REG - Griffin Mining Ld - 2021 FINAL RESULTS
13/05/2022 07:00
For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20220513:nRSM3577La&default-theme=true
RNS Number : 3577L Griffin Mining Ld 13 May 2022
Royal Trust House, 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
13(th) May 2022
2021 Final Results
Griffin Mining Limited ("Griffin" or the "Company") has today published its
annual report and financial statements for the year ended 31 December 2021
which are available on the Company's web site wwww.griffinmining.com.
In 2021, the Company and its subsidiaries (together the "Group") recorded:
· Revenues increased 61% to $121,648,000 (2020: $75,403,000);
· Operating profit increased 143% to $36,925,000 (2020: $15,148,000);
· Profit before tax increased 152% to $36,526,000 (2020: $14,515,000);
· Profit after tax increased 185% to $25,376,000 (2020: $8,910,000);
and
· Basic earnings per share increased 182% to 14.53 cents per share
(2020: 5.16 cents).
Record amounts of ore were mined and processed in 2021 which, with improved
zinc metal market prices and lower smelter treatment charges ("TCs"), resulted
in Group profits before tax increasing 152% from that in 2020 of $14,515,000
to $36,925,000 in 2021. Group profits after tax increased by 185% from
$8,910,000 in 2020 to $25,376,000 in 2021.
Turnover in 2021 of $121,648,000 was up $46,245,000 (61%) on that achieved in
2020 of $75,403,000. This reflects zinc in concentrate sales up $43,856,000
(83%) with: 41,949 tonnes of zinc metal in concentrate sold in 2021 compared
with 32,276 tonnes in 2020, an increase of 30%; and average zinc metal in
concentrate prices received in 2021 of $2,311 per tonne compared with $1,645
received in 2020, an increase of 40%. This price increase reflects an
increase in market prices with the average LME zinc metal price of $3,007 per
tonne in 2021 compared with $2,268 in 2020, but also a reduction in TCs with
average TCs equating to 23.1% of the average LME zinc price in 2021 compared
with 27.5% in 2020.
Lead and precious metal in concentrate sales in 2021 of $31,915,000 were up
22.7% on that achieved in 2020 of $25,999,000. This reflects increased gold
metal in concentrate sold and increased lead and silver in concentrate prices
received despite lower gold prices received.
In 2021, metal in concentrate sales were:
· Zinc 41,949 tonnes (2020: 32,276 tonnes) an increase of 30%;
· Gold 14,417 ozs (2020: 11,218 ozs) an increase of 29%;
· Silver 269,505 ozs (2020: 291,756 ozs) a decrease of 8%; and
· Lead 1,069 tonnes (2020: 1,425 tonnes) a decrease of 25%.
Average prices achieved in 2021 were:
· Zinc metal per tonne of $2,311 (2020: $1,645);
· Gold metal per oz of $1,691 (2020: $1,759);
· Silver metal per oz of $19.8 (2019: $17.7); and
· Lead metal per tonne of $2,074 (2019: $1,339).
Total cost of sales in 2021 of $63,224,000 was up 47.9% on that incurred in
2020 of $42,737,000. In the main this reflects more tonnes mined, hauled and
processed in 2021. Further cost increases occurred with the mine deepening,
increasing mine service costs and the distances ore is hauled, whilst
processing costs were impacted by tailings disposal issues and increased
maintenance costs. Costs were also increased by a 4.5% appreciation of the
Renminbi to the US dollar and pay awards to staff.
Administration expenses rose $3,981,000 (23%) from $17,518,000
in 2020 to $21,499,000 in 2021. Administration costs include a charge of
$3,876,000 (2020: 2,943,000) incurred with Yuanrun based upon the profits of
Hebei Hua Ao subject to a minimum fee. Hebei Hua Ao's administration fees
increased by 27% in 2021 with a 4.5% appreciation in the Renminbi exchange
rate, pay awards to staff and additional environmental and safety regulatory
compliance costs, including that to maintain Caijiaying' s "Green Mine" status
in the PRC. Administration costs outside the PRC were impacted by investor and
public relation costs curtailed in previous years and significantly increased
insurance premiums.
