Director's Report

The directors have pleasure in submitting their report and the accounts for the year ended 31 March 1998.

Principal activities and business review

The principal activity of Anglesey Mining plc during the year was the development of the Parys Mountain property. The company also evaluated other mineral development opportunities and acquired control of the Dolaucothi gold property in south Wales.

The loss for the year before taxation was £97,551 (1997 £98,446). The company has no revenues from the operation of its properties and almost all of this loss represents corporate and administrative expenses which, in accordance with the company’s accounting policy, are charged to the Profit and Loss Account. During the year fixed assets totalling £121,549 (1997 - nil) were acquired, £414,658 (1997 - £135,268) was capitalised in respect of the development of the Parys Mountain property and £98,531 (1997 - £97,040) was expended on corporate costs, administration expenses and the investigation of exploration and development opportunities. The expenditure on development at Parys Mountain increased in comparison with last year because of (a) increased geological activities, (b) costs associated with the acquisition of the leasehold and freehold of Parys Mountain and (c) the acquisition of Parys Mountain Mines Limited.

The company is continuing the exploration of the Parys Mountain property by its ongoing geological re-assessment programme and further lithogeochemical studies to which has been added diamond core drilling which commenced in October 1997. Diamond core drilling is underway at the new Dolaucothi site and further geological evaluation is also planned. In order to carry out all these activities further funding will be required. The directors remain attentive for opportunities to be involved in appropriate new mineral ventures.

Four significant transactions were completed in August 1997 and were described in detail in last year’s report. In brief they were :

The purchase for £120,000 of the freehold of the western portion of Parys Mountain.

The purchase of Parys Mountain Mines Limited.

The purchase of Anglo Canadian Exploration (Ace) Ltd, which holds the Dolaucothi property.

A private placing to raise £485,000 net of expenses

The directors are unable to recommend a dividend. Since the date of the accounts the activities of the company have continued in accordance with the directors' expectations.

Post balance sheet events

Details of significant post balance sheet events are included in note 25 to the accounts.

Subsidiaries and consolidation

Following the acquisition of subsidiaries during the year consolidated accounts have been prepared this year. The subsidiaries of the company at 31 March 1998 (unchanged at 25 September 1998) are:
Anglo Canadian Exploration (Ace) Limited
Parys Mountain Mines Limited - Incorporated in Ontario, Canada
Parys Mountain Mines (UK) Limited.

Intangible fixed assets

Development expenditure incurred by the company is carried in the financial statements classified as intangible assets at cost. 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 property offered for sale at this time. 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.

Market value of land

During the year the freehold of the western part of Parys Mountain was purchased by the company. The directors are required to state whether there is any significant difference between the market value of the land owned by the company and the value at which it is held in the accounts. 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 a value 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.

Going concern basis

As in previous years the directors have given careful consideration to the appropriateness of the going concern concept in the preparation of the financial statements. The validity of the going concern concept is dependent on finance being available for the continuing working capital requirements of the company and finance for the development of the Parys Mountain property eventually becoming available.

The directors believe that the steps outlined in this report represent solid progress and that, whilst there is uncertainty as to whether these conditions will be met, the going concern basis is appropriate for these financial statements.

Directors’ responsibilities

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 as at the end of the financial year and of the profit or loss of the company 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 the accounts for the year ended 31 March 1998. 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 are responsible for keeping proper accounting records, for safeguarding the assets of the company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities.

Directors

The names of directors with biographical details are shown on page 32. In accordance with the articles of association, John Kearney retires by rotation and, being eligible, offers himself for re-election. On 22 December 1997 Ian Cuthbertson, the company secretary, was appointed to the board as finance director and Malcolm Burne was appointed as a non-executive director. Both of these directors offer themselves for election at the annual general meeting. Lord Crickhowell, Malcolm Swallow and Malcolm Burne are regarded as being ‘independent’ non-executive directors for Hampel committee purposes.

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 a further working capital agreement of June 1998. Apart from the working capital advances and the acquisition of Anglo Canadian Exploration (Ace) Limited described elsewhere in this report there were no transactions between the company and Juno and its group during the year. Danesh Varma is a director and, through his family interests, a significant shareholder of Juno. John Kearney is a director and shareholder of Irish Marine Oil plc (and certain of its subsidiaries) in which Juno holds an interest of approximately 30%.

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

Directors’ shareholdings

The interests at 31 March 1998 of the directors and their families in the share capital of the company, all of which are beneficial, are set out below. These holdings were unchanged in amount at 25 September 1998. The holdings are expressed as a percentage of 114,643,858 (1997 - 103,343,858) shares, this being the number of shares in issue at 25 September 1998.

                                At 31 March 1998                  At 31 March 1997

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		-		1.9
Lord Crickhowell	600,000	455,555	0.9	600,000		455,555		1.0
Malcolm Burne	500,000	1,000,000	1.3	500,000		-		0.5
Ian Cuthbertson	600,000	500,000	1.0	600,000		500,000		1.1
Malcolm Swallow	600,000	-	0.5	600,000		-		0.6
Danesh Varma	300,000	-	0.3	300,000		-		0.3

Directors’ remuneration

Except in the case of Ian Cuthbertson, there are no directors’ service contracts and no arrangements in force whereby the company is under an obligation to pay fees, salaries, pensions or any other remuneration to any of the directors.

