REG - Griffin Mining Ltd - UNAUDITED INTERIM RESULTS
12/09/2023 07:00
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RNS Number : 0562M Griffin Mining Limited 12 September 2023
8(th) 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 (mailto:griffin@griffinmining.com)
12(th) September 2023
UNAUDITED INTERIM RESULTS
for the six months ended 30(th) June 2023
SHARE BUY-BACK PROGRAMME TO BE CONTINUED
Griffin Mining Limited ("Griffin" or the "Company") today releases its
unaudited results for the six months ended 30th June 2023.
Highlights:
· Revenues of $69.5 million (30(th) June 2022: $34.7 million).
· Gross Profit of $21.7 million (30(th) June 2022: $15.5 million).
· Operating profit of $9.1 million (30(th) June 2022: $5.5 million).
· Profits before tax, depreciation, and interest of $23.9m (30(th) June
2022: $12.7m).
· Profit before tax of $9.6m (30(th) June 2022 $5.4m).
· Profit after tax of $5.2 million (30(th) June 2022: profit $3.0
million).
· Basic earnings per share of 2.77 cents (30(th) June 2022: 1.73
cents).
· Cash inflow from operations $21,427,000 (30(th) June 2022 outflow
$4,122,000).
Financial and Trading:
738,924 tonnes of ore were processed in the 6 months to 30(th) June 2023
(30(th) June 2022 338,039) to produce:
- 28,095 tonnes of zinc ( 30(th) June 2022 - 13,457 tonnes);
- 697 tonnes of lead (30(th) June 2022 - 353 tonnes);
- 151,608 ounces of silver (30(th) June 2022 - 80,717 ounces); and
- 7,980 ounces of gold (30(th) June 2022 - 3,672 ounces).
Ore throughput at Caijiaying is now running consistently at a rate of circa
1.5 million tonnes of ore per annum.
Zinc ore grades declined from 4.2% in the first half of 2022 to 3.98% in the
first half of 2023, the gold grade improved marginally from 0.5g/t in the
first half 2022 to 0.53g/t in the first half of 2023, whilst the silver grade
declined from 15.5g/t in the first half of 2022 to 14.0g/t in the first half
of 2023. Zinc, lead and silver recoveries were marginally down on that in the
first half of 2022 whilst gold recoveries marginally improved on that in the
first half of 2022.
During the six months to 30(th) June 2023:
- 28,939 tonnes of zinc metal in concentrate were sold (30(th) June
2022: 10,719 tonnes);
- 7,835 ozs of gold in concentrate were sold (30(th) June 2022: 2,491
ozs); and
- 147,663 ozs of silver in concentrate were sold (30(th) June 2022:
44,627 ozs).
Zinc revenues before royalties and resource taxes in the six months to 30(th)
June 2023 were $55,443,000 (30(th) June 2022 - $31,234,000) with the average
zinc metal price received declining from $2,914 per tonne in the first half of
2022 to $1,916 in the first half of 2023. Lead and precious metals
revenues in the first six months to 30(th) June 2023 were $18,179,000 (30(th)
June 2022 - $5,735,000), with the average gold price received of $1,851 per oz
(30(th) June 2022 - $1,788) and silver $19.3 per oz (30(th) June 2022 -
$18.1).
With uninterrupted production resulting in ore processed increasing by 119%
from that in the first half of 2022, when operations were suspended by the
Chinese authorities for the 2022 Winter Olympics in the first quarter of 2022,
costs of sales (mining, haulage and processing costs) have increased from that
in the first half of 2022.
Administration costs increased by $2,641,000 from that in the first half of
2022 reflecting increased activity with operations suspended in the first
quarter of 2022 and includes a pro-rata charge of $969,000 (30(th) June 2022
nil) in respect of 7,805,000 new ordinary shares in the Company issued under a
share incentive scheme, as announced on 29(th) March 2023 to retain and
incentivise management to 31(st) December 2024.
The Group benefited from a significant increase in interest received from
$107,000 in the first half of 2022 to $565,000 in the first half of 2023. with
increased interest rates and bank deposits.
The tax charge of $4,424,000 is disproportionally large compared with pre-tax
profits of $9,612,000 as the tax charge primarily arises on Hebei Hua Ao's
profit determined under Chinese Generally accepted Accounting Principles
("GAAP") in the first half of the year, at a rate of 25%. Accordingly, the
share incentive scheme charge and certain other costs incurred outside China
are not tax deductible. The tax charge incorporates a deferred tax credit of
$1,486,000 in respect of accelerated depreciation.
In light of the severely undervalued nature of the Company's share price, the
cash generated by operations in conjunction with the available funds available
outside of China to Griffin and the current depressed nature of base metals
prices and the share prices of those producers, the Directors have resolved to
renew efforts to successfully effect the share buy-back programme announced on
the 25(th) February 2021 (the "Buy-Back Programme") to return excess monies
not required to meet financial and working capital requirements to
shareholders. Furthermore, the Directors have determined that, provided
sufficient funds are available, they may seek to extend the buy-back programme
in the same terms once the current Buy-Back Programme expires on the 25(th)
February 2024.
