Half-yearly report

Anglesey Mining plc LSE:AYM 25 November 2009 Interim report and financial statements at 30 September 2009. Chairman's statement Anglesey Mining with its flagship Labrador iron ore project has made major progress during the half year ended 30 September 2009. Labrador is moving steadily towards iron ore production and has been successful in reaching its targets. We are pleased that the market has begun to recognise both what we are achieving and what we intend to achieve during the next twelve months. This is shown by both improved market understanding of the project and a share price which is beginning to reflect the underlying value of the group's assets. Labrador Iron Ore Labrador Iron Mines (LIM) the group's 50% owned Toronto Stock Exchange listed associate has made good progress in advancing its Schefferville direct shipping iron ore project towards production with active programmes including drilling, metallurgical testing, environmental permitting and marketing. On 5 November 2009 the Department of Environment and Conservation of the Province of Newfoundland and Labrador confirmed that LIM's Environmental Impact Statement for phase I complies with the Environmental Protection Act and requires no further work. Final release of project environmental approval is now awaited following which LIM will submit applications for the necessary operating permits and licenses. Assuming these permits and licences are issued during the fourth quarter of calendar 2009, it is planned to begin initial site construction during the winter of 2009-10, ahead of the start up of commercial production, which is currently scheduled for the middle of calendar 2010. Activities A programme of reverse circulation drilling commenced at the beginning of June 2009 and was completed at the end of October. A total of 4,830 metres of reverse circulation drilling in 72 drill holes and 1,525 meters of trenching in 31 trenches was completed. Most of the work was at the four deposits planned to be mined in the phase 1 development plan. The results of this testwork, together with results from the 2006 and 2008 programmes, were combined with historical data generated by the Iron Ore Company of Canada during its 30 year operational occupation of the Schefferville area, to form the basis for compliant resource estimates on the James and Redmond deposits. These new independent estimates show a significant increase in tonnage over the historical resources estimated by the Iron Ore Company of Canada prior to 1982 which were not compliant with current Canadian reporting standard NI 43- 101. Indicated Resource Estimates compared to Historical Resources (at a cut off grade of 50% iron) (Mt=million tonnes of ore) Deposit New Grade Historical Resource Resource Mt (% Fe) Mt James 8.1 57.7 4.0 Redmond 2.9 56.4 1.2 Total 11.0 57.4 5.2 A second programme of hydro-geological drilling and testing comprising three large diameter pumping wells totalling 271 meters in depth was carried out in 2009 to confirm expected flow rates and water quality from future mining operations at the James deposit. This work will enable dewatering plans including any potential additional perimeter wells to be properly designed and installed in a timely manner. Metallurgical testwork continued during 2009 aimed at improving expected recovery levels from all size fractions of mined material while maintaining high iron and low impurity levels in the final product. Testwork on the sintering properties of the fines was carried out at an independent laboratory in Germany, and the results and report from that testwork are very positive All of the exploration, hydrogeological, and metallurgical testwork, together with open-pit planning and infrastructure design, is being incorporated into the final engineering and cost study. This will allow orders to be placed with suppliers and contractors for infrastructure, mining and beneficiation facilities in sufficient time to ensure they are available for the planned mid- 2010 production start up. On-going environmental baseline and field measurements related to both the current permit application areas as well as to future application areas continued during 2009 including a wide area airborne survey for migratory and sedentary caribou around the project sites. LIM has signed asset exchange and rail co-operation agreements with a neighbouring company. These agreements will enable LIM to mine and operate