REG - Griffin Mining Ld - Half-year Report
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 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)
6 months to
30/06/2019
Unaudited
6 months to
30/06/2018
Unaudited
Year to
31/12/2018
Audited
$000
$000
$000
Net cash flows from operating activities
Profit before taxation
6,276
21,311
34,798
Foreign exchange losses / (gains)
4
(133)
(42)
Finance income
(82)
(102)
(223)
Finance costs
122
144
283
Depreciation, depletion and amortisation
5,000
4,964
10,328
Losses on disposal of equipment
59
18
939
Decrease / (increase) in inventories
1,157
1,803
917
(Increase) / decrease in receivables and other current assets
(1,140)
(1,206)
(1,059)
Increase / (decrease) in trade and other payables
2,032
(6,880)
(12,917)
Taxation paid
(9,469)
(12,275)
(12,585)
Net cash inflow from operating activities
3,959
7,644
20,439
Cash flows from investing activities
Interest received
82
102
223
Proceeds on disposal of equipment
-
-
351
Payments to acquire - mineral interests
(10,318)
(4,597)
(10,669)
Payments to acquire - plant & equipment
(1,519)
(1,323)
(6,134)
Payments to acquire - office equipment
-
(1)
-
Payments to acquire - intangible assets - exploration interests
(8)
(21)
(81)
Net cash (outflow) from investing activities
(11,763)
(5,840)
(16,310)
Cash flows from financing activities
Purchase of shares for treasury
-
(300)
(917)
Issue of shares on exercise of share purchase options
-
1,059
1,174
Interest paid
(52)
-
-
Finance lease
(1,304)
(1,365)
(2,728)
Net cash (outflow) from financing activities
(1,356)
(606)
(2,471)
(Decrease) / increase in cash and cash equivalents
(9,160)
1,198
1,658
Cash and cash equivalents at beginning of the period
28,452
26,518
26,518
Effects of exchange rate changes
1
125
276
Cash and cash equivalents at end of the period
19,293
27,841
28,452
Cash and cash equivalents comprise bank deposits
Bank deposits
19,293
27,841
28,452
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 rns@lseg.com or visit www.rns.com.ENDIR SFMFEDFUSESU
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