In addition to the Buy-Back Programme, the directors reserve the right
(subject to compliance with applicable law) to:
1. purchase large blocks of shares from individual shareholders where the
large number of such shares offered in the market may cause instability in the
Company's share price; and
2. purchase a larger number of shares via a tender offer which would be
the subject of further documentation being sent to non-US resident
shareholders.
Purchases will be carried out in compliance with the EU Market Abuse
Regulation 2016, as implemented and amended by the European Union (Withdrawal)
Act 2018 and the Market Abuse Exit Regulations 2019 pertaining to the relevant
conditions for trading, including where relevant, applicable restrictions
regarding time and volume, disclosure and reporting obligations and price
conditions.
Griffin will make further announcements in due course following the completion
of any share repurchases. The ordinary shares bought back will be held as
treasury shares or cancelled.
Chairman's Statement
Chairman Mladen Ninkov commented, "This is a truly stellar operational and
financial performance by the Caijiaying Mine, the Company and all its
employees, contractors and other stakeholders, particularly in the current,
relatively modest, commodity prices environment. I'm further delighted that
the Directors have decided to address the issue of the market value of the
Company which, with the cash now being generated by operations, will be an
ongoing and permanent feature of the Company's future."
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
Dougie Mcleod
Berenberg
Telephone: +44(0)20
3207 7800
Matthew Armitt
Jennifer Wyllie
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 (http://www.griffinmining.com/)
Griffin Mining Limited
Condensed Consolidated Income Statement
(expressed in thousands US dollars)
6 months to 6 months to Year to
30/06/2023 30/06/2022 31/12/2022
Unaudited Unaudited Audited
$000 $000 $000
Revenue 69,518 34,749 94,397
Cost of sales (47,779) (19,272) (56,145)
Gross profit 21,739 15,477 38,252
Administration expenses (12,645) (10,004) (22,627)
Profit from operations 9,094 5,473 15,625
Losses on disposal of equipment (63) (77) (404)
Foreign exchange (losses) (25) (121) (387)
Finance income 565 107 369
Finance costs (85) (68) (135)
Other income 126 120 204
Profit before tax 9,612 5,434 15,272
Income tax expense (4,424) (2,400) (7,568)
Profit after tax 5,188 3,034 7,704
Basic earnings per share (cents) 2.77 1.73 4.41
Diluted earnings per share (cents) 2.76 1.62 4.11
Griffin Mining Limited
Condensed Consolidated Statement Of Comprehensive income
(expressed in thousands US dollars)
6 months to 6 months to Year to
30/06/2023 30/06/2022 31/12/2022
Unaudited Unaudited Audited
$000 $000 $000
Profit for the financial period 5,188 3,034 7,704
Other comprehensive income
Exchange differences on translating foreign operations (5,865) (7,892) (15,498)
Other comprehensive income for the period, net of tax (5,865) (7,892) (15,498)
Total comprehensive (losses) for the period (677) (4,858)
(7,794)
Griffin Mining Limited
Condensed Consolidated Statement Of Financial Position
(expressed in thousands US dollars)
30/06/2023 30/06/2022 31/12/2022
Unaudited Unaudited Audited
$000 $000 $000
ASSETS
Non-current assets
Property, plant and equipment 245,632 268,266 258,041
Intangible assets - exploration interests 532 399 407
Other non-current assets 1,613 - 1,494
247,777 268,665 259,942
Current assets
Inventories 5,530 9,198 8,077
Receivables and other current assets 2,957 3,960 3,433
Cash and cash equivalents 46,887 24,993 34,138
55,374 38,151 45,648
Total assets 303,151 306,816 305,590
EQUITY AND LIABILITIES
Equity attributable to equity holders of the parent
Share capital 1,928 1,749 1,749
Share premium 78,551 69,334 69,334
Contributing surplus 3,690 3,690 3,690
Share based payments 1,059 2,072 168
Shares held in treasury (1,644) (1,644) (1,644)
Chinese statutory re-investment reserve 3,091 3,105 2,992
Other reserve on acquisition of non-controlling interests (29,346) (29,346) (29,346)
Foreign exchange reserve (6,375) 6,888 (618)
Profit and loss reserve 204,121 201,870 199,140
Total equity attributable to equity holders of the parent 255,075 257,718 245,465
Non-current liabilities
Other payables 9,134 13,112 6,317
Long-term provisions 2,594 2,576 2,649
Deferred taxation 1,160 3,078 2,717
Finance leases 628 705 683
13,516 19,471 12,366
Current liabilities
Trade and other payables 34,393 29,427 47,590
Finance leases 167 200 169
Total current liabilities 34,560 29,627 47,759
Total equities and liabilities 303,151 306,816 305,590
Number of shares in issue 192,828,420 174,892,894 174,892,894
Attributable net asset value / total equity per share $1.32 $1.47 $1.40
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 held in re investment reserve on exchange and loss attributable
