TIDMANGM
RNS Number : 1511L
Angel Mining PLC
31 August 2012
ANGEL MINING PLC ("Angel Mining" or the "Company")
(AIM: ANGM)
2012 ANNUAL REPORT AND ACCOUNTS
Angel Mining announces the publication of its Annual Report and
Accounts for the year ended 29 February 2012.
Highlights:
-- Commenced gold production at Nalunaq in May 2011 with
commercial production expected during the third quarter of 2012,
following recent receipt from the Bureau of Minerals and Petroleum
of the new permit for partial mining of pillars.
-- Achieved first gold sale in August 2011 and by 31 July 2012
had sold 7,569 ounces of gold at an average price of $1,668 per
ounce.
-- Continued development of the Black Angel zinc/lead mine and
completed the construction of the cable car, subject to final
commissioning.
Chairman's Report
OVERVIEW
There is no doubt that the last year has seen some major
operational challenges for the Company, most of which, aside from
the issues of funding, have now been overcome as discussed further
in the CEO's report. Dealing with these issues has resulted in a
weak share price and more equity dilution for shareholders than any
of us would have liked. In the larger scheme of things, however, we
must keep our eyes on the major prize, which is the Black Angel
zinc and lead mine, and our target is to have this operational by
2014/15. Meanwhile, we expect the Nalunaq gold mine to produce
enough gold, not only to make it a profitable exercise in its own
right, but also to assist in the funding of the development of
Black Angel. We will, of course, also need to tap both the equity
and debt markets to fund the Black Angel project as is outlined
below in the CEO's report. I think it fair to say that morale in
the Company is generally high and we are looking forward to a
period of steady gold production after all the problems encountered
in the past year or so. Finally, I would like to add that both
management and employees have done an extraordinary job of keeping
the business afloat during this very difficult period and my
heartfelt thanks go out to them all.
FOUNDATIONS
The Company is working to build a successful mining operation in
Greenland where it is still the only company with active mining
activities. It is learning how to deal with the challenge of
working in a remote Arctic location and, during the year under
review, it achieved some important milestones.
The main operation currently is the Nalunaq gold mine in
southern Greenland. In May 2011, we commenced commissioning gold
production using the world's first underground cyanide leaching
plant. The Company is yet to reach and sustain commercial
production and as such no sales revenue has been recognised during
the year, as discussed further in the Financial Review section of
the CEO's report. Commercial production is expected during the
third quarter of 2012. The plant's cyanide leaching design aimed to
achieve the highest level of environmental protection and it has
proved to be a great success as the cyanide content of water
leaving the mine is less than two parts per million, which is
within the World Health's recommended standard for safe drinking
water. The mine and process plant is capable of producing between
1,500 and 2,000 ounces of gold per month. Now that the major
operational issues with the plant have been resolved, the remaining
obstacle to achieving commercial production was permission to mine
pillars which is needed to ensure that this target can be regularly
achieved going forward. This vital permit has now been issued by
the Bureau of Minerals and Petroleum (the "BMP") and the mining of
pillars will commence immediately. The known resource base,
including the pillars, should support this level of output for at
least a further eighteen months and it is hoped that planned
underground exploration will extend the operating life. Based on
our experience to date, the cash cost of an ounce of gold should be
approximately $800 at an average production rate of 1,750 ounces
per month. It is also interesting to note that further exploratory
work is planned to see if evidence can be found for any other veins
of gold impregnated quartz in the same mountain.
The Company's main project is the Black Angel zinc/lead mine,
which is located some 900 kilometers further north. It is a high
grade, high quality deposit with a resource potential that exceeds
seven million tonnes of ore, of which 4.425 million tonnes can be
measured on a JORC compliant basis. The current feasibility study
is based on an annual production of approximately 80,000 tonnes of
concentrate a year. The resource base, as it is currently
understood, can support this level of production for approximately
25 years. The adit access to the mine is 600 metres above sea
level, entering a mountain made of white marble, which is separated
from the base camp by a 1.7 kilometres wide fjord. A cable car has
been constructed to facilitate access to the mine and this work was
completed in October 2011, subject to final commissioning.
Commissioning will take place once the Company is ready to commence
construction of the mine infrastructure and the process plant which
it also plans to build underground. The development of the mine and
process plant is, of course, subject to the Group securing
funding.
