Half-year Report

RNS Number : 9708W
Griffin Mining Ld
07 August 2018
 

 

 

 

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

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

E mail: griffin@griffinmining.com

 

7th August 2018

 

INTERIM STATEMENT

for the six months ended 30th June 2018

 

Griffin Mining Limited ("Griffin" or "the Company") has today released its unaudited results for the six months ended 30th June 2018.

 

Highlights:

 

·     Revenues of $54.1 million

 

·     Operating profit of $21.1 million

 

·     Profit before tax of $21.3 million

 

·     Profit after tax of $15.3 million

 

·     Basic earnings per share 8.95 cents

 

 

Financial and Trading:

 

The first six months of 2018 has seen falling zinc metal prices only marginally impacting profitability whereas higher grade gold areas have resulted in record gold in concentrate production in the first six months of the year. Operations at Caijiaying were maintained with minimal disruption throughout the first half of 2018.

 

In the six months to 30th June 2018, 448,530 tonnes of ore were processed to produce:

 

·     16,873 tonnes of zinc;

·     459 tonnes of lead;

·     132,689 ounces of silver; and

·     9,492 ounces of gold.  

 

Zinc revenues before royalties and resource taxes in the six months to 30th June 2018 were $42,573,000 with 16,881 tonnes of zinc metal in concentrate sold with an average price received after smelter charges of $2,522 per tonne.  Lead and precious metals revenues were $14,045,000 with more gold in concentrate sold offset by lower silver in concentrate sold. 

 

 

 

During the six months to 30th June 2018:

 

·     400,167 tonnes of ore were mined;

·     437,734 tonnes of ore were hauled; and

·     448,530 tonnes of ore were processed.

 

Cost of sales of $23,336,000 in the first six months of 2018 was up on that incurred in 2017 of $20,820,000. This in the main reflects additional costs incurred extracting ore from greater depth and backfilling waste material and tailings to minimise surface storage of tailings.

 

Administration expenses (including those of the Caijiaying site) have risen from $8,061,000 in the first six months of 2017 to $9,663,000 in 2018. This includes fees to the Group's Chinese partners, of $2,186,000 (2017 $2,111,000); equivalent to their equity interest of 11.2% of Hebei Hua Ao's profits.  Administration costs within China have increased with higher fees and costs in dealing with stricter environmental, health and safety regulations and in applying for the mining licence over Zone II.  At the beginning of 2018, Griffin's wholly owned Hong Kong subsidiary, China Zinc Ltd, engaged a corporate development manager to identify potential areas and projects of interest in China.

 

Basic earnings per share were 8.95 cents (2017: 8.85 cents).  At 30th June 2018, attributable net assets per share amounted to 119 cents (2017: 91 cents).

 

Cash flows from operations in the period have been directed at paying down outstanding creditors and further development of the Caijiaying Mine.

 

On 11th July 2018 the Company's Chinese operating subsidiary, Hebei HuaAo Mining Industry Co Ltd ("Hebei Hua Ao") completed the most important phase in the granting of the new mining licence over Zone II of the Caijiaying Zinc-Gold Mine ("Zone II").  On  11th July 2018 a legally binding contract was signed with the Hebei Department of Land and Mineral Resources, as authorised by the Beijing Ministry of Natural Resources, pursuant to the Interim Administrative Regulation for Proceeds Collection from the Transfer of Mineral Rights (2017).  Hebei Hua Ao has become the first company to proceed under this newly promulgated regulation governing the transfer and conversion of mining tenements.  Hebei Hua Ao will be prioritized in its final documentation approvals for the conversion of the exploration licence over Zone II into a mining licence in compliance with relevant national policies.

 

With cash flows from operations now directed towards the development of the Zone II area at Caijiaying 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, "This is a wonderful result in light of the 21% fall in the zinc since the beginning of the year.  The second half of the year will remain challenging if commodity prices remain subdued.  However, the recent signing of the Contract of Transfer and the progress towards the issue of the new Mining Licence over Zone II, sets the stage for an exciting 2019." 

 

 

Further information

 

Griffin Mining Limited

Mladen Ninkov - Chairman                               Telephone: +44(0)20 7629 7772

Roger Goodwin - Finance Director

 

Panmure Gordon (UK) Limited                               Telephone: +44 (0)20 7886 2500

             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

30/06/2018

Unaudited

 

6 months to

30/06/2017

Unaudited

 

Year to

31/12/2017

Audited

 

$000

 

$000

 

$000

 

 

 

 

 

 

Revenue

54,058

 

52,332

 

126,657

 

 

 

 

 

 

Cost of sales

(23,336)

 

(20,820)

 

(44,360)

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit 

30,722

 

31,512

 

82,297

 

 

 

 

 

 

Net operating expenses

(9,663)

 

(8,061)

 

(18,524)

 

