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17 May 2019

The company notifies that the placing to an institution of 9,367,681 new ordinary shares, representing approximately 5.3% of the company’s current issued share capital, at 2.135 pence per share to raise a total of £200,000 gross and £180,000 net has been concluded and that the shares were admitted for trading on 17 May 2019.

Following this allotment the issued ordinary share capital of the company is 186,975,732 ordinary shares of 1 pence each with voting rights; there are no shares held in treasury. This figure may be used by shareholders as the denominator for the calculations which will determine whether they are required to notify their interest in the company, or any change to that interest, under the Financial Conduct Authority’s Disclosure and Transparency Rules.

For further information, please contact:
Bill Hooley, Chief Executive +44 (0)7785-572517
Danesh Varma, Finance Director +44 (0)7740-932766
Elliot Hance, SVS Securities+44 (0)203-7000078

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29th April 2019 LSE: AYM
Placing of New Shares for £0.2 million

Anglesey Mining plc is pleased to announce that it has today entered into a placing agreement to issue 9,367,681 new ordinary shares, representing approximately 5.3% of the company’s current issued share capital, at 2.135 pence per share in a placement to institutions, to raise a total of £200,000 gross and £180,000 net. The placing price represents a discount of approximately 9.1 per cent. to the closing middle market price of 2.35 pence per ordinary share at the close of business on 26 April 2019.

The proceeds of issue will be used for project development of its 100% owned Parys Mountain zinc-copper-lead deposit in North Wales, UK and for general working capital.

The Parys Mountain property is a significant zinc, copper and lead deposit with small amounts of silver and gold, with a reported a resource of 2.1 million tonnes at 6.9% combined base metals in the indicated category and 4.1 million tonnes at 5.0% combined base metals in the inferred category. An Optimisation Study on the Parys Mountain Project is currently being prepared by QME Mine Engineering Services and this is expected to be completed by the middle of the current year.

The directors have authorised the proposed issue of the new shares under the dispensation approved at the last AGM on 20th September 2018. The new ordinary shares of 1 pence each to be issued in respect of this transaction will rank pari passu with the existing ordinary shares of the company. The transaction is conditional on the admission of the new ordinary shares to the Official List and to trading on the London Stock Exchange’s main market.

Application will be made for these shares to be admitted to both the Official List and to trading on the London Stock Exchange’s main market for listed securities and it is expected that such admission will become effective and dealings will commence on or after 14th May 2019.

Following the allotment of these new ordinary shares becoming unconditional, the issued ordinary share capital of the company will be 186,975,732 ordinary shares of 1 pence each with voting rights; there are no shares held in treasury. This figure may be used by shareholders as the denominator for the calculations which will determine whether they are required to notify their interest in the company, or any change to that interest, under the Financial Conduct Authority’s Disclosure and Transparency Rules.

Bill Hooley, CEO, stated “We are very pleased to announce this financing, which represents significant support for Anglesey Mining, and we look forward to completion of the optimisation study and to expedite development of the Parys Mountain project.”

About Anglesey Mining plc

Anglesey is carrying out development and exploration work at its 100% owned Parys Mountain zinc-copper-lead deposit in North Wales, UK with a reported resource of 2.1 million tonnes at 6.9% combined base metals in the indicated category and 4.1 million tonnes at 5.0% combined base metals in the inferred category.
Anglesey holds an 8.7% interest, and management rights to the Grangesberg Iron project in Sweden, together with a right of first refusal to increase its interest by a further 50.1%.
Anglesey also holds 12% of Labrador Iron Mines Holdings Limited which holds direct shipping iron ore deposits in Labrador and Quebec.

For further information, please contact:
Bill Hooley, Chief Executive +44 (0)7785-572517
Danesh Varma, Finance Director +44 (0)7740-932766
Elliot Hance, SVS Securities+44 (0)203-7000078

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Anglesey Mining plc (“AYM”) is pleased to report on progress of the Optimisation Study being carried out on its Parys Mountain copper, zinc, lead, gold and silver project, located on the island of Anglesey in North Wales.

The Optimisation Study is being conducted under a Project Development and Cooperation Agreement entered into with QME Mine Engineering Services (“QME”) which is based in Navan, County Meath, Ireland.  QME is carrying out this study at its own expense in return for which AYM has agreed to grant QME various rights and options relating to the future development of Parys Mountain as detailed in the AYM RNS of 26th November 2018.

QME has assembled a team of qualified and experienced geologists and engineers particularly for this project.  The QME team has conducted two workshops with AYM since the project commenced in late November, including a site visit to Parys Mountain earlier this month.

QME is examining a number of development scenarios for Parys Mountain which include the initial development of the mine from a new decline, with first production from the White Rock Zone, and alternatively initial development through refurbishing the existing Morris Shaft, with early production from the higher value though deeper Engine Zone.  A number of sub-alternatives are also being considered.

Anglesey Chief Executive, Bill Hooley, said: “I am very pleased with the progress that QME has made in the short period since work commenced on this project in November.  I am also greatly encouraged by the high-quality team that has been assembled and particularly by the enthusiasm and vigour with which each member of that team is approaching the production of an optimised and viable development plan.  I believe that the final output from this Optimisation Study will do much to enhance the value and development of Parys Mountain.”

In order to fully evaluate these alternatives QME has carried out a detailed validation and review of the wire-frame models of the various orebodies and zones that will form part of the new production plans.  QME has also examined the classifications of resources utilised previously and at this point in time believe that it will be possible to increase the tonnages available for production when these reviews are combined with updated costing models.  Work will continue on the wire-frame review and is expected to lead to development of alternative mine production plans in the coming weeks.

