Interim Results

RNS Number : 1848Y

Griffin Mining Ld

01 September 2009

 



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

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

E mail: [e-mail]

1st September 2009

INTERIM STATEMENT FOR THE SIX MONTHS ENDED 30th JUNE 2009

Griffin Mining Limited ('Griffin' or 'the Company') is pleased to publish its interim results for the six months ended 30th June 2009. During most of this period, mining operations at the Caijiaying zinc-gold mine were suspended.

Financial and Trading:

The results for the six months ended 30 June 2009, during which operations were suspended for most of this period at Caijiaying, show a pre-tax loss of US$1,354,000 compared to a profit in the six months to 30 June 2008 of US$13,047,000. 

Operations at Caijiaying were suspended from January to May 2009 inclusive to allow for upgrade and maintenance work.  48,129 tonnes of low grade ore was processed in the first two months of 2009 from stockpiles mined and hauled in 2008.  33,152 tonnes of ore was processed in June following recommencement of operations.  The site upgrade is continuing with ongoing work on the third tailings dam, new crushing circuit and installation of a delivered, second primary ball mill. Whilst further increases in throughput are expected during 2009, the Company does not anticipate processing rates will reach 750,000 tonnes of ore per annum until the upgrade process has been completed

In light of the fall in commodity prices in 2008/2009, a comprehensive review of costs and procedures was undertaken during the suspension of operations with a view to see if it was possible to further reduce the already very low operating costs at Caijiaying. This included the opportunity to renegotiate terms with contractors and to retrench superfluous personnel.  

 

Since the recommencement of operations, zinc and silver metal in concentrate production has been ahead of expectations with record gold production in July. This has been the result of improved head grades and production throughput resulting from ore-body re-modelling and maintenance undertaken during the suspension of operations. Costs have, in many cases, been reduced from that incurred in 2008. Revenues have also benefited from a rise in the price of zinc since the recommencement of operations with the zinc price having reached a recent high of $1,930 per tonne compared with $1,250 at the beginning of 2009.

All further documentation required to permit mining below the 1300 level at Caijiaying has now been submitted to the Chinese authorities.  

Griffin has a 39.2% equity interest in Spitfire Oil Ltd ('Spitfire'). Full provision has been made in the interim results for Griffin's share of Spitfire's losses.  Spitfire continues to make good progress having announced a 69% increase in the previously reported resource for its 100% owned Salmon Gums lignite deposit in the south-east of Western Australia on 16 July 2009. The new reported Resource of lignite (at 4m coal thickness & 45% ashdb cut-off) is estimated to be:

Indicated: 406 million tonnes.

Inferred: 470 million tonnes.

Total: 876 million tonnes

The estimate was made in accordance with the 'Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves' (The JORC Code, 2004). 

Spitfire has reported that, if the current oil yields achieved with the test reactors in the Curtin University laboratory can be maintained at an industrial scale, then the reported resource of lignite would correspond to an in-situ pyrolysis oil resource in the range of 330 to 420 million barrels, an increase in the range of 65% to 110% over the 200 million barrels in-situ oil volumes which supported Spitfire's admission onto AIM. Spitfire is now focusing its efforts on completing its technology definition work with the emphasis now shifting from the generation of oil to the upgrading of the pyrolysis oil into its maximum saleable form and completing its pre-feasibility studies.

Griffin held cash balances of $64.5m as at 30 June 2009. This places the Company in an enviably strong position to continue its strategy of identifying acquisition opportunities to broaden the resources and geographical profile of the Company. 

In line with previous years and the Company's policy of determining annual dividends at the time of the Company's full year results, the Board of Griffin has not declared an interim dividend.

Chairman's Statement

'These results, for the first six months of 2009 were to be expected considering Caijiaying was shut down during most of the reporting period.  Much has been achieved in the first six months of 2009 to improve operations at Caijiaying. The full benefits of the maintenance work, cost review and ore block re-modelling earlier this year, together with the increase in commodity prices, should be reflected in the results for the second half of 2009.' 

