Half Yearly Report

RNS Number : 3220L

Griffin Mining Ld

04 September 2012

 

Griffin Mining Limited

4th September 2012

Interim Statement for the six months ended 30th June 2012

Griffin Mining Limited ("Griffin" or "the Company") is pleased to publish its interim results for the six months ended 30th June 2012.

Highlights:

·     Record production of zinc, lead and silver in concentrate at Caijiaying for any six month period

·     Revenues of $39.7m (2011 $33.9m)

·     Operating profit of $16.7m (2011 $15.4m)

·     Profit before tax of $15.0m (2011 $17.9m)

·     Profit after tax of $11.4m (2011 $13.6m)

·     Attributable profit after tax of $7.5m (2011 $8.5m)

Financial and Trading:

Operating profit in the six months to the 30^th June 2012 has benefited from increased throughput at Griffin's Caijiaying Mine with 386,313 tonnes (2011 319,525 tonnes) processed to produce:

·     20,336 tonnes (2011 16,069 tonnes) of zinc metal in concentrate;

·     1,364 tonnes (2011 602 tonnes) of lead in concentrate;

·     215,773 ounces (2011 117,036 ounces) of silver in concentrate;

·     3,769 ounces (2011 4,493 ounces) of gold in concentrate. 

Production of zinc, lead and silver in concentrate in the six months to the 30^th June 2012 was a record for any six month period at Caijiaying despite production being impacted by the Chinese Spring Festival holidays in January / February and restricted delivery of explosives during the Chinese National Party Congress.  Metallurgical configuration is continuing to help improve gold recoveries. In the interim, mining of high grade gold areas has been deferred until metallurgical improvements have been consolidated.

Increases in costs of sales and net operating costs mainly reflect increased ore processed and concentrate produced with unit costs per tonne of ore processed and zinc metal in concentrate produced in line with the equivalent period in 2011.

Profits before tax have been impacted by foreign exchange losses of $684,000 (2011 gains of $2,221,000) arising as a result of a stronger US Dollar against both the Chinese Renminbi and British Pound Sterling in the period and interest payable on Chinese bank loans of $1,385,000 (2011 nil). 

Griffin has a 39.2% equity interest in Spitfire Oil Ltd ("Spitfire").  Griffin's share of Spitfire's losses of $88,000 (2011 profits $28,000) have been recognised in the interim results. 

Interest receivable of $399,000 (2011 $228,000) was recorded in the period.

Chinese income taxes and withholding taxes of $3,617,000 (2011 $4,273,000) have been charged to profit resulting in profits after tax of $11,379,000 (2011 $13,598,000).

The minority interest in the profit of Griffins Chinese subsidiary, Hebei Hua Ao Mining Industry Company Limited ("Hua Ao"), of 40% to 21^st May 2012 and 11.2% from the 22^nd May to the 30^th June of $3,840,000 (2011 $5,102,000), have been ascribed to the non-controlling interest and $7,539,000 (2011 $8,496,000) attributable to Griffin's interest.

As announced on 10^th May 2012, 28.8% of the existing joint venture partner's interest in Hua Ao was acquired, and the term of the joint venture's business licence extended to 2037, by the outlay of $117,444,000. In accordance with International Financial Reporting Standards 75% of this amount has been attributed to the extension of the joint venture term and capitalised to non-current assets and 25% attributed to buying out the minority interests and charged directly to reserves within other reserves on acquisition of non controlling interests. The allocation has been based upon estimated future discounted cash flows from the Caijiaying mine.  The purchase price has been financed from undistributed retained dividends in Hua Ao, banking facilities in China and Griffin's existing cash resources. 

At 30^th June 2012, attributable net assets per share on issue amounted to 75 cents (48p) compared with 82 cents (52.5p) at 30^th June 2011.

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, "The interim results are very pleasing in the face of falling commodity prices and only minor financial benefits flowing at the 30^th of June from the Company moving to an 88.8% interest in Hua Ao.  Assuming commodity prices stay at or above these levels, we expect to see a significant improvement in the full year results."

 

Further information

Griffin Mining Limited

Mladen Ninkov - Chairman                               Telephone: [phone]

Roger Goodwin - Finance Director

Panmure Gordon (UK) Limited                                      Telephone: [phone]

