Below are the interim results for Griffin Mining Limited ("Griffin" or "the Company") for the six months ended 30th June 2014.

Highlights:

  • Revenues of $33.2 million (2013: $33.7 million)

  • Operating profit of $9.2 million (2013: $7.3 million)

  • Profit before tax of $7.4 million (2013: $5.8 million)

  • Profit after tax of $5.4 million (2013: $4.0 million)

Financial and Trading:

Throughput of 408,671 tonnes of ore in the six months to the 30th June 2014 at Griffin's Caijiaying Mine was in line with that achieved of 412,799 tonnes in the six months to 30th June 2013, resulting in metal in concentrate production of:

  • 19,147 tonnes of zinc (2013: 19,077 tonnes);

  • 609 tonnes of lead (2013: 903 tonnes);

  • 147,901 ounces of silver (2013: 151,921 ounces); and

  • 5,999 ounces of gold (2013: 3,869 ounces).

Metal in concentrate production in the six months to 30th June 2014 compared to that in the six months to 30th June 2013 was impacted by lower lead and silver grades but better gold grades and recoveries. Zinc grades were marginally better with recoveries in line with previous years.

Revenues in the six months to 30th June 2014 were down 1.2% on that achieved in the first six months of 2013 with less zinc, lead and silver in concentrate sold, whilst more gold was sold at lower prices.

Operating costs and expenses were down on that incurred in the six months to 30th June 2014 following the appointment of a new management team at Caijiaying with savings achieved across most areas of operations.

Chinese income taxes and withholding taxes of $1,754,000 (2013: $1,724,000) and deferred taxation of $255,000 (2013: $nil) have been charged to profit resulting in profits after tax of $5,350,000 (2012: $4,035,000).

Provision of $1,601,000 (2013: $584,000) has been made for the minority interests in the profit of Griffin's Chinese subsidiary, Hebei Hua Ao Mining Industry Company Limited ("Hua Ao"). Profit attributable to Griffin amounted to $3,749,000 (2013: $3,451,000).

Basic earnings per share were 2.09 cents (2013: 1.97 cents) and diluted earnings per share 2.09 cents (2013: 1.95 cents). At 30 th June 2014, attributable net assets per share on issue amounted to 84 cents (2013: 81 cents).

Funds continue to be repatriated from China to cover central costs whilst leaving sufficient working capital within Hua Ao for the upgrade of the processing facilities and the further development of the Caijiaying mine. During the period: $6,548,000 was expended on mine development and plant upgrade work; $2,072,000 of bank loans in China were repaid; whilst cash balances throughout the Group have decreased by $2,519,000 (2013: $7,740,000 increase).

Despite this delay, work is continuing with the upgrade of the processing facilities and underground development to increase throughput capacity to 1.5 million tonnes of ore per annum. Considerable progress has been made to date with the above ground work expected to be completed by the end of October. Whilst the mining and haulage of ore has continued unabated during the expansion, the processing of ore has been suspended since 12th August for a scheduled 2 month period. Once the expanded processing capacity has been commissioned, it is expected that the stockpiled ore will be processed and the annual budgeted production targets met by year end.

In line with previous years practice and the Company's policy of determining annual dividends at the time of the Company's full year results, no interim dividend has been declared by the Board of Griffin.

Chairman's Statement

Chairman Mladen Ninkov commented, "these are very pleasing results with a 26% increase in operating profit and a 35% increase in net profit with no real change in revenues. In effect, this means that management has been able to successfully implement real, substantial cuts in costs at Caijiaying with all the benefits that will ensue in the future with the predicted rise in the zinc price. Added to these positive results is the further good news of the doubling of our processing capacity in the near future from 750,000 tonnes per annum to 1.5 million tonnes per annum. All these factors point to 2015 being a watershed year for the Company."