Foreign exchange losses of $51,000 (2020: gains $22,000) were recorded in
2021, mainly on a weaker sterling. Interest of $236,000 (2020: $108,000) was
received on bank deposits in 2021. Interest of $309,000 (2020: $111,000) was
paid on short term bank loans. Finance interest on the lease of the dry
tailings facility at Caijiaying and the London office totalling $11,000 (2020:
$171,000) was charged in 2021. Deemed interest on discounted rehabilitation
provisions of $84,000 (2020: $77,000) was charged in 2021.
Losses on the disposal of equipment of $293,000 (2020: $1,129,000) were
recorded with equipment being replaced to meet higher Chinese environmental
standards.
Income taxes of $11,150,000 (2020 $5,605,000) have been charged in 2021.
Basic earnings per share in 2021 was 14.53 cents (2020: 5.16 cents) and
diluted earnings per share was 13.47 cents (2020: 4.88 cents).
Cash generated from operations of $42,880,000 (2020: $24,398,000), an increase
of 76%, have been used in further developing the mine and facilities and
held pending development of the Zone II area at Caijiaying.
Attributable net assets per share at 31 December 2021 was $1.50 (2020: $1.35),
and increase of 11%.
Whilst the Directors do not recommend the payment of a dividend at this time,
the Directors have discussed and will further consider a dividend policy later
this year when current political, social and economic circumstances permit
enabling such a policy to be instituted and executed over a consistent, long
term basis.
Chairman's Statement:
In terms of the Company's financial and operational performance, it has been a
stellar year, even more extraordinary considering Zone II has yet to be fully
developed or brought into production and in light of the continuing
restrictions imposed by the Covid-19 pandemic in China.
In 2021, in comparison to 2020:
· Revenue was 61% higher at $121,648,000;
· Operating profit was 143% higher at $36,925,000;
· Profit before tax was 152% higher at $36,526,000;
· Profit after tax was 185% higher at $25,376,000; and
· Basic earnings per share was 182% higher at14.53 cents per share.
Operationally, record amounts of ore were mined and processed in 2021 and
metal production of our 2 largest revenue producers, zinc and gold, were
substantially higher than in the previous year:
· Ore mined was up 14% at 971,492 tonnes;
· Ore hauled was up 19% at 979,783 tonnes;
· Ore processed was up 20% at 985,404 tonnes;
· Zinc metal in concentrate produced was up 28% at 41,587 tonnes;
and
· Gold metal in concentrate produced was up 28% at 14,447 ounces;
This bodes very well for the future results of the Company when Zone II is
commissioned and in full production. Since the grant of the new mining licence
over Zone II in January 2021, the Company has been working continuously and
tirelessly on obtaining approval for the design and development of Zone II.
That approval is expected shortly and drive development is planned to begin on
the 1(st) July 2022. In the interim, the first drill platform for resource
drilling at Zone II was constructed in September 2021 and diamond drilling
commenced in early October 2021.
What makes the above results truly exceptional is the continuing Covid-19
crisis in China and the quarantine procedures the various levels of government
have put in place making the transport of materials, employees and contractors
over Provincial borders at the least, extraordinarily difficult and, at the
most, impossible. Furthermore, China has prevented the entrance of any foreign
national into the country who does not have a pre-existing work permit and
then, only with 28 days hotel quarantine. What this reinforces in simple terms
is the dedication and loyalty of both our on-site staff and our ex-pat staff.
The former who, in effect, now live permanently at camp as they are wary of
not being permitted to return to the Caijiaying Mine site should quarantine be
imposed unilaterally at local, county, city or Provincial level. The latter
ex-pats, who now spend 3 to 6 months away from their partners, children and
extended family, allow the Company to keep operating. I should add, all this
when there is a 30,000 person shortage in the Australian mining industry where
most of our ex pat staff are based. In particular, and most of all, I would
like to thank John Steel, our new Chief Operating Officer, Paul Benson, our
Chief Geologist, and Wendy Zhang, our site Chief Financial Officer, for their
Herculean efforts over the past 12 months. All these on-site and ex-pat
individuals have displayed the extent of their loyalty and I am grateful on
behalf of everyone involved with the Company.
