Unaudited Interim Results

RNS Number : 0767W

Griffin Mining Ld

16 August 2022

 

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]

 

16^th AUGUST 2022

UNAUDITED INTERIM RESULTS

for the six months ended 30^th June 2022

Griffin Mining Limited ("Griffin" or the "Company") has today released its unaudited results for the six months ended 30th June 2022. It should be noted that all operations at the Caijiaying Zinc-Gold Mine were fully suspended for virtually the whole of the first quarter of 2022  due to the mandatory Governmental suspension of operations directive relating to the 2022 Winter Olympics, subsequent Winter Paralympics and the Chinese New Year holidays.

Highlights:

· Record second quarter zinc production and profitable second quarter.

· Revenues of $34.7 million (uninterrupted 6 months operations to 30^th June 2021: $54.1 million).

· Gross Profit of $15.5 million (uninterrupted 6 months operations to 30^th June 2021: $25.7 million).

· Profit before tax of $5.4 million (uninterrupted 6 months operations to 30^th June 2021: $15.5 million).

· Profit after tax of $3.0 million (uninterrupted 6 months operations to 30^th June 2021: $10.3 million).

· Basic earnings per share of 1.73 cents (uninterrupted 6 months operations to 30^th June 2021: 5.88 cents).

Financial and Trading:

The results for the six months to 30^th June 2022 were impacted by the suspension of operations at the Caijiaying Zinc Gold Mine imposed by the Chinese authorities in the period during, and leading up to, the Winter Olympics and Paralympics at Chong Li and the Chinese New Year Holidays.  From 1^st January 2022 to 23^rd March 2022 no stoping or underground development work was undertaken with processing not restarting until 25^th March 2022.

Whilst minimal ore was mined and processed in the first quarter of 2022, the second quarter to 30^th June 2022 saw the successful recommencement of operations with record ore mined, hauled and processed resulting in record zinc metal in concentrate production for a quarter since operations began at Caijiaying in June 2005.

Mining and processing have now reached the equivalent of over 1.3 million tonnes of ore per annum, all of which has been extracted from Zone III. Zone II has not yet been placed into production. 

Quarterly analysis of the trading results underlines exceptional performance since 25^th March 2022:

		3 months to 30th  June 2022	3 months to 31st March 2022	3 months to 30th  June 2021
Ore mined	Tonnes	338,790	17,975	277,112
Ore processed	Tonnes	329,390	8,649	275,576
Zinc in concentrate Produced	Tonnes	13,189	268	11,645
Gold in concentrate produced	Ozs	3,504	1,474	4,080
Silver in concentrate produced	Ozs	79,246	168	81,098
Lead in concentrate produced	Tonnes	345	7	327
Average zinc price received per tonne	$	2,886	-	2,224
Average gold price received per oz	$	1,788	-	1,684
Average silver price received per oz	$	18.1	-	20.4
Average lead price received per tonne	$	2,323	-	2,026
Zinc sales	$000s	31,104	130	23,878
Lead and precious metals sales	$000s	5,479	256	7,766
Royalties	$000s	(2,198)	(22)	(1,784)
Total Turnover	$000s	34,385	364	29,860
Cost of sales	$000s	(15,457)	(3,815)	(15,412)
Gross profit (loss)	$000s	18,928	(3,451)	14,448
Administration expenses	$000s	(6,040)	(3,964)	(5,037)
Operating profit / (loss)	$000s	12,888	(7,415)	9,411
Interest and other income / (costs)	$000s	(118)	(79)	(4)
Profit (loss) before tax	$000s	12,770	(7,336)	9,407
Taxation	$000s	(2,398)	(2)	(3,082)
Profit (loss) after tax	$000s	10,372	(7,338)	6,325

Despite the suspension in operations in the first quarter of 2022, ore tonnes mined in the first half of 2022 were down only 22.9% on that mined in the first half of 2021 and tonnes processed in the first half of 2022 were down 29.0% on that achieved in the first half of 2021. Zinc metal in concentrate produced was down 32.3% on that achieved in the first half of 2021, gold in concentrate production was down 51.6% on that produced in the first half of 2021 and silver in concentrate production was down 44.3% on that produced in the first half of 2021.