Griffin Mining Limited
Condensed Consolidated Income Statement
(expressed in thousands US dollars)

6 months to 30/06/2014 Unaudited

6 months to 30/06/2013 Unaudited

Year to 31/12/2013 Audited

$000

$000

$000


Revenue

33,226

33,651

71,071


Cost of sales

(18,217)

(20,534)

(40,078)



Gross profit

15,009

13,117

30,993


Net operating expenses

(5,772)

(5,808)

(10,700)



Profit from operations

9,237

7,309

20,293


Share of losses of associated company

-

(45)

-

Loss on disposal of interest in associated company

-

-

(2,229)

Foreign exchange (losses) / gains

(26)

(20)

107

Finance income

126

59

145

Finance costs

(2,040)

(1,577)

(3,651)

Other income

62

33

162



Profit before tax

7,359

5,759

14,827


Income tax expense

(2,009)

(1,724)

(5,071)



Profit after tax

5,350

4,035

9,756



Attributable to non-controlling interests

1,601

584

1,599

Attributable to equity share owners of the parent

3,749

3,451

8,157


5,350

4,035

9,756



Basic earnings per share (cents)

2.09

1.97

4.63



Diluted earnings per share (cents)

2.09

1.95

4.63

Griffin Mining Limited
Condensed Consolidated Statement Of Comprehensive income
(expressed in thousands US dollars)

6 months to 30/06/2014 Unaudited

6 months to 30/06/2013 Unaudited

Year to 31/12/2013 Audited

$000

$000

$000


Profit for the financial period

5,350

4,035

9,756



Other comprehensive income




Exchange differences on translating foreign operations

(401)

211

841




Other comprehensive income for the period, net of tax


(401)

211

841



Total comprehensive income for the period

4,949

4,246

10,597



Attributable to non-controlling interests

1,567

614

1,683

Attributable to equity share owners of the parent

3,382

3,632

8,914


4,949

4,246

10,597

Griffin Mining Limited
Condensed Consolidated Statement Of Financial Position
(expressed in thousands US dollars)

30/06/2014 Unaudited

30/06/2013 Unaudited

31/12/2013 Unaudited

$000

$000

$000


ASSETS


Non-current assets


Property, plant and equipment

195,301

178,433

193,444

Intangible assets - Exploration interests

1,833

1,766

1,852

Investment in associated company

-

3,552

-

197,134

183,751

195,296

Current assets


Inventories

8,501

4,949

7,981

Other current assets

2,456

1,568

4,214

Cash and cash equivalents

24,310

24,504

26,278

35,267

31,021

38,473


Total assets

232,401

214,772

233,769


EQUITY AND LIABILITIES


Equity attributable to equity holders of the parent


Share capital

1,790

1,754

1,791

Share premium

71,310

70,016

71,339

Contributing surplus

3,690

3,690

3,690

Share based payments

2,896

3,055

2,748

Chinese statutory re-investment reserve

1,667

1,538

1,683

Other reserve on acquisition of non-controlling interests

(29,346)

(29,346)

(29,346)

Foreign exchange reserve

10,861

10,655

11,212

Profit and loss reserve

88,363

80,034

84,614

Total equity attributable to equity holders of the parent

151,231

141,396

147,731


Non-controlling interests

4,571

1,957

3,004


Total equity

155,802

143,353

150,735


Non-current liabilities


Long-term provisions

2,567

3,228

2,591

Deferred taxation

1,886

1,316

1,646

Finance lease

10,908

-

12,012

15,361

4,544

16,249

Current liabilities


Taxation payable

1,321

393

2,878

Trade and other payables

11,783

13,073

14,215

Finance lease

1,001

-

487

Bank loans

47,133

53,409

49,205

Total liabilities

61,238

66,875

66,785


Total equities and liabilities

232,401

214,772

233,769


Number of shares in issue

179,041,830

175,401,830

179,091,830


Attributable net asset value / total equity per share

$0.84

$0.81

$0.84

Griffin Mining Limited
Condensed Consolidated Statement of Changes in Equity
(expressed in thousands US dollars)