QME has significant experience in mine development and operation through its involvement in major mining activities in Ireland and elsewhere.  As its understanding of the requirements for development and production at Parys Mountain has evolved since November, QME has commenced the compilation of a detailed cost data-base to be utilised in examining each of the alternative scenarios.  This will ensure that the comparative financial models to be produced for each option will be consistent and current.  It is expected that compilation of this data-base will be completed to tie in with the completion of the alternative mine production plans as noted above.

The next major piece of work for QME, and which follows directly from the site visit earlier this month, will be the development of plans to reopen and utilise the 300 metre deep Morris Shaft as a potential early access option to the higher value Engine Zone.  It is believed that this shaft, though currently flooded to near surface, is in reasonable condition and could be dewatered and rehabilitated relatively easily.  In addition to the shaft itself, QME has examined the headframe and winder on site and will consider if and how best this existing equipment can be utilised for the shaft reopening exercise.  Development of the logistics and costing of this possible approach will be incorporated into the various alternative models as information becomes available.

The original timetable was for the entire Optimisation Study to be completed by the end of June 2019 and this target still appears to be quite achievable.

Parys Mountain – 2017 Scoping Study

In July 2017 a new Scoping Study on the Parys Mountain, was prepared by Micon International Limited and Fairport Engineering Ltd.  The Scoping Study envisaged a mining rate of 1,000 tonnes per day, to produce an average annual output of 14,000 tonnes of zinc concentrate at 57% Zn, 7,200 tonnes of lead concentrate at 52% Pb and 4,000 tonnes of copper concentrate at 25% Cu, over an initial mine life of eight years.

The QME Optimisation Study will build on the results of the Scoping Study which will be used as a Base Case for comparison purposes, and it is hoped and anticipated that the Study will result in a development plan that both increases the mine life beyond the eight years, as well as providing improved financial results.

About QME

QME Limited, based in Navan, County Meath, Ireland, supplies services to the mining industry worldwide.  QME is involved in various mining projects in the fields of both mine development and mining operations.  QME also supplies new and re-manufactured underground and open pit mining equipment to the international mining industry worldwide and has carried out both large and small scale underground mine development contracts for a number of clients including New Boliden Tara Mines at Navan Ireland, Dalradian Gold Limited at Curraghinalt Northern Ireland, and Lafarge Holcim at Glensanda Scotland.

About Anglesey Mining plc

Anglesey is carrying out feasibility and development work at its 100% owned Parys Mountain copper-zinc-lead deposit in North Wales, UK with a reported resource of 2.1 million tonnes at 6.9% combined base metals in the indicated category and 4.1 million tonnes at 5.0% combined base metals in the inferred category.

Following a recent refinancing, Anglesey now holds an 8.7% interest, (increased from 6%), and management rights to the Grangesberg Iron project in Sweden, together with a right of first refusal to increase its interest by a further 50.1%.  Anglesey also holds 12% of Labrador Iron Mines Holdings Limited which holds direct shipping iron ore deposits in Labrador and Quebec.

For further information, please contact:

Bill Hooley, Chief Executive +44 (0)7785 572517
Danesh Varma, Finance Director +44 (0)7740 932766

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Anglesey Mining plc

Half yearly report for the six months to 30 September 2018

Chairman’s Statement and Management Report

In our most recent Annual Report to shareholders, issued in July, I commented that metal prices had softened somewhat during 2018 but that there was a strong expectation of a continued positive outlook for base metals, particularly for zinc and copper. Despite the current geopolitical uncertainty caused by fears of trade wars and tariffs, that general prognosis still holds and we continue to maintain a positive outlook for all these metals.

The recently announced Project Development and Cooperation Agreement entered into with QME Mining Technical Services, a division of QME Ltd, (“QME”) is a very important and positive step forward in the advancement of the Parys Mountain copper, zinc, lead, gold and silver project, located on the island of Anglesey in North Wales. (See Anglesey Mining plc News release 26 November 2018).

QME is experienced in underground mine development and has developed and recruited the necessary skills in mine planning to deliver local and relevant mining expertise to assist Anglesey to progress the Parys Mountain project at no direct cash cost to Anglesey or dilution of its shareholders.

Under the Agreement, QME will, at its own cost, carry out an agreed programme of design, engineering and optimisation studies relating to the future development of Parys Mountain.  This will enable Anglesey to complete this work without additional cash commitment.

Anglesey has granted QME various rights relating to the future development of Parys Mountain. On completion of the optimisation study Anglesey will award QME, on an exclusive basis, contracts for the development of the decline and underground mine development, including rehabilitation of the shaft, and in addition, will grant QME the right and option, upon completion of a Prefeasibility Study, to undertake at QME’s cost and investment, the underground development component of Parys Mountain, with a scope to be agreed, to the point of commencement of production, in consideration of which QME would earn a 30% undivided joint venture interest in the Parys Mountain project.  If exercised, this would represent a significant portion of the capital cost of the project and could be considered to be a major equity contribution in any future financing package.

 Parys Mountain – Path towards Production

We have continued to review the results of the 2017 Scoping Study on Parys Mountain with the objective of enhancing the economics of the project to attract the capital financing necessary to achieve our target of getting the Parys Mountain Mine into production at the earliest date possible. The 2017 Scoping Study by Micon International Limited and Fairport Engineering Limited recommended further work as interim steps towards undertaking a Feasibility Study, including more detailed mine planning and design, more engineering studies, additional metallurgical test work and a review of tailings management and environmental and planning permissions, all of which require new and further financing.