 

 

 

 

 

 

 

 

 

 

 

Profit from operations

21,059

 

23,451

 

63,773

 

 

 

 

 

 

Losses on disposal of equipment

(18)

 

(16)

 

(1,067)

Foreign exchange gains (losses)

133

 

(104)

 

87

Finance income

102

 

63

 

143

Finance costs

(144)

 

(1,401)

 

(2,219)

Other income

179

 

60

 

160

 

 

 

 

 

 

 

 

 

 

 

 

Profit before tax

21,311

 

22,053

 

60,877

 

 

 

 

 

 

Income tax  expense

(6,005)

 

(6,209)

 

(17,556)

 

 

 

 

 

 

 

 

 

 

 

 

Profit after tax

15,306

 

15,844

 

43,321

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share (cents)

8.95

 

8.85

 

24.63

 

 

 

 

 

 

Diluted earnings per share (cents)

8.42

 

8.36

 

22.97

 

 

Griffin Mining Limited

Condensed Consolidated Statement Of Comprehensive income

(expressed in thousands US dollars)

 

 

6 months to

30/06/2018

Unaudited

 

6 months to

30/06/2017

Unaudited

 

Year to

31/12/2017

Audited

 

$000

 

$000

 

$000

 

 

 

 

 

 

Profit for the financial period

15,306

 

15,844

 

43,321

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

Exchange differences on translating foreign operations

(1,498)

 

3,854

 

5,004

 

 

 

 

 

 

 

Other comprehensive income for the period, net of tax

 

(1,498)

 

 

3,854

 

 

5,004

 

 

 

 

 

 

Total comprehensive income for the period

13,808

 

19,698

 

 

48,325

 

 

 

 

 

 

 

Griffin Mining Limited

Condensed Consolidated Statement Of Financial Position

 (expressed in thousands US dollars)

 

 

30/06/2018

 

30/06/2017

 

31/12/2017

 

Unaudited

 

Unaudited

 

Audited

 

$000

 

$000

 

$000

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Non-current assets

 

 

 

 

 

Property, plant and equipment

213,920

 

206,556

 

214,695

Intangible assets - Exploration interests

2,031

 

1,834

 

2,035

 

215,951

 

208,390

 

216,730

Current assets

 

 

 

 

 

Inventories

4,065

 

6,121

 

5,868

Other current assets

5,546

 

6,607

 

4,374

Cash and cash equivalents

27,841

 

15,752

 

26,518

 

37,452

 

28,480

 

36,760

 

 

 

 

 

 

Total assets

253,403

 

236,870

 

253,490

 

 

 

 

 

 

EQUITY AND LIABILITIES

 

 

 

 

 

Equity attributable to equity holders of the parent

 

 

 

 

 

Share capital

1,725

 

1,790

 

1,700

Share premium

68,329

 

71,310

 

67,295

Contributing surplus

3,690

 

3,690

 

3,690

Share based payments

2,072

 

2,072

 

2,072

Shares held in treasury

(300)

 

(4,105)

 

-

Chinese statutory re-investment reserve

2,177

 

1,621

 

2,204

Other reserve on acquisition of non-controlling interests

(29,346)

 

(29,346)

 

(29,346)

Foreign exchange reserve

8,306

 

8,687

 

9,777

Profit and loss reserve

149,278

 

107,018

 

133,972

Total equity attributable to equity holders of the parent

205,931

 

162,737

 

191,364

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

Long-term provisions

2,387

 

2,332

 

2,418

Deferred taxation

2,830

 

2,670

 

2,865

Finance lease

-

 

3,479

 

712

 

5,217

 

8,481

 

5,995

Current liabilities

 

 

 

 

 

Taxation payable

6,077

 

2,826

 

12,349

Trade and other payables

33,039

 

26,142

 

40,088

Finance lease

3,139

 

1,995

 

3,694

Bank loans

-

 

34,689

 

-

Total liabilities

42,255

 

65,652

 

56,131

 

 

 

 

 

 

Total equities and liabilities

253,403

 

236,870

 

253,490

 

 

 

 

 

 

Number of shares in issue

172,512,061

 

179,041,830

 

169,993,727

 

 

 

 

 

 

Attributable net asset value / total equity per share

$1.19

 

$0.91

 

$1.13

 

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 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

 

 

 

 

 

 

 

 

 

 

 

Regulatory transfer for future investment

-

-

-

-

-

523

-

-

(523)

-

Cancellation of shares in treasury

(90)

(4,015)

-

-

4,105

-

-

-

-

-

Transaction with owners

(90)

(4,015)

-

-

4,105

523

-

 

(523)

-

 

 

 

 

 

 

 

 

 

 

 

Retained profit for the 6 months

-

-

-

-

-

-

-

-

27,477

27,477

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

Exchange differences on translating foreign operations

-

-

-

-

 