Needless to say, the safety and welfare of the Company's workforce remains the
overwhelming priority of the Company. Underground and surface operations
operated safely and consistently in 2021 without any major incidents. With the
Company's extensive Covid-19 pandemic controls, there have been no outbreaks
of Covid-19 at the Caijiaying Mine to date. With assistance from local Chinese
authorities all personnel have received Chinese manufactured Covid-19
vaccinations.
Operational highlights throughout the year included the acquisition of land
for the construction of new Tailings Dam 4 and the completion of the
construction of the bridge to provide access to the area, the installation and
extension of the paste pipe reticulation system and the continuation of the
programme to further modernise and increase safety at the Caijiaying Mine.
This included the introduction of 10 specific PRC Kuang Anquan ("KA") wet
brake vehicles for personnel transportation underground, further increasing
mine safety, traffic management and the underground environment. In addition,
a new 40 tonne low emission boiler used to heat the site processing,
administration and other buildings as well as the underground workings was
commissioned and a new electrical boiler was installed and commissioned at the
Caijiaying Mine Camp reducing the Company's carbon emissions footprint.
Importantly, probably the most significant non-operational event of the past
year was the activism of the major shareholders of the Company to effect
change at the board level with the intention of seeking to extract greater
value from the Company and their shareholding. To that end, 3 new independent
directors were appointed to the board. Clive Whiley was appointed to the board
in August 2021 and Linda Naylor and Dean Moore in May 2022. I would like to
welcome all 3 formally to the board and wish them every success and a
productive and enjoyable time on the board.
With this substantial change to the board I'd like to state that I will always
be enormously grateful and humbled by the contribution and comradery the
directors, whom I'm proud to call "my friends", gave so freely, warmly,
genuinely and passionately. It made this impossible dream possible and
bearable and I shall always be so grateful I had this journey with these
amazing individuals - the deceased Rupert Crowe and Bill Mulligan, the mining
thoroughbred Dal Brynelsen and the indefatigable Roger Goodwin. To quote Bill
Curry, an American football star, "It's not for the bucks that I drive myself
to the limits of my ability. It's so that I can go back to the locker room,
after having gone those last 35 yards and won the game and walk back in there
with my arm around a teammate and know that we did that together, that we both
gave it a little more than we really had. Now that may sound real phony but I
promise you it's the reason we play."
To the shareholders, my overwhelming wish is that Covid-19 disappears from
concern, that there be peace in Eastern Europe, the World economy avoids
severe recession and inflation, that the zinc price remains high and Zone II
hits our long awaited full production target. May the Year of the Tiger make
it just so.
About Griffin Mining Limited
Griffin Mining Limited's shares are quoted on the Alternative Investment
Market (AIM) of the London Stock Exchange (symbol GFM). Griffin Mining Limited
owns and operates in China, through its 88.8% owned Joint Venture stock
company, the Caijiaying Zinc Gold Mine, a profitable mine producing zinc,
gold, silver, and lead metals in concentrates. For more information, please
visit the Company's website www.griffinmining.com.
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
Ailisa MacMaster
Berenberg Telephone: +44(0)20 3207 7800
Matthew Armitt
Jennifer Wyllie
Deltir Elezi
BlytheRay
Tim Blythe 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
Summarised Consolidated Income Statement
For the year ended 31 December 2021
(expressed in thousands US dollars)
2021 2020
Audited Audited
$000 $000
Revenue 121,648 75,403
Cost of sales (63,224) (42,737)
Gross profit 58,424 32,666
Administration expenses (21,499) (17,518)
Profit from operations 36,925 15,148
Losses on disposal of plant and equipment (293) (1,129)
Provisions against intangible assets (11) (10)
Foreign exchange (losses) / gains (51) 22
Finance income 236 108
Finance costs (404) (359)
Other income 124 735
Profit before tax 36,526 14,515
Income tax expense (11,150) (5,605)
Profit for the year 25,376 8,910
Basic earnings per share (cents) 14.53 5.16
Diluted earnings per share (cents) 13.47 4.88
Griffin Mining Limited
Summarised Consolidated Statement of Comprehensive Income
For the year ended 31 December 2021
(expressed in thousands US dollars)
2021 2020
Audited Audited
Restated
$000 $000
Profit for the year 25,376 8,910
Other comprehensive income that will be reclassified to profit or loss
Exchange differences on translating foreign operations 3,336 9,837
Other comprehensive income for the year, net of tax 3,336 9,837
Total comprehensive income for the year 28,712 18,747
The 2020 exchange differences on translating foreign operations have been
corrected from that reported in 2020 of $9,662,000.