FINANCIAL RESULTS
The loss for the year was $5,534,000, compared to a loss of
$7,773,000 for the same period last year. At 29 February 2012, the
Group's cash and bank balances amounted to $667,000 compared to
$441,000 at 28 February 2011. The financial results for the year,
and the accounting treatment of sales during the period, are
described in more detail in the financial review found in the CEO's
Report.
MARKETS
Since Nalunaq commenced commissioning production in May 2011,
the price of gold has fluctuated between a high of $1,898 and a low
of $1,487. Between our first shipment in August 2011 and 31 July
2012, the Company sold 7,569 ounces of gold at an average price of
$1,668 per ounce.
In line with my comments last November when we published our
half year results, there is still a great deal of uncertainty
affecting the world's financial markets and it remains likely that
the USA and major European countries will resort to further
quantitative easing to help stimulate stagnant economies. The
consequence of these conditions provides potential for the gold
price to increase and this would enhance the cash generation
capability of Nalunaq.
Since last November the market prices of both zinc and lead have
weakened, due to the general slowdown in manufacturing activity and
the resultant over supply. Prices fell to $1,650 per tonne for zinc
and $1,680 per tonne for lead but by 31 July 2012 they had
recovered to $1,850 and $1,947 respectively. A recent report by
Wood Macenzie predicts that the price of zinc may rise as high as
$4,000 per tonne by 2015. That prediction may prove to be
optimistic but I am of the opinion that Black Angel is likely to
benefit from higher market prices if it can be brought into
production by 2014/2015, as is now planned.
FINANCE
It is anticipated that the Black Angel mine will be funded by
cash generated from gold sales, advance sales of zinc and lead,
plus an element of debt and equity.
The Company will ultimately need to renegotiate its loans with
Cyrus and to restructure the Group's balance sheet but these steps
are unlikely to happen until a clear financing programme can be
agreed and announced to shareholders.
THE FUTURE
The Group has laid some important foundations during the year
under review. It has encountered some production setbacks since the
year end, as reported by the Chief Executive in his report, but the
fundamentals of the business remain positive, despite difficult
market conditions. In the current year I expect the Company to
generate trading profits and to secure funding for the Black Angel
project.
THANKS TO THE TEAM
Finally, I would like to express my thanks to the team at
Nalunaq in Greenland and those who are in support in the UK. I am
delighted that the Nalunaq team are now in sight of achieving their
target and that we now have a dedicated team working full time on
the Black Angel project.
Frank Chapman
Chairman
30 August 2012
Enquiries:
Angel Mining plc
Nicholas Hall, Chief Executive Officer 07931 709 053
Kevin McNair, Chief Financial Officer 07900 690 908
Fox-Davies Capital (Broker)
Daniel Fox-Davies/Simon Leathers 0203 463 5000
Bishopsgate Communications Limited
Nick Rome/ Anna Michniewicz/ Ivana Petkova 0207 562 3350
Chief Executive Officer's Report
SUMMARY
During the year, we achieved the following milestones:
-- Commenced commissioning gold production at Nalunaq in May 2011;
-- Achieved our first gold sales in August 2011;
-- Significantly strengthened the team in Greenland; and
-- Completed the construction of the upper terminal of the cable
car at Black Angel and hung the cables across the fjord.
Nalunaq
The mine at Nalunaq is targeting a vein of quartz hosted in
Basalt which reposes at approximately 35 degrees parallel to the
south face of the Mountain. The top part of the resource from the
600 meters level to 800 meters is known as the Mountain Block and
it contains the highest grade ore. Typically this ore contains at
least 50 grammes per tonne but it can be much higher. The central
part of the deposit, which was most heavily mined by the previous
owner of the mine, extends from the 270 meter level to the 600
meter level and is known as the Target Block. Grade varies but has
averaged approximately 14.5 grammes per tonne. Below this part of
the mine is the area known as South Block. Core drilling data
indicated that the geological structure continued and it was
assumed that there would be further gold resource to mine, going to
greater depth, but it had been anticipated also that the grade
would progressively reduce.