Further information

Griffin Mining Limited

Mladen Ninkov - Chairman                   Telephone: [phone]

Roger Goodwin - Finance Director

Investec Investment Banking:

Gerard Kisbey-Green                              Telephone: [phone]        

Stephen Cooper                                                           [phone]

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 30/06/2009 Unaudited		6 months to 30/06/2008 Unaudited		Year to  31/12/2008 Audited
	$000		$000		$000
Revenue	2,366		22,201		32,061
Cost of sales	(3,484)		(10,621)		(18,438)
Gross (loss) / profit	(1,118)		11,580		13,623
Net operating expenses	(3,578)		(5,349)		(10,517)
(Loss) / profit from operations	(4,696)		6,231		3,106
Share of losses of associated company	(210)		-		(39)
Foreign exchange gains / (losses)	3,340		723		(3,221)
Finance income	167		3,569		4,670
Other income	45		2,524		2,533
Interest payable	-		-		(90)
(Loss) / profit before tax	(1,354)		13,047		6,959
Income tax expense	-		(1,135)		(637)
(Loss) / profit after tax attributable to equity share owners for the financial period	(1,354)		11,912		6,322
Basic (loss) / earnings per share (cents)	(0.75)		4.83		2.87
Diluted (loss) / earnings per share (cents)	(0.75)		4.82		2.83

  Griffin Mining Limited

Condensed Consolidated Statement Of Comprehensive income

(expressed in thousands US dollars)

	6 months to 30/06/2009 Unaudited		6 months to 30/06/2008 Unaudited		Year to  31/12/2008 Audited
	$000		$000		$000
(Loss) / profit after tax attributable to equity share owners for the financial period	(1,354)		11,912		6,322
Other comprehensive income
Exchange differences on translating foreign operations	(58)		4,413		4,090
Other comprehensive income for the period, net of tax	(58)		4,413		4,090
Total comprehensive income for the period attributable to equity shareholders	(1,412)		16,325		10,412

  Griffin Mining Limited

Condensed Consolidated Statement Of Financial Position

 (expressed in thousands US dollars)

	30/06/2009		30/06/2008		31/12/2008
	Unaudited		Unaudited		Audited
	$000		$000		$000
ASSETS
Non-current assets
Property, plant and equipment	57,267		52,851		56,885
Intangible assets - Exploration interests	1,327		907		1,313
Investment in associated company	4,293		-		4,503
	62,887		53,758		62,701
Current assets
Inventories	2,354		2,431		3,227
Other current assets	5,715		5,370		5,564
Cash and cash equivalents	64,540		83,919		67,193
	72,609		91,720		75,984
Total assets	135,496		145,478		138,685
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Share capital	1,816		1,817		1,816
Share premium	75,942		75,967		75,950
Contributing surplus	3,690		3,690		3,690
Share based payments	6,068		5,131		5,826
Other reserves	711		634		711
Foreign exchange reserve	7,084		7,467		7,142
Profit and loss reserve	33,991		41,009		35,345
Total equity	129,302		135,715		130,480
Non-current liabilities
Long-term provisions	138		-		98
Current liabilities
Trade and other payables	6,056		9,763		8,107
Short term bank overdrafts	-		-		-
Total liabilities	6,056		9,763		8,107
Total equities and liabilities	135,496		145,478		138,685
Number of shares in issue	181,555,164		181,657,731		181,589,731
Attributable net asset value / total equity per share	$0.71		$0.75		$0.72

  Griffin Mining Limited

Condensed Consolidated Statement of Changes in Equity

(expressed in thousands US dollars)

	Share	Share	Contributing	Share	Other	Foreign	Profit
	Capital	Premium	surplus	Based	Reserves	Exchange	and loss	Total
				Payments		Reserve	Reserve
	$000	$000	$000	$000	$000	$000	$000	$000
At 31 December 2007	2,615	196,637	3,690	4,426	579	3,109	37,106	248,162
Dividend paid	-	-	-	-	-	-	(8,009)	(8,009)
Purchase of shares for cancellation	(798)	(120,670)	-	-	-	-	-	(121,468)
Cost of share based payments	-	-	-	705	-	-	-	705
Transaction with owners	(798)	(120,670)	-	705	-	-	(8,009)	(128,772)
Retained profit for the 6 months	-	-	-	-	-	-	11,912	11,912
Other comprehensive income:
Exchange differences on translating foreign operations	-	-	-	-	55	4,358	-	4,413
Total comprehensive income for the 6 month period	-	-	-	-	55	4,358	11,912	16,325
At 30 June 2008	1,817	75,967	3,690	5,131	634	7,467	41,009	135,715
Regulatory transfer for future investment	-	-	-	-	75	-	(75)	-
Purchase of shares for cancellation	(1)	(17)	-	-	-	-	-	(18)
Cost of share based payments	-	-	-	695	-	-	-	695
Transaction with owners	(1)	(17)	-	695	75	-	(75)	677
Retained loss for the 6 months	-	-	-	-	-	-	(5,589)	(5,589)
Other comprehensive income:
Exchange differences on translating foreign operations	-	-	-	-	2	(325)	-	(323)
Total comprehensive income for the 6 month period	-	-	-	-	2	(325)	(5,589)	(5,912)
At 31 December 2008	1,816	75,950	3,690	5,826	711	7,142	35,345	130,480
Purchase of shares for cancellation	-	(8)	-	-	-	-	-	(8)
Cost of share based payments	-	-	-	242	-	-	-	242
Transaction with owners	-	(8)	-	242	-	-	-	234
Retained loss for the 6 months	-	-	-	-	-	-	(1,354)	(1,354)
Other comprehensive income:
Exchange differences on translating foreign operations	-	-	-	-	-	(58)	-	(58)
Total comprehensive income for the 6 month period	-	-	-	-	-	(58)	(1,354)	(1,412)
At 30 June 2009	1,816	75,942	3,690	6,068	711	7,084	33,991	129,302

