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Griffin Mining Ld (GFM)

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Monday 16 September, 2019

Griffin Mining Ld

Half-year Report

RNS Number : 3172M
Griffin Mining Ld
16 September 2019
 

 

 

 

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

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

E mail: [email protected]

 

16th September 2019

 

INTERIM STATEMENT

for the six months ended 30th June 2019

 

Griffin Mining Limited ("Griffin" or "the Company") has today released its unaudited results for the six months ended 30th June 2019.

 

Highlights:

 

·     Revenues of $38.6 million (30th June 2018 - $54.1 million)

 

·     Operating profit of $6.0 million (30th June 2018 - $21.1 million)

 

·     Profit before tax of $6.3 million (30th June 2018 - $21.3 million)

 

·     Profit after tax of $4.1 million (30th June 2018 - $15.3 million)

 

·     Basic earnings per share of 2.36 cents (30th June 2018 - 8.95 cents)

 

 

Financial and Trading:

 

The first six months of 2019 has seen falling zinc metal prices and significantly higher smelter treatment charges resulting in the average zinc metal in concentrate prices received in the first six months of 2019 of $1,591 per tonne compared with $2,522 per tonne in the first six months of 2018, a 36.5% reduction.

 

In the six months to 30th June 2019, 432,592 tonnes (30th June 2018 - 448,530 tonnes) of ore were processed to produce:

 

·     16,692 tonnes of zinc (30th June 2018 - 16,873 tonnes);

·     494 tonnes of lead (30th June 2018 - 459 tonnes);

·     141,306 ounces of silver (30th June 2018 - 132,689 ounces); and

·     9,099 ounces of gold (30th June 2018 - 9,492 ounces).  

 

Zinc revenues before royalties and resource taxes in the six months to 30th June 2019 were $27,159,000 (30th June 2018 - $42,573,000) with 17,072 tonnes of zinc metal in concentrate sold (30th June 2018 - 16,881 tonnes).   Lead and precious metals revenues were $13,036,000 (30th June 2018 - $14,045,000) with less gold in concentrate sold. 

 

 

 

During the six months to 30th June 2019:

 

·     410,819 tonnes of ore were mined (30th June 2018 - 400,167 tonnes);

·     426,070 tonnes of ore were hauled (30th June 2018 - 437,734 tonnes); and

·     432,592 tonnes of ore were processed (30th June 2018 - 448,530 tonnes).

 

Costs of sales (mining, haulage and processing costs) of $22,671,000 in the first six months of 2019 were down 2.8% on that incurred in 2018 of $23,336,000. Whilst enhanced safety requirements in China have caused an increase in mining costs, haulage and processing costs have been reduced with less waste materials hauled and sent to tailings and crushing efficiencies.

 

Net operating expenses (including those of the Caijiaying site) have risen from $9,663,000 in the first six months of 2018 to $9,955,000 in 2019. This includes fees to the Group's Chinese partners of $1,820,000 (2018 $2,186,000), equivalent to their equity interest in Hebei Hua Ao's profits.  Whilst these fees have fallen, other operating 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. 

 

Basic earnings per share were 2.36 cents (30th June 2018: 8.95 cents).  At 30th June 2019, attributable net assets per share amounted to 124 cents (30th June 2018: 119 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, "Although all stakeholders in the Company will be disappointed with the financial results for the first half of 2019, they are directly, and practically solely, attributable to the fall in the zinc price and the tremendously higher smelter treatment charges in the first 6 months of the year.  Operations and metal production were generally in line with budget.  As is often said, mining is a fixed cost business and, as such, a reduction is sales revenues has a direct and significant effect on the margin of profit. We continue to hope for a higher zinc price and lower treatment charges for 2019 into 2020."

 

 

 

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

30/06/2019

Unaudited

 

6 months to

30/06/2018

Unaudited

 

Year to

31/12/2018

Audited

 

$000

 

$000

 

$000

 

 

 

 

 

 

Revenue

38,619

 

54,058

 

99,067

 

 

 

 

 

 

Cost of sales

(22,671)

 

(23,336)

 

(45,798)

 

 

 

 

 

 

 

 

 

 

 

 

Gross profit 

15,948

 

30,722

 

53,269

 

 

 

 

 

 

Net operating expenses

(9,955)

 

(9,663)

 

(17,714)

 

 

 

 

 

 

 

 

 

 

 

 

Profit from operations

5,993

 

21,059

 

35,555

 

 

 

 

 

 

Losses on disposal of equipment

(59)

 

(18)

 

(939)

Foreign exchange (losses) / gains

(4)

 

133

 

42

Finance income

82

 

102

 

223

Finance costs

(122)

 

(144)

 

(283)

Other income

386

 

179

 

200

 

 

 

 

 

 

 

 

 

 

 

 

Profit before tax

6,276

 

21,311

 

34,798

 

 

 

 

 

 

Income tax  expense

(2,202)

 

(6,005)

 

(9,321)

 

 

 

 

 

 

 

 

 

 

 

 

Profit after tax

4,074

 

15,306

 

25,477

 

 

 

 

 

 

 

 

 

 

 

 

Basic earnings per share (cents)

2.36

 

8.95

 

14.83

 

 

 

 

 

 

Diluted earnings per share (cents)