Production built slowly during 2011 following the initial pour
in late May and this reflected the fact that there were many
improvements needed to get the plant to operate with an acceptable
level of efficiency in terms of gold recovery. By January 2012, the
mine was close to achieving the lower end of its production target
range and then the first of two setbacks hit the team. The first
related to a critical pump for which parts had been ordered on time
but the wrong parts were sent and it took two weeks for replacement
parts to arrive from America costing the Company two valuable weeks
of plant production.
The plant was back in production for a few days when, on 5(th)
March 2012, the second setback occurred and the main generator on
site failed. The stand-by generator was immediately brought into
service but it is a smaller unit and could not produce enough power
to run the crushing circuit. It took approximately six weeks to
repair the generator and this stopped all crushing of ore during
this period.
While the generator was being repaired, the process plant was
unable to process ore mined during the period of enforced shutdown
and the mining team were deployed on the construction of a bulkhead
to create a new disposal area for tailings. This work has now
created a very substantial area in the old workings which will
outlive the needs of the mine. The mining crew then returned to the
task of mining new ore and one of the main headings was the
development in South Block.
The table below sets out the history of doré production and gold
and silver sales since commissioning production commenced in May
2011:
Doré Produced Gold Sales Silver
Sales
----------- --------------------- ----------- -------
Kg Ounces Ounces Ounces
----------- -------- ----------- ----------- -------
2011
----------- -------- ----------- ----------- -------
May 0.9 30 - -
----------- -------- ----------- ----------- -------
June 1.3 41 - -
----------- -------- ----------- ----------- -------
July 6.0 192 - -
----------- -------- ----------- ----------- -------
August 12.3 394 322 -
----------- -------- ----------- ----------- -------
September 21.8 701 799 -
----------- -------- ----------- ----------- -------
October 10.4 335 391 -
----------- -------- ----------- ----------- -------
November 21.6 693 614 163
----------- -------- ----------- ----------- -------
December 29.2 940 842 -
----------- -------- ----------- ----------- -------
2012
----------- -------- ----------- ----------- -------
January 32.4 1,042 432 -
----------- -------- ----------- ----------- -------
February 17.0 545 1,043 143
----------- -------- ----------- ----------- -------
March 15.0 481 430 -
----------- -------- ----------- ----------- -------
April - - - 82
----------- -------- ----------- ----------- -------
May 40.7 1,309 1,125 -
----------- -------- ----------- ----------- -------
June 27.5 883 765 -
----------- -------- ----------- ----------- -------
July 29.3 941 806 183
----------- -------- ----------- ----------- -------
During the year, the Group did not reach the commercial
production level defined for the Nalunaq gold mine, as set out in
the Financial Review section of this report. As such, none of the
gold and silver sales listed above have been recognised as revenue
during the year. All sales have been offset against capital
expenditure in the year. The Group is expected to reach commercial
production in Q3 of 2012 if all ramp-up activities are
successful.
In June 2012, the grade of the ore in the South Block started to
deteriorate and the geologists realised that we were entering into
an area of unexpected faulting. The nature of the faults was that
they run with the quartz which is why it took a few days before the
full extent of the problem was understood. It meant, however, that
the ore which was processed in June was a lower grade than had been
anticipated and the gold production was therefore less than
planned. Consequently, mining has been terminated in this part of
the mine so that men and machines can concentrate their efforts
mining the remaining panels in other parts of the mine, preparing
for the mining of pillars in the Target Block, and developing new
exploratory headings and rises in the Mountain Block. It is still
possible that mining could be re-established in South Block if
additional geological work indicates the probability of there being
economic resource.
A year ago, our team of geologists estimated that it had 102,800
tonnes of economic ore to mine. The current estimate is that there
is 96,690 tonnes of high grade ore, which should yield
approximately 35,000 ounces of gold. This figure is believed to be
conservative as it is hoped that the Mountain Block will prove to
contain much more ore than can currently be measured or
inferred.
The current mine plan indicates that mining will continue until
at least August 2014 and the process plant will continue to operate
until all available ore has been processed. At a gold price of
$1,600 per ounce and cost base of $800 per ounce, the mine would
generate approximately $28 million of free cash. Hopefully this
will be increased by further development within the Mountain
Block.
