The directors have pleasure in submitting their report and the accounts for the year ended 31 March 2000.
The principal activity of Anglesey Mining plc during the year was the development of the Parys Mountain property. The group also explored at the Dolaucothi gold property in south Wales and evaluated other mineral development opportunities.
The loss for the year before taxation was £164,184 (1999 £111,465). The group has no revenues from the operation of its properties. The loss comprises interest and administrative expenses together with evaluation costs not related to Parys Mountain which, in accordance with the group’s accounting policy, are charged to the Profit and Loss Account. Included in the loss was £50,948 (1999 £27,534) in respect of interest due. The increase in the level of loan outstanding is the explanation for higher interest charges. £115,929 (1999 - £88,220) was expended on corporate costs, administration expenses and the investigation and evaluation of exploration and development opportunities. This expenditure has risen in comparison with last year only because of increased costs in connection with the evaluation of potential new opportunities in Ireland and the UK.
During the year no fixed assets (1999 - £1,191) were acquired, £109,373 (1999 - £281,419) was capitalised in respect of the development of the Parys Mountain property and £8,907 (1999 - £13,885) was capitalised in respect of the Dolaucothi property. The reduction in these development expenditures is due to reduced levels of activities at the properties.
At a time when metal prices remain low and financing conditions poor, the group has cut back on many activities in order to conserve its finances. Work is still being done to refine the planned programme of diamond core drilling at Parys Mountain. Drilling took place at Dolaucothi and further geological evaluation is planned. However further funding will be required In order to carry out any of these activities.
In December 1999 an additional working capital agreement with Juno was negotiated in order to provide funding for the company’s activities.
The group has no revenues and the directors do not recommend a dividend. Since the date of the accounts the activities of the group have continued in accordance with the directors' expectations. The directors remain attentive for opportunities to be involved in appropriate new mineral ventures.
The names of directors with biographical details are shown on page 27. Lord Crickhowell has indicated his wish to retire at the forthcoming annual general meeting. In accordance with the articles of association, Danesh Varma and Ian Cuthbertson retire by rotation and, being eligible, offer themselves for re-election.
Juno Limited (“Juno”) which is registered in Bermuda is the ultimate parent company. The company has a controlling shareholder agreement with Juno dated September 1996, a working capital agreement with Juno of the same date and further working capital agreements of June 1998, December 1998 and December 1999. Apart from working capital advances and related interest charges there were no transactions between the group and Juno or its group during the year. An independent committee reviews and approves all transactions and potential transactions with Juno. Danesh Varma is a director and, through his family interests, a significant shareholder of Juno. John Kearney is a director and shareholder of Minco plc, formerly Irish Marine Oil plc, in which Juno holds an interest of approximately 28%.
There are no other contracts of significance in which any director has or had during the year a material interest.
The interests at 31 March 2000 of the directors and their families in the share capital of the company, all of which are beneficial, are set out overleaf. These holdings were unchanged in amount at 28 July 2000. The holdings are expressed as a percentage of 116,241,384 (1999 – 115,340,324) shares, this being the number of shares in issue at 28 July 2000.
At 31 March 2000 At 31 March 1999
Director |
Number of options |
Number of ordinary shares |
% of issued ordinary shares |
Number of options |
Number of ordinary shares |
% of issued ordinary shares |
||||||||
John Kearney |
1,960,000 |
- |
1.7 |
1,960,000 |
- |
1.7 |
||||||||
Lord Crickhowell |
600,000 |
455,555 |
0.9 |
600,000 |
455,555 |
0.9 |
||||||||
Malcolm Burne |
500,000 |
1,000,000 |
1.3 |
500,000 |
1,000,000 |
1.3 |
||||||||
Ian Cuthbertson |
600,000 |
500,000 |
1.0 |
600,000 |
500,000 |
1.0 |
||||||||
Malcolm Swallow |
600,000 |
- |
0.5 |
600,000 |
- |
0.5 |
||||||||
Danesh Varma |
300,000 |
- |
0.3 |
300,000 |
- |
0.3 |
||||||||
The directors are required by UK company law to prepare accounts for each financial year that give a true and fair view of the state of affairs of the company and the group as at the end of the financial year and of the profit or loss for that period.