In view of the small size of the board, the directors had not considered it appropriate to formally constitute the remuneration committee which is recommended by section A of the best practice provisions annexed to the London Stock Exchange listing rules. In any matter concerned with directors’ remuneration, decisions were made by the entire board. Three of the board’s five members are non-executive directors. In other respects the company has complied with the best practice provisions. Since the year end the company has set up a formal remuneration committee.

The company’s policy with regard to directors’ remuneration is to provide a remuneration package which will attract, retain and motivate directors of the calibre required and also be consistent with the company’s limited ability to pay for such a package in cash. In determining the company’s policy with regard to directors’ remuneration the board gave full consideration to section B of the best practice provisions annexed to the London Stock Exchange listing rules.

Details of directors’ remuneration are as follows:

Name	Salary and fees	Benefits in kind	Other emoluments	Pension contri-butions	Total emoluments
Executive directors
John Kearney	-	-	-	-	-
Ian Cuthbertson	7,429	95	-	253	7,777
Non-executive directors
Lord Crickhowell	-	-	-	-	-
Malcolm Burne	-	-	-	-	-
Malcolm Swallow	-	-	-	-	-
Danesh Varma	-	-	-	-	-
Totals	7,429	95	-	253	7,777

The remuneration shown above in respect of Ian Cuthbertson is that from 22 December 1997, the date of his appointment as a director. Pension contributions are to a defined contribution pension scheme.

Directors' options

Details of each share option held by directors at 31 March 1998 are set out below. These holdings were unchanged in amount at 25 September 1998:

Name	Options at 31 March 98	Granted in year	Exercise price	Date from which exercisable	Expiry date
John Kearney	*1,960,000	-	5p	23 October 96	22 October 2003
Lord Crickhowell	384,000	-	5p	30 November 95	30 November 1999
Lord Crickhowell	*216,000	-	5p	23 October 96	22 October 2003
Malcolm Burne	*500,000	500,000	8.5p	22 December 97	22 October 2003
Ian Cuthbertson	400,000	-	5p	30 November 95	30 November 2002
Ian Cuthbertson	200,000	-	5p	23 October 96	22 October 2006
Malcolm Swallow	600,000	-	5p	30 November 95	30 November 2002
Danesh Varma	*300,000	-	5p	23 October 96	22 October 2003

There are performance criteria to be met in respect of share options marked with an asterisk, namely that the company’s share price performance 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 option was granted at a cost of £1. No share options have been exercised during the year.

The market price of the ordinary shares at 31 March 1998 was 7.5 pence, the high for the year to 31 March 1998 was 16.25 pence and the low for the year was 2.25 pence.

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 company and any other remuneration receivable by him from the company.

Taxation

The company is not a close company within the provisions of the Income and Corporation Taxes Act 1988 and this position has not changed since the end of the financial year.

Creditor payment policy

The company’s policy in relation to the payment of its creditors is to settle its terms of payment with each creditor when agreeing the terms of each business transaction. The creditor is made aware of the terms, which may be varied subsequently by agreement. It is company practice to abide by the agreed terms of payment. The company’s average creditor payment period at 31 March 1998 was 89 days (1997 - 68 days). This increase in payment period is due to relatively large amounts due to the drilling contractor at the year end without a corresponding turnover in the year.

Substantial shareholders

At 25 September 1998 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	55,350,000	50.02
Strategic Lines Asset Management Limited	9,800,000	8.6

Authority to allot shares

Although the directors would usually wish to allot any new share capital on a pre-emptive basis, they believe 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 £573,000, being approximately 10% of the issued ordinary share capital at 25 September 1998. This continues the authority granted to the directors at each annual general meeting since 1993 and whilst such authority is 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.

The authority granted to directors to allot shares under section 80 of the Companies Act at the EGM on 23 October 1996 has now been almost utilised. Consequently a resolution granting the directors powers to allot shares of a nominal value of up to £817,807 being all the authorised but unissued share capital, and representing 14% of the issued share capital, will be proposed at the AGM.

Charitable and political contributions

The company made no contributions during the year. (1997 - nil).

Employment

The company is an equal opportunity employer in all respects.

Year 2000 and the Euro

The directors do not anticipate any difficulties in connection with the introduction of the Euro, nor complications in respect of the company’s information technology systems at the millennium. The estimated cost of any changes will not be significant for the group

Auditors

Coopers & Lybrand tendered their resignation as the company's auditors on 14 July 1998. There were no matters in connection with this resignation to be brought to the attention of the shareholders.

The directors appointed Deloitte and Touche to fill the vacancy and a resolution to confirm this appointment and to authorise the directors to fix the auditors remuneration will be proposed at the annual general meeting.

By order of the board

Ian Cuthbertson

Company Secretary

Amlwch, 29 September 1998