaken by the company, or on demandsubject to 367 days notice. The terms of the facility were approved by anindependent committee of the board. The carrying value of the loan approximatesto its fair value. 20 Long term provision Group Group Company Company 2010 2009 2010 2009 £ £ £ £ Provision for (42,000) (42,000) - -site reinstatement The provision for site reinstatement covers the estimated costs ofreinstatement at the Parys Mountain site of the work done and changes made bythe group up to the date of the accounts. These costs would be payable oncompletion of mining activities which is estimated to be in more than 20 yearstime. There are uncertainties inherent in the assumptions made in estimatingthe amount of this provision, which include judgements of changes to the legaland regulatory framework, magnitude of possible contamination and the timing,extent and costs of required restoration and rehabilitation activity.21 Share capital Ordinary shares of 1p Deferred shares of 4p Total Nominal Nominal Nominal value £ Number value £ Number value £

Authorised share capital

At 31 March 2008, 2009 & 2010 2,240,000 224,000,000 7,320,000 183,000,000 9,560,000

Issued and fully paid At 1 April 2008 & 2009 1,525,581 152,558,051

5,510,833 137,770,835 7,036,414

Issued 23 April 2009 3,000 300,000 - - 3,000 Issued 23 March 2010 3,000 300,000 - - 3,000 At 31 March 2010 1,531,581 153,158,051 5,510,833 137,770,835 7,042,414 The deferred shares are non-voting, have no entitlement to dividends and havenegligible rights to return of capital on a winding up. The share issues in theperiod followed upon the exercise of directors' share options.

22 Equity-settled employee benefits

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. The vesting period for 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. 2010 2009 Options Weighted Options Weighted average average exercise exercise price in price in pence pence

Outstanding at beginning of period 15,100,000 9.75

13,400,000 10.36 Granted during the period - - 1,700,000 5.00

Forfeited during the period - - - - Exercised during the period 600,000 2.00 - - Expired during the period - - - - Outstanding at the end of the period 14,500,000 10.07

15,100,000 9.75

Exercisable at the end of the period 14,500,000 10.07

13,400,000 10.36

No options were granted during the year. Those granted in 2009 had a fair valueof 1.7 pence each. The options outstanding at 12H31 March 2010 had a weightedaverage exercise price of 10.07 pence (2009 - 9.75 pence), and a weightedaverage remaining contractual life of 6.1 years (2009 - 6.9 years).The inputs into the Black-Scholes model in respect of options granted duringthe year are as follows: 2010 2009

Weighted average share price in pence - 3.88 Weighted average exercise price in pence

- 5.00 Expected volatility - 71% Expected life - 3 years Risk free rate - 5% Expected dividends - None

Expected volatility was determined by calculating the historical volatility ofthe share price over the previous three years. The expected life used in themodel has been adjusted from the longer historical average life, based ondirectors' estimates of the effects of non-transferability, exerciserestrictions, market conditions, age of recipients and behaviouralconsiderations.

The group recognised total expenses of £28,127 (2009 - £271,112) in respect of equity-settled employee remuneration during the year.

A summary of options granted and outstanding, all of which are over ordinary shares of 1 penny, is as follows:

Scheme Number Nominal Exercise Exercisable Exercisable Value £ price from until

2004 Unapproved 6,700,000 67,000 4.13p 22 October 2004 21 October 2014

2004 Unapproved 2,100,000 21,000 10.625p 15 January 2007 14 January 2016

2004 Unapproved 4,000,000 40,000 21.9p 26 November 2008 26 November 2017

2004 Unapproved 1,700,000 17,000 5.00p 27 March

2010 27 March 2019 Total 14,500,000 145,000 23 Profit attributable to Anglesey Mining plc

The loss after taxation in the parent company amounted to £390,879 (2009- profit -£115,997). The directors have taken advantage of the exemptions available under section 408 of the Companies Act 2006 and not presented a profit and loss account for the company alone.

24 Financial instruments

Capital risk management

The group manages its capital to ensure that entities in the group will be ableto continue as going concerns while optimising the debt and equity balance. Thecapital structure of the group consists of debt, which includes the borrowingsdisclosed in note 19, the cash and cash equivalents and equity comprisingissued capital, reserves and retained earnings.The group does not enter into derivative or hedging transactions and it is thegroup's policy that no trading in financial instruments be undertaken. The mainrisks arising from the group's financial instruments are currency risk andinterest rate risk. The board reviews and agrees policies for managing each ofthese risks and these are summarised below.

Interest rate risk

The group finances its operations through a mixture of loans from Juno Limitedand equity. The Juno loans are at a fixed rate of interest of 10% per annum andas a result the group is not exposed to interest rate fluctuations.

Liquidity risk

The group's policy has been to ensure continuity of funding through a mixtureof issues of shares and the working capital agreement with Juno Limited. At theend of this financial period the sale of shares in the group's associate LIMalso provided a source of funds.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 21 July 2010. 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 group is pounds sterling. The loan from Juno Limited is denominated in pounds sterling. As a result, the group has no currency exposure in respect of this loan.

