Half-year Report

RNS Number : 8896M

Griffin Mining Ld

03 August 2017

 

8^th Floor, 54 Jermyn Street, London, SW1Y 6LX. United Kingdom

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

E mail: [e-mail]

 

3^rd August 2017

INTERIM STATEMENT

for the six months ended 30^th June 2017

Griffin Mining Limited ("Griffin" or "the Company") has today released its unaudited results for the six months ended 30th June 2017.

Highlights:

·     Revenues of $52.3 million (2016: $20.8 million)

·     Operating profit of $23.5 million (2016: loss $1.8 million)

·     Profit before tax of $22.1 million (2016: loss $4.1 million)

·     Profit after tax of $15.8 million (2016: loss $4.1 million)

·     Basic earnings per share 8.85 cents (2016 loss per share 2.29 cents)

Financial and Trading:

The first six months of 2017 has seen a continued recovery in profitability from the first half of 2016 mainly from increased zinc metal in concentrate prices received and increased throughput and higher grades. Operations at Caijiaying were maintained with minimal disruption throughout the first half of 2017 following the connection of the new 35kv power line and commissioning of the new 750,000 tonnes per annum ball mill.

In the six months to 30^th June 2017, 461,618 (2016: 365,337) tonnes of ore were processed to produce:

·     19,553 tonnes of zinc (2016: 13,420 tonnes);

·     719 tonnes of lead (2016: 705 tonnes);

·     168,426 ounces of silver (2016: 120,953 ounces); and

·     9,372 ounces of gold (2016: 3,553 ounces).  

Zinc revenues before royalties and resource taxes in the six months to 30^th June 2017 were $40,259,000 (2016; $15,798,000) with 19,336 tonnes (2016: 13,414 tonnes) of zinc metal in concentrate sold with an average price received after smelter charges of $2,082 per tonne up 90% on that received in 2016 of $1,090.  Lead and precious metals revenues were $14,485,000 (2016: $6,372,000) with more metal in concentrate sold. 

During the six months to 30^th June 2017:

·     486,000 tonnes of ore were mined, up 139,811 (40.3%) on that mined in 2016 of 346,189 tonnes;

·     466,020 tonnes of ore were hauled, up 159,958 (52.2%) on that hauled in 2016 of 306,062 tonnes; and

·     461,618 tonnes of ore were processed, up 96,281 (26.3%) on that processed in 2016 of 365,337 tonnes.

Basic earnings per share were 8.85 cents (2016: losses 2.29 cents).  At 30^th June 2017, attributable net assets per share amounted to 91 cents (2016: 75 cents).

In the six months to 30^th June 2017 bank loans of $10,940,000 (2016: nil) were repaid.

Cash flows from operations are being directed to the repayment of bank loans.

The Company continues to await the grant of a new mining licence over the Zone II and adjacent areas at Caijiaying.  Development of the mine at Zone III continues.

With cash flows from operations directed to repaying Chinese banking facilities and in line with previous years' practice 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, "I am sure shareholders, in conjunction with management, derive enormous satisfaction from the outstanding results for the first half of the 2017 financial year.   The result was due to a superb operational effort by all concerned with the Caijiaying mine which led to increased throughput and higher zinc grades in conjunction with the long awaited increase in the zinc price and lower smelter charges.  Needless to say, we fully expect, all things being equal, an equally as impressive second half of the year.  Most importantly, the priority of the Company remains the granting of the new mining licence over zone II at the Caijiaying mine which will only multiply the results achieved to date.  I sincerely hope that day will arrive in the not too distant future."

 

 

 

Further information

Griffin Mining Limited

Mladen Ninkov - Chairman                               Telephone: [phone]

Roger Goodwin - Finance Director

Panmure Gordon (UK) Limited                               Telephone: [phone]

             Dominic Morley

This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) No. 596/2014

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 30/06/2017 Unaudited		6 months to 30/06/2016 Unaudited		Year to 31/12/2016 Audited
	$000		$000		$000
Revenue	52,332		20,818		66,270
Cost of sales	(20,820)		(17,290)		(37,851)
Gross profit	31,512		3,528		28,419
Net operating expenses	(8,061)		(5,354)		(13,218)
Profit / (loss) from operations	23,451		(1,826)		15,201
Losses on disposal of equipment	(16)		-		(224)
Foreign exchange (losses)	(104)		(190)		(532)
Finance income	63		80		178
Finance costs	(1,401)		(2,245)		(4,286)
Other income	60		81		45
Profit / (loss) before tax	22,053		(4,100)		10,382
Income tax  expense	(6,209)		-		(4,468)
Profit / (loss) after tax	15,844		(4,100)		5,914
Basic earnings / (loss) per share (cents)	8.85		(2.29)		3.30
Diluted earnings / (loss) per share (cents)	8.36		(2.29)		3.26

 

