INTERIM STATEMENT

 

 

Griffin Mining Limited

 

60 St James's Street, London SW1A 1LE, United Kingdom

Telephone: + 44 (0)20 7629 7772  Facsimile:  + 44 (0)20 7629 7773

E mail: [email protected]

 

4^th August 2015

 

INTERIM STATEMENT

for the six months ended 30^th June 2015

 

Griffin Mining Limited ("Griffin" or "the Company") has today released its results for the six months ended 30th June 2015.

 

Highlights:

 

·     Revenues of $35.2 million (2014: $33.2 million)

 

·     Operating profit of $6.4 million (2014: $7.6 million)

 

·     Profit before tax of $3.7 million (2014: $5.8 million)

 

·     Profit after tax of $2.2 million (2014: $3.7 million)

 

 

Financial and Trading:

 

Throughput of 418,950 tonnes of ore in the six months to 30^th June 2015 at Griffin's Caijiaying Mine was up 2.5% on that achieved of 408,671 tonnes in the six months to 30^th June 2014. With effort directed to improving precious metal recoveries, metal in concentrate production in the period was:

 

·     20,081 tonnes of zinc (2014: 19,147 tonnes);

·     962 tonnes of lead (2014: 609 tonnes);

·     193,098 ounces of silver (2014: 147,901 ounces); and

·     6,274 ounces of gold (2014: 5,999 ounces), a record high.

 

Metal in concentrate production in the six months to 30^th June 2015 compared to that in the six months to 30^th June 2014 benefited from better grades and better lead and gold recoveries.

 

Zinc revenues before royalties and resource taxes in the six months to 30^th June 2015 were $26,288,000 (2014 $24,860,000) having benefited from higher prices achieved whilst lead and precious metals revenues were $10,799,000 (2014: $10,222,000) with increased quantities sold albeit at lower prices. 

 

Cost of sales in the six months to 30^th June 2015 was up on the same period in 2014 mainly as a result of increased processing costs with efforts directed at improving precious metal recovery rates. Net operating costs were up with increased regulatory, environmental and social security costs in China.

 

Profits before tax were impacted by: Foreign exchange losses of $24,000 (2014: $26,000) arising from a weaker Renminbi offset by gains on Sterling deposits against the US dollar in the period; interest payable on Chinese bank loans of $2,480,000 (2014: $1,629,000); finance lease interest of $392,000 (2014: $411,000); interest receivable of $106,000 (2014: $126,000); and other income of $36,000 ( 2014: $62,000).

 

Taxation of $1,442,000 (2014:$2,009,000) has been provided resulting in profits after tax of $2,220,000 (2014: $3,749,000).

 

Basic earnings per share were 1.27 cents (2014: 2.09 cents) and diluted earnings per share 1.27 cents (2014: 2.09 cents).  At 30^th June 2015, attributable net assets per share amounted to 82 cents (2013: 84 cents).

 

Funds continue to be repatriated from China to cover central costs whilst leaving sufficient working capital within Hua Ao for the completion of the upgrade of the processing facilities and the further development of the Caijiaying mine. During the period: $8,589,000 was expended on mine development and plant upgrade work, and $3,875,000 was incurred in buying in Griffin shares held in treasury.  Bank loans in China of $3,328,000 were drawn down; whilst cash balances throughout the Group have increased by $977,000 (2014: $1,968,000 decrease).

 

Administrative state issues in China outside the Company's control continue to delay the grant of a new mining licence over the unmined Zone III deeps, Zone II and adjacent areas at Caijiaying.  Development of the mine at Zone III continues and the main drive between Zone III and Zone II has almost been completed.

 

A new additional power line to the Caijiaying mine has almost been completed and will be connected immediately thereafter allowing the commissioning of the new primary ball mill. The new power line and ball mill will increase the capacity of the Caijiaying processing facilities to 1.5 million tonnes per annum.

 

In line with previous years' practice and the Company's policy of determining annual dividends at the time of the Company's full year results, no interim dividend has been declared by the Board of Griffin.

 

 

Chairman's Statement

 

Chairman Mladen Ninkov commented, "Operationally, the Company continues to achieve very good results in light of the current downturn in commodity prices with, period to period, increased zinc, lead, silver and gold production, including record gold output, better grades and good recoveries, all this without the imminent commissioning of the new 1.5 million tonnes per annum processing facilities.  Nevertheless, the continuing severe weakness in commodity prices coupled with the fixed cost nature of mining production inevitably means any costs increases, such as the increased regulatory costs in the first half, impact the profitability of the Company.  The Company eagerly looks forward to any or all of the following occurring: The increased processing and production profile, the long awaited Mining Licence over new production areas and/or a rise in commodity prices." 