At the year end the group held the proceeds from the sale of part of its LIMshareholding, in the amount of C$4,230,465 in Canadian dollars, equivalent to £2,756,004. If the rate of exchange between Canadian dollars and sterling wereto move against sterling by 10% there would be a loss to the group of £250,500and if it were to move in favour of sterling by a similar amount there would bea gain of £306,200.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.

The financial instruments of the group and the company are:

Group Loans & Other financial receivables liabilities 31 March 31 March 31 March 31 March 2010 2009 2010 2009 £ £ £ £ Financial assets Deposit 120,574 119,549 Other debtors 8,327 2,915 Cash and cash 2,766,074 150,431 equivalents Financial liabilities Trade creditors (42,971) (79,930) Loans due to Juno (1,960,347) (1,760,529) 2,894,975 272,895 (2,003,318) (1,840,459) Company Loans & Other financial receivables liabilities 31 March 2010 31 March 2009 31 March 2010 31 March 2009 £ £ £ £ Financial assets Deposit - - Other debtors 4,254 1,433 Cash and cash 7,201 149,110 equivalents Financial liabilities Trade creditors (42,443) (79,011) Loans due to Juno (1,960,347) (1,760,529) 11,455 150,543 (2,002,790) (1,839,540)

All financial assets and liabilities are initially stated at fair value and measured at amortised cost, and all carrying values approximate to fair values.

25 Related party transactions

Juno Limited

Juno Limited (Juno) which is registered in Bermuda holds 37.8% of the company'sissued ordinary share capital. The group has the following agreements withJuno: (a) a controlling shareholder agreement dated September 1996 and (b) aconsolidated working capital agreement of 12 June 2002. Interest payable toJuno is shown in note 7 and the balance due to Juno is shown in note 19. Therewere no transactions between the group and Juno or its group during the yearother than a loan of £100,000 from Juno to the group and the accrual ofinterest due to Juno. Danesh Varma is a director and, through his familyinterests, a significant shareholder of Juno.

Labrador Iron

Labrador Iron Mines Holdings Limited (LIM) is a 41% held associate andtherefore a related party. During the year the parent company made no rechargesto LIM in respect of directors salaries as these were paid directly; last yearLIM was charged with £122,889 in respect of remuneration and associated socialsecurity costs. There are no other transactions between LIM, the group and thecompany which are required to be disclosed.

John Kearney is chairman of Labrador Iron Mines Holdings Limited (LIM), Bill Hooley is a director and chief operations officer and Danesh Varma is chief financial officer. All three are shareholders of LIM, are entitled to remuneration from LIM and have been granted options over the shares of LIM

All key management personnel are directors and appropriate disclosure with respect to them is made in the directors' remuneration report. There are no other contracts of significance in which any director has or had during the year a material interest.

26 Mineral holdingsParys(a) Most of the mineral resources delineated to date are under the westernportion of Parys Mountain, the freehold and minerals of which are owned by thegroup. A royalty of 6% of net profits after deduction of capital allowances, asdefined for tax purposes, from production of freehold minerals is payable. Themining rights over and under this area, and the leasehold area described in (b)below, are held in the Parys Mountain Mines Limited subsidiary.(b) Under a lease from Lord Anglesey dated December 2006, the subsidiary ParysMountain Land Limited holds the eastern part of Parys Mountain, formerly knownas the Mona Mine. An annual certain rent of £5,425 is payable for the yearbeginning 23 March 2009; the base part of this rent increases to £10,000 in2012 and to £20,000 when extraction of minerals at Parys Mountain commences;all of these rental figures are index-linked. A royalty of 1.8% of net smelterreturns from mineral sales is also payable. The lease may be terminated at 12months notice but not before 2012 and otherwise terminates in 2070.(c) Under a mining lease from the Crown dated December 1991 there is an annuallease payment of £5,000. A royalty of 4% of gross sales of gold and silver fromthe lease area is also payable. The lease may be terminated at 12 months noticeand otherwise terminates in 2020.(d) Under a royalty agreement with Intermine Limited the group is obligated tomake payments of C$50,000 (c.£32,500) per annum until production commences atthe Parys Mountain mine. A royalty of 4% of net profits (as defined aftervarious deductions) generated from production at the mine is also payable.There is an option to buy out the royalty and advance payments. The agreementmay be terminated at 12 months notice on abandonment of the property. The grouphas not paid all of the amounts due under this agreement and has madesettlement proposals to Intermine Limited but no understanding has yet beenreached. Intermine Limited holds a charge over the mining rights held by ParysMountain Mines Limited to secure the payment of royalties in respect ofminerals produced in the areas described in (a) and (b) above.

