Chairman's Statement 1998

I am pleased to report another year of real progress for the company with highlights being the commencement of a new phase of exploration borehole drilling at Parys Mountain, the application of a number of new and advanced techniques to the geology at the Parys property and, after the year end, final settlement of the litigation which had been taken against the company.

Progress at Parys Mountain

Diamond borehole drilling started last October and four holes of a planned first phase five or six hole drilling programme have been completed. Although economic grades of mineralisation were not intersected, the information gained from these boreholes is both useful and significant. We consider the results to be encouraging and continue to be optimistic.

The geological reassessment of Parys Mountain which commenced in 1995 is continuing and expanding. Major advances are being obtained through the use of lithogeochemistry and associated advanced analytical techniques to identify accurately different rock types, even to the stage of locating different lava flows within the package of volcanic rocks. Accurate dating of the age of the rock types is central to understanding the geological structure.

Joint studies have been undertaken in conjunction with the British Geological Survey using new technologies and advanced instruments. These have included infrared mineral analysis, radio isotope dating and three dimensional modelling together with studies of the alteration effects of hot fluids which are the source of all the mineralisation.

As we discover more and more information about the structure and stratigraphy of the area, our understanding of the relationships between the different volcanic rocks and mineralisation improves. So far these new techniques are showing great promise in helping to unravel the geological mysteries of Parys Mountain and to target areas of higher potential for mineralisation.

All of the ongoing exploration, geological and technological work at Parys Mountain continues to indicate that there is potential for the discovery of substantial additional resources on the property, the largest part of which remains unexplored.

It is clear that the Parys Mountain property requires and justifies further detailed exploration and a major new drilling programme. Subject to securing the necessary funding, the company has developed plans for a major drilling programme comprising a minimum of 10,000 metres in 10 to 15 holes.

Litigation Settled

I was pleased to be able to report previously that the outstanding litigation concerning the Parys Mountain property has been settled on very satisfactory terms. This litigation had occupied a disproportionate amount of management time over the past two years and settlement has removed a cloud that was hanging over the company. We are pleased to be able to put the litigation behind us so that we can once again focus our efforts on the development of the property.

New Financing

In August 1997 the company completed a placing of 9.8 million shares to raise proceeds of £485,000 which provided the funding for the company’s activities through the year end. Subsequent to year end the company concluded a new financing agreement with Juno Limited, the company’s major shareholder. Under this agreement, which replaces the previous working capital agreement signed in 1996, Juno agreed to provide up to an additional £200,000 for current liabilities and ongoing programmes. This financing has enabled the company’s activities to be continued through the end of September. However, additional funding will be required to continue exploration and drilling activities past that date.

Outlook

Anglesey Mining is making real progress. Exploration and development of a mining property requires hard work, patience and lots of money. We are working very hard, shareholders are being particularly patient but we still need more money to carry out our ambitious plans.

Despite world metal prices having had a very poor year the longer term outlook for the metals we have at Parys Mountain, especially zinc, is quite positive. At present investor interest in mining companies is at a major low but we are part of a cyclical industry and I am sure conditions will change. Anglesey’s shareholders have heard these problems before. We remain undaunted and will press ahead with determination.

I would like to thank all employees, directors, consultants and advisors for their efforts and enthusiasm and particularly to commend shareholders for their continued support.

John F. Kearney

Chairman

29 September 1998