2.17

 

8.42

 

13.35

 

 

Griffin Mining Limited

Condensed Consolidated Statement Of Comprehensive income

(expressed in thousands US dollars)

 

 

6 months to

30/06/2019

Unaudited

 

6 months to

30/06/2018

Unaudited

 

Year to

31/12/2018

Audited

 

$000

 

$000

 

$000

 

 

 

 

 

 

Profit for the financial period

4,074

 

15,306

 

25,477

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

Prior period adjustment (note 6)

(33)

 

-

 

-

Exchange differences on translating foreign operations

(297)

 

(1,498)

 

(5,856)

 

 

 

 

 

 

 

Other comprehensive income for the period, net of tax

 

(330)

 

 

(1,498)

 

 

(5,856)

 

 

 

 

 

 

Total comprehensive income for the period

3,744

 

13,808

 

 

19,621

 

 

 

 

 

 

 

Griffin Mining Limited

Condensed Consolidated Statement Of Financial Position

 (expressed in thousands US dollars)

 

 

30/06/2019

 

30/06/2018

 

31/12/2018

 

Unaudited

 

Unaudited

 

Audited

 

$000

 

$000

 

$000

 

 

 

 

 

 

ASSETS

 

 

 

 

 

Non-current assets

 

 

 

 

 

Property, plant and equipment

219,937

 

213,920

 

213,140

Intangible assets - Exploration interests

2,021

 

2,031

 

2,016

 

221,958

 

215,951

 

215,156

Current assets

 

 

 

 

 

Inventories

3,793

 

4,065

 

4,951

Receivables and other current assets

3,959

 

5,546

 

2,819

Cash and cash equivalents

19,293

 

27,841

 

28,452

 

27,045

 

37,452

 

36,222

 

 

 

 

 

 

Total assets

249,003

 

253,403

 

251,378

 

 

 

 

 

 

EQUITY AND LIABILITIES

 

 

 

 

 

Equity attributable to equity holders of the parent

 

 

 

 

 

Share capital

1,727

 

1,725

 

1,727

Share premium

68,442

 

68,329

 

68,442

Contributing surplus

3,690

 

3,690

 

3,690

Share based payments

2,072

 

2,072

 

2,072

Shares held in treasury

(917)

 

(300)

 

(917)

Chinese statutory re-investment reserve

2,382

 

2,177

 

2,386

Other reserve on acquisition of non-controlling interests

(29,346)

 

(29,346)

 

(29,346)

Foreign exchange reserve

3,734

 

8,306

 

4,027

Profit and loss reserve

163,202

 

149,278

 

159,161

Total equity attributable to equity holders of the parent

214,986

 

205,931

 

211,242

 

 

 

 

 

 

Non-current liabilities

 

 

 

 

 

Long-term provisions

2,182

 

2,387

 

2,302

Deferred taxation

2,389

 

2,830

 

2,393

Finance leases

413

 

-

 

258

 

4,984

 

5,217

 

4,953

Current liabilities

 

 

 

 

 

Trade and other payables

28,469

 

39,116

 

33,632

Finance leases

564

 

3,139

 

1,551

Total liabilities

29,033

 

42,255

 

35,183

 

 

 

 

 

 

Total equities and liabilities

249,003

 

253,403

 

251,378

 

 

 

 

 

 

Number of shares in issue

172,748,728

 

172,512,061

 

172,748,728

 

 

 

 

 

 

Attributable net asset value / total equity per share

$1.24

 

$1.19

 

$1.22

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 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

 

 

 

 

 

 

 

 

 

 

 

Regulatory transfer for future investment

-

-

-

-

-

288

-

-

(288)

-

Issue of shares on exercise of options

2

113

-

-

-

-

-

-

-

115

Purchase of shares for treasury

-

-

-

-

(617)

-

-

-

-

(617)

Transaction with owners

2

113

-

-

(617)

288

-

 

(288)

(502)

 

 

 

 

 

 

 

 

 

 

 

Retained profit for the 6 months

-

-

-

-

-

-

-

-

10,171

10,171

Other comprehensive income:

 

 

 

 

 

 

 

 

 

 

Exchange differences on translating foreign operations

-

-

-

-

 

-

(79)

-

(4,279)

-

(4,358)

Total comprehensive income for the period

-

-

-

-

-

(79)

-

(4,279)

10,171

5,813

 

 

 

 

 

 

 

 

 

 

 

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

 

Griffin Mining Limited

Condensed Consolidated Cash Flow Statement

 (expressed in thousands US dollars)

 

 

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 2018.  

 

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 31st December 2018 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 2018 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

30/06/2019

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 earnings per share

 

 

Earnings  attributable to ordinary shareholders

 

4,074

172,748,728

2.36

 

15,306

170,991,849

8.85

 

25,477

171,842,166

14.83

Dilutive effect of securities

 

 

 

 

Options

-

14,823,528

(0.19)

-

17,086,523

(0.43)

-

16,494,541

(1.48)

Diluted earnings per share

 

4,074

187,572,256

2.17

 

15,306

188,078,102

8.42

 

43,321

 

188,336,707

13.35

                       

 

6.     The prior year adjustment relates to the capitalisation of leases following the introduction of International Financial Reporting Standard 16, on leases.

 


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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