             Dominic Morley

            Hannah Woodley

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 30/06/2012 Unaudited		6 months to 30/06/2011 Unaudited		Year to 31/12/2011 Audited
	$000		$000		$000
Revenue	39,747		33,938		79,062
Cost of sales	(16,494)		(13,087)		(31,918)
Gross profit	23,253		20,851		47,144
Net operating expenses	(6,508)		(5,469)		(10,312)
Profit from operations	16,745		15,382		36,832
Share of (losses) / profits of associated company	(88)		28		(118)
Foreign exchange (losses) / gains	(684)		2,221		2,588
Finance income	399		228		616
Finance (losses)	-		(14)		(14)
Finance costs	(1,385)		-		-
Other income	9		26		49
Profit before tax	14,996		17,871		39,953
Income tax  expense	(3,617)		(4,273)		(12,256)
Profit  after tax	11,379		13,598		27,697
Attributable to non controlling interests	3,840		5,102		11,882
Attributable to equity share owners of the parent	7,539		8,496		15,815
	11,379		13,598		27,697
Basic earnings per share (cents)	4.30		4.79		8.96
Diluted earnings per share (cents)	4.26		4.65		8.76

 

Griffin Mining Limited

Condensed Consolidated Statement Of Comprehensive income

(expressed in thousands US dollars)

	6 months to 30/06/2012 Unaudited		6 months to 30/06/2011 Unaudited		Year to 31/12/2011 Audited
	$000		$000		$000
Profit for the financial period	11,379		13,598		27,697
Other comprehensive income
Exchange differences on translating foreign operations	(478)		903		2,417
Other comprehensive income for the period, net of tax	(478)		903		2,417
Total comprehensive income for the period	10,901		14,501		30,114
Attributable to non controlling interests	3,704		5,452		12,691
Attributable to equity share owners of the parent	7,197		9,049		17,423
	10,901		14,501		30,114

Griffin Mining Limited

Condensed Consolidated Statement Of Financial Position

 (expressed in thousands US dollars)

	30/06/2012		30/06/2011		31/12/2011
	Unaudited		Unaudited		Audited
	$000		$000		$000
ASSETS
Non-current assets
Property, plant and equipment	171,617		80,368		85,291
Intangible assets - Exploration interests	1,572		1,537		1,573
Investment in associated company	3,670		3,905		3,759
	176,859		85,810		90,623
Current assets
Inventories	5,538		4,277		4,608
Other current assets	2,740		2,248		2,505
Cash and cash equivalents	28,720		74,652		91,089
	36,998		81,177		98,202
Total assets	213,857		166,987		188,825
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Share capital	1,755		1,755		1,755
Share premium	70,061		70,061		70,061
Contributing surplus	3,690		3,690		3,690
Share based payments	3,043		2,775		3,030
Chinese statutory re-investment reserve	1,288		959		1,300
Other reserve on acquisition of non controlling interests	(29,336)		-		-
Foreign exchange reserve	9,711		9,011		10,041
Profit and loss reserve	70,670		56,127		63,131
Total equity attributable to equity holders of the parent	130,882		144,378		153,008
Non controlling interests	16,202		9,642		12,523
Non-current liabilities
Long-term provisions	1,422		1,197		806
Current liabilities
Taxation payable	4,548		2,939		11,631
Trade and other payables	14,288		8,831		10,857
Bank loans	46,515		-		-
Total liabilities	65,351		11,770		22,488
Total equities and liabilities	213,857		166,987		188,825
Number of shares in issue	175,501,830		175,501,830		175,501,830
Attributable net asset value / total equity per share	$0.75		$0.82		$0.87

Griffin Mining Limited

Condensed Consolidated Statement of Changes in Equity

(expressed in thousands US dollars)

