Chairman's Statement

The financial results for the year show a loss of £106,078, before exceptional items, compared to a loss of £118,051 in the previous year. Again this year the carrying values of the development costs of the company’s properties were reviewed in accordance with the relevant accounting policy and compared to the discounted net cash flows expected to be received from the operation of the properties. Following this review it was determined to make a further impairment provision of £2,200,000 against the accumulated development costs of the properties. I would like to again emphasize that the requirement for this accounting provision, whilst undoubtedly prudent in today’s low metal price conditions, does not diminish the directors’ positive view of the long term potential of the Parys Mountain property.

Anglesey Mining plc holds mineral properties at Parys Mountain and Dolaucothi in Wales.

Parys Mountain is located to the north of the island of Anglesey in north Wales in an area worked for copper since prehistoric times. It has an important geological resource of 6.5 million tonnes identified and described in independent geological reports. This resource is beyond and separate from the old workings and has a combined average grade for zinc, copper and lead of over 10%. There are also estimated to be 60,000 ounces of gold and 250 tonnes (8 million ounces) of silver in the identified resource however zinc would provide more than half the anticipated revenues. There is exploration potential within the freehold area and over an area of several kilometres outside it. Parys Mountain is currently held awaiting development in accordance with plans set out in a feasibility study completed in 1990. Further exploration is planned with the objective of developing a significantly larger deposit which should support a higher production rate which would be economic at lower metal prices and would also result in a longer mine life than anticipated in the feasibility study.

Expenses during the year were again kept to a bare minimum and work on Parys Mountain was very limited. Negotiations 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 ongoing rent to be paid, continued with some progress although a conclusion has not yet been reached. The lease in question is over the eastern portion of Parys Mountain. All the mineral reserves delineated to date are under the western portion of Parys Mountain, the freehold of which is owned by the company and which is unaffected by this matter.

Dolaucothi is located at Pumpsaint near Lampeter in South Wales where the company holds a Crown Mining Lease for gold and silver covering 11,000 acres. In today’s conditions minimal funds were expended on the development of the Dolaucothi property.

At the AGM held in September 2001 shareholders approved the reduction in nominal value of the company’s shares from 5 pence to 1 pence. This will provide greater flexibility in the financing of the company in the future. Although the company requires further finance no opportunities arose to raise such finance during the year.

The mineral industry has been adversely affected by the changes we have seen in the world during the past year and Anglesey Mining has been no exception. As a result of the world economic slow down metal prices have become heavily depressed and investor interest in the minerals industry, particularly in the case of zinc, is at a very low ebb. Base metal prices fell more or less throughout the year. Zinc metal prices are at an all time low in real terms and this has severely affected a number of companies and mines with closures and cutbacks of zinc metal production. Despite the mine closures, inventories of zinc metal are still high and this will hold the price down in the short term. However, as companies reduce production and shut older or more marginal mines this should ultimately be reflected in improved metal prices. Many analysts expect metal prices to improve in 2003 and this continues to give the directors encouragement to bring the Parys Mountain project forward. Over the past twelve years, zinc has traded as high as US$0.96 per pound and averaged in excess of US$0.53 per pound. The Parys Mountain property remains the only substantial undeveloped polymetallic mineral deposit in the United Kingdom .

In June 2002 a new working capital agreement was concluded with Juno Limited, the company’s largest shareholder, in order to provide funding for the company’s routine expenses. This agreement consolidated all the previous working capital advances between the company and Juno. Although the advances are repayable on demand, Juno has indicated that it has no intention of requiring immediate repayment. The ongoing support of Juno continues to be important to the company.

At the AGM held in September 2001 two new directors, David Lean and Howard Miller were appointed to the Board and we are already benefiting from their advice to the company.

Anglesey Mining continues to be fortunate to be able to retain the support of its directors, advisors, consultants and major shareholders and I would again like to thank all of them for their efforts on behalf of the company. I would also like to thank many other shareholders for their patience and support.

