Chairman's Statement 2001

Perhaps the best thing that can be said about the past year is that the company successfully avoided engaging in the “new economy” sector. A number of projects that we were told were very attractive were evaluated: none were felt to be sufficiently robust. Whether by good fortune or perceptive management we can now be glad that the company did not become involved in this area of business.
The positive development that came out of the crash of the 'dot coms' is that investors and institutions, for the first time in a few years, appear willing to consider opportunities in the mineral sector of the traditional economy and to again invest in mining companies. In this market environment, the board has determined to 'stick to its knitting' within the mineral industry.
During the year we conducted a detailed evaluation of the Bula zinc deposit in Ireland which had been placed on the market by its bankers and, in joint venture with Minco plc, submitted an offer to the receiver. Unfortunately, we were not successful and were outbid by Tara Mines Limited, a wholly owned subsidiary of Outokumpu OYG, which operates the large Tara mine which forms the extension of the Bula orebody, and which has agreed to buy the Bula assets from the receiver for IR£27.5 million (£21.5 million) subject to court approval and other conditions.
During the past year we also evaluated a number of other mining opportunities including projects in Europe, Russia and China but, despite our efforts, no specific transaction has been concluded.

Parys Mountain
Closer to home we have continued to improve the Parys Mountain property. We were not able to undertake our planned major drilling program due to shortage of funds. However work during the past year concentrated on two studies of the geology of Parys Mountain which have led to the identification of a potential new zone of mineralisation on the property.
The potential new zone lies at the western end of the property, down dip from the White Rock zone, separated by faulting from the major part of the deposits and within a few hundred metres of the Morris shaft. It is believed to be comparable to the Northern Copper zone (a lens of disseminated/semi-massive sulphide estimated in the 1960s to contain 30 million tonnes averaging 0.7% copper, with minor zinc and lead) which lies to the north and down dip of the Carreg y Doll zone from which most of the underground mining took place throughout the first half of the nineteenth century. The potential new zone lies to the west and down dip of the White Rock zone (which contains a possible mineral resource of 1.5 million tonnes with grades averaging 5.81% zinc, 3.02% lead and 0.41% copper) within the same stratigraphic relationship to the White Rock zone as the Northern Copper zone has to the Carreg y Doll zone.
The identification of this potential new zone is very important because it opens up a second major exploration target, and new zone, to the west. The upper part of this potential new zone lies at reasonable depths and within close proximity to the existing Morris shaft. The identification of this new zone demonstrates again the unexplored potential of the entire Parys Mountain property. It is not possible to estimate the size or grade of the new zone without further drilling.
The company plans as soon as possible to undertake financing for a drilling programme to explore both this potential new zone and the previously identified exploration target areas on the Engine zone. Such a programme has the potential to very significantly increase the value of the mineral deposits at Parys Mountain.

Financial Results
The financial results for the year show a loss of £118,051, before exceptional items, compared to a loss of £164,184 in the previous year. In accordance with the relevant accounting policy, the carrying value of development costs of the company's intangible fixed assets was reviewed and compared to its estimated recoverable value at the balance sheet date. Following this review it was determined to make an impairment provision of £3,000,000 against the accumulated development costs of the Parys Mountain property. This exceptional item increased the loss for the year to £3,118,051. I would like to emphasise that the requirement for this accounting provision in no way diminishes the directors' positive view of the long term potential of the property.
Expenses during the year were kept to a bare minimum. In an effort to minimize costs the company is in negotiation with the lessor of the eastern part of the Parys Mountain property, who also holds a royalty on the entire property, with regard to the settlement of outstanding rent and a reduction of the rent and royalty payable. The company has successfully negotiated with the Crown Commissioners a temporary reduction on the rent payable for the lease of the Dolaucothi gold property. Due to the low gold price no work was carried out at Dolaucothi during the year.

Funding
It is now important that the company seeks additional financing for its planned exploration programmes and any new opportunities. In order to provide greater flexibility in the financing of the company it is proposed to put resolutions to the forthcoming AGM to reduce the nominal value of the company's shares from 5 pence to 1 pence and to continue the authority of the directors to issue shares. More information concerning these resolutions is contained in the directors' report and I urge you to support them.

Directors
Subsequent to the end of the year Malcolm Swallow and Malcolm Burne resigned from the board, in each case because of other company commitments and potential conflicts. Malcolm Swallow served as a director of the company since 1988 and as mining director from 1988 to 1994. Malcolm Burne served as a non-executive director since 1997. I would like to gratefully acknowledge the contribution of the two Malcolms to Anglesey Mining and to thank them for their services and advice.
I am very pleased to advise that David Lean and Howard Miller have accepted the directors' invitation to join the board and will be standing for election as directors at the forthcoming annual meeting. We look forward to benefiting from their extensive experience in the mining industry.
Anglesey Mining has been fortunate to retain the support of its directors, advisors, consultants and major shareholders and I would like to thank all of them for their efforts on behalf of the company.

John F. Kearney
Chairman
24 August 2001