The Project Development and Co-operation Agreement with QME Mining Technical Services will see the completion of a substantial part of the recommended further work on mine planning and design and project optimisation. The 2017 Scoping Study was based on mining only the 2.1 million tonnes of indicated resources reported by Micon in 2012. Micon had reported a further 4.1 million tonnes of inferred resources which were not incorporated into the Scoping Study. Development of even half of these inferred resources would significantly increase the projected life of the Parys Mountain mine with potential positive outcomes on the project economics.

The Development Agreement with QME will examine a revised mine model with the objective of incorporating some of the inferred resources, including part of the higher-grade Engine Zone inferred resources, into the earlier years of the mine plan with the intention of increasing the life of the mine to at least 10 years.

The 2017 Scoping Study was based on the initial development and production from the White Rock zone using a newly developed decline eventually leading to development of the deeper Engine zone and then the rehabilitation and use of the Morris Shaft as a hoisting facility. The QME programme will examine whether different approaches to accessing the orebodies, particularly by the early dewatering, rehabilitation and recommissioning of the Morris Shaft, could speed up access to the higher-grade Engine zone resources. This should have a beneficial effect upon both the net present value of the operation and the pay-back period.

It is expected that these optimisation studies will be completed by the middle of 2019 and, subject to financing being available, would then form the basis for commissioning of a Preliminary Feasibility Study to lead to an overall project financing package. In the meantime, we will continue to maintain our mineral interests in good standing. We have confirmed that our current planning consents remain in good order and we will make the appropriate preparations for those further environmental baseline studies that will be required as part of the expected Preliminary Feasibility Study. We will also continue to discuss concentrate and metal sales with brokers, traders and smelters as part of both the longer-term financing plan and as inputs to the future studies.

 Iron Ore

Iron ore prices have continued to grow steadily if not spectacularly during 2018 and currently 62%Fe ore is trading at just under $75 per tonne. The premiums for higher grade ore have weakened slightly but still provide an exceptional differential over the 62% Fe basis. This slow but steady growth period represents some consolidation after fairly erratic trading during the last five years and could herald the beginning of a more mature and financeable market.

 Grangesberg

Anglesey continues to manage the Grangesberg iron ore project in Central Sweden though these activities have been kept at a minimum level while product prices have remained low. However, the greater maturity of the market coupled with some increase in price, the continuing premiums expected for premium product, and importantly the announcement by LKAB that its flagship Kiruna project in northern Sweden will have a shorter life than originally planned, makes the interest in developing the Grangesberg project albeit at significant capital cost much more likely. We continue to support Grangesberg and recognise that it is likely that further external partnerships will be required to raise the capital required for full development.

 Labrador

The group continues to hold a 12% interest in Labrador Iron Mines Limited which owns extensive iron ore resources and facilities in the Schefferville area of Labrador and Quebec in Canada. These resources are kept on a stand-by care and maintenance basis and subject to financing are positioned to resume operations as soon as economic conditions warrant.

 Operations

As always, we have kept our corporate and operating costs at the lowest level consistent with maintaining our assets in good order. We will maintain this policy going forward but costs will increase once a feasibility study is commissioned on Parys Mountain and as activity is resumed on our iron ore properties.

 Financial results

The group had no revenue for the period. The loss for the six months to 30 September 2018 was £137,117 (2017 – £167,186) and the expenditures on the mineral property in the period were £25,755 compared to £65,943 in the comparative period when there were additional expenses in respect of consultants’ fees. Net current assets at 30 September 2018 were £7,874 compared to £91,033 at 31 March 2018. Further funding will be required for continuing expenses as well as the maintenance and development of the group’s mineral properties. A substantial amount of work on mine planning and project optimisation at Parys Mountain will be completed at no cost to Anglesey under the Project Development Co-operation Agreement with QME Technical Services.

 Outlook

We remain confident that demand for metals will remain strong and the outlook for commodity prices will remain positive for the foreseeable future. There will be occasional pressures on price by external geopolitical forces but the underlying growth of the emerging industrialised nations particularly China will support demand growth in the longer term.

On that basis we look to move Parys Mountain forward in a planned and sequential manner, firstly through optimisation studies to determine the best development plan and then advancing through feasibility for raising the necessary finance. We will also continue to review the commercial and development opportunities for our iron ore projects and look for other new opportunities as they present themselves.

I would like to thank the current directors for their continuing diligence and support in moving the Parys Mountain mine project forward and again thank shareholders for their continued confidence and patience.

John F Kearney

Chairman

29 November 2018

Unaudited condensed consolidated income statement

 Notes Unaudited six months ended 30 September 2018 Unaudited six months ended 30 September 2017
All operations are continuing                            £                            £
 Revenue  –  –
 Expenses  (57,477)  (78,100)
 Equity-settled employee benefits  –  (9,324)
 Investment income 52 56
 Finance costs  (79,719)  (79,954)
 Foreign exchange movement 27 136
 Loss before tax  (137,117)  (167,186)
 Taxation 8  –  –
 Loss for the period 7  (137,117)  (167,186)
 Loss per share 
 Basic – pence per share  (0.1)p  (0.1)p
 Diluted – pence per share  (0.1)p  (0.1)p

Unaudited condensed consolidated statement of comprehensive income

 Loss for the period  (137,117)  (167,186)
Other comprehensive income
Items that may subsequently be reclassified to profit or loss:
 Exchange difference on
translation of foreign holding
 (21,265) 21,155
 Total comprehensive loss for the period  (158,382)  (146,031)