Griffin Mining Limited
Summarised Consolidated Statement of Financial Position
As at 31 December 2021
(expressed in thousands US dollars)
2021 2020
Audited Audited
$000 $000
ASSETS
Non-current assets
Property, plant and equipment 275,296 266,709
Intangible assets - exploration interests 387 325
275,683 267,034
Current assets
Inventories 4,516 5,333
Receivables and other current assets 2,174 6,675
Cash and cash equivalents 38,159 16,435
44,849 28,443
Total assets 320,532 295,477
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Share capital 1,749 1,728
Share premium 69,334 68,470
Contributing surplus 3,690 3,690
Share based payments 2,072 2,072
Shares held in treasury (1,644) (917)
Chinese statutory re-investment reserve 2,896 2,830
Other reserve on acquisition of non controlling interests (29,346) (29,346)
Foreign exchange reserve 14,635 11,365
Profit and loss reserve 199,190 173,814
Total equity attributable to equity holders of the parent 262,576 233,706
Non-current liabilities
Other Payables 10,352 13,487
Long-term provisions 2,667 2,200
Deferred taxation 3,240 3,359
Finance leases 794 -
17,053 19,046
Current liabilities
Trade and other payables 40,726 42,342
Finance leases 177 383
Total current liabilities 40,903 42,725
Total equities and liabilities 320,532 295,477
Attributable net asset value per share to equity holders of parent 1.50 1.35
Griffin Mining Limited
Summarised Consolidated Statement of Changes in Equity
For the year ended 31 December 2021
(expressed in thousands US dollars)
Share Share Contributing Share Shares Chinese Other Foreign Profit Total
Capital Premium surplus Based held in statutory reserve on Exchange and loss attributable to
re-investment
Payments Treasury Reserve acquisition of Reserve reserve equity holders
non-controlling of parent
interests
$000 $000 $000 $000 $000 $000 $000 $000 $000 $000
At 1(st) January 2020 1,728 68,455 3,690 2,072 (917) 2,500 (29,346) 1,703 165,059 214,944
- - - - 155 - (155) -
Regulatory transfer for future investment - -
Issue of shares on exercise of options - 15 - - - - - - - 15
Transaction with owners - 15 - - - 155 - - (155) 15
- - - - - - 8,910 8,910
Profit for the year - -
Other comprehensive income:
Exchange differences on translating foreign operations - - - - 175 9,662 9,837
- -
Total comprehensive income - - - - - 175 - 9,662 8,910 18,747
1,728 68,470 3,690 2,072 2,830 11,365 173,814 233,706
At 31st December 2020 (917) (29,346)
- - - - - - - -
Regulatory transfer for future investment - -
Purchase of shares held in treasury - - - - (727) - - - - (727)
Issue of shares on exercise of options 21 864 - - - - - - - 885
Transaction with owners 21 864 - - (727) - - - - 158
- - - - - - 25,376 25,376
Profit for the year - -
Other comprehensive income:
Exchange differences on translating foreign operations - - - - 66 3,270 - 3,336
- -
Total comprehensive income - - - - - 66 - 3,270 25,376 28,712
1,749 69,334 3,690 2,072 2,896 14,635 199,190 262,576
At 31st December 2021 (1,644) (29,346)
Griffin Mining Limited
Summarised Consolidated Cash Flow Statement
For the year ended 31 December 2021
(expressed in thousands US dollars)
2021 2020
Audited Audited
$000 $000
Net cash flows from operating activities
Profit before tax 36,526 14,515
Foreign exchange losses / (gains) 51 (22)
Finance income (236) (108)
Finance costs 404 359
Depreciation, depletion and amortisation 16,530 12,801
Provisions against intangible assets 11 10
Losses on disposal of equipment 293 1,129
Decrease / (increase) in inventories 817 (1,494)
Decrease / (increase) in receivables and other current assets 4,936 (4,814)
(Decrease) / increase in trade and other payables (2,871) 5,666
Tax paid (13,581) (3,644)
Net cash inflow from operating activities 42,880 24,398
Cash flows from investing activities
Interest received 236 108
Proceeds / (costs) on disposal of equipment 1 (44)
Payments to acquire - mineral interests (13,564) (18,691)
Payments to acquire - plant and equipment (6,365) (5,684)
Payments to acquire office, office furniture & equipment - (5)
Payments to acquire intangible fixed assets - exploration interests (73) (11)
Net cash outflow from investing activities (19,765) (24,327)
Cash flows from financing activities
Issue of ordinary shares on exercise of options 885 15