Sharecapital

Share premium

Contributing surplus

Share Based Payments

Chinese re-investment Reserve

Other reserve on acquisition of non-controlling Interests

Foreign Exchange Reserve

Profit and loss Reserve

Total attributable to equity holders of parent

Non Controlling Interests

Total Equity

$000

$000

$000

$000

$000

$000

$000

$000

$000

$000

$000

At 31 December 2012

1,755

70,037

3,690

3,055

1,313

(29,346)

10,485

77,966

138,955

4,904

143,859

Prior period adjustment re deferred taxation

-

-

-

-

-

-

-

(1,169)

(1,169)

(147)

(1,316)

At 1st January 2013 restated

1,755

70,037

3,690

3,055

1,313

(29,346)

10,485

76,797

137,786

4,757

142,543

Regulatory transfer for future investment

-

-

-

-

214

-

-

(214)

-

-

-

Purchase of shares for cancellation

(1)

(21)

-

-

-

-

-

-

(22)

-

(22)

Transfers in respect of distributions

-

-

-

-

-

-

-

-

-

(3,414)

(3,414)

Retained profit for the 6 months

-

-

-

-

-

-

-

3,451

3,451

584

4,035

Other comprehensive income:

Exchange differences on translating foreign operations

-

-

-

-

11

-

170

-

181

30

211

Total comprehensive income for the period

-

-

-

-

11

-

170

3,451

3,632

614

4,246

At 30 June 2013 restated (unaudited)

1,754

70,016

3,690

3,055

1,538

(29,346)

10,655

80,034

141,396

1,957

143,353

Regulatory transfer for future investment

-

-

-

-

126

-

-

(126)

-

-

-

Purchase of shares for cancellation

(2)

(95)

-

-

-

-

-

-

(97)

-

(97)

Issue of shares on exercise of options

39

1,228

-

-

-

-

-

-

1,267

-

1,267

Transfer on exercise of options

-

190

-

(190)

-

-

-

-

-

-

-

Buy out of share purchase options

-

-

-

(117)

-

-

-

-

(117)

-

(117)

Transfers in respect of dividends

-

-

-

-

-

-

-

-

-

(22)

(22)

Transaction with owners

37

1,323

-

(307)

126

-

-

(126)

1,053

(22)

1,031

Retained profit for the 6 months

-

-

-

-

-

-

-

4,706

4,706

1,015

5,721

Other comprehensive income:

Exchange differences on translating foreign operations

-

-

-

-

19

-

557

-

576

54

660

Total comprehensive income for the period

-

-

-

-

19

-

557

4,706

5,282

1,069

6,351

At 31 December 2013

1,791

71,339

3,690

2,748

1,683

(29,346)

11,212

84,614

147,731

3,004

150,735

Cost of share based payments

-

-

-

148

-

-

-

-

148

148

Purchase of shares for cancellation

(1)

(29)

-

-

-

-

-

-

(30)

-

(30)

Transaction with owners

(1)

(29)

-

148

-

-

-

-

118

-

118

Retained profit for the 6 months

-

-

-

-

-

-

-

3,749

3,749

1,601

5,350

Other comprehensive income:

Exchange differences on translating foreign operations

-

-

-

-

(16)

-

(351)

-

(367)

(34)

(401)

Total comprehensive income for the period

-

-

-

-

(16)

-

(351)

3,749

3,382

1,567

4,949

At 30 June 2014 (unaudited)

1,790

71,310

3,690

2,896

1,667

(29,346)

10,861

88,363

151,231

4,571

155,802

Griffin Mining Limited
Condensed Consolidated Cash Flow Statement
(expressed in thousands US dollars)

6 months to 30/06/2014 Unaudited

6 months to 30/06/2013 Unaudited

Year to 31/12/2013 Audited

$000

$000

$000

Net cash flows from operating activities


Profit before taxation

7,359

5,759

14,827

Share of associated company losses

-

45

-

Loss on disposal of interest in associated company

-

-

2,229

Foreign exchange losses / (gains)