All attributable to equity holders of the company

Unaudited condensed consolidated statement of financial position

 Notes Unaudited 30 September 2018 Audited 31 March 2018
               £                £
Assets
 Non-current assets
 Mineral property exploration and evaluation 9 15,136,896 15,111,141
 Property, plant and equipment 204,687 204,687
 Investments 10 86,660 86,660
 Deposit 123,279 123,227
15,551,522 15,525,715
 Current assets
 Other receivables 18,014 19,790
 Cash and cash equivalents 57,537 137,113
75,551 156,903
 Total assets 15,627,073 15,682,618
Liabilities
 Current liabilities
 Trade and other payables  (67,677)  (65,870)
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26 November 2018        LSE:AYM


Anglesey Optimisation Study on Parys Mountain Mine Project

Agreement with mining contractor, QME, on mine development 

Anglesey Mining plc (“AYM”) is pleased to announce a major development on the path forward for the advancement of its Parys Mountain copper, zinc, lead, gold and silver project, located on the island of Anglesey in North Wales.

Under a Project Development and Cooperation Agreement (“Agreement”) entered into with QME Mining Technical Services, a division of QME Ltd, (“QME”), QME will, at no cost to AYM, carry out an agreed programme of design, engineering and optimisation studies relating to the future development of Parys Mountain.

Over the period to the end of June 2019, QME will carry out a detailed review of various development and mining alternatives for Parys Mountain. The primary objective is to determine the optimum production plan for Parys Mountain, utilising all available and potential means of accessing both the indicated resources and inferred resources, (as currently defined and estimated by Micon International) at various “cut-off” grades.

Anglesey Chief Executive, Bill Hooley, said: “We consider this to be a very important and positive step forward in the development of the Parys Mountain mine. QME is experienced in underground mine development and has developed and recruited the necessary skills in mine planning to deliver local and relevant underground mining expertise to Parys Mountain that will assist Anglesey to move forward with the development of the Parys Mountain project at no direct cash cost to Anglesey or dilution of its shareholders.”

AYM has agreed to grant QME various rights and options relating to the future development of Parys Mountain. On completion of the optimisation study and delivery to AYM of the results thereof:

(i)         AYM will award QME, on an exclusive basis, contracts for the development of the decline and underground mine development, including rehabilitation of the shaft. This will be done on terms to be agreed following a decision by AYM to proceed with the development of Parys Mountain;

(ii)        In the event Anglesey and QME are not able to agree terms AYM may offer such contracts to third parties, subject to a right of first refusal in favour of QME, and subject to a payment by AYM to QME, upon the award of such contracts to a third-party, of a break-fee; and

(iii)       In addition, AYM will grant to QME the right and option, upon completion of a Prefeasibility Study (“PFS”), to undertake at QME’s cost and investment, the mine development component of the Parys Mountain project, including decline and related underground development and shaft development, with a scope to be agreed, to the point of commencement of production, in consideration of which QME would earn a 30% undivided joint venture interest in the Parys Mountain project.

Parys Mountain – 2017 Scoping Study Recommendations

In July 2017 a Scoping Study on Parys Mountain, was prepared by Micon International Limited (Micon) and Fairport Engineering Ltd. The Scoping Study envisages a mining rate of 1,000 tonnes per day, to produce an average annual output of 14,000 tonnes of zinc concentrate at 57% Zn, 7,200 tonnes of lead concentrate at 52% Pb and 4,000 tonnes of copper concentrate at 25% Cu, over an initial mine life of eight years.

Following completion of the positive 2017 Scoping Study, Anglesey has been working to progress the Parys Mountain project towards production.  The 2017 Scoping Study recommended further work as interim steps towards undertaking a PFS, including more detailed mine planning and design, more engineering studies, additional metallurgical test work and a review of tailings management and environmental and planning permissions, all of which will require new and further financing. The Agreement with QME announced today is a major component of this and is a very positive development that will significantly advance the Parys Mountain project.

Optimisation Studies and Revised Mine Plan

The 2017 Scoping Study was based on mining only the 2.1 million tonnes of indicated resources reported by Micon in 2012. Micon had reported a further 4.1 million tonnes of inferred resources which were not incorporated into the Scoping Study. Development of even half of these inferred resources not included in the Scoping Study, would significantly increase the projected life of the Parys Mountain mine with potential positive outcomes on the project economics.

Under the Agreement QME will examine a revised mine model with the objective of incorporating some of the inferred resources, including part of the higher-grade Engine Zone inferred resources, into the earlier years of the mine plan with the intention of bringing forward cashflows and increasing the life of the mine to at least 10 years.

The 2017 Scoping Study was based on the initial development and production from the White Rock zone using a newly developed decline eventually leading to development of the deeper Engine zone and then the rehabilitation and use of the Morris Shaft as a hoisting facility.

The QME review will examine whether different approaches to accessing the orebodies, particularly by early dewatering, rehabilitation and recommissioning of the Morris Shaft, could provide early access to the higher-grade Engine zone resources. This should have a beneficial effect upon both the net present value of the operation and the pay-back period.

It is expected that these optimisation studies will be completed by the middle of 2019 and, subject to financing being available, would then form the basis for commissioning of a Preliminary Feasibility Study to lead to an overall project financing package.

Following delivery of the optimisation studies pursuant to the Agreement, and the subsequent completion of a PFS, QME will have the option to undertake at QME’s investment, the mine development component of the Parys Mountain project, including decline and related underground development and shaft development, in consideration of which QME would earn a 30% undivided joint venture interest in the Parys Mountain project, thereby significantly reducing AYM’s capital cost requirements.

 About QME

QME Limited, founded in 1987 by its current Managing Director Peter McParland, is based in Navan, County Meath, Ireland from which it operates several divisions and provides a wide range of services in the fields of both mine development and mine operations to the local and international mining community.