With 338,039 tonnes (30^th June 2021 475,785 tonnes) of ore processed, metal in concentrate production in the first six months of 2022 was:

· 13,457 tonnes of zinc ( 30^th June 2021: 19,876 tonnes);

· 353 tonnes of lead (30^th June 2021: 561 tonnes);

· 80,717 ounces of silver (30^th+ June 2021: 144,705 ounces); and

· 3,672 ounces of gold (30^th June 2021: 7,584 ounces).  

The results benefited from a significant improvement in the market price for zinc with the average price received for zinc metal in concentrate increasing by 31.9% from $2,209 per tonne in the first six months of 2021 to $2,914 per tonne in the first half of 2022.  Zinc revenues before royalties and resource taxes in the six months to 30^th June 2022 were $31,234,000 (30^th June 2021 - $42,102,000).  Lead and precious metals revenues were $5,735,000 (30^th June 2021 - $15,136,000), with the average gold price received of $1,788 per oz (30^th June 2021 - $1,675) and silver $18.1 per oz (30^th June 2021 - $20.4).  Metal in concentrate with a potential sales value of over $9m remained unsold at 30^th June 2022.

During the six months to 30^th June 2022:

-  10,719 tonnes of zinc metal in concentrate were sold (30^th June 2021 : 19,876ozs); 

-  2,491 ozs of gold in concentrate were sold (30^th June 2021 : 6,919 ozs); and

-  44,627 ozs of silver in concentrate were sold (30^th June 2021 : 129,990 ozs).

With operations suspended in the first quarter of 2022, costs of sales (mining, haulage and processing) fell by 32.1% from that in the first six months of 2021. Costs of sales in the second quarter of 2022  were in line with that in the second quarter of 2021 despite increased ore mined and hauled..

Administration costs were marginally reduced with a reduction in charges from Griffin's Chinese joint venture partners based upon the profits of Hebei Hua Ao. Otherwise, additional costs were incurred with the appointment of 3 new directors with their associated directors fees, Mr Clive Whiley's appointment as a consultant to the company with his associated consulting fees, annual bonuses awarded by the directors to Keynes Capital and the Finance Director, increased directors and officers liability insurance premiums and the resumption of corporate travel. With the suspension in operations in the first quarter administration costs were contained at Hebei Hua Ao.

Basic earnings per share were 1.73 cents (30^th June 2021: 5.88 cents per share).  At 30^th June 2022, attributable net assets per share amounted to 149 cents (30^th June 2021: 141 cents).

With the suspension in operations in the first quarter of 2022 cash flows used in operations in the period amounted to $4,122,000 (the cash flow generated in the period to 30^th June 2021 was $16,818,000). The Griffin Mining Group of companies remains free of any bank loans.

Chairman's Statement

Chairman Mladen Ninkov commented, "What an amazing performance, yet again, by the staff, contractors and orebody at Caijiaying. They all continue to deliver outstanding results, even more impressive in light of the unique environment of generally no operations at Caijiaying during the whole of the 1^st quarter and to then come back in the 2^nd quarter with record ore mined, hauled and processed, resulting in record zinc metal in concentrate production for any quarter since operations began in June 2005. If anything further needed to be added to that performance, the equivalent of over 1.3 million tonnes of ore on an annualised basis was being mined and processed, all from Zone III. This is without any contribution yet from Zone II. I couldn't be prouder or happier with the Griffin Team and it augurs extraordinarily well for the Company in the second half of 2022 and into 2023. "

 

Further information

Griffin Mining Limited

Mladen Ninkov - Chairman  Telephone: [phone]

Roger Goodwin - Finance Director

Panmure Gordon (UK) Limited   Telephone: [phone]

  John Prior

  Alisa MacMaster

Berenberg    Telephone: [phone]

    Matthew Armitt

Jennifer Wyllie

Deltir Elezi

BlytheRay

  Tim Blythe  Telephone: [phone]