its direct shipping ore deposits in as efficient a manner as is possible. The rail agreement will also provide the framework under which the companies will co- operate in the development of the transportation facilities for their direct shipping iron ore projects in the Schefferville area and enable each company to rebuild the necessary rail infrastructure in their respective operating areas. Marketing discussions have continued with potential end users and samples have been dispatched to a number of steel mills. These discussions have indicated an encouraging level of interest in the LIM products based on the metallurgical test results and analysis of the samples supplied. The indicated high iron grades and the low level of impurities are important and should ensure that LIM will be able to market both its lump ore and its sinter fines products. In addition to European interest there is significant Chinese interest in seeking iron ore from eastern Canada and discussions continue with a number of Chinese customers and importers. Parys Mountain Parys Mountain remains on a care and maintenance basis and no active programmes have been undertaken in the period under review. The continued improvement in the prices of copper, zinc and lead, the major products to be produced from Parys Mountain, has led to renewed interest in the project from a number of external companies and these are being followed and encouraged. Financial The loss for the six month period was £368,100 (2008 - £444,330) of which share based remuneration amounted to £14,298 (2008 - £206,156). The group's share of the loss in Labrador was £226,880 (2008 - profit £3,014). Development expenses capitalised in respect of Parys Mountain amounted to £52,245 (2008 - £76,824). The group has no revenues from the operation of its properties. LIM reported cash in treasury in excess of Canadian $28 million (£16.4 million) at 30 September 2009. Outlook We look forward to further progress at Labrador during the next few months, including the construction of a spur rail line and the beneficiation plant which will be assembled on site in spring to enable commencement of commercial production in the middle of next year. Anglesey remains very well placed to take advantage of the current resurgence of interest in commodities, in particular iron ore and base metals. There are considerable grounds for optimism about the likely level of iron ore prices next year when Labrador is scheduled to begin commercial production. Continuing strength in base metals will also presage well for the advancement of Parys Mountain. We confidently expect that 2010 will be a very exciting year for Anglesey Mining. John F Kearney Chairman 25 November 2009 Anglesey Mining plc - Group Condensed income statement - unaudited Six months Six months Year ended 31 Notes ended 30 ended 30 March 2009 September September 2009 2008 All operations are continuing £ £ £ Revenue - - - Expenses (85,419) (211,490) (224,737) Equity-settled employee 5 (14,298) (206,156) (271,112) benefits Share of (loss) of (226,880) 3,014 (254,069) associate Investment income 1,352 5,240 7,118 Finance costs (42,855) (34,938) (84,535) Parys properties fair 7 - - 698,321 value adjustments (Loss) before tax (368,100) (444,330) (129,014) Tax 9 - - - (Loss) for the period (368,100) (444,330) (129,014) (Loss) per share Basic - pence per share 6 (0.2)p (0.3)p (0.1)p Diluted - pence per share (0.2)p (0.3)p (0.1)p Condensed statement of comprehensive income (Loss) for the period (368,100) (444,330) (129,014) Other comprehensive income: Translation differences on 374,123 2,722 1,835,562 foreign operations Total comprehensive profit 6,023 (441,608) 1,706,548 /(loss) for the period Condensed statement of financial position - unaudited 30 30 31 March September September 2009 2009 2008 £ £ £ Notes Assets Non-current assets Mineral property development 11 13,668,994 12,803,062 13,616,749 Property, plant and equipment 204,687 204,687 204,687 Interest in associate 13,970,113 12,074,012 13,821,013 Deposit 120,849 118,223 119,549 27,964,643 25,199,984 27,761,998 Current assets Other receivables 2,933 3,497 2,915 Cash and cash equivalents 148,460 80,483 150,431 151,393 83,980 153,346 Total assets 28,116,036 25,283,964 27,915,344 Liabilities Current liabilities Trade and other payables (638,566) (611,256) (608,682) (638,566) (611,256) (608,682) Net current (liabilities)/assets (487,173) (527,276) (455,336) Non-current