Interest paid (309) (112)
Purchase of shares for treasury (727) -
Bank loan advances 15,500 -
Repayment of bank loans (15,500) -
Finance lease repayments (462) (2,469)
Net cash outflow from financing activities (613) (2,566)
Increase / (decrease) in cash and cash equivalents 22,502 (2,495)
Cash and cash equivalents at the beginning of the year 16,435 19,885
Effects of exchange rates (778) (955)
Cash and cash equivalents at the end of the year 38,159 16,435
Cash and cash equivalents comprise bank deposits
Bank deposits 38,159 16,435
Included within net cash flows of $22,502,000 (2020 $2,495,000) are foreign
exchange losses of $51,000 (2020: gains $22,000) which have been treated as
realised.
Notes to the Summarised Financial Statements:
This statement has been prepared using accounting policies and presentation
consistent with those applied in the preparation of the statutory financial
statements of the Company.
The summary financial statements set out above do not constitute statutory
financial statements as defined by Section 84 of the Bermuda Companies Act
1981 or Section 435 of the UK Companies Act 2006. The Summarised
Consolidated Statement of Financial Position at 31 December 2021 and the
Summarised Consolidated Income Statement, Summarised Consolidated Statement of
Comprehensive Income, Summarised Consolidated Statement of Changes in Equity
and the Summarised Consolidated Cash Flow statement for the year then ended
have been extracted from the Group's audited 2021 statutory financial
statements.
The annual report and accounts for 2021 are being sent by post to all
registered shareholders. Additional copies of the annual report and accounts
are available from the Company's London office, 8(th) Floor, 54 Jermyn Street,
London, SW1Y 6LX and are available on Griffin Mining Ltd's web site
www.griffinmining.com
The Group has one business segment, the Caijiaying zinc gold mine in the
People's Republic of China. All revenues and costs of sales in 2021 and 2020
were derived from the Caijiaying zinc gold mine.
2021 2020
$000 $000
REVENUES
China 121,648 75,403
Zinc concentrate sales 96,951 53,095
Lead and precious metals concentrate sales 31,915 25,999
Royalties and resource taxes (7,218) (3,691)
121,648 75,403
COST OF SALES: CHINA
Mining costs 19,003 16,056
Haulage costs 11,466 7,282
Processing costs 16,574 8,868
Depreciation (excluding depreciation in administration costs) 14,481 11,780
Stock movements 1,520 (1,249)
63,224 42,737
ADMINISTRATION EXPENSES
China 16,433 12,939
Australia 136 312
UK / Bermuda 4,930 4,267
21,499 17,518
All revenues, cost of sales and operating expenses charged to profit relate to
continuing operations.
Notes (continued):
TOTAL ASSETS 2021 2020
$000 $000
China 312,026 290,147
Australia 1,011 967
UK / Bermuda 7,495 4,363
320,532 295,477
CAPITAL EXPENDITURE 2021 2020
$000 $000
China 19,929 24,375
Australia - -
UK / Bermuda 963 5
20,892 24,380
FINANCE INCOME 2021 2020
$000 $000
Interest on bank deposits 236 108
FINANCE COSTS 2021 2020
$000 $000
Interest payable on short term bank loans 309 111
Interest on rehabilitation provisions 84 77
Finance lease interest 11 171
404 359
OTHER INCOME 2021 2020
$000 $000
Scrap and sundry other sales 124 735
Income Tax Expense
2021 2020
$000 $000
Profit for the year before tax 36,526 14,515
Expected tax expense at a standard rate of PRC income tax of 25% (2018 25%) 9,132 3,629
Adjustment for tax exempt items:
- Income and expenses outside the PRC not subject to tax 934 567
Adjustments for short term timing differences:
- In respect of accounting differences 890 (298)
- In respect of other timing differences (4) -
Adjustments for permanent timing differences other 372 1,051
Withholding tax on intercompany dividends and charges 21 232
Current taxation expense 11,345 5,181
Deferred taxation expense
Origination and reversal of temporary timing differences (195) 424
(195) 424
Total tax expense 11,150 5,605
Notes (continued):
INCOME TAX EXPENSE (continued)
The parent company is not resident in the United Kingdom for taxation
purposes. Hebei Hua-Ao paid income tax in the PRC at a rate of 25% in 2021
(25% in 2020) based upon the profits calculated under Chinese generally
accepted accounting principles (Chinese "GAAP").