payments treasury reserve acquisition of reserve reserve to equity holders
non-controlling of parent
interests
$000 $000 $000 $000 $000 $000 $000 $000 $000 $000
At 31(st) 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 30(th) June 2022 (Unaudited) 1,749 69,334 3,690 2,072 (1,644) 3,105 (29,346) 6,888 201,870 257,718
Transfer on surrender of share options - - - (1,904) - - - - (7,413) (9,317)
Transaction with owners - - - (1,904) - - - (7,413) (9,317)
Retained profit for the 6 months - - - - - - - - 4,670 4,670
Other comprehensive income:
Exchange differences on translating foreign operations - - - - (113) - (7,506) 13 (7,606)
-
Total comprehensive income for the period - - - - - (113) - (7,506) 4,683 (2,936)
At 31(st) December 2022 1,749 69,334 3,690 168 (1,644) 2,992 (29,346) (618) 199,140 245,465
Issue of shares on cancellation of share options 101 9,217 - - - - - - - 9,318
Issue of shares under share incentive scheme 78 - - 891 - - - - - 7,084
Regulatory transfer for future investment - - - - - 207 - - (207) -
Transaction with owners 179 9,217 - 891 - 207 - - (207) 16,402
Retained profit for the 6 months - - - - - - - - 5,188 5,188
Other comprehensive income:
Exchange differences on translating foreign operations - - - - - (108) - (5,757) - (5,865)
Total comprehensive income for the period - - - - - (108) - (5,757) 5,188 (677)
At 30(th) June 2023 (Unaudited) 1,928 78,551 3,690 1,059 (1,644) 3,091 (29,346) (6,375) 204,121 255,075
Griffin Mining Limited
Condensed Consolidated Cash Flow Statement
(expressed in thousands US dollars)
6 months to 6 months to Year to
30/06/23 30/06/2022 31/12/2022
$000 $000 $000
Net cash flows from operating activities
Profit before taxation 9,612 5,434 15,272
Issue of shares under share incentive scheme 969 - -
Foreign exchange losses 25 121 387
Finance income (565) (107) (369)
Finance costs 84 68 135
Depreciation, depletion and amortisation 14,845 7,226 19,590
Losses on disposal of equipment 63 77 404
Decrease / (increase) in inventories 2,547 (4,683) (3,561)
Decrease / (increase) in receivables and other current assets 477 (2,011) (1,807)
(Decrease) in trade and other payables (385) (7,351) (6,284)
Taxation paid (6,245) (2,896) (8,033)
Net cash inflow / (outflow) from operating activities 21,427 (4,122) 15,734
Cash flows from investing activities
Interest received 565 107 369
Proceeds / (expenses) on disposal of equipment 168 11 (178)
Payments to acquire - mineral interests (mine development) (4,539) (3,619) (7,348)
Payments to acquire - plant & equipment (4,995) (6,846) (13,749)
Payments to acquire - office lease, furniture and equipment 0 0 (6)
Payments to acquire - intangible assets - exploration interests (125) (13) (20)
Net cash (outflow) from investing activities (8,926) (10,360) (20,932)
Cash flows from financing activities
Interest paid (21) 0 0
Bank loan advances 4,228 0 0
Repayment of bank loans (4,228) 0 0
Finance lease repayments (78) (90) (167)
Net cash (outflow) from financing activities (99) (90) (167)
Increase / (decrease) in cash and cash equivalents 12,402 (14,572) (5,365)
Cash and cash equivalents at beginning of the period 34,138 38,159 38,159
Effects of exchange rate changes 347 1,406 1,344
Cash and cash equivalents at end of the period 46,887 24,993 34,138
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 31(st) December 2022.
2. This interim report will be available on the Company's web site,
www.griffinmining.com (http://www.griffinmining.com) . Hard copies are
available from the Company's London office, 8(th) 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 consolidated statement of financial
position at 31(st) December 2022 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 2022 statutory financial statements
upon which the auditors' opinion is unqualified, and should be read in
conjunction with the accompanying notes contained therein.
4. 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.
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.
6. Reconciliation of the earnings and weighted average number of
shares used in the calculations are set out below:
6 months to 6 months to Year to
30/06/2023 30/06/2022 31/12/2022
Unaudited
Unaudited Audited
Earnings Weighted Per share amount Weighted Per share amount (cents) Earnings Weighted Per share amount (cents)
$000 average number of shares (cents) average number of shares $000 average number of shares
Earnings
$000
Basic (loss) / earnings per share
Earnings attributable to ordinary shareholders 5,188 187,039,932 2.77 3,034 174,653,602 1.73
7,704 174,892,894 4.41
Dilutive effect of securities
Options - 1,226,454 (0.1) - 12,950,882 (0.11) - 12,384,576 (0.30)
Diluted earnings per share 188,266,386 2.76 187,843,776 1.62
5,188 3,034 7,704 187,277,470 4.11
7. As at 30(th) June 2023 there were no adjusting post balance sheet
events.
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