When production ends, it is envisaged that all of the mining
assets, buildings and mobile equipment will be transferred to Black
Angel. The process plant will be mothballed as it is possible that
it may be practical for the plant to process ore from other gold
mines which are expected to be opened in the area. Several
promising sites are currently being explored by Nuna Minerals and
just one of them could lead to a second life for Nalunaq.
The geologist who discovered the Nalunaq deposit believes that
there is a good chance that there will be other gold bearing veins
in the same mountain and it is now planned to undertake some
surface exploration to see if we can find evidence to support this
theory. If the evidence is found, we will be keen to undertake more
serious exploration during the summer of 2013.
Black Angel
The cable car needed to provide access to the mine across some
1.7 kilometres across the fjord and up to the adit entrance 600
metres above sea level, is now largely constructed. Both upper and
lower terminals are fully constructed, the winding mechanism and
controls are all in place and the main cables have been installed
and tensioned. No more work will be done on site until funding for
the project is in place. At that point, we will arrange for the
gondolas to be fixed in place, the connecting cable to be drawn
across the fjord and final commissioning to be undertaken. Work
will then commence immediately on the construction of the mine and
process plant.
A week was spent on site with our principle technical advisors
and suppliers, GBM, Golders Associates, Qualter Hall, EMJ-Atcom,
the senior Nalunaq team and Dr. Bob Dowdell, a consultant to the
Group, last September to focus on some key issues which
included:
-- agreeing the ideal location for the process plant;
-- assessing the Deep Ice Zone bulkhead and how to safely drain
the 2 kilometre tunnel behind it;
-- review source of clean water to feed the process plant;
-- plan the layout of ground facilities at Maarmorilik and
ensure that the materials handling plan can be fully automated;
and
-- treatment and disposal of tailings
The trip was a great success. The perfect location was quickly
found for the process plant within the old Angel Zone workings.
There is sufficient physical space and the floor is on a slight
slope which will help the plant to rely more on gravity than on
pumping. The area can be kept separate from the rest of the mine
with its own ventilation arrangements. It is also close to the main
drive on the 600 meter level so material will be fed into the plant
using the existing rail, a Granby tippler and conveyor. The Deep
Ice Zone bulkhead will require work as water has weakened the rock
wall to which the bulkhead is fixed. However, a number of possible
solutions were put forward, so a study will be done nearer the time
to determine exactly how it should be dealt with as the area needs
to be secured before mining commences. The Deep Ice Zone can
produce 90 litres of water per second which is more than enough for
the needs of the process plant. The plant has been designed to
recycle all of the water that will be extracted from both
concentrate and tailings using a filter press. EMJ and Qualter Hall
worked together to design the ground facilities to take maximum
advantage of the topography and Golders Associates were able to
expand on their proposal for the disposal of tailings. A large
proportion of the tailings in phase 1 will be used in the pillar
backfill and will become part of the mine support. The remainder
will be taken by conveyor to walled-in sections for safe, long term
disposal.
The revised financial model indicates a cash cost of $1,120 per
tonne of zinc or lead and the net smelter return at $1,800 per
sales tonne is $1,260 per tonne.
Recent discussions with potential funding sources suggested that
we had to achieve two things to raise the funding:
-- Produce a resource statement for the Deep Ice Zone; and
-- Demonstrate that the project is viable at current market prices for zinc and lead.
Dr. Bob Dowdell has prepared an estimate of the potential
resource in the Deep Ice Zone based on mineralisation intersections
from the Cominco exploration programme. Unfortunately, the drill
holes were not close enough for us to get a JORC compliant resource
statement. Dr. Dowdell's estimate of the potential resource in the
Deep Ice Zone totalled 2.6 million tonnes at an average grade of
5.5% Lead and 14.9% Zinc. The grade has been assumed to be the same
as the workings in the Deep Ice Zone that were undertaken by
Cominco before the mine closed.
The resource statement produced by Wardell Armstrong
International Ltd. in 2007 confirmed a JORC compliant resource of
4.425 million tonnes at an average grade of 3.0% Lead and 8.6%
Zinc. The Deep Ice Zone, which is not included in the 4.425 million
tonnes, is therefore a very significant addition to the mine's
potential.