liabilities Loan (1,903,384) (1,510,931) (1,760,529) Long term provision (42,000) (42,000) (42,000) (1,945,384) (1,552,931) (1,802,529) Total liabilities (2,583,950) 2,164,187 (2,411,211) Net assets 25,532,086 23,119,777 25,504,133 Equity Share capital 10 7,039,414 7,036,414 7,036,414 Share premium 8,095,198 8,092,423 8,092,423 Currency translation reserve 2,206,967 - 1,832,844 Retained earnings 8,190,507 7,990,940 8,542,452 Total shareholders' equity 25,532,086 23,119,777 25,504,133 Condensed statement of cashflows - unaudited Six months Six months Year ended Notes ended 30 ended 30 31 March September September 2009 2009 2008 £ £ £ Operating activities (Loss) for the period (368,100) (444,330) (129,014) Adjustments: Investment revenue recognised in loss (1,352) (5,240) (7,118) Finance costs recognised in loss 42,855 34,938 84,535 Equity-settled employee benefits 5 14,298 206,156 271,112 Share of (loss) of associate 226,880 (3,014) 254,069 Parys properties fair value 7 - - (698,321) adjustments (85,419) (211,490) (224,737) Movements in working capital (Increase)/decrease in receivables (18) 22,192 22,775 Increase in payables 29,884 124,696 122,122 Cash utilised by operations (55,553) (64,602) (79,840) Interest paid - - - Net cash used in operating activities (55,553) (64,602) (79,840) Investing activities Interest received 52 3,940 4,492 Mineral property development (52,245) (76,823) (192,189) Net cash used in investing activities (52,193) (72,883) (187,697) Financing activities Proceeds from issue of shares 5,775 - - Loans 100,000 - 200,000 Net cash generated from financing activities 105,775 - 200,000 Net (decrease) in cash and cash equivalents (1,971) (137,485) (67,537) Cash and cash equivalents at start of year 150,431 217,968 217,968 Cash and cash equivalents at end of year 148,460 80,483 150,431 Capital and reserves reconciliation - unaudited Six months Six months Year ended ended 30 ended 30 31 March September September 2009 2009 2008 £ £ £ At beginning of period 25,504,133 23,355,229 23,355,229 Shares issued for cash 5,775 - - Equity-settled employee benefits credit: - associate 1,857 - 171,244 - company 14,298 206,156 271,112 Comprehensive (loss) for the period 6,023 (441,608) 1,706,548 Total shareholders' equity 25,532,086 23,119,777 25,504,133 Statement of directors' responsibilities The directors are responsible for preparing the half yearly financial report in accordance with applicable laws and regulations. The directors confirm that to the best of their knowledge, these condensed financial statements which should be read in conjunction with the annual financial statements for the year ended 31 March 2009: i) have been prepared in accordance with IAS 34 'Interim financial reporting' as adopted by the European Union; and ii) include a fair review of the information required by the Financial Services Authority's Disclosure and Transparency Rules 4.2.7R and 4.2.8R. The directors of the company are listed in the annual report and accounts for 2009 and there have been no changes to the board since its publication. A list of current directors is also maintained on the company's website to be found at www.angleseymining.co.uk. These interim results were approved by the board on 25 November 2009. The half- yearly results for the current and comparative period are neither audited nor reviewed by the company's auditors. By order of the board Bill Hooley Ian Cuthbertson Chief Executive Finance Director Significant accounting policies and notes to accounts 1. BASIS OF ACCOUNTING: The unaudited condensed interim financial statements have been prepared under the historical cost convention, on a going concern basis and in accordance with the accounting policies employed in the 31 March 2009 annual report. Any accounting assumptions and estimates made in connection with these statements are consistent with those applied in that report. They should be read in conjunction with that annual report which is available on the company's website at www.angleseymining.co.uk. 2. RISKS AND UNCERTAINTIES: The risks and uncertainties applicable to these condensed financial statements are equivalent to those described in the annual report for the year ended 31 March 2009. 3. NEW OR AMENDED IFRSs: These statements reflect the amendments introduced to IAS 1 which were effective from 1 January 2009. Other amendments to IFRSs are not applicable to these statements. 