Half-year Report

RNS Number : 8119T

Griffin Mining Ld

23 July 2020

 

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]

 

23^rd July 2020

UNAUDITED INTERIM RESULTS

for the six months ended 30^th June 2020

Griffin Mining Limited ("Griffin" or "the Company") has today released its unaudited results for the six months ended 30th June 2020.

Highlights:

· Revenues of $21.3 million (30^th June 2019 - $38.6 million)

· Gross Profit of $4.2 million (30^th June 2019 - $15.9 million)

· Profit (Loss) before tax of ($3.0 million) (30^th June 2019 - Profit $6.3 million)

· Profit (Loss) after tax of ($3.8 million) (30^th June 2019 - Profit $4.1 million)

· Profit (Loss) per share of (2.22 cents) (30^th June 2019 - Basic earnings per share 2.36 cents)

Financial and Trading:

The first six months of 2020 were impacted by the suspension in operations at Caijiaying imposed by the Chinese authorities for a month in late January / February and subsequent travel restrictions with consequent difficulties in returning mining personnel to Caijiaying resulting in reduced stoping and delayed development work.  Tonnes mined were down 23.4% in the first six months of 2020 compared with that achieved in the first six months of 2019 with a knock on effect on ore hauled and processed, with tonnes of ore processed down 25.2% on that achieved in the first six months of 2019.  Profitability was further impacted by lower zinc prices received which were 18.0% less than that realised in the first six months of 2019.  As a result of the foregoing, zinc metal in concentrate sales were down $10,151,000 on that recorded in the first six months of 2019 directly impacting profits. Gold production was also impacted by the suspension in operations and delays in accessing higher grade gold ore bodies.

In the six months to 30^th June 2020, 323,536 tonnes (30^th June 2019 - 432,592 tonnes) of ore were processed to produce:

· 13,448 tonnes of zinc (30^th June 2019 - 16,692 tonnes);

· 631 tonnes of lead (30^th June 2019 - 494 tonnes);

· 110,832 ounces of silver (30^th June 2019 - 141,306 ounces); and

· 2,418 ounces of gold (30^th June 2019 - 9,099 ounces).  

Zinc revenues before royalties and resource taxes in the six months to 30^th June 2020 were $17,008,000 (30^th June 2019 - $27,159,000) with 13,046 tonnes of zinc metal in concentrate sold (30^th June 2019 - 17,072 tonnes).  Lead and precious metals revenues were $5,279,000 (30^th June 2019 - $13,036,000) with less gold in concentrate sold. 

During the six months to 30^th June 2020:

· 314,690 tonnes of ore were mined (30^th June 2019 - 410,819 tonnes);

· 321,514 tonnes of ore were hauled (30^th June 2019 - 426,070 tonnes); and

· 323,536 tonnes of ore were processed (30^th June 2019 - 432,592 tonnes).

Costs of sales (mining, haulage and processing costs) of $17,153,000 in the first six months of 2020 were down 24.3% on that incurred in the six months to 30^th June 2019 of $23,336,000. This reflects reduced activity during the suspension in operations and subsequent travel restrictions imposed by the Chinese authorities, together with consequent cost control by management.

Net operating expenses (including those of the Caijiaying site) fell 27.6% from $9,955,000 in the first six months of 2019 to $7,204,000 in 2020. This includes fees to the Group's Chinese partners of $831,000 (2019 $1,820,000), equivalent to their minimum equity interest in Hebei Hua Ao's profits. Again the reduction in other operating expenses reflects reduced activity and cost control by management. 

Losses per share were 2.22 cents (30^th June 2019: Basic earnings 2.36 cents).  At 30^th June 2020, attributable net assets per share amounted to 121 cents (30^th June 2019: 124 cents).

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

Chairman's Statement

Chairman Mladen Ninkov commented, "On first glance, the first 6 month's results seem disappointing but a closer inspection reveals a solid result in the face of the COVID-19 shutdown in operations, the subsequent restrictions imposed by all relevant governments on travel to and from China and the continuing low zinc prices and higher treatment charges. All of these issues resulted in, most importantly, reduced tonnes mined meaning less metal produced, particularly gold. A slow first half of any year is not unusual for Griffin and we expect a stronger and more robust performance in the second half of 2020 as we return to a normal operating environment. It is superfluous to add, we eagerly await the issue of our new mining licence."