QME Mining Technical Services division undertakes contract mining projects and employs an ‘in-house’ team of highly experienced operations managers, underground supervisors, miners, fitters and electricians. QME has carried out both large- and small-scale underground mine development contracts, providing all technical evaluation and budgeting services, personnel, management, equipment and maintenance.

Current and past clients include: Boliden Tara Mines, Navan, Ireland; Dalradian Gold Limited, Curraghinalt, Northern Ireland; Lafarge Holcim, Glensanda Super Quarry, Scotland; Lundin Mining Galmoy Mine, Ireland; Vedanta Lisheen Mine, Ireland; Irish Base Metals Ltd., Tynagh Mine and Gortdrum Mine, Ireland; Saint Gobain, Gyproc, Ireland; Northgate Exploration Ltd, Canada; and Campbell Resources, Canada.

QME Equipment Division is a large provider of new and re-manufactured underground and open pit mining equipment to the international mining industry worldwide, employing a highly skilled workforce of mechanical and technical staff with the capability to repair or fully overhaul a wide range of mining equipment.

About Anglesey Mining plc

Anglesey is carrying out feasibility and development work at its 100% owned Parys Mountain copper, zinc, lead deposit in North Wales, UK with a reported resource of 2.1 million tonnes at 6.9% combined base metals in the indicated category and 4.1 million tonnes at 5.0% combined base metals in the inferred category.

Anglesey holds a 6% interest and management rights to the Grangesberg Iron project in Sweden, together with a right of first refusal to increase its interest by a further 51%. Anglesey also holds 12% of Labrador Iron Mines Holdings Limited which holds direct shipping iron ore deposits in Labrador and Quebec.

For further information, please contact:

Bill Hooley, Chief Executive +44 (0)7785 572517
Danesh Varma, Finance Director +44 (0)7740 932766

For further information on QME, please contact:

Peter McParland, Managing Director QME: +353 (0) 87 2566601 www.qme.ie

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In respect of the voting at the company’s AGM held on 20 September 2018 the directors are pleased to report that all resolutions were passed unanimously on a show of hands.

The valid proxies recorded in respect of voting at the meeting were as follows:

Resolution In Favour Against Withheld
1 To receive the report and accounts 59,188,251 4,811 9,250
2 To approve the directors’ remuneration policy report 59,175,885 18,211 8,216
3 To approve the directors’ remuneration report 59,025,885 17,711 158,716
4 To reappoint John F. Kearney as a director 59,162,476 39,586 250
5 To reappoint Bill Hooley as a director 59,162,476 39,586 250
6 To reappoint David Lean as a director 59,007,240 189,586 5,486
7 To reappoint Howard Miller as a director 59,007,140  189,086 6,086
8 To reappoint Danesh Varma as a director 58,759,240 39,086 1,350
9 To reappoint Mazars LLP as auditors 59,161,876 4,811 11,900
10 To authorise the directors to determine the remuneration of the auditor 59,183,015 4,811 14,486
11 To authorise the directors to issue new share capital 59,181,015 21,047 250
12 To dis-apply pre-emption rights in respect of certain issues of shares 59,010,269 185,957 6,086

Notes

  1. Votes were received in respect of 59,202,312 shares representing 33.3% of the issued share capital.
  2. Any proxy appointments which gave discretion to the chairman have been included in the “For” total.
  3. The full text of the resolutions is shown in the notice of the AGM which is available in the annual report and on the website.
Total voting rights

The issued ordinary share capital of the company is 177,608,051 shares with voting rights; there are no shares in treasury.

The above figure may be used by shareholders as the denominator for the calculations which will determine whether they are required to notify their interest in the company, or any change to that interest, under the FSA’s Disclosure and Transparency Rules.

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For a full text pdf version of the annual report, financial statements and notice of the AGM, please click here Chairman’s statement

To Anglesey Shareholders

The improvement in base metal prices, which began in 2016, continued in 2017 and into 2018. The zinc price increased from US$1.00 per pound in January 2017 to a 10-year high of US$1.63 per pound in February 2018. From January 2016, the zinc price more than doubled making it one of the better performing metals over the two-year period. Expectations of an increase in the supply of zinc concentrates towards the end of 2018 have led to the recent decline in the zinc price to the $1.15 per pound range.

The price of copper increased substantially in the second half of 2017 and ended the year at US$3.25 per pound, a 30% increase from the end of 2016. Lead also performed well in 2017, rising from US$0.92 per pound in January 2017 to US$1.22 per pound in January 2018. Although all metal prices softened in mid -summer 2018 in response to global geopolitical uncertainty, there is a strong expectation of a continued positive outlook for base metals, particularly for zinc and copper.

Parys Mountain – 2017 Scoping Study

In July 2017 a new Scoping Study on the Parys Mountain copper-lead-zinc project in North Wales, was prepared by Micon International Limited (Micon) and Fairport Engineering Ltd. The Scoping Study envisages a mining rate of 1,000 tonnes per day, to produce an average annual output of 14,000 tonnes of zinc concentrate at 57% Zn, 7,200 tonnes of lead concentrate at 52% Pb and 4,000 tonnes of copper concentrate at 25% Cu, over an initial mine life of eight years.

The Scoping Study demonstrates a viable mine development and a healthy financial rate of return. For example, using assumptions of longer term metal price projections of $1.35 per pound for zinc and $3.00 per pound for copper, and using an 8% discount rate, to reflect the relatively low political risk in the UK, the indicated NPV would be $52 million or £42 million, with an IRR of 30%.