  Megan Ray

Swiss Resource Capital AG

Jochen Staiger	Telephone: + 41(0)71 354 8501

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 30/06/2022 Unaudited		6 months to 30/06/2021 Unaudited		Year to 31/12/2021 Audited
	$000		$000		$000
Revenue	34,749		54,072		121,648
Cost of sales	(19,272)		(28,401)		(63,224)
Gross profit	15,477		25,671		58,424
Administration expenses	(10,004)		(10,209)		(21,499)
Profit from operations	5,473		15,462		36,925
Losses on disposal of equipment	(77)		(26)		(293)
Impairment of intangible fixed assets	0		(2)		(11)
Foreign exchange (losses)	(121)		(7)		(51)
Finance income	107		68		236
Finance costs	(68)		(152)		(404)
Other income	120		63		124
Profit before tax	5,434		15,406		36,526
Income tax  expense	(2,400)		(5,148)		(11,150)
Profit after tax	3,034		10,258		25,376
Basic earnings per share (cents)	1.73		5.88		14.53
Diluted earnings per share (cents)	1.62		5.43		13.47

 

Griffin Mining Limited

Condensed Consolidated Statement Of Comprehensive income

(expressed in thousands US dollars)

	6 months to 30/06/2022 Unaudited		6 months to 30/06/2021 Unaudited		Year to 31/12/2021 Audited
	$000		$000		$000
Profit for the financial period	3,034		10,258		25,376
Other comprehensive income
Exchange differences on translating foreign operations	(7,892)		2,514		3,336
Other comprehensive income for the period, net of tax	(7,892)		2,514		3,336
Total comprehensive income / (losses) for the period	(4,858)		12,772		28,712

Griffin Mining Limited

Condensed Consolidated Statement Of Financial Position

 (expressed in thousands US dollars)

	30/06/2022		30/06/2021		31/12/2021
	Unaudited		Unaudited		Audited
	$000		$000		$000
ASSETS
Non-current assets
Property, plant and equipment	268,266		268,930		275,296
Intangible assets - exploration interests	399		349		387
	268,665		269,279		275,683
Current assets
Inventories	9,198		6,257		4,516
Receivables and other current assets	3,960		4,175		2,174
Cash and cash equivalents	24,993		25,143		38,159
	38,151		35,575		44,849
Total assets	306,816		304,854		320,532
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Share capital	1,749		1,749		1,749
Share premium	69,334		69,334		69,334
Contributing surplus	3,690		3,690		3,690
Share based payments	2,072		2,072		2,072
Shares held in treasury	(1,644)		(1,589)		(1,644)
Chinese statutory re-investment reserve	3,105		2,858		2,896
Other reserve on acquisition of non-controlling interests	(29,346)		(29,346)		(29,346)
Foreign exchange reserve	6,888		13,851		14,635
Profit and loss reserve	201,870		184,072		199,190
Total equity attributable to equity holders of the parent	257,718		246,691		262,576
Non-current liabilities
Other payables	13,112		13,622		10,352
Long-term provisions	2,576		2,264		2,667
Deferred taxation	3,078		3,392		3,240
Finance leases	705		-		794
	19,471		19,278		17,053
Current liabilities
Trade and other payables	29,427		38,842		40,726
Finance leases	200		43		177
Total current liabilities	29,627		38,885		40,903
Total equities and liabilities	306,816		304,854		320,532
Number of shares in issue	174,892,894		174,892,894		174,892,894
Attributable net asset value / total equity per share	$1.47		$1.41		$1.50

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 31st December 2020	1,728	68,470	3,690	2,072	(917)	2,830	(29,346)	11,365	173,814	233,706
Purchase of shares for treasury	-	-	-	-	(672)					(672)
Issue of shares on exercise of options	21	864	-	-	-	-	-	-	-	885
Transaction with owners	21	864	-	-	(672)	-	-	-	-	213
Retained profit for the 6 months	-	-	-	-	-	-	-	-	10,258	10,258
Other comprehensive income:
Exchange differences on translating foreign operations	-	-	-	-	-	28	-	2,486	-	2,514
Total comprehensive income for the period	-	-	-	-	-	28	-	2,486	10,258	12,772
At 30th June 2021 (Unaudited)	1,749	69,334	3,690	2,072	(1,589)	2,858	(29,346)	13,851	184,072	246,691
Purchase of shares  for treasury	-	-	-	-	(55)	-	-	-	-	(55)
Transaction with owners	-	-	-	-	(55)	-	-		-	(55)
Retained profit for the 6 months	-	-	-	-	-	-	-	-	15,118	15,118
Other comprehensive income:
Exchange differences on translating foreign operations	-	-	-	-	-	38	-	784	-	822
Total comprehensive income for the period	-	-	-	-	-	38	-	784	15,118	15,940
At 31st December 2021	1,749	69,334	3,690	2,072	(1,644)	2,896	(29,346)	14,635	199,190	262,576
Regulatory transfer for future investment	-	-	-	-	-	354	-	-	(354)	-
Transaction with owners	-	-	-	-	-	354	-	-	(354)	-
Retained profit for the 6 months	-	-	-	-	-	-	-	-	3,034	3,034
Other comprehensive income:
Exchange differences on translating foreign operations	-	-	-	-	-	(145)	-	(7,747)	-	(7,892)
Total comprehensive income for the period	-	-	-	-	-	(145)	-	(7,747)	3,034	(4,858)
At 30th June 2022  (Unaudited)	1,749	69,334	3,690	2,072	(1,644)	3,105	(29,346)	6,888	201,870	257,718