 

Further information

Griffin Mining Limited

Mladen Ninkov - Chairman  Telephone: [phone]

Roger Goodwin - Finance Director

Numis Securities Limited

  Paul Gillam  Telephone: [phone]

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 30/06/2020 Unaudited		6 months to 30/06/2019 Unaudited		Year to 31/12/2019 Audited
	$000		$000		$000
Revenue	21,321		38,619		82,267
Cost of sales	(17,153)		(22,671)		(48,609)
Gross profit	4,168		15,948		33,568
Net operating expenses	(7,204)		(9,955)		(19,433)
(Loss) / profit from operations	(3,036)		5,993		14,225
Losses on disposal of equipment	(614)		(59)		(305)
Impairment of intangible fixed assets	(1)		-		(1,985)
Foreign exchange (losses) / gains	(147)		(4)		(93)
Finance income	45		82		171
Finance costs	(149)		(122)		(377)
Other income	76		386		76
(Loss) / profit before tax	(3,826)		6,276		11,712
Income tax  expense	-		(2,202)		(5,628)
(Loss) / profit after tax	(3,826)		4,074		6,084
(Loss) / basic earnings per share (cents)	(2.22)		2.36		3.52
(Loss) / diluted earnings per share (cents)	(2.22)		2.17		3.24

 

Griffin Mining Limited

Condensed Consolidated Statement Of Comprehensive income

(expressed in thousands US dollars)

	6 months to 30/06/2020 Unaudited		6 months to 30/06/2019 Unaudited		Year to 31/12/2019 Audited
	$000		$000		$000
(Loss) / profit for the financial period	(3,826)		4,074		6,084
Other comprehensive income
Prior period adjustment (note 6)	-		(33)		-
Exchange differences on translating foreign operations	(1,891)		(297)		(2,324)
Other comprehensive income for the period, net of tax	(1,891)		(330)		(2,324)
Total comprehensive (losses) / income for the period	(5,717)		3,744		3,760

Griffin Mining Limited

Condensed Consolidated Statement Of Financial Position

 (expressed in thousands US dollars)

	30/06/2020		30/06/2019		31/12/2019
	Unaudited		Unaudited		Audited
	$000		$000		$000
ASSETS
Non-current assets
Property, plant and equipment	225,898		219,937		228,287
Intangible assets - exploration interests	325		2,021		322
	226,223		221,958		228,609
Current assets
Inventories	3,896		3,793		3,839
Receivables and other current assets	2,275		3,959		1,861
Cash and cash equivalents	10,351		19,293		19,885
	16,522		27,045		25,585
Total assets	242,745		249,003		254,194
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Share capital	1,728		1,727		1,728
Share premium	68,455		68,442		68,455
Contributing surplus	3,690		3,690		3,690
Share based payments	2,072		2,072		2,072
Shares held in treasury	(917)		(917)		(917)
Chinese statutory re-investment reserve	2,463		2,382		2,500
Other reserve on acquisition of non-controlling interests	(29,346)		(29,346)		(29,346)
Foreign exchange reserve	(151)		3,734		1,703
Profit and loss reserve	161,233		163,202		165,059
Total equity attributable to equity holders of the parent	209,227		214,986		214,944
Non-current liabilities
Long-term provisions	3,802		2,182		2,150
Deferred taxation	2,691		2,389		2,731
Finance leases	-		413		479
	6,493		4,984		5,360
Current liabilities
Trade and other payables	25,311		28,469		31,769
Finance leases	1,714		564		2,121
Total liabilities	27,025		29,033		33,890
Total equities and liabilities	242,745		249,003		254,194
Number of shares in issue	172,786,228		172,748,728		172,786,228
Attributable net asset value / total equity per share	$1.21		$1.24		$1.24