Path towards Production

Following completion of the positive 2017 Scoping Study, Anglesey has been working to progress the Parys Mountain project towards production. We have previously described four key steps in the development of the project which are: the conversion of the Scoping Study to a Definitive Feasibility Study, the commencement of an Environmental Impact Assessment, the recruitment of key corporate staff and securing project finance. Whilst a Definitive Feasibility Study to develop the project to a suitable status for bank debt financing might be the ideal course, the Parys Mountain project is not yet at the stage to undertake a Definitive Feasibility Study.

A Definitive Feasibility Study can be defined as a comprehensive technical and economic study to demonstrate that development of a mine is reasonably justified. The results of the study may serve as the basis for a decision by a financial institution to finance the development of the project. However, a Preliminary Feasibility Study is an intermediate step in the engineering process to evaluate the technical and economic viability of a mining project, occurring between a Scoping Study and a DFS.

The 2017 Scoping Study recommended further work as interim steps towards undertaking a PFS, including more detailed mine planning and design, more engineering studies, additional metallurgical test work and a review of tailings management and environmental and planning permissions, all of which will require new and further financing. During the year the Scoping Study has been subject to detailed examination and review with the aim of enhancing the economics of the project to attract the capital financing necessary to achieve our target of getting the Parys Mountain Mine into production at the earliest date possible.

Optimisation Studies

The 2017 Scoping Study was based on mining only the 2.1 million tonnes of indicated resources reported by Micon in 2012. Micon had reported a further 4.1 million tonnes of inferred resources which were not incorporated into the Scoping Study. Of the inferred resources currently estimated, the Engine Zone, which lies at depths up to 600m, is of higher grade in most areas.

Development of even half of these inferred resources, which were not included in the Scoping Study, would significantly increase the projected life of the Parys Mountain mine from the initial eight years to perhaps double the projected mine-life to 15 or 18 years with potential positive outcomes on the project economics.

Anglesey is working on a revised mine model with the objective of incorporating some of the inferred resources, including part of the higher-grade Engine Zone inferred resources, into the earlier years of the mine plan and thereby increasing the project life of the mine to at least 10 years. In parallel, the cut-off grade used to determine the resources included in the Scoping Study can be tested to determine if this cut-off grade can be lowered to increase the mineable tonnage and thereby further extend the projected mine life.

The Scoping Study also recommended further metallurgical investigation to improve recoveries and minimise metal losses from the DMS plant, particularly for gold and silver via the gravity concentration circuit. The proposed metallurgical work would help to confirm the design and selection of key process items such as the grinding circuit and the flotation cells and finalise the process flow sheet and mass balance before carrying out any detailed engineering works. A preliminary proposal for additional laboratory test work, with an estimated cost of £100,000, has been obtained which requires representative samples of the ore which currently may not be available. The recommended metallurgical review will be carried out to the extent possible using existing data and technical information.

Environmental Studies

Completion of a feasibility study requires an evaluation of the planning and environmental aspects of the proposed development. An external review of the planning permissions and associated licence requirements has confirmed that the planning permissions previously granted remain valid and in force and that development and operation of the Parys Mountain Mine will require various environmental assessments and permits granted by Natural Resources Wales. It is proposed that some further environmental baseline and investigative work be carried out to bring the database up to date and to comply with the current level of requirements.

Financing and Marketing

Based on the positive results of the Scoping Study, we have commenced discussions with potential financiers for the development of the Parys Mountain project. It is expected that this development will occur in stepped progressions, to be followed by sequential financings to move towards mine construction.

The Parys Mountain Mine will produce three separate marketable concentrates for each of the base metals to be mined: zinc, lead and copper. In addition, a small quantity of gravity concentrate containing silver and gold will be produced. The concentrates are likely be sold to one or more of the smelting and refining operations in Europe. Anglesey has also commenced preliminary discussions with potential end-purchasers of the concentrates with a view to entering long-term supply contracts  provided these can be linked to investment or other funding or commercial arrangements as part of the financing for the development of the project.

Iron Ore

The group’s investments in Grangesberg Iron and in Labrador Iron are heavily dependent on the future price of iron ore. In 2017 the price of 62% Fe iron ore ranged from US$55 to US$97, while averaging US$71 per tonne, and during the first six months of 2018 ranged from US$65 to US$80 per tonne. Over the past two years there has been a substantial shift in the iron ore market favouring higher grade quality (+65% Fe) product, with premiums paid for 65% Fe exceeding 30% of the 62% Fe spot price. As a result, high grade iron ore products are currently commanding high premiums to this spot price while sub-commodity grades (<60% Fe) with high impurities are suffering increasing penalties, resulting in a widening divergence in actual market sale prices. These market conditions and the resultant strong premium for ~65% Fe products are expected to continue in the medium term based on the current global project pipeline, to the potential benefit of our projects.

Grangesberg Iron

Anglesey continues to manage the Grangesberg iron ore project in Sweden. The high-quality product expected to be produced from Grangesberg, together with the potential for sales within Sweden’s domestic markets, make Grangesberg more attractive than many other undeveloped iron ore projects. Although Grangesberg will benefit from extensive existing infrastructure the project will still require high levels of capital expenditure. Together with the other shareholders and stakeholders in Grangesberg we continue to evaluate all options to develop a viable way forward for the project.

Labrador Iron

The group holds a 12% interest in Labrador Iron Mines Holdings Limited (LIM) which owns extensive iron ore resources and facilities in its Schefferville Projects in Labrador and Quebec, Canada. LIM has not undertaken mining operations since 2013, primarily due to the low iron ore price environment, but maintains its iron ore assets on a stand-by care and maintenance basis and, subject to securing financing, is positioned to resume mining operations as soon as economic conditions warrant.