 

 

Further information

 

Griffin Mining Limited

Mladen Ninkov - Chairman                               Telephone: +44(0)20 7629 7772

Roger Goodwin - Finance Director

 

Panmure Gordon (UK) Limited                               Telephone: +44 (0)20 7886 2500

             Dominic Morley

           

Cantor Fitzgerald Europe Limited                                    Telephone: +44 (0)20 7894 7000 

            Jeremy Stephenson

            Stewart Dickson

 

Griffin Mining Limited's shares are quoted on the Alternative Investment Market (AIM) of the London Stock Exchange (symbol GFM).

The Company's news releases are available on the Company's web site: www.griffinmining.com

 

 

Griffin Mining Limited

Condensed Consolidated Income Statement

(expressed in thousands US dollars)

 

	6 months to 30/06/2015 Unaudited		6 months to 30/06/2014 Restated Unaudited		Year to 31/12/2014 Audited
	$000		$000		$000
Revenue	35,216		33,226		45,564
Cost of sales	(20,676)		(18,217)		(25,345)
Gross profit	14,540		15,009		20,219
Net operating expenses	(8,124)		(7,373)		(13,487)
Profit from operations	6,416		7,636		6,732
Losses on disposal of equipment	-		-		(1,835)
Foreign exchange (losses)	(24)		(26)		(39)
Finance income	106		126		223
Finance costs	(2,872)		(2,040)		(4,165)
Other income	36		62		105
Profit before tax	3,662		5,758		1,021
Income tax  expense	(1,442)		(2,009)		(831)
Profit  after tax	2,220		3,749		190
Basic earnings per share (cents)	1.27		2.09		0.11
Diluted earnings per share (cents)	1.27		2.09		0.11

 

Griffin Mining Limited

Condensed Consolidated Statement Of Comprehensive income

(expressed in thousands US dollars)

 

	6 months to 30/06/2015 Unaudited		6 months to 30/06/2014 Restated Unaudited		Year to 31/12/2014 Audited
	$000		$000		$000
Profit for the financial period	2,220		3,749		190
Other comprehensive income
Exchange differences on translating foreign operations	10		(367)		(281)
Other comprehensive income for the period, net of tax	10		(367)		(281)
Total comprehensive income for the period	2,230		3,382		(91)

Griffin Mining Limited

Condensed Consolidated Statement Of Financial Position

 (expressed in thousands US dollars)

 

	30/06/2015		30/06/2014		31/12/2014
			Restated
	Unaudited		Unaudited		Audited
	$000		$000		$000
ASSETS
Non-current assets
Property, plant and equipment	213,186		195,301		208,339
Intangible assets - Exploration interests	1,946		1,833		1,914
	215,132		197,134		210,253
Current assets
Inventories	16,797		8,501		17,477
Other current assets	3,293		2,456		3,540
Cash and cash equivalents	24,348		24,310		23,371
	44,438		35,267		44,388
Total assets	259,570		232,401		254,641
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Share capital	1,790		1,790		1,790
Share premium	71,310		71,310		71,310
Contributing surplus	3,690		3,690		3,690
Share based payments	388		2,896		3,064
Shares held in treasury	(3,875)		-		-
Chinese statutory re-investment reserve	1,688		1,667		1,686
Other reserve on acquisition of non-controlling interests	(29,346)		(29,346)		(29,365)
Foreign exchange reserve	10,946		10,861		10,957
Profit and loss reserve	89,762		88,363		84,794
Total equity attributable to equity holders of the parent	146,353		151,231		147,926
Non-current liabilities
Long-term provisions	2,584		2,567		2,582
Deferred taxation	1,954		1,886		1,953
Finance lease	10,693		10,908		10,720
	15,231		15,361		15,255
Current liabilities
Taxation payable	-		1,321		-
Trade and other payables	30,197		16,354		26,563
Finance lease	725		1,001		1,161
Bank loans	67,064		47,133		63,736
Total liabilities	97,986		65,809		91,460
Total equities and liabilities	259,570		232,401		254,641
Number of shares in issue	179,041,830		179,041,830		179,041,830
Attributable net asset value / total equity per share	$0.82		$0.84		$0.83