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 2018	1,727	68,442	3,690	2,072	(917)	2,386	(29,346)	4,027	159,161	211,242
Retained profit for the 6 months	-	-	-	-	-	-	-	-	4,074	4,074
Prior period adjustment									(33)	(33)
Other comprehensive income:
Exchange differences on translating foreign operations	-	-	-	-	-	(4)	-	(293)	-	(297)
Total comprehensive income for the period	-	-	-	-	-	(4)	-	(293)	4,041	3,744
At 30th June 2019 (Unaudited)	1,727	68,442	3,690	2,072	(917)	2,382	(29,346)	3,734	163,202	214,986
Regulatory transfer for future investment	-	-	-	-	-	153	-	-	(153)	-
Issue of shares on exercise of options	1	13	-	-	-	-	-	-	-	14
Transaction with owners	1	13	-	-	-	153	-		(153)	14
Retained profit for the 6 months	-	-	-	-	-	-	-	-	2,010	2,010
Other comprehensive income:
Exchange differences on translating foreign operations	-	-	-	-	-	(35)	-	(2,031)	-	(2,066)
Total comprehensive income for the period	-	-	-	-	-	(35)	-	(2,031)	2,010	(56)
At 31st December 2019	1,728	68,455	3,690	2,072	(917)	2,500	(29,346)	1,703	165,059	214,944
Retained loss for the 6 months	-	-	-	-	-	-	-	-	(3,826)	(3,826)
Other comprehensive income:
Exchange differences on translating foreign operations	-	-	-	-	-	(37)	-	(1,854)	-	(1,891)
Total comprehensive income for the period	-	-	-	-	-	(37)	-	(1,854)	(3,826)	(5,717)
At 30th June 2020 (Unaudited)	1,728	68,455	3,690	2,072	(917)	2,463	(29,346)	(151)	161,233	209,227

Griffin Mining Limited

Condensed Consolidated Cash Flow Statement

 (expressed in thousands US dollars)

	6 months to 30/06/20+20 Unaudited		6 months to 30/06/2019 Unaudited		Year to 31/12/2019 Audited
	$000		$000		$000
Net cash flows from operating activities
(Loss) / profit  before taxation	(3,826)		6,276		11,712
Foreign exchange losses / (gains)	147		4		93
Finance income	(45)		(82)		(171)
Finance costs	149		122		377
Depreciation, depletion and amortisation	5,518		5,000		12,343
Impairment of intangible assets	1		-		1,985
Losses on disposal of equipment	614		59		305
(Increase) / decrease in inventories	(57)		1,157		1,112
(Increase) / decrease in receivables and other current assets	(414)		(1,140)		959
Increase / (decrease) in trade and other payables	(2,762)		2,032		4,016
Taxation paid	(3,584)		(9,469)		(11,092)
Net cash inflow from operating activities	(4,259)		3,959		21,639
Cash flows from investing activities
Interest received	45		82		171
Proceeds / (expenses) on disposal of equipment	(34)		-		1
Payments to acquire - mineral interests (mine development)	(3,379)		(10,318)		(18,883)
Payments to acquire - plant & equipment	(984)		(1,519)		(8,193)
Payments to acquire - office equipment	(4)		-		(69)
Payments to acquire - intangible assets - exploration interests	(3)		(8)		(308)
Net cash (outflow) from investing activities	(4,359)		(11,763)		(27,281)
Cash flows from financing activities
Issue of shares on exercise of share purchase options	-		-		14
Interest paid	-		(52)		(52)
Finance lease advance	-		-		65
Finance lease repayments	(929)		(1,304)		(2,762)
Net cash (outflow) from financing activities	(929)		(1,356)		(2,735)
(Decrease) / increase in cash and cash equivalents	(9,547)		(9,160)		(8,377)
Cash and cash equivalents at beginning of the period	19,885		28,452		28,452
Effects of exchange rate changes	13		1		(190)
Cash and cash equivalents at end of the period	10,351		19,293		19,885
Cash and cash equivalents comprise bank deposits
Bank deposits	10,351		19,293		18,885

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 2019.  

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 condensed consolidated statement of financial position at 31^st December 2019 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 2019 statutory financial statements upon which the auditors' opinion is unqualified.

4.  As detailed in the last annual financial statements for the year to 31^st December 2019, the summary accounts have been prepared on a going concern basis.  Having considered recent events, in particular the impact of Covid-19, the cash resources, banking facilities and forecasts regularly prepared, 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. There was no dilutive effect on the losses per share in the six months to 30^th June 2020. Reconciliation of the earnings and weighted average number of shares used in the calculations are set out below:

	6 months to 30/06/2019 Unaudited			6 months to 30/06/2018 Unaudited				Year to 31/12/2018 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	3,826	172,728,728	(2.22)	4,074	172,748,728	2.36	6,084		172,748,831	3.52
Dilutive effect of securities
Options				-	14,823,528	(0.19)			15,107,500	(0.28)
Diluted earnings per share				4,074	187,572,256	2.17	6,084		187,856,331	3.24

 

END

 

 

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