Chairman

Location

The Parys Mountain property is located in the northern part of the island of Anglesey in north Wales. The mineral property is about 3 kilometres in length and covers more than 2 square kilometres. The company holds the freehold including the mineral rights to about half of this area. The other half, formerly leased, is held but is subject to negotiation of an agreement over lease payments. The company also has a mining lease from the Crown for gold and silver over a wider area.

The property is located 2 miles south of the town of Amlwch. The port of Holyhead is 18 miles to the west. Access to the property is excellent by road, rail and sea. All necessary services and resources including power, engineering, maintenance facilities and a skilled labour force are located nearby.

History

Parys Mountain has been the site of mining activity at various times since the Bronze age. During the 1780s Parys Mountain was the largest copper mine in the world. Open pit and underground mining were carried out over a strike length of more than 3 kilometres and to depths of about 200 metres, the deepest then achievable by known technologies. Almost all activities ceased by the beginning of the 20th century.

In the 1960s the search for a new mine at Parys Mountain commenced. Exploration in the 1960s and 1970s was focused on the extension of the old open pit workings and was directed towards copper. This exploration utilised a variety of geological, geophysical and geochemical methods together with approximately 285 diamond drill holes totalling about 60,000 metres of drilling. A resource of 30 million tonnes containing about 250,000 tonnes of copper metal (the Northern Copper zone) was identified at depth, however this is regarded as being too low a grade to mine economically unless combined with other deposits.

Approximately 2,000 tonnes of development ore were hoisted and successfully processed through a pilot plant constructed on the site for metallurgical testing; the concentrate production of about 200 tonnes was sold to the smelter at Avonmouth.

Feasibility Study

In 1990 Kilborn Engineering completed an independent feasibility study of the project that confirmed the technical and economic viability of a 1,000 tonnes per day (300,000 tonnes per year) mining and milling operation producing zinc, copper, lead and gold concentrates. Kilborn estimated the capital cost of the mine at £22 million. This study was based on a mineable reserve of 1,963,000 tonnes at a grade of 6.43% zinc, 1.30% copper, 3.32% lead, 75 grams of silver and 0.51 grams of gold per tonne and a mine life of seven years. This mineable reserve is in the shaft development area, being only a portion of the identified geological resource of 6.5 million tonnes.

Detailed mine and plant designs were prepared and planning permission obtained. At the same time an environmental protection programme was devised also giving attention to historical and archaeological concerns. Declining metal prices and weakening stock markets in 1991 and 1992 resulted in development of the project being placed on hold. The property has been maintained on a care and maintenance basis since that time.

Geological studies carried out over the past few years have identified new areas, including a possible new zone, with significant exploration potential.

Reassessment

An extensive geological reassessment of the property commenced in 1995 and this has resulted in the development of new geological models which indicate that there is potential for the discovery of substantial additional mineral resources in largely unexplored areas to the north, west and east of the established resource.

Geological studies 1997 – 2000

Major lithogeochemical studies were carried out at Parys Mountain by the company’s consultants in conjunction with Cardiff University, using the analytical laboratory at McGill University in Montreal. The work involved the re-examination of large quantities of drill core and outcrop. Over 60 drill holes were relogged and sampled. Based on this work it has been possible to identify and classify the volcanic rock at Parys Mountain much more accurately than was previously possible.

Numerous scientific and technological studies were also carried out, including a joint project in conjunction with the British Geological Survey supported by the Department of Trade and Industry, using the PIMA (portable infra red mineral analyser) which examined the nature and distribution of alteration in the volcanogenic massive sulphide rocks at Parys Mountain. Palaeontology studies were conducted in conjunction with the University of Leicester. Additionally work was carried out with the British Geological Survey using high precision U-Pb isotope dating and in the application of 3-D visualization and virtual reality modelling of the Parys Mountain deposits.

All this work has considerably improved the understanding of the stratigraphic and structural settings of various mineralised zones and significantly enhanced the potential for discovery of further mineralisation.

Exploration Potential

The potential for the discovery of additional mineral resources in previously largely untested areas of the Parys Mountain property is very significant.