Griffin Mining Limited

Condensed Consolidated Cash Flow Statement

 (expressed in thousands US dollars)

	6 months to 30/06/2009 Unaudited		6 months to 30/06/2008 Unaudited		Year to  31/12/2008 Audited
	$000		$000		$000
Net cash flows from operating activities
(Loss) / profit before taxation	(1,354)		13,047		6,959
Share of associated company loss	210		-		39
Foreign exchange (gains) / losses	(3,340)		(723)		3,221
Taxation paid	-		(1,135)		(637)
Finance income	(167)		(3,569)		(4,670)
Adjustment in respect of share based payments	242		705		1,400
Depreciation, depletion and amortisation	384		953		2,844
Provisions	41		-		98
Decrease  in inventories	873		2,208		1,412
(Increase) in other current assets	(152)		(1,215)		(1,101)
(Decrease) / increase in trade and other payables	(2,051)		4,716		3,059
Net cash (outflow) / inflow from operating activities	(5,314)		14,987		12,624
Cash flows from investing activities
Interest received	167		3,569		4,670
Payments to acquire intangible fixed assets	(12)		-		(388)
Payments to acquire tangible fixed assets	(827)		(5,249)		(11,074)
Payments to acquire interest in associated company	-		-		(4,542)
Net cash (outflow) from investing activities	(672)		(1,680)		(11,334)
Cash flows from financing activities
Purchase of shares for cancellation	(8)		(121,469)		(121,486)
	(8)		(121,469)		(121,486)
Dividends paid	-		(8,008)		(8,008)
(Decrease) in cash and cash equivalents	(5,994)		(116,170)		(128,204)
Cash and cash equivalents at beginning of the period	67,193		199,283		199,283
Effects of exchange rate changes	3,341		806		(3,886)
Cash and cash equivalents at end of the period	64,540		83,919		67,193
Cash and cash equivalents comprise
Bank deposits	64,540		83,919		67,193
Total	64,540		83,919		67,193

  Griffin Mining Limited

Notes to the Interim Statement

 

1.       These 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 2008 except for the adoption of IAS 1 Presentation of Financial Statements (Revised 2007).

 

2.      Copies of this interim report are being sent to all registered shareholders. Additional copies are available from the Company’s London office, 60 St James’s Street, London, SW1A 1LE.

 

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 435 of the UK Companies Act 2006. The condensed consolidated statement of financial position at 31 December 2008 and the condensed consolidated income statement, 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 2008 statutory financial statements upon which the auditors’ opinion is unqualified. The condensed consolidated statement of comprehensive income has been prepared using information extracted from the Group’s 2008 statutory financial statements.

 

4.      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. There is no dilutive earnings per share in the 6 months to 30 June 2009 due to the incidence of losses. Reconciliation of the earnings and weighted average number of shares used in the calculations are set out below:

	6 months to 30/06/2009 Unaudited				6 months to 30/06/2008 Unaudited			Year to 31/12/2008 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
(Loss) / earnings attributable to ordinary shareholders		(1,354)	181,555,355	(0.75)	11,912	246,509,760	4.83	6,322	220,587,242	2.87
Dilutive effect of securities
Options		-				66,198			3,090,342
Diluted earnings per share		(1,354)	181,555,355	(0.75)	11,912	246,575,958	4.82	6,322	223,677,584	2.83

 

END

 

 

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