The original bankable feasibility study from January 2008 was
based on an average metal price of $2,500 per tonne but the
project, at that time, did not provide for a processing plant to be
built on site because it was considered to be too environmentally
controversial. The current price is low and it reduces to $1,260
per tonne as a net smelter return when we adjust for shipping costs
and the smelter's treatment costs.
To improve the project economics, we are investigating the
possibility of building a hydro-electric power plant. A study
undertaken in 1979 concluded that there is sufficient water in the
South Lake to give us the potential of generating 9 megawatts and
the process plant as currently designed, requires 4.4 megawatts and
this power requirement may be reduced by using more efficient
crushing machines. Golders Associates have suggested that the cost
of a hydro-electric generation plant is in the region of $2 million
to $4 million per megawatt which would indicate a cost range of $18
million to $36 million but this could potentially reduce the annual
cost of fuel from $10.4 million to $3.5 million. The saving of $6.9
million each year would give pay back in three to five years. We
now need to get proper cost and performance quotations to fully
explore this opportunity.
People
The Group employed an average of 107 people during the year
under review. Headcount peaked at 114 earlier this year but since
then we have reduced the team to 104 as at 31 July 2012. This
change reflects the team's efforts to reduce the cost base by
working smarter and the fact some activities, like mine
development, now require less men and machines.
Mike Buckland left in April 2012 to spend more time with his
family in Angola having recruited Alex Hamilton as Head of Mineral
Processing and Steve Ainsworth as Head of Mining in 2011. Alex and
his deputy, John Simpson, have made significant improvements to the
Nalunaq processing plant. Steve has transformed the mining
operation by recruiting experienced hard rock miners and promoting
the partial mining of pillars. Steve has also introduced new
standards of health and safety, job risk assessments and weekly
safety training sessions.
Steve left the Company in July 2012 to take up an opportunity
near his home in Armenia. He will continue to work with us in an
advisory capacity. Alex Hamilton has been appointed General Manager
and Haraldur Haraldsson has been appointed Health & Safety and
Environmental Superintendent. Nigel Handley joined the Company in
late July 2012 as Joint General Manager of Nalunaq, General Manager
of Angel Mining and Group Head of Mining.
The Black Angel Project team is currently led by myself and it
comprises Joan Plant as project manager, Shaun Bentley as data
control manager, Chris Hill as procurement officer and Nigel
Handley as General Manager. The team is support by Bob Dowdell as
technical consultant and continues to work closely with GBM for the
plant design, Golders Associates for mine planning and water
management and Qualter Hall for materials handling.
FINANCIAL REVIEW
The Group has a stated production target of 2,000 ounces of gold
per month. Capitalisation of costs and associated sales from
start-up operations continues until the mine is capable of
operating as intended, which includes achieving and sustaining
commercial production. The Group has determined that it will
achieve commercial production when it is capable of producing 70%
of its stated target production. The Group did not reach commercial
production during the year. As a result, no revenue was recognised
in the Consolidated Statement of Comprehensive Income. The Group
sold $7,525,000 of gold during the period and these sales were
offset against expenditure during the period which was capitalised.
The operating loss of $2,804,000 does not, therefore, include any
sales revenue achieved during the year or any associated mine
operating costs. The operating loss of $2,804,000 is made up
principally of Group overheads and foreign exchange losses.
During the period, the Group incurred finance charges of
$3,074,000 which were primarily related to the Company's
borrowings. The Group's borrowings at 29 February 2012 totalled
$37,052,000 (2011: 29,038,000).
Capital expenditure during the year totalled $16,523,000 after
credits for gold sales. This investment included commissioning and
start-up activities at the Nalunaq gold mine and completion of the
upper terminal for the cable car at the Black Angel mine.
Cyrus/FBC
In December 2011, Cyrus agreed to capitalise any accrued
interest to 31 December 2011 on the loan and for the repayment
terms of the loan to be amended so that the repayment date of the
loan was extended to 31 December 2012. The Company is currently in
technical default on this facility. This is discussed further in
note 21 to the financial statements.
On 24 July 2012, Cyrus and FBC agreed to advance the Company an
additional $1.75 million via the secured short term funding
facility already in place. The advance is interest free and must be
repaid by 30 November 2012. The Company also agreed to increase its
management fee to Cyrus from 5% of deemed cash margin on sales to
6%. This change is in recognition of additional strategic advisory
services which are being provided by Cyrus in relation to the Black
Angel project.