Dolaucothi

Under a mining lease from the Crown dated August 1997, a subsidiary, AngloCanadian Exploration (Ace) Limited, has an obligation to make annual leasepayments of £3,890 and to pay a royalty of 4% of gross sales of gold and silverfrom production at the Dolaucothi mine. The lease may be terminated at 12months notice and otherwise terminates in 2011. Certain financial obligationsrelating to this lease have been guaranteed by the parent company.

27 Restatement of prior year results

In accounting for the results of its associate Labrador Iron Mines, the grouphas historically recorded the share based payment expenses in LIM's incomestatement in the same way as its own share based payments, in accordance withIFRS 2. In 2008 and 2009 the group did not record certain other share basedpayments which were capitalised by LIM to mineral property development expense,and not charged in LIM's income statement.Following a review of this treatment the directors decided that these sharebased payments should be recorded as an expense in the group income statement.As a result the losses of the associate for the year ended 31 March 2009 havebeen increased by £444,189. This change has no net effect on the group'sinterest in LIM but has lead only to a restatement of the associate's loss inthe income statement for that year and to restated basic and diluted earningsper share of (0.4) pence, from (0.1) pence originally.

Since there has been no change to the amounts and totals in any of the statements of financial position, and the net adjustment is immaterial, no additional comparative information has been shown.

28 Material non cash transactions

There were no material non-cash transactions.

29 Commitments

Other than commitments under leases (note 26) there is no capital expenditureauthorised or contracted which is not provided for in these accounts (2009

-nil).30 Contingent liabilities

There are no contingent liabilities (2009 - nil).

31 Events after the period end

There are no post period end events to be disclosed.

Directors

Irish, aged 59, chairman, is a mining executive with more than

36

years experience in the mining industry and is chairman of the John F. company's associate Labrador Iron Mines Holdings Limited. He is

Kearney also chairman of Canadian Zinc Corporation, Minco plc and Conquest

Resources Limited. He is a director of the Mining Association

of

Canada and has degrees in law and economics from University

College

Dublin and an MBA from Trinity College Dublin. He is a member of the nomination committee and is resident in Canada. Bill Hooley aged 63, chief executive, is a mining engineering graduate from the Royal School of Mines and has extensive experience in many countries including the UK and Australia. He is chief operating officer and a director of the company's associate Labrador Iron Mines Holdings Limited. He has been a director of a number of companies involved in the minerals industry. He is a Fellow of the Australasian Institute of Mining and Metallurgy. Ian aged 63, finance director and company secretary, is a chartered

Cuthbertson accountant. He has extensive previous experience in the

international oilfield and construction industries and has been secretary of the company since 1988. Australian, aged 63, non-executive director, is a chartered accountant. He has over 30 years experience in the commercial David Lean aspects of the mining industry most of which was with major base and precious metal mining houses. Currently he is involved in trading mineral products. He is a member of the audit and nomination committees. Howard aged 66, non-executive director, a lawyer with over 40 years Miller experience in the legal and mining finance sector in Africa, Canada and the UK. He has extensive experience in the financing of resource companies. He is chairman of Avnel Gold Mining

Limited. He

is a member of the remuneration and nomination committees and the senior independent director.

Roger aged 67, non-executive director, is a mining engineer with more Turner than 40 years experience in engineering, management and project

development. He is a Camborne School of Mines graduate and has an MSc in economic geology. He was previously President and CEO of Nelson Gold Corporation and Oxus Gold plc.

Danesh Canadian, aged 60, non-executive director, is a chartered

Varma accountant and a member of the Chartered Institute of Taxation. He

is chief financial officer of the company's associate Labrador

Iron

Mines Holdings Limited. He is also chief financial officer of

Minco

plc, Xtierra Inc. and Conquest Resources Limited. He is a

member of

the audit and remuneration committees. Solicitors Auditors Bankers DLA Piper UK LLP Mazars LLPTower Bridge House, HSBCDinorben Square

101 Barbirolli Square St. Katharine's Way, London Amlwch, Anglesey

Manchester E1W 1DD LL68 9AH M2 3DL Glossary

AGM - the annual general meeting to be held on 24 September 2010.

C$ - Canadian dollars. At 31 March 2010 £1 sterling was equivalent to C$1.535.

Hematite or haematite - iron oxide Fe2O3, one of the most abundant forms of iron ore. Chemically pure hematite is about 71% iron.

IOC or IOCC - the Iron Ore Company of Canada, original developers and operators of the iron ore deposits around Schefferville.

LIM or Labrador Iron - both Labrador Iron Mines Holdings Limited (the Toronto-listed holding company) and Labrador Iron Mines Limited (the operating subsidiary) for the Labrador iron properties.

NI 43-101 - a set of rules and guidelines for reporting and displaying information related to mineral properties within Canada.

tonne - metric tonnes of 2,204.6 pounds avoirdupois, used for current production.

ton - short ton of 2,000 pounds avoirdupois, used for historic resources in Canada.

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