Unaudited Interim Results

RNS Number : 0767W
Griffin Mining Ld
16 August 2022
 

 

 

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

 

 

16th AUGUST 2022

 

UNAUDITED INTERIM RESULTS

for the six months ended 30th 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 30th June 2021: $54.1 million).

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

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

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

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

 

Financial and Trading:

 

The results for the six months to 30th 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 1st January 2022 to 23rd March 2022 no stoping or underground development work was undertaken with processing not restarting until 25th March 2022.

 

Whilst minimal ore was mined and processed in the first quarter of 2022, the second quarter to 30th 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 25th March 2022:

 



3 months to 30th  June 2022

3 months to 30th  June 2021

Ore mined

Tonnes

338,790

277,112

Ore processed

Tonnes

329,390

275,576

Zinc in concentrate Produced

Tonnes

13,189

11,645

Gold in concentrate produced

Ozs

3,504

4,080

Silver in concentrate produced

Ozs

79,246

81,098

Lead in concentrate produced

Tonnes

345

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

23,878

Lead and precious metals sales

$000s

5,479

7,766

Royalties

$000s

(2,198)

(22)

(1,784)

Total Turnover

$000s

34,385

364

29,860






Cost of sales

$000s

(15,457)

(15,412)






Gross profit (loss)

$000s

18,928

(3,451)

14,448





Administration expenses

$000s

(6,040)

(5,037)






Operating profit / (loss)

$000s

12,888

(7,415)

9,411





Interest and other income / (costs)

$000s

(118)

(4)






Profit (loss) before tax

$000s

12,770

(7,336)

9,407





Taxation

$000s

(2,398)

(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 (30th 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 ( 30th June 2021: 19,876 tonnes);

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

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

· 3,672 ounces of gold (30th 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 30th June 2022 were $31,234,000 (30th June 2021 - $42,102,000).  Lead and precious metals revenues were $5,735,000 (30th June 2021 - $15,136,000), with the average gold price received of $1,788 per oz (30th June 2021 - $1,675) and silver $18.1 per oz (30th June 2021 - $20.4).  Metal in concentrate with a potential sales value of over $9m remained unsold at 30th June 2022.

 

During the six months to 30th June 2022:

 

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

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

44,627 ozs of silver in concentrate were sold (30th 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 (30th June 2021: 5.88 cents per share).  At 30th June 2022, attributable net assets per share amounted to 149 cents (30th 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 30th 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 1st quarter and to then come back in the 2nd 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: +44(0)20 7629 7772

Roger Goodwin - Finance Director

 

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

  John Prior

  Alisa MacMaster

 

Berenberg    Telephone: +44(0)20 3207 7800

    Matthew Armitt

Jennifer Wyllie

Deltir Elezi

 

 

BlytheRay

  Tim Blythe  Telephone: +44(0)20 7138 3205

  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 31st 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, 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 consolidated statement of financial position at 31st 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 30th June 2022 there were no adjusting post balance sheet events.

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