The directors confirm that suitable accounting policies have been used and applied consistently, and that reasonable and prudent judgements and estimates have been made in the preparation of these accounts. The directors also confirm that applicable accounting standards have been followed and that the financial statements have been prepared on the going concern basis.
The directors have responsibility for ensuring that the group keeps proper accounting records which disclose with reasonable accuracy the financial position of the group and which enable them to ensure that the financial statements comply with the Companies Act 1985. The directors have general responsibility for taking such steps as are reasonably open to them to safeguard the assets of the group and to prevent and detect fraud and other irregularities.
Further definition of the distinction of responsibilities between directors and auditors is to be found in the auditors’ report.
At 28 July 2000 the following shareholders had advised the company of an interest in the ordinary share capital of the company. So far as the company is aware there are no other interests of more than 3% in the ordinary share capital of the company.
Name |
Number of shares |
Percentage of share capital |
Juno Limited |
57,924,248 |
49.8 |
Strategic Lines Asset Management Limited |
9,800,000 |
8.4 |
In the light of the company’s limited financial resources and the requirement to raise further funds, the directors wish to have a larger than usual number of shares available for issue. Accordingly a resolution will be placed before the AGM which will, if approved, create an additional £1,250,000 of share capital, an increase of 19% of the existing authorised ordinary share capital. A further resolution will grant authority under section 80 of the Companies Act 1985 over £1,850,000 of share capital (representing 32% of the company’s issued ordinary share capital at 28 July 2000) enabling the directors to issue up to 37,000,000 ordinary shares within five years of the date of the AGM. The directors have no present intention of exercising this authority.
Although the directors would usually wish to allot any new share capital on a pre-emptive basis, they believe, for the reasons stated above, that it is appropriate to have a larger amount available for issue at their discretion without pre-emption than is usually the case. Accordingly a resolution will be put to the AGM to renew the directors' authority to allot equity securities for cash without pre-emption. In the case of allotments other than for rights issues, it is proposed that such authority will be for up to £1,450,000 (or 29,000,000 ordinary shares), being approximately 25% of the issued ordinary share capital at 28 July 2000. This continues but also increases the authority granted to the directors at each annual general meeting since 1993. Whilst such authority is significantly in excess of the 5% of existing issued ordinary share capital which is normal for listed companies, it will provide additional flexibility which the directors believe is in the best interests of the company in its present circumstances.
Development expenditure incurred by the group is carried in the financial statements classified as intangible assets at cost in respect of Parys Mountain and at a valuation which is less than cost in respect of Dolaucothi. The directors continue to give careful consideration to the value at which this development expenditure should be shown. The balance sheet value may exceed that which could be obtained were the Parys Mountain property offered for sale. However the results of the independent feasibility study conducted in 1990 and other studies since that date, taken together with the directors’ reasonable forecast of metal prices during the projected life of the mine, demonstrate that this development expenditure, together with other expenditure required to bring the mine into production, will be recovered by the operation of the mine. Consequently no provision, amortisation or write down in the value of intangible fixed assets has been made. Operation of the mine is dependent on finance being available to fund mine development and mill construction.
In August 1997 the freehold of the western part of Parys Mountain was purchased by the company. For many reasons, obtaining a meaningful value for this land is difficult, especially given its historical use and that the company’s pre-existing interest in the mineral rights would also have to be taken into account. The land is carried in the accounts at its cost to the company of £120,000. The directors are able to state only that, in their opinion, the market value of this land is unlikely to be significantly less than this figure.
The group conducts its business on the normal trade credit terms of each of its suppliers and tries to ensure that suppliers are paid in accordance with those terms. The group’s average creditor payment period at 31 March 2000 was 60 days (1999 - 56 days).
The group made no contributions during the year (1999 - nil).
The group is an equal opportunity employer in all respects.
The directors do not anticipate difficulties in connection with the introduction of the Euro.
Following their initial review, the directors continue to be alert to the potential risks and uncertainties surrounding the year 2000 issue. As at the date of this report the directors are not aware of any significant factors which have arisen, or that may arise, which will affect the activities of the business; however the situation is still being monitored. Any future costs associated with these issues cannot be quantified but are not expected to be significant.
Deloitte & Touche have indicated their willingness to continue in office and a resolution to re-appoint them and to authorise the directors to fix their remuneration will be proposed at the annual general meeting.
By order of the board
Ian Cuthbertson
Company Secretary
Amlwch, 3 August 2000