Interim Results

Griffin Mining Ld 16 September 2002 GRIFFIN MINING LIMITED 1 Berkeley Street, London, W1J 8DJ, United Kingdom Telephone: + 44 (0)20 7016 8821 Facsimile: + 44 (0)20 7016 9124 E mail: griffin@griffinmining.demon.co.uk 16th September 2002 SUBSTANTIAL RESOURCE UPGRADE EXPECTED AT CAIJIAYING INTERIM STATEMENT FOR THE 6 MONTHS TO 30 JUNE 2002 Griffin Mining Limited ('Griffin') has today published both a summary report by independent geological consultants CSA Australia Pty Ltd on the results of its successful pre-development drilling program at Caijiaying in China and its interim results for the 6 months ended 30th June 2002, copies of which are attached hereto. Griffin has successfully completed its 2002 field programme at its Caijiaying zinc gold project in China. Although analyses from its pre development drilling programme are not yet available, visual interpretations indicate that the resource at Caijiaying is likely to be much larger than previously estimated. A further announcement will be made when the analyses become available. Mineralised lodes occur within a 60 metre wide envelope which has been demonstrated to have a consistent dip of 75-80(o) to the west and have almost a 0.5 kilometre length and 75 metre vertical extent, the first time such continuity has been demonstrated in the area. At least two parallel lodes are present within the envelope and in places more lodes are present, contrasting with the previous interpretation of a single lode. It is likely that this system continues to the southeastern edge of the deposit giving an overall length of 1 kilometre. The entire resource can now be re-modelled for a new resource estimate The interpretation of steep north-trending lode orientations is consistent with the mineralisation at the Zone II deposit, which is situated (within Griffin's licence area) 1 kilometre to the south of the main Zone III deposit and this strongly suggests that the two deposits are continuous opening up a large area for further exploration once production begins at Caijiaying The results of the 2002 drilling work now clears the way for completion of a feasibility study to western banking standards. Losses in the six months to 30th June 2002 were further reduced to $109,000 compared to losses of $194,000 in the 6 months ended 30th June 2001. At 30th June 2002 the Company retained cash and deposits of $2,218,000. Mladen Ninkov, Chairman, commenting on the activities of Griffin said: 'This is yet another remarkable result for Griffin and its shareholders. Whilst continuing to reduce our cost base the Company has shown the courage to undertake further drilling in a difficult base metals market. This decision has paid off handsomely for shareholders with the expectation now that a large increase of the resource base at Caijiaying will be announced on the completion of a competent person's report. It proves the orientation of the ore body and, for the first time, indicates the full size of the resource and allows Griffin to have the confidence to move forward with completing the feasibility study, financing and building an operating mine at Caijiaying. I congratulate everyone that was involved in this process'. Further information Mladen Ninkov - Chairman Telephone: +44(0)20 7016 8821 Roger Goodwin - Finance Director Telephone: +44(0)20 7016 8821 Charles Dampney - Charles Stanley Telephone: +44(0)20 7739 8200 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 Consolidated Profit and Loss Account (Expressed in thousands US Dollars) 6 months to 6 months to Year to 30/06/2002 30/06/2001 31/12/2001 Unaudited Unaudited Audited $000 $000 $000 Income Gains on the disposal of investments 8 - - Net operating expenses (225) (202) (422) (Loss) on disposal of discontinued operations - - (250) Operating (Loss) (217) (202) (672) Foreign exchange profits / (losses) 74 (20) 47 Interest receivable and similar income 34 28 82 (Loss) on ordinary activities before taxation (109) (194) (543) Taxation on ordinary activities - - - (Loss) for the financial period (109) (194) (543) (Loss) per share (cents) (0.1) (0.3) (0.6) Consolidated Balance Sheet (Expressed in thousands US Dollars) 30/6/2002 30/6/2001 31/12/2001 Unaudited Unaudited Audited $000 $000 $000 Fixed Assets Intangible assets 5,190 4,761 4,985 Tangible assets 2 4 3 5,192 4,765 4,988 Current Assets Portfolio investments 28 72 17 Accounts receivable 11 262 12 Prepaid expenses 14 21 7 Cash and deposits 2,218 2,915 2,581 2,271 3,270 2,617 Creditors: Amounts falling due within one year Creditors and accrued expenses (45) (93) (70) Net current assets 2,226 3,177 2,547 Total net assets 7,418 7,942 7,535 Capital and reserves Share capital 1,033 1,033 1,033 Share premium 15,516 15,517 15,516 Contributing surplus 3,690 3,690 3,690 Investment revaluation reserve (845) (803) (857) Foreign exchange reserve 152 176 173 Profit & loss (Deficit) (12,128) (11,671) (12,020) Equity interests 7,418 7,942 7,535 Attributable net assets per share (cents) 7 8 7 Number of shares in issue 103,257,248 103,257,248 103,257,248 Consolidated Cash Flow (Expressed in thousands US Dollars) 6 months to 6 months to Year to 30/06/2002 30/06/2001 31/12/2001 Unaudited Unaudited Audited $000 $000 $000 Net cash (outflow) from operating activities (178) (266) (420) Investing activities Interest received 34 28 82 Payments to acquire intangible fixed assets (219) (204) (434) Payments to