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Griffin Mining Ld (GFM)

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Thursday 23 July, 2020

Griffin Mining Ld

Half-year Report

RNS Number : 8119T
Griffin Mining Ld
23 July 2020
 

 

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]

 

23rd July 2020

 

UNAUDITED INTERIM RESULTS

for the six months ended 30th 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 (30th June 2019 - $38.6 million)

 

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

 

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

 

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

 

· Profit (Loss) per share of (2.22 cents) (30th 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 30th June 2020, 323,536 tonnes (30th June 2019 - 432,592 tonnes) of ore were processed to produce:

 

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

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

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

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

 

 

 

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

 

During the six months to 30th June 2020:

 

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

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

· 323,536 tonnes of ore were processed (30th 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 30th 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 (30th June 2019: Basic earnings 2.36 cents).  At 30th June 2020, attributable net assets per share amounted to 121 cents (30th 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: +44(0)20 7629 7772

Roger Goodwin - Finance Director

 

Numis Securities Limited

  Paul Gillam  Telephone: +44(0)20 7260 1000

 

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


$000






Revenue

21,321




Cost of sales

(17,153)








Gross profit 

4,168





Net operating expenses

(7,204)





(Loss) / profit from operations

(3,036)





Losses on disposal of equipment

(614)

Impairment of intangible fixed assets

(1)

Foreign exchange (losses) / gains

(147)

Finance income

45



Finance costs

(149)



Other income

76









(Loss) / profit before tax

(3,826)





Income tax  expense

-








(Loss) / profit after tax

(3,826)








(Loss) / basic earnings per share (cents)

(2.22)





(Loss) / diluted earnings per share (cents)

(2.22)


 



Griffin Mining Limited

Condensed Consolidated Statement Of Comprehensive income

(expressed in thousands US dollars)

 


6 months to

30/06/2020

Unaudited


$000






(Loss) / profit for the financial period

(3,826)





Other comprehensive income



Prior period adjustment (note 6)

-


Exchange differences on translating foreign operations

(1,891)




 

Other comprehensive income for the period, net of tax

 

(1,891)





Total comprehensive (losses) / income for the period

(5,717)








Griffin Mining Limited

Condensed Consolidated Statement Of Financial Position

 (expressed in thousands US dollars)

 


30/06/2020




Unaudited




$000








ASSETS




Non-current assets




Property, plant and equipment

225,898



Intangible assets - exploration interests

325




226,223



Current assets




Inventories

3,896



Receivables and other current assets

2,275



Cash and cash equivalents

10,351




16,522







Total assets

242,745







EQUITY AND LIABILITIES




Equity attributable to equity holders of the parent




Share capital

1,728



Share premium

68,455

Contributing surplus

3,690

Share based payments

2,072

Shares held in treasury

(917)

Chinese statutory re-investment reserve

2,463

Other reserve on acquisition of non-controlling interests

(29,346)

Foreign exchange reserve

(151)

Profit and loss reserve

161,233

Total equity attributable to equity holders of the parent

209,227








Non-current liabilities




Long-term provisions

3,802



Deferred taxation

2,691



Finance leases

-




6,493



Current liabilities




Trade and other payables

25,311



Finance leases

1,714

Total liabilities

27,025



Total equities and liabilities

242,745



Number of shares in issue

172,786,228



Attributable net asset value / total equity per share

$1.21


Griffin Mining Limited

Condensed Consolidated Statement of Changes in Equity

(expressed in thousands US dollars)

 




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

Prior period adjustment

Other comprehensive income:

Exchange differences on translating foreign operations

Total comprehensive income for the period


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

Issue of shares on exercise of options

Transaction with owners


Retained profit for the 6 months

Other comprehensive income:

Exchange differences on translating foreign operations

Total comprehensive income for the period












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

 


$000



Net cash flows from operating activities




 

(Loss) / profit  before taxation

(3,826)



 

Foreign exchange losses / (gains)

147

 

Finance income

(45)



 

Finance costs

149



 

Depreciation, depletion and amortisation

5,518



 

Impairment of intangible assets

1



 

Losses on disposal of equipment

614



 

(Increase) / decrease in inventories

(57)



 

(Increase) / decrease in receivables and other current assets

(414)



 

Increase / (decrease) in trade and other payables

(2,762)



 

Taxation paid

(3,584)



 

Net cash inflow from operating activities

(4,259)



 

 




 

Cash flows from investing activities




 

Interest received

45



 

Proceeds / (expenses) on disposal of equipment

(34)



 

Payments to acquire - mineral interests (mine development)

(3,379)



 

Payments to acquire - plant & equipment

(984)



 

Payments to acquire - office equipment

(4)


 

Payments to acquire - intangible assets - exploration interests

(3)



 

Net cash (outflow) from investing activities

(4,359)



 





 

Cash flows from financing activities




 

Issue of shares on exercise of share purchase options

-



 

Interest paid

-



 

Finance lease advance

-



 

Finance lease repayments

(929)



 

Net cash (outflow) from financing activities

(929)



 





 

(Decrease) / increase in cash and cash equivalents

(9,547)



 





 

Cash and cash equivalents at beginning of the period

19,885



 

Effects of exchange rate changes

13



 

Cash and cash equivalents at end of the period

10,351



 





 

Cash and cash equivalents comprise bank deposits




 

Bank deposits

10,351



 



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 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, 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 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 31st 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 30th 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)

Basic (loss) / earnings per share


(Loss) earnings  attributable to ordinary shareholders

3,826

172,728,728

(2.22)

Dilutive effect of securities

 

Options




Diluted earnings per share




 

 

 


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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