The Engine zone, which is the principal host of the known reserves, has seen little exploration beyond the immediate area of the shaft. Further exploration of the Engine Zone is planned for the northern and north eastern parts of the property which have been largely unexplored to date and where widely scattered massive sulphide intersections demonstrate considerable exploration potential.

In a separate area a potential new zone of disseminated / semi-massive mineralisation has been identified at depth, down-dip from the White Rock Zone, along the western boundary of the volcanic complex, where the potential for continuation of mineralisation is considered excellent. The upper part of this possible new zone lies at a reasonable depth, within close proximity to the existing shaft and within reach of the present underground development.

The results of the geological reassessment and various studies carried out over recent years demonstrate clearly that the Parys Mountain property has strong similarities with other major volcanogenic massive sulphide (VMS) deposits elsewhere in the world and that the property has the potential for new discoveries which would make Parys Mountain comparable to other major volcanogenic hosted polymetallic deposits which are substantial resources of zinc, copper, lead, gold and silver.

The directors have pleasure in submitting their report and the accounts for the year ended 31 March 2002.

The principal activity during the year was the development of the Parys Mountain property. Operations at the Dolaucothi gold property in south Wales are suspended. Other mineral development opportunities continue to be evaluated.

The loss for the year before taxation was £2,306,078 (2002 - £3,118,051). The group has no revenues from the operation of its properties. The loss comprises interest and administrative expenses together with an impairment provision of £2,200,000 (2001 - £3,000,000) (see below) and 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 £69,707 (2001 - £61,546) in respect of interest due. The increase in the level of loan outstanding is the explanation for higher interest charges. £38,822 (2001 - £59,637) was expended on corporate costs, administration expenses and the investigation and evaluation of exploration and development opportunities. This expenditure has fallen in comparison with last year because of reduced activity.

The impairment provision of £2,200,000 (2001 - £3,000,000) arises following a review by the directors of the net value at which the accumulated development costs of Parys Mountain should be carried in the accounts. The provision was determined following calculations of discounted estimated future real cash flows on the basis of current estimates of proven and probable reserves and capital and operating costs, together with directors’ estimates of future metal prices and foreign currency exchange rates and in accordance with the provisions of FRS 11. Further details of the valuation of intangible assets are to be found in note 8.

During the year no fixed assets (2001 - nil) were acquired, £73,687 (2001 - £74,159) was capitalised in respect of the development of the Parys Mountain property and £1,638 (2001 - £1,250) was capitalised in respect of the Dolaucothi property.

At a time when metal prices remain low, the group has continued to minimise many activities in order to conserve its finances.

On 12 June 2002 a new working capital agreement with Juno Limited was concluded in order to provide funding for the company’s routine expenses. This agreement consolidated all the previous working capital agreements between the company and Juno.

The interests at 31 March 2002 of the directors and their families in the share capital of the company, all of which are beneficial, are set out overleaf. The holdings are expressed as a percentage of 116,241,384 (2001 – 116,241,384) shares, this being the number of shares in issue at 5 August 2002.

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.

Company Secretary

Amlwch, 14 August 2002

There are no directors’ service contracts and, except in the case of Ian Cuthbertson, no arrangements in force whereby the group is under an obligation to pay fees, salaries, pensions or any other remuneration to any of the directors. During the year the remuneration committee comprised Howard Miller and David Lean.

The board’s aim with regard to executive and non-executive directors’ remuneration is to provide a package which will attract, retain and motivate directors of the calibre required and be consistent with the group’s limited ability to pay directors in cash. Consequently share options form the major part of the directors’ remuneration.

All directors and employees are eligible to receive options. In determining the amount of options to be granted to each individual, the directors take into account the need for and value of his services, the amount of time he spends on the business of the group and any other remuneration receivable by him from the group.

The total directors’ remuneration amounted to £16,505 (2001 - £18,654) all payable to Ian Cuthbertson and comprising salary £15,575 (2001 - £17,679) and pension contributions £930 (2001 - £975).

Directors' options

Malcolm Swallow resigned on 14 June 2001 and Malcolm Burne resigned on 28 June 2001. Howard Miller and David Lean were appointed on 20 September 2001.