EARNINGS PER SHARE
Reconciliation of the earnings and weighted average number of shares used in
the calculations are set out below:
2021 2020
Earnings Weighted Per share amount (cents) Earnings Weighted Per share amount (cents)
Average number of shares Average number of shares
$000
$000
Basic earnings per share
Earnings attributable to ordinary shareholders
25,376 174,653,602 14.53 8,910 172,788,420 5.16
Dilutive effect of securities
Options - 13,730,107 (1.06) - 9,861,227 (0.28)
Diluted earnings per share
25,376 188,383,709 13.47 8,910 182,649,647 4.88
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 year. 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.
Notes (continued):
Property, plant and equipment
Mineral Mill and mobile mine equipment Offices furniture & equipment Total
Interests
At 1 January 2020 177,583 50,373 331 228,287
Foreign exchange adjustments 8,292 3,408 5 11,705
Additions during the year 18,691 5,684 5 24,380
Provision for licence transfer fees 16,338 - - 16,338
Change in estimate of mine closure costs (115) - - (115)
Transfer of rehabilitation provision 697 (697) - -
Disposals - (1,085) - (1,085)
Depreciation charge for the year (6,542) (6,084) (175) (12,801)
51,599
At 31 December 2020 214,944 166 266,709
Foreign exchange adjustments 3,405 1,224 (2) 4,627
Transfer (773) 773 - -
Additions during the year 13,564 6,365 963 20,892
Change in estimate of mine closure costs 327 - - 327
Release of rehabilitation provision (435) - - (435)
Disposals - (294) - (294)
Depreciation charge for the year (10,200) (6,180) (150) (16,530)
53,487
At 31 December 2021 220,832 977 275,296
At 31 December 2019
Cost 222,589 80,935 573 304,097
Accumulated depreciation (45,006) (30,562) (242) (75,810)
Net carrying amount 177,583 50,373 331 228,287
At 31 December 2020
Cost 267,763 90,173 583 358,519
Accumulated depreciation (52,819) (38,574) (417) (91,810)
Net carrying amount 214,944 51,599 166 266,709
At 31 December 2021
Cost 285,471 97,910 1,544 384,628
Accumulated depreciation (64,639) (44,423) (567) (106,929)
Net carrying amount 220,832 53,487 977 275,926
Mineral interests comprise the Group's interest in the Caijiaying ore bodies
including costs on acquisition, plus subsequent expenditure on licences,
concessions, exploration, appraisal and construction of the Caijiaying mine
including expenditure for the initial establishment of access to mineral
reserves, commissioning expenditure, and direct overhead expenses prior to
commencement of commercial production and together with the end of life
restoration costs.
Mill and mobile mine equipment include $5,795,000 (2020: $3,872,000) of assets
under construction yet to be depreciated.
Notes (continued):
Property, plant and equipment (continued)
The offices, furniture and equipment disclosed above relates solely to the
fixed assets, including leased offices, of Griffin Mining (UK Services)
Limited and China Zinc Pty Limited.
During 2013 plant and equipment with a deemed value of $11,381,000, revalued
in 2019 to $14,150,000, were acquired under a finance lease, upon which
depreciation of $8,132,000 (2020: $6,712,000) has been provided. At 31
December 2021 the net carrying amount of this equipment was $7,351,000 (2020:
$8,417,000). In 2019 the London office lease was capitalised, and in November
2021 renewed. To comply with IFRS16 a deemed value of $1,581,000 has been
applied upon which depreciation of $618,000 has been provided. At 31 December
2021 the net carrying amount of this office was $963,000 (2020: $124,000).