Griffin Mining Limited

Condensed Consolidated Cash Flow Statement

 (expressed in thousands US dollars)

	6 months to 30/06/22		6 months to 30/06/2021		Year to 31/12/2021
	$000		$000		$000
Net cash flows from operating activities
Profit before taxation	5,434		15,406		36,526
Foreign exchange losses	121		7		51
Finance income	(107)		(68)		(236)
Finance costs	68		152		404
Depreciation, depletion and amortisation	7,226		7,964		16,530
Impairment of intangible assets	0		2		11
Losses on disposal of equipment	77		26		293
(Increase) / decrease in inventories	(4,683)		(924)		817
(Increase) / decrease in receivables and other current assets	(2,011)		2,936		4,936
(Decrease) in trade and other payables	(7,351)		(1,395)		(2,871)
Taxation paid	(2,896)		(7,288)		(13,581)
Net cash (outflow) / inflow from operating activities	(4,122)		16,818		42,880
Cash flows from investing activities
Interest received	107		68		236
Proceeds / (expenses) on disposal of equipment	11		0		1
Payments to acquire - mineral interests (mine development)	(3,619)		(7,471)		(13,564)
Payments to acquire - plant & equipment	(6,846)		(1,215)		(6,365)
Payments to acquire - intangible assets - exploration interests	(13)		(26)		(73)
Net cash (outflow) from investing activities	(10,360)		(8,644)		(19,765)
Cash flows from financing activities
Issue of shares on exercise of share purchase options	0		885		885
Purchase of shares for treasury	0		(672)		(309)
Interest paid	0		(101)		(727)
Bank loan advances	0		0		15,500
Repayment of bank loans	0		0		(15,500)
Finance lease repayments	(90)		(357)		(462)
Net cash (outflow) from financing activities	(90)		(245)		(613)
Increase / (decrease) in cash and cash equivalents	(14,572)		7,929		22,502
Cash and cash equivalents at beginning of the period	38,159		16,435		16,435
Effects of exchange rate changes	1,406		779		(778)
Cash and cash equivalents at end of the period	24,993		25,143		38,159

 

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^st December 2021.  

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 consolidated statement of financial position at 31^st December 2021 and the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and the consolidated cash flow statement for the year then ended have been extracted from the Group's 2021 statutory financial statements upon which the auditors' opinion is unqualified, and should be read in conjunction with the accompanying notes contained therein.

4.  The summary accounts have been prepared on a going concern basis.  Having considered recent events, including the impact of Covid-19, the Group's cash resources, banking facilities and regularly updated forecasts, the directors consider that the Group will be able to meet its liabilities as they fall due.

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.

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

	6 months to 30/06/2022 Unaudited			6 months to 30/06/2021 Unaudited				Year to 31/12/2021 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 (loss) / earnings per share
(Loss) earnings  attributable to ordinary shareholders	3,034	174,653,602	1.73	10,258	174,410,343	5.88	25,376		174,653,602	14.53
Dilutive effect of securities
Options		12,950,882	(0.11)		14,374,897	(0.45)			13,730,107	(1.06)
Diluted earnings per share	3,034	187,843,776	1.62	10,258	188,785,241	5.43	25,376		188,383,709	13.47

7.  As at 30^th June 2022 there were no adjusting post balance sheet events.

 

END

 

 

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