Outlook

The 2017 Scoping Study demonstrated a viable mine development at Parys Mountain with a healthy financial rate of return. The outlook for metal prices, particularly zinc, copper and lead, which form the basis of the Parys Mountain revenue, remains very positive.

Our objective is to phase the development and financing of Parys Mountain in logical, sequential and parallel steps by undertaking the various optimisations studies and programmes, completing a prefeasibility or feasibility study and progressing Parys Mountain towards production as quickly as the necessary financing and technical timelines allow.

As well as maintaining a watching brief on the iron ore projects in Canada and Sweden, Anglesey also plans to pursue new opportunities for mineral exploration and development projects, in the context of the current resource cycle, with a focus on advanced copper exploration or development projects. We plan to enhance our board and small management team by recruiting experienced executives to help execute our plans and deliver our objectives.

We believe that given the world’s continuing demand for metals and the shortage of attractive advanced projects, the strong technical base and political stability associated with all of Anglesey’s projects, particularly Parys Mountain, finance for project development will become available.

Once again, I would like to thank all our shareholders for their patience and continuing support.

John F. Kearney

Chairman

31 July 2018

Strategic report – Operations Principal activities and business review

Anglesey Mining is engaged primarily in the evaluating and developing its wholly owned Parys Mountain zinc, lead, copper project in North Wales. In 2017 a new Scoping Study demonstrated a viable mine development and a healthy financial rate of return. Site activities during the year have continued to be limited to care and maintenance, though the Scoping Study has been subject to detailed examination and review with the aim of further optimising the development of the Parys Mountain project.

In addition, under various agreements the group participates in the management of the Grangesberg iron ore property in Sweden in which it has a 6% holding and a right of first refusal to acquire a further 51% ownership interest. The group also has a 12% holding in the Labrador Iron Mines in eastern Canada, currently in care and maintenance.

The group’s objective is to phase the development and financing of the Parys Mountain project by undertaking various optimisation programmes, completing a prefeasibility or feasibility study and progressing the Parys Mountain Mine towards production.

Parys Mountain

The Parys Mountain property hosts a significant polymetallic zinc, copper, lead, silver and gold deposit. The site has a head frame, a 300m deep production shaft and planning permission for operations. The group has freehold ownership of the minerals and surface land. Infrastructure is good, political risk is low and the project enjoys the support of local people and government.

An independent JORC resource estimate completed in 2012 by Micon International Limited reported a resource of 2.1 million tonnes at 6.9% combined base metals in the indicated category and 4.1 million tonnes at 5.0% combined base metals in the inferred category, with substantial exploration potential.

In July 2017 a new Scoping Study using the 2012 resource estimate was prepared by Micon and Fairport Engineering Ltd. The Scoping Study demonstrates a viable development mining 1,000 tpd to produce lead, zinc and copper concentrates and yielding a healthy financial rate of return.

Development Plan

During the period 2006-2010 Anglesey Mining carried out a detailed drilling programme on the White Rock Zone which lies adjacent to the existing 300m deep Morris Shaft and largely overlies the deeper Engine Zone deposits, but which extends to surface. As a result of this drilling the 2012 resource estimate by Micon included both the White Rock Zone and the Engine Zone.

A new mining plan based on a surface decline to access the White Rock zone was prepared. It proposed that a decline would be developed by mining contractors and would be used as the initial means of access to the resource for development and mining. During the initial production phase from the White Rock zone the decline would continue to be driven to reach the current bottom of the Morris Shaft and beyond. The shaft would then be dewatered and deepened by approximately 150 metres and recommissioned as a hoisting shaft for the remnant White Rock ore and for the deeper and more valuable Engine Zone ore. Mining would be carried out initially from the main decline using rubber-tyred equipment including drill jumbos, load-haul-dump machines and trucks to remove development waste to surface and production ore to the planned adjacent processing plant. The existing hoist and headframe would be refurbished and used to bring ore to the surface for delivery to the processing plant through the deepened shaft.

The 2017 Scoping Study concluded that the preferred development option for Parys Mountain is a 1,000 tpd mine and plant with a Dense Media Separation (DMS) section and that after an initial ramp-up period, the higher production level can be maintained. This would result in a mine life of approximately eight years based only on the indicated resources.

Metal Production

The proposed processing plant will consist of crushing and grinding followed by conventional three stage flotation to produce copper, zinc and lead concentrates to be shipped to smelters in Europe. Metallurgical performance and recovery is based on the large volume of information available from test work on Parys Mountain ores over the years. Total base metal recovery to each of the three copper, zinc and lead concentrates is forecast to be 89.8% and taking into account the DMS losses overall recovery will be approximately 85.7%. Significant amounts of silver and gold will report to each of the concentrates. Some free gold will be recovered by gravity methods and will be sold as Welsh gold.

Smelter payment terms and penalties have been based on indicative treatment charges currently prevailing from European smelters.

On average 14,000 tonnes of zinc concentrate at 57% Zn, 7,200 tonnes of lead concentrate at 52% Pb and 4,000 tonnes of copper concentrate at 25% Cu, will be produced annually. These figures will vary somewhat during the life of the mine as mine feed varies depending upon the particular ore bodies being mined at any time. Life of mine average annual metal production into concentrates is forecast at 17.6 million pounds of zinc, 8.3 million pounds of lead and 2.2 million pounds of copper.

Using estimated shipping costs, smelter terms and penalties, the overall NSR for the three concentrates, including the precious metals, is expected to total in excess of $270 million at the metal prices used for the base case. This would represent net smelter revenue of approximately 72% of the metal value in concentrates delivered to the smelters.