Standby Equity Distribution Agreement ("SEDA")
On 24 April 2009, the Company entered into a GBP5.0 million
($7.3 million) SEDA with Yorkville, of which $812,509 was drawn
down during the year to 29 February 2012 (2011: $6,417,608) through
the issue of 12,229,423 shares at a price of 4.09p per share. The
facility expired on 26 June 2011 having been largely utilised.
On 27 July 2011, the Company entered into a new GBP10.0 million
($16.0 million) SEDA with Yorkville. On the same date, the Company
entered into a promissory note facility of up to $3,654,000 with
the agreement of Yorkville. The Company had fully drawn down the
funds available under the promissory note by 1 February 2012. The
promissory note can, at the Company's election, be repaid either
out of cash resources or through the issue of advance notices under
the SEDA. The promissory note bears interest at 4% per annum and is
repayable in instalments with the final instalment due on 30
September 2012. Amounts of principal outstanding under the
promissory note are convertible at the option of Yorkville into
ordinary shares at 3.0p per share. Due to the negative impact of
the failure of the main generator at Nalunaq in March 2012, the
Company was unable to meet all its repayments under the promissory
note with Yorkville. The Company has chosen not to use the SEDA to
meet these repayments to avoid excessive dilution of the
shareholders. The promissory note is currently in technical default
and the Company is in discussions with Yorkville to resolve this
situation.
Subsequent to the year end, the Company has drawn down
$1,229,309 through the issue of 60,007,071 shares at an average
price of 1.30 pence per share.
Socius
On 31 August 2010, the Company signed an agreement for a $25.0
million financing facility with Socius which would enable the
Company to issue 10 year 10% Eurobonds as it draws down on the
facility. The financing facility contains certain conditions which
must be met before an issue can be completed. On draw down of a
portion of the facility, the Company would issue an option to
Socius to subscribe for ordinary shares in the Company at the
closing Angel Mining share price on the day before the draw down
request ("the investment share price") for such number of ordinary
shares in the Company that would have a value equal to 110% of the
draw down amount. The Company would also issue warrants to Socius
which could be exercised at any time for twelve months from the
date of issue at the investment share price, for a value equal to
25% of the draw down amount. Socius could pay for the exercise of
the options and warrants either in cash or in four year 2% loan
notes, which may be offset against the Eurobond notes. The
Eurobonds provide for an early redemption premium such that the
loan notes, the Eurobond and interest commitments will cancel each
other out at anniversary dates plus one day.
On 1 October 2010, the Company requested a drawn down of $3.0
million when the share price was 3.21p. In accordance with the
terms of the facility, Angel Mining issued $3.0 million 10% loan
notes and issued to Socius warrants over 10,885,714 ordinary shares
in the Company and an option to subscribe for 47,897,142 ordinary
shares in the Company. Socius subsequently exercised both the
warrants and the option to subscribe for the full amount. These
shares were paid for through the issue of a promissory note.
On 3 April 2011, the Company made an $8.0 million draw down
request when the share price was 4.38p. The draw was to have been
in two parts, a first tranche of $5.0 million and a second tranche
of $3.0 million. The Company issued options and warrants over
153,996,951 shares in relation to the $8.0 million draw as per the
terms of the programme agreement which Socius exercised
immediately. On 19 May 2011, Socius advised the Company that it
needed to change the terms of the second draw to reflect the recent
fall in the share price. The Company exercised its right to abandon
the draw down. As a result, Socius is in possession of 50,025,312
ordinary shares which relate to the $3.0 million tranche which was
never completed. The Company and Socius are working together to
arrange the return of these shares to the Company although this may
take some time due to technical legal reasons. These shares are
recognised as having been issued in the Company's financial
statements.
GOING CONCERN
The Directors have prepared the financial statements on the
going concern basis. The Directors consider that the greatest risks
facing the Group are the ability to raise future funding, the
continued support of Cyrus and the Group's ability to generate cash
at Nalunaq gold mine. The ability to draw down against the Socius
and Yorkville facilities is an important element impacting
availability of cash.
As a result of the above, the Directors have concluded that a
material uncertainty exists. This is discussed further in note 1a
to the financial statements.