There are performance criteria to be met in respect of share options marked with an asterisk, namely that the company’s share price performance over the period from grant to exercise must exceed that of the companies in the top quartile of the FTSE 100 index. There are no performance criteria to be met in respect of other share options. Each grant of an option was made at a cost to the participant of £1. No share options have been exercised during the year.

The market price of the ordinary shares at 31 March 2002 was 1.5 pence, the high for the year to 31 March 2002 was 2.75 pence and the low for the year was 1.5 pence. The market price at 5 August 2002 was 0.5 pence.

The board regularly considers its policies and practices in relation to corporate governance in the light of the Combined Code issued by the Financial Services Authority.

The board supports the highest standards in corporate governance and endeavours to implement the principles of the Combined Code in such a manner as not to hinder the development of the group. This is perhaps harder in a small group than in the larger organisations with which the Combined Code is chiefly concerned.

Throughout the year the group has been in compliance with the Code provisions set out in section 1 of the Combined Code on Corporate Governance issued by the Financial Services Authority, except as set out below:

During the year the board was comprised of two executive directors and between one and three non-executive directors.

The board currently has two executive and three non-executive directors. Howard Miller is the senior independent non-executive director for the purposes of the Combined Code.

John Kearney is the chairman and chief executive. In the light of the size and activity level of the group, the board believes that combining these roles is entirely appropriate for the group at present. The company’s strategy is determined by the whole board.

The audit committee comprises Danesh Varma and David Lean.

There is an established procedure by which directors may, at the company’s expense, take independent advice in the furtherance of their duties.

The board of directors is responsible for and annually reviews the group’s systems of internal control, financial and otherwise. Such systems provide reasonable and not absolute assurance of the safeguarding of assets, the maintenance of proper accounting records and the reliability of financial information. The key feature of the group's financial control system is that board members directly monitor all payments and transactions as well as budgets and annual accounts. The board does not wish to establish an internal audit function at present, however this decision is reviewed annually.

In reviewing the other risks facing the company, the board is sufficiently close to the company’s operations and aware of its activities to be able to adequately monitor risk without the establishment of any formal process. The board believes the significant risks facing the company are adequately disclosed in these financial statements and that there are no other risks of comparable magnitude which need to be disclosed.

We have audited the financial statements of Anglesey Mining for the year ended 31 March 2002 which comprise the consolidated profit and loss account, the balance sheets, the consolidated cash flow statement and the related notes 1 to 26. These financial statements have been prepared under the accounting policies set out therein. We have also examined the amounts disclosed relating to directors’ remuneration in the report to shareholders on directors’ remuneration.

Respective responsibilities of directors and auditors

As described in the statement of directors' responsibilities, the company's directors are responsible for the preparation of the financial statements in accordance with applicable United Kingdom law and accounting standards. Our responsibility is to audit the financial statements in accordance with relevant United Kingdom legal and regulatory requirements, auditing standards, and the Listing Rules of the Financial Services Authority.

We report to you our opinion as to whether the financial statements give a true and fair view and are properly prepared in accordance with the Companies Act 1985. We also report if, in our opinion, the directors’ report is not consistent with the financial statements, if the company has not kept proper accounting records, if we have not received all the information and explanations we require for our audit, or if information specified by law or the Listing Rules regarding directors’ remuneration and transactions with the company and other members of the group is not disclosed.

We review whether the corporate governance statement reflects the company's compliance with the seven provisions of the Combined Code specified for our review by the Listing Rules and we report if it does not. We are not required to consider whether the board's statements on internal control cover all risks and controls, or form an opinion on the effectiveness of the group's corporate governance procedures or its risk and control procedures.

We read the directors’ report and the other information contained in the annual report for the above year as described in the contents section and consider the implications for our report if we become aware of any apparent misstatements or material inconsistencies with the financial statements.

Basis of audit opinion

We conducted our audit in accordance with United Kingdom auditing standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements and of whether the accounting policies are appropriate to the company’s circumstances, consistently applied and adequately disclosed.