	Share	Share	Contributing	Share	Chinese	Other	Foreign	Profit	Total attributable	Non	Total
	capital	premium	surplus	based	re investment	reserve on	exchange	and loss	to equity holders	controlling	equity
				payments	Reserve	acquisition of	reserve	reserve	of parent	interests
						non controlling
						interests
	$000	$000	$000	$000	$000	$000	$000	$000	$000	$000	$000
At 31 December 2010	1,804	74,948	3,690	2,513	938	-	8,480	47,631	140,004	6,218	146,222
Issue of share  capital	1	40	-	-	-	-	-	-	41	-	41
Purchase of shares for cancellation	(50)	(4,927)	-	-	-	-	-	-	(4,977)	-	(4,977)
Cost of share based payments	-	-	-	262	-	-	-	-	262	-	262
Transfer in respect of distributions	-	-	-	-	-	-	-	-	-	(2,028)	(2,028)
Transaction with owners	(49)	(4,887)	-	262	-	-	-	-	(4,674)	(2,028)	(6,702)
Retained profit for the 6 months	-	-	-	-	-	-	-	8,496	8,496	5,102	13,598
Other comprehensive income:
Exchange differences on translating   foreign operations	-	-	-	-	21	-	531	-	552	350	902
Total comprehensive income for the 6 month period	-	-	-	-	21	-	531	8,496	9,048	5,452	14,500
At 30 June 2011 (unaudited)	1,755	70,061	3,690	2,775	959	-	9,011	56,127	144,378	9,642	154,020
Regulatory transfer for future investment investment	-	-	-	-	315	-	-	(315)	-	-	-
Cost of share based payments	-	-	-	255	-	-	-	-	255	-	255
Transfers in respect of distributions	-	-	-	-	-	-	-	-	-	(4,358)	(4,358)
Transaction with owners	-	-	-	255	315	-	-	(315)	255	(4,358)	(4,103)
Retained profit for the 6 months	-	-	-	-	-	-	-	7,319	7,319	6,780	14,099
Other comprehensive income:
Exchange differences on translating foreign operations	-	-	-	-	26	-	1,030	-	1,056	459	1,515
Total comprehensive income for the 6 month period	-            -	-	-	-	26	-	1,030	7,319	8,375	7,239	15,614
At 31 December 2011	1,755	70,061	3,690	3,030	1,300	-	10,041	63,131	153,008	12,523	165,531
Cost of share based payments	-	-	-	13	-		-	-	13	-	13
Purchase of minority interests	-	-	-	-	-	(29,336)	-	-	(29,336)	(25)	(29,361)
Transaction with owners	-	-	-	13	-	(29,336)	-	-	(29,323)	(25)	(29,348)
Retained profit for the 6 months	-	-	-	-	-	-	-	7,539	7,539	3,840	11,379
Other comprehensive income:
Exchange differences on translating foreign operations	-	-	-	-	(12)	-	(330)	-	(342)	(136)	(478)
Total comprehensive income for the 6 month period	-	-	-	-	(12)	-	(330)	7,539	7,197	3,704	10,901
At 30 June 2012 (unaudited)	1,755	70,061	3,690	3,043	1,288	(29,336)	9,711	70,670	130,882	16,202	147,084

Griffin Mining Limited

Condensed Consolidated Cash Flow Statement

 (expressed in thousands US dollars)

	6 months to 30/06/2012 Unaudited		6 months to 30/06/2011 Unaudited		Year to 31/12/2011 Audited
	$000		$000		$000
Net cash flows from operating activities
Profit before taxation	14,996		17,871		39,953
Share of associated company losses / (profits)	88		(28)		118
Foreign exchange losses / (gains)	684		(2,221)		(2,588)
Finance (income)	(399)		(228)		(616)
Finance costs	1,385		-		-
Finance losses	-		14		14
Adjustment in respect of share based payments	12		262		517
Depreciation, depletion and amortisation	3,501		2,555		5,900
Provisions	623		455		-
(Increase) in inventories	(929)		(1,141)		(1,472)
(Increase) in other current assets	(235)		(867)		(1,226)
Increase in trade and other payables	3,432		719		2,746
Net cash inflow from operating activities	23,158		17,391		43,346
Taxation paid	(10,699)		(2,346)		(1,637)
Cash flows from investing activities
Interest received	399		228		616
Payments to extend joint venture term and acquire non controlling interests	(117,444)		-		-
Payments to acquire intangible fixed assets - exploration interests	(13)		(21)		(19)
Payments to acquire tangible fixed assets - mineral interests	(2,201)		(3,141)		(6,073)
Payments to acquire tangible fixed assets - plant & equipment	(350)		(381)		(3,607)
Net cash (outflow) from investing activities	(119,609)		(3,315)		(9,083)
Cash flows from financing activities
Issue of ordinary share capital	-		41		41
Purchase of shares for cancellation	-		(4,977)		(4,977)
Interest paid	(1,385)		-		-
Dividends to non controlling interests	-		-		(4,257)
Proceeds from bank loans	46,515		-		-
	45,130		(4,936)		(9,193)
(Decrease)/increase in cash and cash equivalents	(62,020)		6,794		23,433
Cash and cash equivalents at beginning of the period	91,089		66,450		66,450
Effects of exchange rate changes	(349)		1,408		1,206
Cash and cash equivalents at end of the period	28,720		74,652		91,089
Cash and cash equivalents comprise bank deposits and loans
Bank deposits	28,720		74,652		91,089

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 2011.

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 434 of the UK Companies Act 2006.  The condensed consolidated statement of financial position at 31 December 2011 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 2011 statutory financial statements upon which the auditors' opinion is unqualified.

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. Reconciliation of the earnings and weighted average number of shares used in the calculations are set out below:

	6 months to 30/06/2012 Unaudited				6 months to 30/06/2011 Unaudited			Year to 31/12/2011 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		7,539	175,501,830	4.30	8,496	177,513,948	4.79	15,815	176,499,620	8.96
Dilutive effect of securities
Options		-	1,374,747		-	5,385,5439		-	3,981,592
Diluted earnings per share		7,539	176,876,577	4.26	8,496	182,899,491	4.65	15,815	180,481,212	8.76

 

END

 

 

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