JOINT OWNERSHIP SHARE PLAN ("JSOP")
There were no awards of shares via the JSOP during the period.
The accounts of the Employee Benefit Trust associated with the JSOP
are consolidated within the Group financial statements. The scheme
enables participants to benefit as though the scheme was an HMRC
approved share option scheme.
UPAPPROVED SHARE OPTION SCHEME
During the period, the Company started a new Unapproved Share
Option Scheme and awarded options over 15,000,000 shares to various
employees. Some of those employees left the business during the
year and their options lapsed. At 29 February 2012, there were
options outstanding over 2,500,000 shares in the Company.
OUTLOOK
Once commercial production is achieved, Nalunaq should be cash
generative for at least twelve months and we look forward to any
resource that may be found by extending the working drives in
Mountain Block. The Directors believe that the outlook for the
price of gold during the life of the mine is positive. The assets
from Nalunaq will then be used in the development and construction
of Black Angel and the experienced team that we now have will
transfer to the new mine.
Forecast and Historic Zinc Prices (2010-2025)
The challenge of raising finance for the Black Angel project is
on hold while we investigate hydro-electric power generation.
Hopefully, hydro-electric powered project can be prepared for
financing in mid 2013. This is later than originally planned and
production of zinc and lead concentrates may not therefore commence
until H1 2015. Wood Macenzie, has a base case prediction for the
price of zinc as being circa $3,000 per tonne in 2015 and therefore
the profit opportunity for this project could be considerably
enhanced as a result of this delay.
Nicholas Hall
Chief Executive Officer
30 August 2012
Consolidated Statement of Comprehensive Income
Year ended 29 February 2012
2012 2011
$000 $000
-------------------------------------------- --- ---------- ----------
Continuing operations
Operating costs (2,804) (3,384)
------------------------------------------------- ---------- ----------
Operating loss (2,804) (3,384)
Finance costs (3,074) (4,444)
Finance revenue 344 42
Change in fair value of assets held for
trading - 13
Loss before tax (5,534) (7,773)
Taxation - -
-------------------------------------------- --- ---------- ----------
Retained loss for the financial year (5,534) (7,773)
------------------------------------------------- ---------- ----------
Loss per share
Basic and diluted loss per share (cents) (0.75) (2.11)
------------------------------------------------- ---------- ----------
Other comprehensive gain for the year
Exchange translation difference on foreign
operations 188 339
Total comprehensive loss for the year
attributable
to ordinary equity holders of the company (5,346) (7,434)
Consolidated and Company Statement of Financial Position
29 February 2012
Group Company
------------------------ ----------------------
2012 2011 2012 2011
$000 $000
$000 $000
---------------------------------- ---- --------- ----------- ----------- ----- ----------- ---------
Non-current assets
Property, plant
and equipment 64,802 48,297 4 6
Investments in subsidiaries - - 9,670 9,670
Note receivable 2,803 - 2,803 -
Rehabilitation deposit 4,326 4,414 - -
--------------------------------------------------- ----------- ----------- ----- ----------- ---------
71,931 52,711 12,477 9,676
------------------------------------------------- ----------- ----------- ----- ----------- ---------
Current assets
Inventories 1,355 862 - -
Trade and other
receivables 44 137 60,703 48,054
Other financial
asset 1,257 1,260 1,257 1,260
Cash and cash equivalents 667 441 642 395
--------------------------------------------------- ----------- ----------- ----- ----------- ---------
3,323 2,700 62,602 49,709
------------------------------------------------- ----------- ----------- ----- ----------- ---------
Current liabilities
Trade and other
payables (10,163) (7,769) (2,114) (3,289)
Current borrowings (29,206) (21,848) (29,206) (21,848)
Current provisions (722) (1,333) (722) (1,333)
--------------------------------------------------- ----------- ----------- ----- ----------- ---------
(40,091) (30,950) (32,042) (26,470)
------------------------------------------------- ----------- ----------- ----- ----------- ---------
Net current (liabilities)/assets (36,768) (28,250) 30,560 23,239
--------------------------------------------------- ----------- ----------- ----- ----------- ---------