Griffin Mining Limited

Condensed Consolidated Statement Of Comprehensive income

(expressed in thousands US dollars)

	6 months to 30/06/2017 Unaudited		6 months to 30/06/2016 Unaudited		Year to 31/12/2016 Audited
	$000		$000		$000
Profit / (loss) for the financial period	15,844		(4,100)		5,914
Other comprehensive income
Exchange differences on translating foreign operations	3,854		(1,184)		(3,299)
Other comprehensive income for the period, net of tax	3,854		(1,184)		(3,299)
Total comprehensive income for the period	19,698		(5,284)		2,615

Griffin Mining Limited

Condensed Consolidated Statement Of Financial Position

 (expressed in thousands US dollars)

	30/06/2017		30/06/2016		31/12/2016
	Unaudited		Unaudited		Audited
	$000		$000		$000
ASSETS
Non-current assets
Property, plant and equipment	206,556		209,388		204,491
Intangible assets - Exploration interests	1,834		1,843		1,792
	208,390		211,231		206,283
Current assets
Inventories	6,121		4,718		6,148
Other current assets	6,607		4,062		8,232
Cash and cash equivalents	15,752		18,313		13,218
	28,480		27,093		27,598
Total assets	236,870		238,324		233,881
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	2,072		1,672		2,072
Shares held in treasury	(4,105)		(3,875)		(3,875)
Chinese statutory re-investment reserve	1,621		1,558		1,583
Other reserve on acquisition of non-controlling interests	(29,346)		(29,346)		(29,346)
Foreign exchange reserve	8,687		6,921		4,871
Profit and loss reserve	107,018		81,250		91,174
Total equity attributable to equity holders of the parent	162,737		134,970		143,269
Non-current liabilities
Long-term provisions	2,332		2,376		2,277
Deferred taxation	2,670		2,568		2,607
Finance lease	3,479		5,670		3,791
	8,481		10,614		8,675
Current liabilities
Taxation payable	2,826		-		2,549
Trade and other payables	26,142		28,654		31,917
Finance lease	1,995		2,420		2,783
Bank loans	34,689		61,666		44,688
Total liabilities	65,652		92,740		81,937
Total equities and liabilities	236,870		238,324		233,881
Number of shares in issue	179,041,830		179,041,830		179,041,830
Attributable net asset value / total equity per share	$0.91		$0.75		$0.80

Griffin Mining Limited

Condensed Consolidated Statement of Changes in Equity

(expressed in thousands US dollars)

	Share	Share	Contributing	Share	Shares	Chinese	Other	Foreign	Profit	Total
	Capital	premium	surplus	based payments	held in treasury	re investment reserve	reserve on acquisition of non-controlling interests	exchange reserve	and loss reserve	attributable to equity holders of parent
	$000	$000	$000	$000	$000	$000	$000	$000	$000	$000
At 31 December 2015	1,790	71,310	3,690	1,363	(3,875)	1,595	(29,346)	8,068	85,350	139,945
Cost of share based payments	-	-	-	309	-	-	-	-	-	309
Transaction with owners	-	-	-	309	-	-	-	-	-	309
Retained profit for the 6 months	-	-	-	-	-	-	-	-	(4,100)	(4,100)
Other comprehensive income:
Exchange differences on translating foreign operations	-	-	-	-	-	(37)	-	(1,147)	-	(1,184)
Total comprehensive income for the period	-	-	-	-	-	(37)	-	(1,147)	(4,100)	(5,284)
At 30th June 2016 (Unaudited)	1,790	71,310	3,690	1,672	(3,875)	1,558	(29,346)	6,921	81,250	134,970
Regulatory transfer for future investment	-	-	-	-	-	90	-	-	(90)	-
Cost of share based payments	-	-	-	400	-	-	-	-		400
Transaction with owners	-	-	-	400	-	90	-		(90)	400
Retained profit for the 6 months	-	-	-	-	-	-	-	-	10,014	10,014
Other comprehensive income:
Exchange differences on translating foreign operations	-	-	-	-	-	(65)	-	(2,050)	-	(2,115)
Total comprehensive income for the period	-	-	-	-	-	(65)	-	(2,050)	10,014	7,899
At 31st December 2016	1,790	71,310	3,690	2,072	(3,875)	1,583	(29,346)	4,871	91,174	143,269
Purchase of shares for treasury	-	-	-	-	(230)	-	-	-	-	(230)
Transaction with owners	-	-	-	-	(230)	-	-	-	-	(230)
Retained profit for the 6 months	-	-	-	-	-	-	-	-	15,844	15,844
Other comprehensive income:
Exchange differences on translating foreign operations	-	-	-	-	-	38	-	3,816	-	3,854
Total comprehensive income for the period	-	-	-	-	-	38	-	3,816	15,844	19,698
At 30th June 2017 (Unaudited)	1,790	71,310	3,690	2,072	(4,105)	1,621	(29,346)	8,687	107,018	162,737