4. ACTIVITIES: The group is engaged in mineral property development and has no turnover. There are no minority interests or exceptional items. 5. EQUITY SETTLED EMPLOYEE BENEFITS: IFRS 2 "Share-based Payment" requires the recognition of equity settled share-based payments (which in the case of the group during the period are for share options only) at fair value at the date of grant. The fair value of the options expensed in these statements has been determined by a Black-Scholes option pricing model using a volatility factor of 71% and an option life of 3 years as the significant assumptions. 6. EARNINGS PER SHARE: The calculation and reporting of basic and diluted earnings per share are in accordance with IAS 33. These earnings per share are computed by dividing the loss attributable to ordinary shareholders of £368,100 (2008 £444,330) by 152,858,051 (2008 - 152,558,051) - the weighted average number of ordinary shares in issue during the period. 7. ASSETS AND LIABILITIES HELD FOR SALE: Previously the group's Parys Mountain assets, liabilities and operations had been classified as held for sale, and a Parys properties fair value adjustment made in respect of a potential impairment in the carrying value of those Parys assets and liabilities. Following the termination of specific negotiations for sale, this classification was rescinded and the Parys project is not classified as being held for sale. Consequently the Parys properties fair value adjustment has been shown as a reversal in the accounts to 31 March 2009. 8. BUSINESS AND GEOGRAPHICAL SEGMENTS: There are no revenues. The cost of all activities charged in the income statement relates to exploration and development of mining properties which is the group's principal activity and no analysis is therefore provided. The group's assets and liabilities are analysed by geographical location. Assets and liabilities - geographical analysis 30 September 2009 31 March 2009 UK Canada Total UK Canada Total £ £ £ £ £ £ Assets 14,145,923 13,970,113 28,116,036 14,094,331 13,821,013 27,915,344 Liabilities (2,583,950) - (2,583,950) - (2,411,211) (2,411,211) Net assets 11,561,973 13,970,113 25,532,086 11,683,120 13,821,013 25,504,133 9. DEFERRED TAX: There is an unrecognised deferred tax asset of £1.4 million which in view of the group's trading results, is not considered to be recoverable in the short term. There are also capital allowances, including mineral extraction allowances, exceeding £9 million unclaimed and available. Because the recoverability of any taxation relative to these amounts from future operations is uncertain, no deferred tax asset is reflected in the condensed financial statements. 10. CHANGES IN SHARE CAPITAL: On 23 April 2009, 300,000 shares were issued following the exercise by a director of a share option grant. 11. DEVELOPMENT EXPENDITURE: Mineral development expenditure incurred by the group is carried in the condensed financial statements at cost, less an impairment provision if appropriate. The recovery of this expenditure is dependent upon the successful development and operation of the Parys Mountain project which is itself conditional on finance being available to fund such development. 12. FINANCIAL INFORMATION: This condensed financial information does not constitute statutory accounts within the meaning of section 240 of the Companies Act 1985. Statutory accounts for the year ended 31 March 2009 which were prepared under International Financial Reporting Standards as approved by the European Union, have been delivered to the Registrar of Companies. The report of the auditors on those accounts did not contain a statement under Section 237 of the Companies Act 1985, was not qualified and did not include a reference to any matters to which the auditors drew attention by way of emphasis. 13. EVENTS AFTER THE REPORTING PERIOD: None. 14. RELATED PARTY TRANSACTIONS: None. About Anglesey Mining Anglesey Mining plc is a UK based company listed on the London Stock Exchange with a 50% interest in a 90 million ton iron ore project in Labrador, Canada, which is under active development towards mining production in 2010. The company also holds the Parys Mountain base metals project with a historical resource of 7.7 million tonnes at 9.3% combined copper, lead and zinc in Anglesey, UK. For further information: Bill Hooley, Chief Executive +(44) 1492 541981 Ian Cuthbertson, Finance Director +(44) 1248 361333

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