Project Financial Results

The pre-production capital cost of the base case including mining, DMS, concentrator and infrastructure is estimated at $56 million, including a $4 million contingency. The initial capital cost for mine development is estimated to be $16 million, the concentrator $29.5 million including $3 million for the DMS plant, and infrastructure $10 million. Operating costs were developed by Micon and Fairport based on current knowledge and experience which at the higher levels of production are forecast at around $47 per tonne of ore treated.

The base case yields a pre-tax net present value of $33 million, or £26 million, at a conservative 10 per cent discount rate, using metal prices of $1.25 per pound for zinc, $1.00 per pound for lead, $2.50 per pound for copper, $17.50 per ounce for silver and $1,275 per ounce for gold and at an exchange rate of £1.00 = $US1.25. With an estimated pre-production capital cost of $56 million, or £45 million, this results in an indicated internal rate of return (IRR) of 26%.

At an 8% discount rate, used to reflect the relatively low risks of the project given its advanced level of development and low political risk in the UK, the NPV8 would be enhanced to $40 million, or £32 million, for the base case metal price scenario. The project is sensitive to metal prices and exchange rates. Using metal price projections of $1.35 per pound for zinc and $3.00 per pound for copper the NPV10 would be $43 million, or £35 million and the NPV8 $52 million, or £42 million, with an IRR of 30%.

The pre-tax net present values, at 10% and 8% discount rates, and internal rates of return, are illustrated in the table below, all at a sterling:US dollar exchange rate of £1.00 = $US1.25.

Metal Prices Pre-Tax Cash Flows
Zinc

US$/lb

Lead US$/lb Copper

US$/lb

Silver

US$/oz

Gold

US$/oz

Undiscounted

$M

NPV10%

$M

NPV8%

$M

IRR

%

1.25 1.00 2.50 17.50 1,275 91.2 33.2 40.2 26
1.35 1.00 3.00 17.50 1,275 110.8 43.5 52.3 30

Mineral Resources and Exploration Potential

The 2017 Scoping Study utilises the Micon 2012 JORC Code compliant resource estimate of 2.1 million tonnes at 6.9% combined base metals in the indicated category. Micon had also reported a further 4.1 million tonnes at 5.0% combined base metals in the inferred category. These inferred mineral resources are not included in the Scoping Study but if utilised would significantly extend the projected operating life of the mine with a consequential increase in the resultant estimated valuation.

While the inclusion of inferred resources does not meet the strict criteria for feasibility studies used by banks for loan evaluation, given the detailed geological knowledge of Parys Mountain now available it would be acceptable to utilise some of this inferred resource for comparative financial modelling. To evaluate potential optimisation of the project some additional mine planning and scheduling will be carried out on the inferred resource and the results input to the financial model.

As reported in 2012, the resource estimate was made using a gross metal product value cut-off of $80 per tonne. The 2017 Scoping Study estimated the cash operating cost, prior to royalties and taxes, at $47 per tonne. Use of a lower cut-off grade would increase the tonnes in the indicated category, but with some reduction in grade, and increase the projected mine life. Further optimisation studies are required to determine the optimum cut-off grade that would provide the maximum increased return. These studies are being carried out initially on the base financial model, i.e. using the indicated resources only, and this will be followed by the extended resources using some of the inferred resources as detailed previously. These optimisation studies are of necessity an on-going process. As more detailed mine costings are developed, and as the increased tonnage potentially changes not just mine life but also the grade of ore processed, a series of iterations will be required to reach that optimum forecast result.

In addition to the indicated and inferred resources reported by Micon, the Parys Mountain area, over which the group holds the mineral rights, contains numerous indications of mineralisation across several kilometres many of which have been disclosed in earlier releases and reports. As most of these indications have been encountered in drilling at some depth, further exploration would be more effective from underground locations once mining operations commence.

Further work on Parys Mountain

The Scoping Study recommended further work to optimise and enhance the project as the next step ahead of mine development, including more detailed mine and stope design, underground geotechnical studies, additional infill drilling, more detailed engineering studies, additional metallurgical test work including work to improve recovery of specific metals to their own concentrate, and review of tailings management and paste fill processes. Several opportunities for cost reduction or productivity improvement have been identified.

Metallurgical Studies

Fairport has recommended that additional metallurgical testwork be carried out to increase confidence in a number of key areas including the performance of the DMS plant, regrind work in the lead circuit to improve concentrate quality, in the paste backfill section to confirm geotechnical characteristics, and in improving the overall water balance to reduce operating costs and discharge requirements. There is insufficient ore of a representative nature currently available to carry out all of this programme.

Environmental Studies

A conditional planning permission was issued by Gwynedd County Council in 1988 for ‘the development of a mining and milling complex for the extraction and processing of metalliferous ores and disposal of waste rock and slurry at Parys Mountain, Amlwch, Gwynedd. In 1991 a second planning permission was granted to develop a ‘Mine portal and spiral decline to access upper levels of the ore body to provide a second means of egress’. Both these planning permissions remain in force.

In the United Kingdom, industrial and other development proposals, including mineral development projects, are subject to two different processes: a) a planning process through which a planning authority grants permission for a specific development and, b) the environmental permitting process through which permission is granted (in this case by Natural Resources Wales) for the operation of an installation or activity that could have an environmental impact.

For planning purposes Parys Mountain is currently considered a dormant site which cannot commence permitted activity until the mineral planning authority has agreed conditions. An application may need to be accompanied by an environmental statement under the Environmental Impact Assessment (EIA) Regulations. The..

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