26

20

(107)

Finance (income)

(126)

(59)

(145)

Finance costs

2,040

1,577

3,651

Adjustment in respect of share based payments

148

-

-

Depreciation, depletion and amortisation

3,701

3,098

7,184

Provisions

-

671

-

(Increase) / decrease in inventories

(520)

1,283

(1,750)

Decrease in receivables and other current assets

1,745

2,008

563

(Decrease) / increase in trade and other payables

(3,510)

(1,160)

1,545


Net cash inflow from operating activities

10,863

13,242

27,997


Taxation paid

(2,231)

(3,528)

(5,692)


Cash flows from investing activities


Interest received

126

59

145

Payments to acquire intangible fixed assets - exploration interests

3

(48)

(110)

Payments to acquire - mineral interests

(2,459)

(2,305)

(4,883)

Payments to acquire - plant & equipment

(4,089)

(399)

(2,499)

Net cash (outflow) from investing activities

(6,419)

(2,693)

(7,347)


Cash flows from financing activities


Issue of ordinary shares on exercise of options

-

-

1,150

Purchase of shares for cancellation

(30)

(22)

(119)

Interest paid

(2,040)

(1,577)

(3,651)

Finance lease

(590)

-

(354)

Distributions to non-controlling interests

-

(3,414)

(3,436)

Proceeds from bank loans

-

6,297

15,508

Repayment of bank loans

(2,072)

-

(13,415)

(4,732)

1,284

(4,317)


(Decrease) / increase in cash and cash equivalents

(2,519)

8,305

10,641


Cash and cash equivalents at beginning of the period

26,278

16,764

16,764

Effects of exchange rate changes

551

(565)

(1,127)

Cash and cash equivalents at end of the period

24,310

24,504

26,278


Cash and cash equivalents comprise bank deposits and loans


Bank deposits

24,310

24,504

26,278

Griffin Mining Limited
Notes to the Interim Statement

1. These 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 December 2013.

2. Copies of this interim report are being sent to all registered shareholders. Additional copies are available from the Company's London office, 60 St James's Street, London, SW1A 1LE.

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 31 December 2013 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 2013 statutory financial statements upon which the auditors' opinion is unqualified.

4. The summary accounts have been prepared on a going concern basis. As at 30th June 2014, Hebei Hua Ao (a subsidiary of the Company) had bank loans outstanding of $47,133,000. Having previously rolled over each of the bank facilities Hebei Hua Ao expects to roll over the existing facilities for a further 12 months. 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 30/06/2014 Unaudited

6 months to 30/06/2013 Unaudited

Year to 31/12/2013 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

3,749

179,091,830

2.09

3,451

175,442,576

1.97

8,157

176,015,707

4.63

Dilutive effect of securities



Options

-

-

-

-

1,582,970

(0.02)

-

-

-

Diluted earnings per share

3,749

179,091,830

2.09

3,451

177,025,546

1.95

8,157

176,015,707

4.63

6. A prior year adjustment of $1,316,000 has been charged to profit and loss reserve, and deferred taxation in respect of financial periods to 31st December 2010. The impact of this is reflected in the statement of changes in equity and deferred taxation set out below. The Statement of Financial Position at 30th June 2013 has been restated to reflect this. This charge relates to deferred taxation at 25% on accelerated depreciation for Chinese tax purposes during which time Hebei Hua Ao enjoyed advantageous tax rates in the PRC tax.

Deferred taxation

$000

At 31st December 2012

-

Prior period adjustment

1,316

At 1st January 2013 restated

1,316

Charge for the period

-

At 30th June 2013 restated

1,316

Charge for the period

297

Foreign exchange adjustments

33

At 31st December 2013

1,646

Charge for the period

256

Foreign exchange adjustments

(16)

At 30th June 2014

1,886

distributed by