acquire tangible fixed assets - 2 (2) Receipts from the disposal of discontinued - - - operations Net cash (outflow) from investing activities (185) (174) (354) Net cash (outflow) before financing (363) (440) (774) Financing Issue of ordinary share capital - 3,101 3,101 Expenses paid in connection with share issue - (116) (116) - 2,985 2,985 (Decrease) / increase in cash and cash (363) 2,545 2,211 equivalents Reconciliation of operating (loss) to net cash (outflow) from operating activities Operating loss (217) (202) (672) Taxation - - - Depreciation 1 2 3 (Gains) on sale of investments (8) - - Receipts on the sale of investments 8 - - Payments to acquire investments - (2) - Provisions in respect of continuing operations - - - Losses / (profits) on disposal of discontinued operations - - 250 (Increase) / decrease / in debtors (6) (4) 10 (Decrease) in creditors (24) (37) (61) Other non-cash income, including exchange differences 68 (23) 50 (178) (266) (420) Statement of Total Recognised Gains & Losses (Expressed in thousands US Dollars) 6 months to 6 months to Year to 30/06/2002 30/06/2001 31/12/2001 Unaudited Unaudited Audited $000 $000 $000 (Loss) for the period (109) (194) (543) Unrealised gains / (losses) on investments 12 (430) (485) Currency translation differences in foreign currency net investments (20) 16 13 Total gains and (losses) recognised in the (117) (608) (1,015) period Notes: 1. This statement has been prepared using accounting policies and presentation consistent with those applied in the preparation of the statutory accounts of the Company. 2. Copies of this interim report are being sent to all registered shareholders. Additional copies are available from the Company's London office, 1 Berkeley Street, London W1J 8DJ. 3. Losses per share have been calculated on the basis of the net loss after taxation of $109,000 and the weighted average number of shares in issue in the period ended 30 June 2002 of 103,257,248. There is no dilutive effect of outstanding share purchase options. 4. The summary accounts set out above do not constitute statutory accounts as defined by Section 84 of the Bermuda Companies Act 1981 or Section 240 of the UK Companies Act 1985. The summarised balance sheet at 31 December 2001 and the summarised profit and loss account, summarised cash flow statement and summarised statement of total recognised gains and losses for the year then ended have been extracted from the Group's 2001 statutory financial statements upon which the auditors' opinion is unqualified. 6. Reconciliation of shareholders' funds. 6 months to 6 months to Year to 30/06/2002 30/06/2001 31/12/2001 Unaudited Unaudited Audited $000 $000 $000 Total gains and (losses) recognised in the period (117) (608) (1,015) Issue of Ordinary Shares in the period - 2,985 2,985 Net additions to shareholders' funds (117) 2,377 1,970 Opening shareholders' funds 7,535 5,565 5,565 Closing shareholders' funds 7,418 7,942 7,535 Date; 13-Sep-02 Ref, RC.94.02 The Directors Griffin Mining Ltd 1 Berekeley Street London W1J 8DJ United Kingdom Re; The Caijiaying Project Dear Sirs, You have asked for a brief explanation of the recent drilling results at Caijiaying, pending receipt of the core analyses. My summary of these results is presented below. Background This brief information sheet has been prepared by us as Griffin is making an initial announcement of the results of their recent drilling program on the Caijiaying Project in China, pending receipt of drill-sample analyses. Neither CSA nor any of its staff hold any shares in Griffin. Following the granting of a Mining Licence on the Caijiaying Zone III zinc/gold deposit on 21st March, 2002, Griffin has completed a program of oriented diamond drilling between May and August as planned. The purpose of this program was to confirm the interpretation of sub-vertical, north-trending lodes interpreted from trial underground mining on the south-eastern part of the resource in 2000. A secondary objective was to test the corridors for additional lodes between the previous north-south drill sections by drilling in an east-west orientation. It was decided to do this over the northern part of the deposit where the bulk of the mineralisation occurs. This confirmation was needed so that an updated resource estimate and mine development plan could be made for the final feasibility study. Program The drilling program consisted of seven angled holes drilled on three sections as follows: • a Southern Section comprising two holes drilled towards the east (on grid line 40020N), • a Central Section (on grid line 40140N) comprising three holes drilled towards the east and one hole drilled towards the west to cross-check the other holes, and • a Northern Section comprising one hole drilled towards the east (on grid line 40360N). A total of 2031m were drilled. All three sections were designed to assess the geometry of mineralisation intersected in the northern part of the previous north-south 315 Section drilled by the Chinese where 40% of the total resource occurs. The holes were drilled at a 60(o) precise angle (within 1.5(o)) orthogonal to the known lodes to establish true widths and also test whether the mineralisation occurs as single or multiple lodes. The previous north-south drilling had meant that the resource estimate had had to assume only a single lode. Drill-hole angles were measured using an imported western down-hole