The directors have pleasure in submitting their report and the accounts for the year ended 31 March 1999.
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 £111,465 (1998 £97,551). The group has no revenues from the operation of its properties and almost all of this loss represents interest, administrative and corporate expenses which, in accordance with the group’s accounting policy, are charged to the Profit and Loss Account. During the year fixed assets totalling £1,191 (1998 - £121,549) were acquired, £281,419 (1998 - £414,658) was capitalised in respect of the development of the Parys Mountain property, £13,885 was capitalised in respect of the Dolaucothi property and £88,220 (1998 - £98,551) was expended on corporate costs, administration expenses and the investigation of exploration and development opportunities. The expenditure on development at Parys Mountain decreased in comparison with last year because there were no costs associated with the acquisition of the leasehold and freehold of Parys Mountain or the acquisition of Parys Mountain Mines Limited.
The group is continuing the exploration of the Parys Mountain property by its geological re-assessment programme. A major lithogeochemical study and review of Parys Mountain geology was completed during the year. A programme of diamond core drilling is planned. Drilling took place at Dolaucothi and further geological evaluation is planned there. In order to carry out all these activities further funding will be required. In June and December 1998 further working capital agreements with Juno were negotiated in order to provide funding for the company’s activities. The directors remain attentive for opportunities to be involved in appropriate new mineral ventures and are reviewing several such opportunities at present.
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 names of directors with biographical details are shown on page 28. Malcolm Burne has indicated his wish to retire at the forthcoming annual general meeting. In accordance with the articles of association, Lord Crickhowell and Malcolm Swallow 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 and December 1998. Apart from working capital advances there were no transactions between the company and Juno and 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 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.
The interests at 31 March 1999 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 9 September 1999. The holdings are expressed as a percentage of 115,340,324 (1998 - 114,643,858) shares, this being the number of shares in issue at 9 September 1999.
At 31 March 1999
At
31 March 1998
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 9 September 1999 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 |
57,700,000 |
50.0 |
Strategic Lines Asset Management Limited |
9,800,000 |
8.5 |
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 £576,000, being approximately 10% of the issued ordinary share capital at 9 September 1999. This continues the authority granted to the directors at each annual general meeting since 1993. 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.
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 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 1999 was 56 days (1998 - 89 days).
The group made no contributions during the year (1998 - nil).
The group is an equal opportunity employer in all respects.
The directors have reviewed these issues and do not anticipate difficulties in connection with the introduction of the Euro, nor complications in respect of the group’s information technology systems at the millennium. The estimated cost of any changes which may be required is not expected to be significant for the group
Deloitte and 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, 16 September 1999