Griffin Mining Limited

Condensed Consolidated Cash Flow Statement

 (expressed in thousands US dollars)

	6 months to 30/06/2017 Unaudited		6 months to 30/06/2016 Unaudited		Year to 31/12/2016 Audited
	$000		$000		$000
Net cash flows from operating activities
Profit / (loss) before taxation	22,053		(4,100)		10,382
Foreign exchange losses	104		190		532
Finance income	(63)		(80)		(178)
Finance costs	1,401		2,245		4,286
Adjustment in respect of share based payments	-		309		709
Depreciation, depletion and amortisation	4,855		3,510		8,526
Losses on disposal of equipment	16		-		224
Decrease / (increase) in inventories	27		2,464		1,034
Decrease / (increase) in receivables and other current assets	1,602		(926)		(6,251)
(Decrease) / increase  in trade and other payables	(3,807)		(326)		3,280
Taxation paid	(5,932)				(641)
Net cash inflow from operating activities	20,256		3,286		21,903
Cash flows from investing activities
Interest received	63		80		178
Payments to acquire - mineral interests	(2,764)		(4,035)		(7,361)
Payments to acquire - plant & equipment	(1,201)		(1,585)		(3,776)
Payments to acquire - office equipment	(2)		-		(102)
Payments to acquire - intangible assets - exploration interests	1		(17)		(43)
Net cash (outflow) from investing activities	(3,903)		(5,557)		(11,104)
Cash flows from financing activities
Purchase of shares for treasury	(230)		-		-
Interest paid	(1,181)		(1,938)		(3,684)
Finance lease	(1,463)		(1,469)		(2,935)
Repayment of bank loans	(10,940)		-		(14,891)
Net cash (outflow) from financing activities	(13,814)		(3,407)		(21,510)
Increase / (decrease) in cash and cash equivalents	2,539		(5,678)		(10,711)
Cash and cash equivalents at beginning of the period	13,218		24,062		24,062
Effects of exchange rate changes	(5)		(71)		(133)
Cash and cash equivalents at end of the period	15,752		18,313		13,218
Cash and cash equivalents comprise bank deposits
Bank deposits	15,752		18,313		13,218

Griffin Mining Limited

Notes to the Interim Statement

1.     These unaudited condensed consolidated interim financial statements have been prepared in accordance with the accounting policies adopted in the last annual financial statements for the year to 31 December 2016.  

2.     This interim report will be available on the Company's web site, www.griffinmining.com. Hard copies are available from the Company's London office, 8^th Floor, Royal trust House, 54 Jermyn Street, London. SW1Y 6LX.

3.     The summary accounts set out above do not constitute statutory accounts as defined by Section 84 of the Bermuda Companies Act 1981 or Section 434 of the UK Companies Act 2006.  The condensed consolidated statement of financial position at 31 December 2016 and the condensed consolidated income statement, condensed consolidated statement of comprehensive income, condensed consolidated statement of changes in equity and the condensed consolidated cash flow statement for the year then ended have been extracted from the Group's 2016 statutory financial statements upon which the auditors' opinion is unqualified.

4.     The summary accounts have been prepared on a going concern basis.  As at 30th June 2017, Hebei Hua Ao (a subsidiary of the Company) had bank loans outstanding of $34,689,000 (30^th June 2016 $61,666,000).  Having previously rolled over each of the bank facilities and having made substantial repayments, Hebei Hua Ao expects to repay or roll over the existing facilities for a further 12 months.  Having considered the cash resources, banking facilities and forecasts for the remainder of the Hebei Hua Ao joint venture term, the directors do not expect any going concern issues to arise.

5.     The calculation of the basic earnings per share is based on the earnings attributable to ordinary shareholders divided by the weighted average number of shares in issue during the period. The calculation of diluted earnings per share is based on the basic earnings per share on the assumed conversion of all dilutive options and other dilutive potential ordinary shares. Reconciliation of the earnings and weighted average number of shares used in the calculations are set out below:

	6 months to 30/06/2017 Unaudited				6 months to 30/06/2016 Unaudited			Year to 31/12/2016 Audited
		Earnings $000	Weighted average number of shares	Per share amount (cents)	Earnings $000	Weighted average number of shares	Per share amount (cents)	Earnings $000	Weighted average number of shares	Per share amount (cents)
Basic earnings per share
Earnings  attributable to ordinary shareholders		15,844	179,091,830	8.85	(4,100)	179,091,830	(2.29)	5,914	179,091,830	3.3
Dilutive effect of securities
Options		-	10,311,861	(0.49)	-	-	-	-	2,248,862	(0.04)
Diluted earnings per share		15,844	189,403,691	8.36	(4,100)	179,091,830	(2.29)	5,914	181,340,692	2.26

 

END

 

 

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