The Group assesses the carrying value of the mineral interests, mill and
mobile mine equipment at least annually, and more frequently in the event of
any indications of impairment, by reference to discounted cash flow forecasts
of future revenue and expenditure for each business segment. These forecasts
are based upon both past and expected future performance, available resources
and expectations for future markets. Management determined there were no
impairment indicators at 31 December 2021. However, as best practice
management have updated the impairment model.
In determining any indications of impairment in the carrying value of the
Caijiaying Mine the directors have reassessed the net carrying value of
capitalised costs at 31 December 2021 by reference to the estimated mineral
resources at Caijiaying that may be extracted by 2056 and 2037 when the
current business licence of Hebei Hua Ao expires. However, it is expected that
Hebei Hua Ao will be converted to an equity joint venture company with an
indefinite life before then in order to comply with new PRC legislation.
Accordingly, a Life of Mine plan ("LOM") has been prepared by the Company that
indicates the continued extraction of ore until 2056. In estimating the
discounted future cash flows from the continuing operations at the Caijiaying
mine the following principal assumptions have been made:
· Future market prices for zinc of $3,000 per tonne, gold of $1,800 per
troy ounce and silver of $22.5 per troy ounce;
· Zinc treatment charges of 30% of market prices;
· Extraction of measured and indicated resources of 23.8 million tonnes
to 2037 when the current business licence of Hebei Hua Ao expires, with ore
mined and processed rising to a maximum rate of 1.6 million tonnes of ore per
annum and the extraction of 50.3 million tonnes by 2056;
· Operating costs, recoveries and payables based upon past performance
and that budgeted for 2022;
· Capital costs based upon that initially scheduled with sustaining
capital based on future scheduling;
· Discount rate of 10%;
· Continued maintenance and grant of applicable licences and permits;
· A Renminbi to US dollar foreign exchange rate of Rmb6.5 to USD1; and
· No significant impact as a result of climate change, earthquakes or
other natural events.
Notes (continued):
Intangible Assets
China - mineral exploration interests
$000
At 1 January 2020 322
Foreign exchange adjustments 2
Additions during the year 11
Impairment during the year (10)
At 1 January 2021 325
Additions during the year 73
Impairment during the year (11)
At 31 December 2021 387
Intangible assets represent cost on acquisition, plus subsequent expenditure
on licences, concessions, exploration, appraisal and development work in
respect to regional exploration in China. Where expenditure on an area of
interest is determined as unsuccessful such expenditure is written off to
profit or loss. The recoverability of these assets depends, initially, on
successful appraisal activities, details of which are given in the report on
operations. The outcome of such appraisal activity is uncertain. Upon
economically exploitable mineral deposits being established, sufficient
finance will be required to bring such discoveries into production. At 31
December 2021 impairment charges of $11,000 (2020: $10,000) had been provided
and charged to the income statement in respect of the above exploration costs
previously capitalised by Hebei Sino Anglo.
POST BALANCE SHEET EVENTS
As at 31 December 2021 there were no adjusting post balance sheet events
(2020: none).
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 (mailto:rns@lseg.com)
or visit
www.rns.com (http://www.rns.com/)
.
RNS may use your IP address to confirm compliance with the terms and conditions, to analyse how you engage with the information contained in this communication, and to share such analysis on an anonymised basis with others as part of our commercial services. For further information about how RNS and the London Stock Exchange use the personal data you provide us, please see our
Privacy Policy (https://www.lseg.com/privacy-and-cookie-policy)
. END FR GPUCAAUPPGQPRecent news on Griffin Mining
See all newsREG - Griffin Mining Ltd - CAIJIAYING MINE TO BE 100% POWERED BY RENEWABLES
AnnouncementREG - Griffin Mining Ltd - Update to Share Buy Back Programme
AnnouncementREG - Griffin Mining Ltd - First Quarter Production 2024
AnnouncementREG - Griffin Mining Ltd - Transaction in Own Shares
AnnouncementREG - Griffin Mining Ltd - CANCELLATION OF SHARES
Announcement