We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion, we also evaluated the overall adequacy of the presentation of information in the financial statements.

Fundamental uncertainties

In forming our opinion we have considered the adequacy of the disclosures in the financial statements concerning the basis of preparation and the recoverability of development and exploration expenditure.

The financial statements have been prepared on a going concern basis, the validity of which depends on:

The financial statements do not include any adjustments that would result, should the above conditions not be met. Details of the circumstances relating to this fundamental uncertainty are described in note 1 to the financial statements.

The financial statements disclose the directors’ assumption that the development and exploration expenditure, included in the company balance sheet at £6,902,122 (2001 - £9,028,435) and in the consolidated balance sheet at £7,094,687 (2001 - £9,219,362) will be recovered by the operation of the mine. The validity of this assumption depends upon the viability of the operation of the mine, the ability of the group to raise the funding referred to above and the ability of the group to trade profitably in the future, Details of the circumstances relating to this fundamental uncertainty are described in note 8 to the financial statements. Our opinion is not qualified in respect of the above fundamental uncertainties.

Opinion

In our opinion, the financial statements give a true and fair view of the state of affairs of the company and the group as at 31 March 2002 and of the loss of the group for the year then ended and have been properly prepared in accordance with the Companies Act 1985.

Chartered Accountants and Registered Auditors

Earlsfort Terrace, Dublin 2.

Basis of Preparation

The financial statements have been prepared in accordance with applicable accounting standards generally accepted in the United Kingdom, with the Companies Act 1985 and the Listing Rules of the Financial Services Authority. The group has adopted the requirements of FRS 18 -Accounting Policies. This has not resulted in any change in accounting policy.

Accounting Convention

The financial statements are prepared under the historical cost convention.

Going concern

The financial statements are prepared on a going concern basis. The validity of the going concern concept is dependent on finance being available for the continuing working capital requirements of the group and finance for the development of the Parys Mountain property eventually becoming available. Based on the assumptions that such finance will become available, the directors believe that the going concern basis is appropriate for these accounts. Should the going concern basis not be appropriate, adjustments would have to be made to reduce the value of the group's assets, in particular the intangible fixed assets, to their realisable values.

Consolidation

The consolidated financial statements include the financial statements of the parent company and its subsidiaries made up to the end of the financial year. Where a subsidiary is acquired or disposed of during the financial year, the consolidated financial statements include the attributable profit from or to the date of acquisition or disposal.

Tangible fixed assets

The group’s freehold property is stated in the balance sheet at cost. The directors consider that the useful life of the premises is so long and their estimated residual value, based on prices prevailing at the date of acquisition, is such that any depreciation would not be material. The carrying value is reviewed annually and any impairment in value would be charged immediately to the profit and loss account.

Plant, equipment, fixtures, fittings and motor vehicles are stated in the balance sheet 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%; motor vehicles - 25%.

Intangible fixed assets

Intangible fixed assets are stated in the balance sheet at cost, less amounts written off and provisions for impairment.

The group follows the method of accounting for its mineral properties whereby all costs related to acquisition, exploration and development, including associated technical and specific administrative expenses, are capitalised by property. No gains or losses are recognised on the sale of mineral properties except when there is a material disposition of reserves. All other proceeds are credited against the cost of the related property. On the commencement of commercial production, net costs are charged to operations on the unit-of-production method by property, based upon estimated recoverable reserves.

Mineral properties are written down when an impairment in their value has occurred and are written off when abandoned. Where a provision is made it is dealt with in the profit and loss account in the period in which it arises.

Foreign currencies

Profit and loss account transactions in foreign currencies are translated at the rates of exchange ruling at the date of the transaction, or where forward currency contracts have been arranged, at the contracted rates.

All foreign exchange differences arising on transactions in the year are taken to the profit and loss account in the year in which they arise.

Assets and liabilities denominated in foreign currencies are translated into sterling at the rates of exchange ruling at the end of the financial year or at a contracted rate if applicable. Differences on exchange are taken to the profit and loss account.