Total assets less
current liabilities 35,163 24,461 43,037 32,915
--------------------------------------------------- ----------- ----------- ----- ----------- ---------
Non-current liabilities
Non-current borrowings (7,846) (7,190) (7,846) (7,190)
Non-current provisions (4,831) (4,398) - -
--------------------------------------------------- ----------- ----------- ----- ----------- ---------
(12,677) (11,588) (7,846) 7,191
------------------------------------------------- ----------- ----------- ----- ----------- ---------
Net assets 22,486 12,873 35,191 25,725
--------------------------------------------------- ----------- ----------- ----- ----------- ---------
Capital and reserves
Share capital 14,915 8,052 14,915 8,052
Share premium 47,904 39,455 47,904 39,455
Own shares held
by EBT (2,568) (2,568) (2,568) (2,568)
Convertible borrowings
- equity component 7,371 7,371 7,371 7,371
Share option reserve 23 - 23 -
Translation reserve (1,029) (841) - -
Retained deficit (44,130) (38,596) (32,454) (26,585)
--------------------------------------------------- ----------- ----------- ----- ----------- ---------
Total equity 22,486 12,873 35,191 25,725
--------------------------------------------------- ----------- ----------- ----- ----------- ---------
Consolidated and Company Statement of Cashflows
Year ended 29 February 2012
Group Company
-------------------- --------------------
2012 2011 2012 2011
$000 $000 $000 $000
---------------------------------------- --------- --------- --------- ---------
Loss before tax (5,534) (7,773) (5,869) (4,707)
Adjusted for:
Depreciation of property, plant
and equipment 5 4 5 4
Change in fair value of assets - (13) - -
held for trading
Loss/(gain) on disposal of property, - 26 - -
plant and equipment
Finance income (344) (42) (292) -
Finance costs 3,074 4,444 4,223 4,402
Share-based payments (678) 298 (678) 298
Reversal of/(provision) against
investments in assets held for
trading/associate - - - (13)
Increase in inventories (493) (12) - -
Increase/(decrease) in trade and
other receivables 128 725 48 46
Increase/(decrease) in trade and
other payables 3,077 321 1,043 176
Net cash (outflow)/ inflow from
operating activities (765) (1,632) (1,520) 206
---------------------------------------- --------- --------- --------- ---------
Investing activities
Loans to subsidiary companies - - (13,358) (18,156)
Purchase of property, plant and
equipment (14,063) (16,119) (3) -
Increase in other financial assets - (135) - (135)
Interest received 17 42 - -
Proceeds from disposal of assets
held for trading - 197 - 197
Cash outflow from investing activities (14,046) (16,015) (13,361) (18,094)
---------------------------------------- --------- --------- --------- ---------
Financing activities
Equity share capital subscription,
net 7,519 6,418 7,519 6,418
Draw down from Socius facility 5,000 3,000 5,000 3,000
New borrowings, net of costs 2,972 6,400 2,972 6,400
Repayment of borrowings (358) - (358) -
Cash flows from financing activities 15,133 15,818 15,133 15,818
---------------------------------------- --------- --------- --------- ---------
Net (decrease)/increase in cash
and cash equivalents 322 (1,829) 252 (2,054)
Cash and cash equivalents at start
of year 441 1,823 395 1,808
Exchange movements (96) 447 (5) 657
---------------------------------------- --------- --------- --------- ---------
Cash and cash equivalents at end
of year 667 441 642 395
---------------------------------------- --------- --------- --------- ---------
The above information has been extracted from the financial
statements of Angel Mining plc, registered number 3319691, which
were approved by the Board of Directors, authorised for issue on 31
August 2012 and signed on its behalf by: Nicholas Hall, Chief
Executive Officer.
Copies of the Report and Accounts will be posted to shareholders
shortly and are available for download from the Company's website:
www.angelmining.com. The Company has also today given notice that
the 2012 Annual General Meeting of the Company (AGM) is to be held
at 12.00 p.m. on 24 September 2012 at the offices of Davenport
Lyons, 30 Old Burlington Street, London, W1S 3NL. The notice
convening the AGM is set out in a letter accompanying the Report
and Accounts.
This information is provided by RNS
The company news service from the London Stock Exchange
END
FR EAKPEDLSAEFF
Angel Mining (LSE:ANGM)
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