Griffin Mining Limited: Unaudited Interim Results for the six months ended 30th June 2022
16th AUGUST 2022. Griffin Mining Limited (“Griffin” or the “Company” - https://www.commodity-tv.com/ondemand/companies/profil/griffin-mining-ltd/) 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 31st March 2022
3 months to 30th June 2021
Ore mined
Tonnes
338,790
17,975
277,112
Ore processed
Tonnes
329,390
8,649
275,576
Zinc in concentrate Produced
Tonnes
13,189
268
11,645
Gold in concentrate produced
Ozs
3,504
1,474
4,080
Silver in concentrate produced
Ozs
79,246
168
81,098
Lead in concentrate produced
Tonnes
345
7
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
130
23,878
Lead and precious metals sales
$000s
5,479
256
7,766
Royalties
$000s
(2,198)
(22)
(1,784)
Total Turnover
$000s
34,385
364
29,860
Cost of sales
$000s
(15,457)
(3,815)
(15,412)
Gross profit (loss)
$000s
18,928
(3,451)
14,448
Administration expenses
$000s
(6,040)
(3,964)
(5,037)
Operating profit / (loss)
$000s
12,888
(7,415)
9,411
Interest and other income / (costs)
$000s
(118)
(79)
(4)
Profit (loss) before tax
$000s
12,770
(7,336)
9,407
Taxation
$000s
(2,398)
(2)
(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
Roger Goodwin – Finance Director
Telephone: +44(0)20 7629 7772
Panmure Gordon (UK) Limited
John Prior
Alisa MacMaster
Telephone: +44 (0)20 7886 2500
Berenberg
Matthew Armitt
Jennifer Wyllie
Deltir Elezi
Telephone: +44(0)20 3207 7800
BlytheRay
Tim Blythe
Megan Ray
Telephone: +44(0)20 7138 3205
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
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.
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.
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.
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.
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
30/06/2022
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
As at 30th June 2022 there were no adjusting post balance sheet events.