-

60

-

1,090

-

1,150

Total comprehensive income for the period

-

-

-

-

-

60

-

1,090

27,477

28,627

 

 

 

 

 

 

 

 

 

 

 

At 31st December 2017

1,700

67,295

3,690

2,072

-

2,204

(29,346)

9,777

133,972

191,364

 

 

 

 

 

 

 

 

 

 

 

Issue of shares on exercise of share options

25

1,034

 

 

 

 

 

 

 

1,059

Purchase of shares for treasury

-

-

-

-

(300)

-

-

-

-

(300)

Transaction with owners

25

1,034

-

-

(300)

-

-

-

-

759

 

 

 

 

 

 

 

 

 

 

 

Retained profit for the 6 months

-

-

-

-

-

-

-

-

15,306

15,306

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

Exchange differences on translating foreign operations

-

-

-

-

-

(27)

-

(1,471)

-

(1,498)

Total comprehensive income for the period

-       

-

-

-

-

(27)

-

(1,471)

15,306

13,808

 

 

 

 

 

 

 

 

 

 

 

At 30th June 2018 (Unaudited)

1,725

68,329

3,690

2,072

(300)

2,177

(29,346)

8,306

149,278

205,931

 

Griffin Mining Limited

Condensed Consolidated Cash Flow Statement

 (expressed in thousands US dollars)

 

 

6 months to

30/06/2018

Unaudited

 

6 months to

30/06/2017

Unaudited

 

Year to

31/12/2017

Audited

 

 

$000

 

$000

 

$000

Net cash flows from operating activities

 

 

 

 

 

 

Profit  before taxation

21,311

 

22,053

 

60,877

 

Foreign exchange (gains) / losses

(133)

 

104

 

(87)

 

Finance income

(102)

 

(63)

 

(143)

 

Finance costs

144

 

1,401

 

2,219

 

Depreciation, depletion and amortisation

4,964

 

4,855

 

9,783

 

Losses on disposal of equipment

18

 

16

 

1,067

 

Decrease / (increase) in inventories

1,803

 

27

 

280

 

Decrease / (increase) in receivables and other current assets

(1,206)

 

1,602

 

3,928

 

(Decrease) / increase  in trade and other payables

(6,880)

 

(3,807)

 

7,621

 

Taxation paid

(12,275)

 

(5,932)

 

(8,108)

 

Net cash inflow from operating activities

7,644

 

20,256

 

77,437

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

Interest received

102

 

63

 

143

 

Proceeds on disposal of equipment

-

 

-

 

184

 

Payments to acquire - mineral interests

(4,597)

 

(2,764)

 

(9,330)

 

Payments to acquire - plant & equipment

(1,323)

 

(1,201)

 

(4,125)

 

Payments to acquire - office equipment

(1)

 

(2)

 

(2)

 

Payments to acquire - intangible assets - exploration interests

(21)

 

1

 

(128)

 

Net cash (outflow) from investing activities

(5,840)

 

(3,903)

 

(13,258)

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

Purchase of shares for treasury

(300)

 

(230)

 

(230)

 

Issue of shares on exercise of share purchase options

1,059

 

-

 

-

 

Interest paid

-

 

(1,181)

 

(1,773)

 

Finance lease

(1,365)

 

(1,463)

 

(2,943)

 

Repayment of bank loans

-

 

(10,940)

 

(46,024)

 

Net cash (outflow) from financing activities

(606)

 

(13,814)

 

(50,970)

 

 

 

 

 

 

 

 

Increase in cash and cash equivalents

1,198

 

2,539

 

13,209

 

 

 

 

 

 

 

 

Cash and cash equivalents at beginning of the period

26,518

 

13,218

 

13,218

 

Effects of exchange rate changes

125

 

(5)

 

91

 

Cash and cash equivalents at end of the period

27,841

 

15,752

 

26,518

 

 

 

 

 

 

 

 

Cash and cash equivalents comprise bank deposits

 

 

 

 

 

 

Bank deposits

27,841

 

15,752

 

26,518

 

 

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 2017.  

 

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, 8th 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 2017 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 2017 statutory financial statements upon which the auditors' opinion is unqualified.

 

4.     The summary accounts have been prepared on a going concern basis.  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

30/06/2018

Unaudited

6 months to

30/06/2017

Unaudited

Year to

31/12/2017

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

 

15,306

170,991,849

8.85

 

15,844

179,091,830

8.85

 

43,321

175,894,007

24.63

Dilutive effect of securities

 

 

 

 

Options

-

17,086,523

(0.43)

-

10,311,861

(0.49)

-

12,703,367

(1.66)

Diluted earnings per share

 

15,306

188,078,102

8.42

 

15,844

189,403,691

8.36

 

43,321

 

188,597,374

22.97

                       

 

 

 


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