camera and core orientations were established by a down-hole spear. The drill program was managed by CSA. Although the analytical results are yet to be received, the mineralisation is sufficiently identifiable by visual means to be able to interpret the broad results and their implications for the Project. Drill Results On the Southern Section, the recent drilling intersected a new zone of mineralisation of 10-12m true width which occurs 15m west of the previously known mineralisation. Both zones occur in a variably mineralised envelope that is 60m wide and dips at 78(o) to the west and parallel to a 4m-wide felsite intrusion which occurs 15m east of the mineralisation. Vertical continuity has been demonstrated over 25m but can be inferred over 75m. The same felsite intrusion was intercepted on the Central and Northern sections where it also parallels the mineralisation and, as such, it represents a marker unit. Mineralisation in the Central Section (120m to the north) also occurs in a 60m wide envelope (also dipping 75 - 80(o) to the west) but is much more abundant and occurs in multiple complex lenses, probably due to a cross fault that cuts off the up-dip vertical extent of the mineralisation on this section. This is similar to the pattern encountered in the trial mining where east-west lodes were developed along cross-cutting features. A total of three main lodes with true widths of 2 -15m were intersected with two smaller peripheral ones of 1 - 5m width. The lodes on this section appear to rapidly pinch and swell over 10m distances. A vertical extent of the mineralised envelope of over 50m has been demonstrated and can be inferred over 75m. The single drill hole on the Northern Section (220m to the north of the Central Section) showed the same general pattern as the Southern Section. A new lode of 7m true width was encountered 15m west of the previously encountered lode. The latter original lode was poorly mineralised in the new drill hole as the hole intersected the felsite intrusion in the middle of the mineralised zone. Like in the other two sections, the mineralised envelope is 60m wide and dips about 75(o) to the west. Structural Study A structural study was completed at the same time as the drilling survey and has provided a framework for understanding the structural controls on the mineralisation on a broad scale. An attempt was made to also apply this model to explain individual lode geometry and, while this may assist future mining operations, it cannot really be applied to the resource modeling due to limited data at this stage. Consequently a more empirical approach will be used for modeling the broad mineralised envelopes that have been defined by the survey. Conclusions The main conclusions that can be drawn from these results are as follows; • Mineralised lodes in the northern part of the deposit are complex in detail but occur within a 60m-wide envelope which has been demonstrated to have a consistent dip of 75-80(o) to the west and have at least 460m length and 75m vertical extent. This is the first time such continuity has been demonstrated in the area. • The survey has demonstrated that at least two parallel lodes are present within the envelope and, in places more lodes are present. This contrasts with the previous interpretation of a single lode which was constrained by the absence of east-west drill sections. • The identification of a marker unit that parallels the mineralisation system will be useful for further resource modeling and exploration within the area. • The conclusion regarding lode geometry is similar to that discovered by trial underground mining of the southeast part of the resource but the earlier results could not be confidently extrapolated northwards until now. The two areas are 380m apart. • The interpretation of steep north-trending lode orientations is also consistent with the mineralisation at the Zone II deposit, which is situated 1km to the south of Zone III (also on Griffin's licence) and this strongly suggests that the two deposits are continuous across the intervening area which has not yet been adequately tested. This forms a large area for further exploration. • The evidence is now overwhelming that the majority of the Caijiaying mineralisation follows the same consistent orientation so that the entire resource can be re-modeled for a new resource estimate. • A new resource estimate will be significantly larger than the previous resource which had to be estimated using unconventional methods due to the absence of east-west drill information. A substantial increase can be expected because the recent drilling intersected more than twice the amount of mineralisation than was expected. The previous estimate was 1.52Mt @ 12.34% zinc, 0.53% lead, 48g/t silver and 0.75g/t gold at a 7% zinc cut-off. In addition, a new resource estimate can be made using block modeling techniques, thus resulting in a higher level of confidence and a workable resource model for mine planning. • Once the new resource estimate is completed, the way will be clear to upgrade the Chinese Feasibility Study to western banking standards during the forthcoming winter. Signed _______________________ Rupert W. A. Crowe BSc, F.AusIMM, MIAEG Managing Director This information is provided by RNS The company news service from the London Stock Exchange NKPABKDNCD

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